Is it possible to be a sustainable manufacturer and stay ahead in today’s construction industry? Here’s how one lumber company’s zero waste business practices are helping them drive more profit.
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Ted Dergousoff is the CEO of NewLife Forest Restoration, an Arizona lumber company committed to protecting our national forests. He shares how NewLife is revitalizing the construction industry with better building practices and high-quality wood products.
Breathing New Life Into the Lumber Industry
Arizona’s leading sustainable wood products manufacturer, NewLife Forest Products, is the largest high-capacity sawmill in the state. NewLife also works with the United States Forest Service to restore and protect the natural resource.
Ted Dergousoff is CEO and has been with NewLife for two years now. “I'm a career lumber guy, and over the years have developed expertise in extracting higher value out of all types of different logs and different species,” explains Ted. “And this opportunity is particularly exciting because it primarily has to do with restoring the nation's forest, Ponderosa pine forest in Northern Arizona, to the state they once were.”
The U.S. Forest Service works with the team at NewLife to tend to the forest. “They give us a parcel of forest that needs us to go in and clean out the undergrowth and remove the small trees or to space the forest accordingly,” says Ted.
NewLife also offers a range of lumber and engineered wood products and recently started building another sawmill in the state to expand production. NewLife has several operations around the state. “We've got an engineered wood plant, which takes the boards, Ponderosa Pine boards and makes higher-end products, including siding and trim and fascia products,” says Ted.
“Our products go nationwide. We try to focus on working with stocking distributors and those that'll get our product out into the retail lumber yards,” he explains.
The Story of Sustainability
Sometimes sustainability can come at the expense of a company’s profit or growth. So how has NewLife stayed successful?
“Well, the nature of our business, the essence of our business, is forest restoration,” explains Ted, “and over the last 10 or so years, we've developed an expertise on how to go in and do the work in the forest.”
Part of that work includes zero-waste processes that have the least amount of environmental impact possible. “All of our products, right from the forest through to the milling process, all of the byproducts have homes. In the forests, we're able to chip products, and those chips, they go for playground material for landscaping,” explains Ted. “And the next level down of residual products, the pine needles and whatnot, they get ground. And those form a fuel for power generation.”
“Being able to take the thinnings from the national forests and convert them into lumber products, into appearance grade products, sidings, trim boards, fascia products, tongue and groove paneling: Those are all specialty products because they require a higher level of attention to detail,” he says.
NewLife has brought innovation to the lumber industry, upgrading these byproducts for consumer use. And they’re not just byproducts from its own mills, but from other operators in the area, which expands NewLife’s sustainable efforts state-wide.
“Now, we strongly feel that our product line, which comes from the restoration efforts, has a compelling story to tell,” says Ted. “Consumers all have a choice. And we're confident that they'll choose a product that's made out of the efforts in making our forests better and less susceptible to the fires that we've seen over the last several years.”
How To Sell Sustainability
It’s this story of partnership and sustainability that makes NewLife such an important force in the lumber industry today. NewLife is working in forests that are susceptible to wildfires that have damaged forests in the regions, and consumers want to see that their purchases can help protect these natural resources.
“We've had very, very good success on feedback from the consumers saying that, given all the options out there, that they really want to embrace the product that comes from making our forests more healthy,” says Ted.
The story of sustainability isn’t always compelling to customers on its own, so NewLife has to consider how else to stay competitive during an intense time in the construction industry. “Well, first and foremost, we have to be competitive in the marketplace. And we're priced competitively, certainly, with our competitors,” says Ted.
It helps that NewLife is able to provide products to the marketplace quickly. “The very interesting thing about our engineered wood products plant, where we finger joint, edge glue and surface and paint, is that ... consider it 3D printing with little pieces of wood. Where we're able to turn over our orders considerably quicker than most other manufacturers,” Ted explains.
NewLife works with distributors, which helps to expand its operations and offerings for consumers. “And if you're able to bring in an order, turn it around and get it out the door into the hands of our distributors, who then, in turn, take it to the retail lumber yards, that efficiency, the link from manufacturing to the end-user, shortens in time considerably,” says Ted.
“So not only do we have a compelling story on sustainability, on making our forests healthier, we're doing it in a way that we can meet the needs of our customers, which are largely the distributors, and make us their preferred choice, their preferred supplier,” says Ted.
“But there's no substitute to going and meeting the person you're doing business with. Providing them the assurance and demonstrating the fact that you can deliver on time, on target, on quality, to meet everybody's expectations,” he explains.
Looking Ahead at Lumber and Housing
The lumber industry saw some of its highest prices in the last year or so — certainly none of us thought we’d see lumber prices on the front page of the news. With so many unexpected turns in construction, we asked Ted to weigh in on what the futures of lumber and the housing industry might hold.
“Well, all the information that we have available, the massive run-up in prices and the subsequent fall, was unique. It's not something that I think anybody's planning on, or I don't think it's anything that too many people are expecting again,” he says.
The drastic changes in prices and availability shifted consumer attitudes and behaviors in the construction market last year. “The high prices invite competition from other materials other than wood,” explains Ted.
Many construction professionals tried new products and brands last year, in fact, because their preferred products weren’t available. Recent surveys show that 32% of contractors, architects and builders used something new on a project last year (and liked that product better).
“And while we compete daily with our friends who are also in the lumber industry, it's important that those are our competitors and that we're not inviting competition from other building materials,” Ted explains.
Even with the high prices, the demand for new housing projects has been strong, and Ted expects that to continue. “Housing starts will continue to be strong. We're not meeting or fulfilling the household formation requirements in North America,” he says.
Want Even More Insight?
Wood is still one of the most sustainable, versatile building materials out there, “worth celebrating and supporting, but it must always and everywhere go hand-in-hand with a renewed emphasis on climate-smart forestry,” writes David Roberts for Vox.
Innovating our production and manufacturing practices is key to the future of the industry, especially when it comes to lumber. “There's always opportunities for these types of sustainability products and manufacturing processes,” says Ted.
You can learn more about NewLife Forest Products and how they’re making an impact on the lumber industry today.
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