CLEVELAND, OH — December 10, 2014 — Two new editorial staffers have joined Golfdom magazine, dedicated to seeing the magazine continue its successful ways in 2015 and beyond.
Ed Hiscock, former editor-in-chief of Golf Course Management (GCM) magazine, has signed on to be Golfdom’s editor-at-large.
“Ed is one of the few people I consider a mentor. He hired me at GCSAA when I was a kid coming out of college, so to add his experience and insight to Golfdom some 15 years later is a thrill for me,” says Seth Jones, Golfdom’s editor-in-chief, who worked with Hiscock from 1999 to 2010.
Hiscock worked for 16 years covering the golf course management and turf industry, first for Grounds Management magazine and then for GCM. He worked for the Golf Course Superintendents Association of America serving as GCM’s managing editor, editor and editor-in-chief. He was on the association’s management team, a position in which he helped plan the annual Golf Industry Show. He eventually became GCSAA’s director of member communications, traveling nationally and internationally to cover an industry for which he is passionate.
“I spent about a quarter of my life writing about and advocating for golf course superintendents,” Hiscock says. “I’m happy and excited to reconnect with so many people in an industry I am proud to serve.”
The magazine also adds recent Ohio State University grad Grant Gannon as associate editor. “Grant was a successful sportswriter at one of the nation’s largest schools, and came highly recommended to us,” Jones says. “He is a perfect fit for our team and our industry.”
Hiscock and Gannon will represent the magazine across all platforms: print, digital media and live events. Readers can expect to see both editors at events such as the Golf Industry Show, GIE+Expo and other in-the-field reporting opportunities.
“We’re making these additions in the same year that we won an industry-commanding 21 TOCA Awards,” says Golfdom publisher Pat Roberts. “Clearly, we’re not going to rest on our laurels. We’re fully committed to continuously strengthening the high level of editorial quality that readers have come to expect of Golfdom. Adding Ed and Grant is another win for our magazine, one that readers and advertisers alike can begin appreciating immediately.”
Hiscock reintroduces himself to the industry via his column he penned for the December issue, available tomorrow. He will work remotely from his home near Table Rock Lake in Missouri. He can be reached via email at ehiscock@northcoastmedia.net. Gannon will be working from North Coast Media’s headquarters in Cleveland, and can be contacted at 216-363-7928 or ggannon@northcoastmedia.net.
A new era of propane production has arrived, but will U.S. retailers adapt their businesses or allow market forces to dictate their future?
Shale gas production is at an all-time high, global demand for the U.S. product is feverish, and markets are developing that can strengthen our footing in the world energy sector for years to come.
A golden age for propane production is under way in the United States, and based solely on the sheer volume being produced domestically, specifically from natural gas plants, an argument can be made that now should also be a golden age for those delivering propane.
It’s not, though. Yes, propane production is up. But consumption is down here in the U.S., which is a net exporter of propane for the first time since the U.S. Energy Information Administration (EIA) began tracking exports in 1973.
More domestically produced propane is available now than at any point in U.S. history, yet gallon consumption in the residential and commercial markets – the backbone of the U.S. industry – has trended downward. Markets such as autogas are emerging to potentially make up for lost gallons, but the gains being made in secondary markets aren’t yet making up for losses in traditional markets.
So what gives?
“If you’re a retailer in the Midwest, the Pacific Northwest or the Gulf Coast and all of these market forces are going on around you, you have to be wondering what is going on with your business,” says Bob Myers, an industry consultant who spent 25 years with Petrolane, in a phone interview. “Unless you do something about it, market forces are going to continue to dictate your business.”
But are U.S. retailers willing to adapt amid changing market dynamics? Or is the status quo a sufficient retailer goal for the foreseeable future? These are questions we explored this fall with a number of propane retailers, who took our annual State of the Industry survey and offered feedback about their businesses and the impact of the market dynamics around them.
Signs of growth and decline
Although the market dynamics are changing rapidly, retailers tell us their propane delivery businesses have been relatively successful over the last 12 months. In fact, the retailers we surveyed rated their success this year, on average, as a 7.97 on a scale of 1 to 10.
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Regionally, Midwest retailers rated their 2014 success the highest (8.23) on a 1-to-10 scale, even despite the supply and infrastructure issues faced there last winter. New England retailers (7.18) rated their success the lowest among the seven U.S. regions we surveyed (see Figure 1).
These success figures simply reflect how propane retailers say they’re doing. What are propane retailers doing to grow their businesses and, in turn, the industry? We asked retailers a few growth-related questions, including how many employees they’ve added, how many bobtails they’ve purchased and how many tanks they’ve set in the last 12 months.
About one-third of retailers tell us they have the same number of employees today as they did a year ago, and only a handful of retailers say they have fewer employees today than they did one year ago. More than half of retailers say they’ve added between one and five employees in that span, and nearly 10 percent report hiring six or more people in 2014.
Retailers’ hiring plans for 2015 are similar to the plans they made for this year. About 43 percent plan to have the same number of employees by the end of next year as they do now, and more than half plan to add between one and five employees to their operations.
Still, a number of propane retailers tell us that hiring the right people for available jobs is a challenge. For example, a few retailers say they’re struggling to find capable drivers. But the struggle hasn’t stopped a significant number of retailers from adding bobtails.
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According to our data, 38 percent of retailers added between one and five bobtails this year and 39 percent plan to add between one and five bobtails in 2015.
Another measuring stick of growth is tank setting (see Figure 6). The retailers we surveyed set a varying number of tanks in the last 12 months. Twenty-five percent say they set between 100 and 199 tanks; 21 percent set between 50 and 99 tanks; and 22 percent set between 10 and 49 tanks.
Some retailers set even more tanks this year. Nearly one in five set between 200 and 499 tanks, and about 7 percent set at least 500 tanks.
Others were not as successful. Three percent didn’t set a single tank in 2014. A handful of others set fewer than 10 this year.
Yet another growth indicator is whether or not retailers expanded the geographic territory in which they deliver propane. According to our data, slightly more than half of all retailers expanded their sales territories.
But how did retailers expand? Slightly more than half say they expanded their businesses into new propane markets, while 13 percent of retailers expanded through energy conversions.
The primary way retailers say they expanded was to take their propane competitors’ customers. Sixty-eight percent of retailers expanded that way. Sixteen percent grew their businesses through acquisitions.
These figures reflect growth for individual businesses, but are they indicative of true industry growth?
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“There’s a lack of new housing on propane,” says a Midwest farm co-op representative in our survey. “We were in continuous growth mode for years. That has slowed, so marketers are fighting each other for the leftovers, while natural gas and electricity are killing us.”
Competitive threats
The continued rise of competitive energies such as natural gas and electricity is troubling for the industry. A greater concern retailers expressed to us through our survey, though, is their own propane security.
What’s particularly troubling to them is that propane is plentiful within the United States, yet they feel they’re struggling to secure it for their own delivery needs.
“We have become a greedy industry,” says a Midwest independent retailer in our survey. “U.S. consumers must be first before shipping outside of the U.S. Our supply and demand has gotten out of hand. I hesitate to say this, but our industry needs to be regulated by Congress.”
A number of retailers have similar feelings about exports. In fact, about two-thirds of retailers tell us they’re in favor of propane exports, but only when domestic supply is sufficient. Fourteen percent say they are not at all in favor of exporting propane, while about one in five retailers say they are totally in favor of exports and the notion of free-market enterprise.
In addition, our survey results show that the type of operation – MLP, independent retailer or farm co-op – doesn’t make a difference in how retailers feel about propane exports. The majority wants to secure their own propane first – even if that doesn’t necessarily make business sense for those producing propane.
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“Quit exporting fuel to other countries, creating imaginary shortages and driving the cost up on our fuel,” says a Rocky Mountain independent retailer in our survey.
Are propane exports a real problem, though? Myers begs to differ.
“This industry really shouldn’t care how much [companies] export,” Myers says. “What we should care about is getting enough storage. When the storage is full going into the winter, let the exports take place. We’re moaning about the fact that we don’t want these exports, but then you have to ask where are the strategic reserves that you really need? Adequate storage ensures supply for the customers, and it also takes volatility out of the pricing – two essentials needed to grow an autogas market.”
U.S. propane reserves don’t have to be monumental in size, Myers adds. They simply need to be sufficient to get the U.S. industry through winters and help to eliminate peaks in demand.
“Exports are going to happen,” Myers says. “There’s a market for them. There’s billions of dollars being spent to get them out of here, and people are making long-term contracts predicated on that.”
Export markets aren’t the only ones affecting U.S. supply. Petrochemical companies in the United States and internationally are buying propane to convert it into propylene, a common building block used in the manufacture of plastics and other products, as part of a dehydrogenation process. The good news for propane retailers is that petrochemical companies in general are demanding less propane (and more ethane) this year than in recent years, according to industry consulting firm Cost Management Solutions.
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Still, the combination of petrochemical demand and the increasing demand for U.S. propane around the world raises a question about U.S. propane retailers, whose businesses are more seasonally based: If petrochemical companies and international customers prove to be more viable outlets for propane, where does that leave retailers in the supply equation? And what prices will retailers have to pay?
Unless retailers present producers with more year-round business, securing propane may become an even greater challenge.
“The producers sell most of their product to the petrochemical market,” Myers says. “Retailers want to sign contracts that say they’ll take it when they need it and if the price is right. But producers have the export market now, too. If retailers don’t like the price, producers are going to look to the petchems. If the petchems don’t like it, there are people around the world who may take it.”
Planning for the future
So how do propane retailers secure the future of their businesses? Unfortunately for them, no silver bullet exists to solve the industry’s problems. But a couple of obvious starts are to develop markets that can grow gallons and build infrastructure that can move the nation’s surplus supply to areas where it’s needed.
As mentioned previously, more than half of U.S. retailers say they grew their business within the last year by expanding into new markets. The motor fuels market is one that offers tremendous potential for growth, but how many retailers are truly taking action on autogas?
“Autogas could save us,” says an independent Midwest retailer, in our survey.
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Another Midwest retailer – this one a farm co-op representative – agrees about the need for new propane markets.
“When I first got into this industry, most houses in the country were using propane or heating oil for heat, and the average customer used around 1,200 gallons of propane per year,” says the Midwest farm co-op rep. “Since then, not only have heat pumps cut into our base tremendously, but because of improvements in appliances and building practices, our average customer now only uses about 700 gallons per year. We are trying to not only survive on fewer customers, but the ones we do have are using almost half as much as before.”
In addition, a number of existing propane customers are coming off a winter in which their prices spiked. Retailers say pricing concerns, as well as their ability to effectively deliver during the winter months, may drive customers to other forms of energy.
In some cases, customers have already taken action.
“If you take someone who’s building a new home, they’re going to decide how they’re going to heat it,” says Keith Volker, energy division manager at Midwest Farmers Cooperative in Elmwood, Neb., in a phone interview. “If they don’t have access to natural gas, their choices are electric or propane. At the high prices we had last winter, that may sway the new homeowner to go electric.”
The heating market is critical to just about every propane retailer, and maintaining, if not developing, market share versus other energy forms in that area is a must. Infrastructure development, albeit through terminals, pipelines, rail facilities, regional storage caverns or other forms, is also a must for the U.S. market to secure its place in the future.
Storage and summer fill
Last winter served as a reminder to a number of retailers about the importance of their own storage. Some retailers made bold moves, adding bulk storage to better secure loads for this winter. But the majority of retailers we surveyed did not take action on the storage front.
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In fact, 70 percent of retailers did nothing to address their storage infrastructure. Thirty percent did, however, add bulk storage. And one in five retailers added at least 30,000 gallons of bulk storage.
“We added more storage and we tried to increase awareness to our customers about the importance of contracting and summer-fill programs,” says a Midwest farm co-op representative.
This retailer wasn’t the only one to do more with a summer-fill program this past year. Two of every three retailers tell us they increased their summer-fill program over last year. In addition, retailers were active this year switching will-call customers to keep-full contracts following last winter.
According to our data, half of all retailers switched at least 5 percent of their will-call customers to keep-full contracts. In addition, 36 percent of all retailers switched at least 10 percent of will calls to keep fulls. Their action should increase their supply security this winter and for winters to come.
“Not just this year but every year we work at getting everyone we can on keep-full [contracts],” says Jeff Manthei, energy marketing and sales manager at West Central FS Inc., in a phone interview. “We manage their inventory; they don’t manage us with a phone call. It’s very ineffective and inefficient if we run at the ring of a phone.”
Contracts aren’t the only things changing in the propane industry. Change is all around us, from the elimination of key pipelines and the rise of electricity to the emergence of autogas and the increase in shale gas production. In many cases, there’s no avoiding this change. But are you willing to embrace it and adapt your businesses?
“I’ve been in the industry 18 years, and I’ve never seen anything like this last year as far as getting ready for a winter,” says Joe Stariha, co-president and CFO of Minnesota-based Como Oil & Propane. “I don’t think we ever put this much work into getting ready for a winter.”
The LM Industry Pulse report reveals 2014 was a win—with strong profits and an average growth rate of 17 percent.
The word is, clients can’t get landscape companies to return phone calls or show up to give estimates. To Philip Germann, owner of GreenLawn Specialists in Lewis Center, Ohio, that’s good news.
“In general, demand is stronger than supply in our area,” he says. His assessment fits the findings of the 2014 LM Industry Pulse research. The study reveals landscape and lawn care professionals are satisfied with their businesses in 2014 and feel positive about their prospects for 2015.
In fact, 80 percent of landscape professionals called the state of the market healthy and nearly nine out of 10 have an optimistic outlook for 2015.
“Just about every landscaper I’ve talked to is having his best year for profits and revenue since the recession,” Germann says.
According to research firm IBISWorld, the landscaping services industry is a $73 billion market with a 3.4 percent annual growth rate since 2009. Despite challenges over the last half decade, the research firm forecasts a prosperous next five years, due to a rapid construction sector recovery and steady disposable income growth.
To that point, the housing market continues its gradual march back to normal, according to the National Association of Home Builders Chief Economist David Crowe. In an October report, he attributes the continued housing market growth to historically low mortgage interest rates, steady job gains and significant pent up demand.
Lynn Tootle also has seen an uptick this year. He’s general manager of Gro-Masters, the Savannah, Ga.-based turf and ornamental care division of TideWater Landscape Management.
“In my market, it’s finally heading in a positive direction after the difficulties following the recession,” he says. “In 2011 we saw the bottom of the market; 2012 started in a good direction, but not aggressively; 2013 built on it; and this year we’ve seen a lot of positive signs—total revenue, profitability and new jobs coming down the pike.”
Gro-Masters will end 2014 with a 10 percent increase over 2013.
Mark Todd, owner of Todd Quality Landscape Services in Spring City, Pa., agrees. “More people are pulling the trigger on jobs I quoted a year ago, saying, ‘We’re ready to go. How soon can you do it?’” he says. Todd senses people are more comfortable with the economy. His full-service, mostly residential company is on track to do $550,000 in 2014, up about 30 percent over last year.
“Before, there was speculation about layoffs, and now (customers are) taking a deep breath and they’re going to be OK,” Todd says. “They’re happy with their home values and confident they’re not going to change. They’re looking to invest in their homes.”
On the commercial side, property managers are ready to reinvest, too, contractors report.
“Over the past four years they’ve tightened their budgets and the properties have suffered for it,” says Craig McBryde, owner of McBryde Landscape & Maintenance Solutions/Green Impact in Greenville, S.C. The primarily commercial maintenance company expects to do $1.5 million in 2014 revenue with 20 percent growth next year. “They (property managers) are trying to put money back into curb appeal.”
Some markets are soft, though. For example, consumers are uncertain in Vermont, says Aaron Smith, general manager for S&D Landscapes in Essex, Vt. He points to the state’s attempt to pass its own single-payer health care law and the buyout of a major employer in his area.
“We’ve had a number of projects get through with either a lot of negotiation to get it to come to fruition or (the customer) saying ‘We’ll wait until next year,’” he says. “Everybody’s got this wait-and-see attitude.”
Still, S&D will end 2014 with $450,000-plus in annual revenue—up from $427,000 in 2013. Its sights are set on $600,000 for 2015.
“We’ve had a good year, but it’s not how I thought we’d get there,” he says. “I was expecting install to be our shining star, but we’ve done less install revenue than last year, although we’ve done quite a bit more overall revenue than last year.”
Some trouble
Although green industry professionals are satisfied and are growing overall, challenges exist. At the top of the list is finding qualified workers.
Federal unemployment has declined gradually since its peak in 2009, eliminating some of the labor pool that migrated to the landscape and lawn care sectors during the recession and driving up labor costs.
“Our biggest challenge is the labor market,” Germann says. “It’s getting more expensive for a lower quality worker. We can’t get the quality we could even a couple of years ago.”
The rising costs of insurance are another concern.
Health insurance, for example, is “through the roof,” Tootle says. “We offer a small group plan through the company, but it’s extremely expensive, even with us paying a substantial portion for the employees.” Luckily, workers’ comp and liability insurance are staying fairly steady, although Tootle says the company invests a lot of time and effort into safety programs to ensure the rates don’t budge.
Mother Nature’s impact
Weather always has an impact on the landscape business, but overall Mother Nature didn’t deliver too much to complain about in 2014.
“It’s been a great weather year,” Smith says. “It was a great summer with consistent rainfall. We just got a little dry in the fall, so it made some of our aerating and overseeding not quite as effective as it could have been, but the grass was kept green by the dew.”
In Pennsylvania, Todd also was content with the weather this year.
“In our area, when July hits we’ll typically have three to four weeks where we don’t cut grass,” he says. “We didn’t have that. We didn’t have as many rainouts this year as normal. There were no issues with begging people to water plant installations. We didn’t have too many days of extreme heat. It made things a lot less stressful this year.”
Despite an active winter of 2013-2014 for operators who do snow removal, precipitation in 2014 was slightly above average through October at 26.04 inches—0.68 inches above the 20th century average, according to the National Oceanic & Atmospheric Administration (NOAA). Although, above-average precipitation dominated many northern states, where Wisconsin and Michigan each had one of their top 10 wet year-to-date periods through October. Below-average precipitation occurred in parts of the West and Southern Plains.
Average temperatures were 55.4 F, 0.5 F above average, through October. The West continued to be much warmer than average, where eight states had a top 10 warm year-to-date. California was record warm for January through October, with a temperature 4.2 F above its 20th century average. It’s likely 2014 will be California’s warmest year on record, NOAA reports. States in the Mississippi River Valley continued to be much below average. No state was record cold.
CLEVELAND, OH — December 3, 2014 — Pit & Quarry, the aggregates industry’s leading publication since 1916, and Portable Plants & Equipment (PP&E), its sister publication written for mobile operators across multiple industries, are pleased to announce that Chloe Kalin has joined their teams as marketing and sales manager for their online buyers’ guides.
Kalin brings with her 10 years of experience with sales and customer service in the retail and hospitality industries, with the last five years in a management role.
“We are excited to add Chloe to our team. I am confident she will be a great asset to our customers as she educates them on how to best take advantage of exposure opportunities offered by the industry’s most complete online directories,” said Publisher Rob Fulop. “We’ve made significant investments into these cutting-edge online reference tools.”
Each September, Pit & Quarry publishes its annual print directory of aggregates industry equipment suppliers and distributors. In 2013, a robust and enhanced online directory debuted in 2013 and is available at www.pitandquarrybuyersguide.com. PP&E also publishes in September a print directory of suppliers to the portable plants industry and its online directory can be accessed at www.ppebuyersguide.com.
To update or upgrade your online buyers’ guide listings, please contact Kalin at 216-363-7929 or ckalin@northcoastmedia.net.
File sharing (peer to peer, or P2P) is a part of life. Because of the size of many video files and even some high-definition photos, using email for these large files is challenging. Many email servers have file size limitations that send most of us to the Internet for help sharing files, but how do we know our files are secure?
Secure file sharing isn’t a new concept. There are dozens of cloud-based services that have helped companies and individuals share files for years. I can remember using File Transfer Protocol (FTP) programs many years ago to transfer a large PowerPoint file. This was a cumbersome and technically challenging process. Unfortunately, the Internet has become an increasingly dangerous place to navigate for those who haven’t kept up on security.
There are hundreds of file-sharing software companies online, but how does the average layman know which ones are safe and reliable? I suppose before we get to safety, some might be asking, why would I need to send files through one of these secure sites? The No. 1 reason for today’s file sharing is entertainment. Music and video files are the most shared files on the Internet, but that doesn’t mean if you aren’t interested in sharing music and videos, you won’t need to use a file-sharing service.
The files we share with our colleagues tend to be video inspections or large photo files. Because most email servers have limited capacity, those who need to share larger files are forced to use file-share service providers to ensure files are securely and efficiently shared.
Not All File-Sharing Programs are Alike
Be cautious when choosing a provider because some of the file-sharing sites are just that — a program you load onto a PC that then permits others to go in and grab files from that same PC. Obviously, this is a dangerous tool because if you haven’t set your default security settings correctly, a thief could grab non-target information.
Because of the risks of wide-open Internet file sharing, I recommend using file-sharing programs with controlled access, which means you can set up temporary or long-term groups that have access to the cloud-managed files. Group members are given an access code, and as changes are made to shared files, the group is advised of an updated copy present in the shared controlled-access cloud.
I’m not qualified to say which programs are the best at achieving this kind of security and convenience, but some of the industry experts recommend the following programs for business types of applications: BoxNet, LiveMesh, Syncplicity and Dropbox are all programs often used by businesses, and they meet all the security and privacy requirements that business owners demand. I’ve used Dropbox for years without any security problems.
No matter the file-sharing needs it’s important to spend some time understanding the risks and benefits of file sharing before diving into these applications. Security and protection of personal information should always be your first priority.
CLEVELAND, OH — November 10, 2014 — Pit & Quarry, the aggregates industry’s market-leading publication since 1916, is pleased to announce that George Reddin has joined the editorial team as a contributing editor.
Reddin is a managing director with FMI Capital Advisors, Inc., FMI Corporation’s investment banking subsidiary. He specializes in mergers and acquisitions and financial advisory services. Reddin will cover these areas quarterly as a contributing editor to the magazine.
“We feel very fortunate to include George in the pages of Pit & Quarry magazine,” says Rob Fulop, publisher of Pit & Quarry. “George has been a well-respected authority in the construction and aggregates industries for years. His presentations and participation at our annual roundtable and conference are always one of the highlights of the event.”
Reddin works regularly with companies in the construction materials industry (aggregate, hot-mix asphalt, ready-mix concrete and concrete product producers), as well as contractors involved in road building construction. He is a member of the National Asphalt Pavement Association, National Ready Mixed Concrete Association, National Stone, Sand & Gravel Association and the National Precast Concrete Association.
“Over the past four years they’ve tightened their budgets and the properties have suffered for it,” says Craig McBryde, owner of McBryde Landscape & Maintenance Solutions/Green Impact in Greenville, S.C. The primarily commercial maintenance company expects to do $1.5 million in 2014 revenue with 20 percent growth next year. “They (property managers) are trying to put money back into curb appeal.”
