Made in America, Sold in America
Lehman’s Hardware is a classic throw-back of a hardware store housed in an 1840s-era barn in Ohio’s Amish country. The 32,000-sq.-ft. Kidron, Ohio, store is closed on Sundays, in keeping with the local culture, but it hums with activity most days, selling products designed for simple living. In keeping with its Amish roots, the retailer specializes in non-electric products such as wood-burning stoves and oil lamps.
“If I show up at a baby shower with something from Lehman’s,” said Glenda Lehman Ervin, president of marketing and daughter of founder Jay Lehman, “I know there won’t be seven others like it from Target.”
And there’s a noticeable made-in-the-U.S.A. push in the aisles.
Lehman’s Hardware promotes domestically crafted products in such categories as toys, housewares, push mowers, wooden wheelbarrows, gardening tools and appliances. Lehman’s even has a “USA Made” area on its Website. “We offer USA-made items whenever possible,” reads the online overview.
Lehman Ervin said her customers are requesting American-made products, but that demand weighs against concern about pricing in a down economy.
“When you can go to a big box and buy a toy for $3, you have to show the consumer why he should purchase an Amish hand-crafted train for $50,” she said.
According to Ervin, interest in American-made products surged in 2007 after the Chinese toy and drywall incidents. But people became concerned about their jobs and the economy in 2008, making price the overriding factor. This year, customers are putting more thought into what they buy, and the price/value relationship is key.
“There are certain categories where people are going to be more concerned about price, but there are others where they’re looking for higher-quality, longer-lasting products, and that’s where American-made products will do better,” she said.
Lehman’s isn’t your typical retailer—but the interest in U.S.-made products seen here is also playing out in various degrees around the country.
Do it Best, the Fort Wayne, Ind.-based co-op, is stepping up its made-in-the-U.S.A. marketing co-op-wide, presenting six endcaps with about 50 American-made products at its October fall market in Indianapolis. There will also be a banner header and other marketing materials available to retailers looking to play up this angle in their stores. (see sidebar).
Ron Beal, CEO of Orgill, said his customers seem to be focused on quality and value, and he’s not noticing any backlash against imports as long as that equation works. “I’m not saying that there isn’t concern or a preference for [products] made in the U.S.A., but we haven’t picked up on any trends that indicate this is more or less important now than in the recent past,” he added.
On the LBM side of the business, products made in the U.S.A. is more of a “given,” according to Jeff Nobers, VP marketing and public relations for 84 Lumber. The company sources most of its lumber in the United States, “but try to find a tape measure that’s made in the U.S. and you might have trouble,” he said.
Nobers said his company bought about four containers of Chinese drywall when domestic product was in short supply about two-and-a-half years ago and has since had to correct some problems related to them. Now that the U.S. drywall supply is back up to speed, they began buying exclusively domestic again.
DOMESTICS ON DISPLAYLauren Wagner, Do it Best category management supervisor in the merchandising department, spoke to HCN about the co-op’s new made-in-the-U.S.A. promotion: six new merchandising endcap display ideas at the October market in the New Idea Room.
HCN: What are some of the products you are planning to use on those made-in-the-U.S.A. endcaps? What categories are more likely to be made in the U.S.A.?
Wagner: Some products planned for use include products from vendors such as 3M, Scotts, etc. Categories more likely to be made in the U.S.A. are chemicals (cleaners, insecticides, herbicides, fertilizers); sanding, paint and solvents; building materials (insulation, roofing); and plastics in general, though not always. Many of our rough electrical products are still made domestically.
HCN: Why have you decided to create this display? Has there been a big push from consumers, retailers, etc.?
Wagner: We created this display because our members wanted it. Some areas of the country are more focused on this than others, particularly areas such as Michigan, where many jobs have been lost to foreign manufacturing. The urban areas are generally not as concerned.
HCN: Has there been an emphasis on products made in the U.S.A. in advertising circulars
Wagner: Yes, there have been circulars since last year—beginning in June or July—and through this year that focus on the made-in-the-U.S.A. theme. Members have the option of adding those pages to their circulars. It might be a page or spread on specific products.
HCN: Do made-in-the-U.S.A. products tend to be more expensive?
Wagner: Somewhat more expensive, yes. Interestingly, during some recent line reviews, where a domestic vendor and an import vendor have gone head-to-head, we were not surprised to see the globally sourced product come in lower than the domestic. However, the gap is getting narrower. And some conversations have occurred between our merchandise managers and members where they ask, what is the value of made-in-the-U.S.A. products? Is it worth a 5%, 10%, 15% premium?
Some recent surveys seem to send mixed messages about how much Americans support domestically produced products. According to Yankelovich, a consumer research company, 83% of consumers say buying U.S.-produced goods is important to them, but only 37% of that group say they’re willing to pay more for them. BIGresearch, which puts out an American Pulse survey each month, said in June that more than half of American adults (57.2%) make a conscious effort to “Buy American.”
“It hits home when your neighbor doesn’t have a job and is being foreclosed on, and another local factory closes. Most economies to survive need manufacturing and technology,” said Ellen Ehrenkranz, executive VP communications and finance of Made in USA Certified, an organization devoted to authenticating American-made products.
FACTORIES COME, FACTORIES GOTwo familiar U.S. home channel companies made headlines in recent weeks with announcements affecting their domestic manufacturing.
Marysville, Ohio-based Scotts Miracle-Gro is adding capacity to its manufacturing plant at its headquarters, leading to the creation of 100 additional jobs, the company said. The expansion will allow the company to process a key ingredient of its Scotts EZ Seed lawn-patching product.
CEO Jim Hagedorn said the move partly reflects the company’s “commitment to being an important employer in central Ohio.”
From a business standpoint, the expansion will allow EZ seed to be distributed nationally in 2010, and in Europe in 2011. Scotts said the introduction of EZ Seed led to a 70% increase in consumer purchases of lawn-patching products.
Benton Harbor, Mich.-based Whirlpool announced that the production of top freezer refrigerators currently made in Evansville, Ind., will be transferred to one of its facilities in Mexico. The closure of the Indiana plant will eliminate about 1,100 full-time positions in mid-2010, the company said.
Al Holaday, VP North American Manufacturing Operations for Whirlpool, called it a “difficult but necessary decision.” The move was announced about a year in advance to soften the blow for affected employees, the company said.
Although much U.S. manufacturing went offshore in the latter part of the 20th century, there are still an estimated 350,000 U.S. companies that produce domestically. Many of these are small, family run businesses, and their products do tend to be more expensive than their imported counterparts.
Rick Swanson, lawn and garden and sporting goods buyer for Nyberg’s Ace Hardware in Sioux Falls, S.D., said he notices more companies are playing up the made-in-the-U.S.A. angle in the past couple of years. (Ace Hardware’s corporate office declined to comment for this story.)
“The thing that’s tough to gauge is how significant it is for the consumer,” Swanson said. “I think you do hear people being a little bit more vocal about wanting to buy American-made, but in the majority of cases, if the quality appears to be there, the customer will buy by price.”