Seeing the forest for the trees
ForestEthics, a hard-hitting environmental group that is running a campaign to protect endangered forests, has kept the Sustainable Forestry Initiative (SFI) organization in its crosshairs for the last several years. The forest industry’s largest certification program for wood products even has its own tab on the ForestEthics Web page: Viewers can click on “Stop SFI GreenWash” and read a critique of the group’s certification process, its membership, its nonprofit status and even its logo.
The campaign really heated up last fall after lawyers for ForestEthics filed administrative complaints with the Federal Trade Commission and the Internal Revenue Service, challenging both the marketing claims and the nonprofit status of the SFI program. (No action was taken by either federal agency, according to SFI.) In November 2010, ForestEthics also published a report, “SFI: Certified Greenwash,” attacking the organization’s auditing process.
SFI responded with a point-by-point refutation of the charges, claiming that ForestEthics was trying to create a monopoly for the Forest Stewardship Council (FSC), a rival organization that also certifies wood products. SFI and FSC often use the same, third-party independent agencies to conduct audits, SFI pointed out. It really took ForestEthics to task for using a photo of a barren mountainside in Washington State to illustrate SFI-sanctioned clear-cutting. The land had been eroded by a landslide caused by record rainfall, SFI said.
As it turns out, both sides were just warming up for another big clash this spring. On March 28, ForestEthics sent out a press release stating that seven major companies, including Aetna, Allstate and Office Depot, have committed to phasing out SFI-approved paper and packaging in their offices, operations and catalogs.
SFI contacted all the companies and sent out a press release entitled, “What to Do When ForestEthics Comes Knocking?” Kathy Abusow, SFI’s president and CEO, urged companies to resist “pressure tactics” from ForestEthics to remove the SFI label from their products.
“ForestEthics is threatening customers, conservation organizations and others,” Abusow told Home Channel News. “Guilt, pressure and misinformation are not the ingredients that drive sustainability.”
Abusow’s defense of her organization was backed up by six conservationists who serve on the SFI board. In an “open letter” sent to the media on April 7, executives with Bird Studies Canada, Theodore Roosevelt Conservation Partnership and other various environmental groups talked about the work they do with SFI to sustain fish and wildlife, biodiversity and water quality. “The six of us have dedicated our lives to conservation,” they wrote. “We would not be on the SFI board if we did not believe it is a credible forest certification program.”
ForestEthics is now conducting an email campaign focused on the six conservationists, whom it says have been offered “token spots on the [SFI] board to boost … its eco-cred.” The group did not respond to a request for comments.
Ken Dunham, president of the Lumber Association of California & Nevada (LACN), has members who produce, distribute and sell both FSC and SFI lumber. Some of his LBM dealers are among the earliest FSC-certified lumberyards.
“The dealers are in the business of trying to avoid conflict and sell products,” Dunham said. “But they’re choosing based on market demand.”
ForestEthics picketed the LACN’s annual convention in 2007; their target that year was Sierra Pacific Industries, a lumber producer based in Redding, Calif. After speaking with the protestors, Dunham said he realized the gulf between both sides.
“They don’t see trees as a crop, something to be harvested and replanted,” Dunham said. Meanwhile, his members are knowledgeable about SFI and FSC’s forest management practices. “They know that nobody who harvests trees leaves the forest a mess anymore,” he said.
HIRI Conference tunes into “That ‘90s Show”
Arlington, Va. — At last year’s Home Improvement Research Institute (HIRI) Spring Conference, the assembled researchers, guests and partners — all thirsty for good news — were told by Morgan Stanley analyst Ian Sugarman that the modest, pre-bubble year of 1999 is the “new normal.”
Fast-forward to this year’s event, held here at the Doubletree Crystal City, and a very similar group of attendees were told to brace for even more simulated time travel — this time to 1996.
“The theme is, we’re going back to the mid-1990s, 1996, in terms of consumer activity, housing market and mortgage lending,” said Michael Fratantoni, VP research and economics for the Mortgage Banking Association and the leadoff speaker of HIRI’s daylong series of presentations.
Things could be worse than 1996. Single-family starts — that’s just single-family— finished the year at 1.160 million, up slightly from 1.076 million in 1995. To be clear, today’s absolute numbers have no resemblance to the mid-’90s, but the growth rate should look familiar.
The MBA is forecasting a 1.7% housing start increase in 2011 to 595,000 — and a more significant leap to 850,000 starts in 2012.
Also reminiscent of the ’90s, home-ownership was hovering in the 65%-range, which will become more familiar in 2011 as we see a shift from owner-occupied housing to renter-occupied housing, Fratantoni said.
The series of seminars carried the theme “Understanding Today’s Home Improvement Industry” and kicked off with a detailed examination of some unpleasant and lingering macroeconomic trends. Other charts presented by the day’s seven presenters picked up where last year’s conference left off, by establishing a “the worst-is-behind-us” view of the home improvement industry.
“I think the main message we heard is the market is improving,” said Fred Miller, managing director of HIRI, a nonprofit organization whose members share the cost of industry research. “And it’s often the smaller projects or the spontaneous emergency projects that are helping to boost home improvement spending.”
Another theme of the diverse collection of presentations is that the national picture is obscured by regional variations. Color-coded maps revealed the hot and cold spots, with the sand states of California, Nevada and Florida generally lagging.
“Texas probably survived the economic downturn better than any other state,” said Jim Gillula, of IHS Global Insights.
To those who point to pent-up demand as a reason to launch optimistic housing starts forecasts, Fratantoni has another term to consider: “pent-up supply.” He defines this term vaguely as the number of houses that aren’t on the market currently, but will be when the homes’ owners see signs of buying activity and home price stabilization.
“There is pent-up demand, but there is also a lot of pent-up supply out there,” Fratantoni said.
Another balancing factor that gets little play is the number of demolitions. “There are about 300,000 demolitions per year,” he said, showing that housing is barely breaking even with household formations.
And what would a research conference be without mention of the researchers’ tool du jour, social media? Jim Longo, VP client development and marketing for iTracks, asked that question, and then addressed it. He described social media as a tool that’s here to stay and an effective method of identifying influencers. He added: “It’s important to understand how your brand is being viewed on Facebook and Twitter.”
The daylong HIRI event attracted about 70 research professionals — members as well as non-members — from a wide variety of home improvement companies. HIRI is a nonprofit organization that pools resources to provide quality industry research for members.
Simpson sales increase 7% in first quarter
Pleasanton, Calif.-based Simpson Manufacturing’s first-quarter net sales increased 7.0% to $132.5 million compared with the same quarter last year.
Net income declined 23.1% to $7.08 million, down from $9.20 million in the same three-month period of 2010.
The company said sales to contractor distributors, dealer distributors, lumber dealers and home centers increased in the quarter, despite economic conditions it described as "challenging." Sales of anchor products and shearwalls also increased over the same period.
In the first quarter of 2011, sales increased throughout most of North America and increased significantly in Europe, the company said. Sales increased in the United States with increases in California, the Midwestern, Southeastern and Northeastern regions as compared with the first quarter of 2010, partly offset by decreases in the Western region excluding California.
The company’s subsidiary Simpson Strong-Tie makes connectors and fastening systems, pre-fabricated shearwalls and related products.