I always enjoy collaborating with our weather buddies at Thermodynamic Solutions because, without fail, they always provide us not only with great insights about winter weather trends, but they do so in an easy to understand fashion. Recently, Co-Owner Beth Carpenter reached out about how the weather industry is closing the book on an old set of bench-marking numbers in lieu of more recent data, and what all of this has to say about snowfall totals.
Since Beth is the weather expert, I’ll let her explain:
“As a consulting meteorologist, I frequently get asked to provide annual snowfall “averages” or “normal” -- we’ll use these terms interchangeably here -- for a location to help snow removal companies build accurate contracts. We also use these averages to forecast general ideas for the winter season For example, saying 'above normal snowfall is expected this winter.' I’ve previously discussed what these normals are and how they’re used in weather forecasting. You can read that HERE.
“As I discussed in that blog post, the climate normal is the average condition, sum, etc of a 30-year period. The current climate period that we use in meteorology is 1981-2010. However, after next winter, we’ll be switching to a new climate period that will be 1991-2020. I wanted to examine how the snowfall “normal” will change for various cities across the snow belt. So, I’ve compiled the preliminary -- though incomplete because its missing this coming winter -- data into the following chart.
“The results were very mixed. Locations such as Indianapolis won’t see a significant change, with only a decrease in annual snowfall of roughly a half-inch.
“However, Cleveland will see an over 4-inch decrease in average annual snowfall, which is much more significant. Bismarck and Minneapolis will see decreases in their average annual snowfall, as well. “Opposite of those locations, Boston will see a significant increase in average annual snowfall of more than 4 inches, with Green Bay and Glasgow seeing similar increases.
“Anecdotally, last year I researched the commonly held notion in the snow and ice management industry of the “Three Year Snow Cycle.” This suggests that only one in every three years actually ends up with an “average” or “normal” snowfall. For a refresher on this, you can read that article HERE.
“Suffice it to say, the new normals shouldn’t change the notion of the 3-year winter weather cycle. I would still expect that over a 9-year period, most locations will see three years at, above, and below the new normal.”
Mike Zawacki is editor of Snow Magazine.
2020 Executive Summit Goes Virtual
ASCA converts its annual event into two days of education and networking in a convenient digital format. Registration is now open.
Due to the challenges and obstacles presented by the COVID-19 pandemic, the Accredited Snow Contractors Association (ASCA) is taking its 2020 ASCA Executive Summit to the digital realm.
“We’ve established the annual Executive Summit as the leading educational and networking conference serving business leaders in the snow and ice management industry,” says ASCA Executive Director Kevin Gilbride. “The pandemic’s persistence created obstacles for snow contractors to attend and enjoy this year’s event. Therefore, we made the decision to continue to serve the industry by providing this high-end education, and the digital venue allows us to bring these great speakers and online networking event to a wider, more inclusive industry group of snow professionals.”
2020 Executive Summit Virtual takes place online Sept. 17-18 and features educational seminars presented by thought leaders from the professional management and snow and ice industries. Conference attendees have the opportunity to earn continuing education credit that can be applied toward the renewal of their ASCA-C certification.
In addition to an impressive educational program, the ASCA is planning a unique networking event to connect attendees with one another and encourage new professional connections with colleagues from throughout the industry.
“Networking is a hallmark of Executive Summit,” Gilbride says. “The digital environment allows us to continue this tradition through our Birds of a Feather networking session, which gives attendees the opportunity to meet over a variety of industry-related topics in an online environment.”
The global pandemic has impacted every business operation, and as such, business leaders have had to find new ways to work around and through these challenges, Gilbride says. Finding a way to bring the 2020 Executive Summit experience to the professional snow and ice management community is one of those challenges the ASCA has had to troubleshoot.
“Is this the most ideal scenario? Certainly not,” Gilbride says. “We would all like to be together, face-to-face, at a resort destination, like we have for more than a decade. However, the pandemic has taught us all that we need to not only be quick on our feet to adapt to new challenges, but also that we can’t give up or relent in the face of opposition. We’re pursuing Executive Summit – even in a digital format – as a way to defy the pandemic and to retain some semblance of normalcy. We can do many things online that we’ve done in year’s past in person to make the very best out of a valuable and professionally enriching two-day opportunity.”
This week I attended Buyers Products official groundbreaking and golden shovel ceremony kicking off the ongoing expansion of its distribution center and corporate HQ. The expansion includes 280,000 square feet of 67-foot-high, brand new, state-of-the-art warehouse space with 20 additional docks at its Mentor, Ohio, location. Simultaneously Buyers will add another 17,500 square feet of office space and expand its employee parking
I had an opportunity to corner Chief Commercial Officer Dave Zelis for a couple of questions about the state of the industry heading into Winter 2020-21 and what snow pros could expect with regard to new product development.
Snow contractors see equipment suppliers reinvesting in themselves as a reflection of healthy activity in the industry. However, contractors also want to know what this type of investment will mean for them. Dave Zelis: This facility helps us address two main objectives. One, it provides space for inventory. When you’re talking equipment for snow and ice removal, those are big items and not shoe box-sized. So for our long-term future we’re going to continue pushing forward our brand preference, and in order to do that you need products on the shelf. When [a snow contractor] wants a snowplow they typically want it as soon as possible and not wait three months for it. That’s true for our distributors, as well. To have the product available when it’s needed you have to have inventory.
Second is the technology going into this addition. Right now, we can ship and LTL order within 24 hours, which is pretty strong for most manufacturers. This [new facility] will allow us to ship product even faster. From the moment we receive the order to the moment that particular order goes out the door, we’re looking at same day, if not a few hours, of having that order shipped. It’s the Amazon Effect, and we’re trying to mimic that for what we’re doing in the industry.
We’ve been struggling to persevere through this global pandemic and two disappointing winters. How these impacted Buyer’s and SnowDogg’s supply chain? As far a market is concerned, suppliers, contractors and dealers have been a bit pensive going into this year. Uncertainty breeds a wait-and-see attitude in people. I can only speak from my position and we’ve seen some dealers get significantly more aggressive with their inventory positioning. And we are doing the same. Obviously, the pandemic has impacted every industry. And yes, I believe nearly everyone in our industry did feel it, especially when you thinking about the challenges of social distancing, PPEs, and state-mandated restrictions regarding the number of employees you can have in a [manufacturing] plant. These things will certainly curtail anyone’s manufacturing capabilities to a certain degree. We did see some of that, but I don’t think we were affected nearly as badly as some other companies, simply because we’re so diversified. That diversification, this past spring, allowed us to become designated as an essential business.
Every manufacturer must plan on a strong winter. If you don’t, then you are running the risk of leaving your customers and the contractors without the products that they’ll need to do their jobs. So, we have to constantly be looking at it as a heavy snow and ice year and be ready with the equipment and replacement parts that snow contractors are going to need. As soon as an organization stops thinking like that you’re going to get yourself and your customers – the snow and ice contractors – in trouble.
With the two lackluster winters contractors did not push as much snow. Therefore, they didn’t put as much wear and tear on their equipment. I can imagine there is a fair amount of available inventory. What can snow contractors expect to find in the market as they begin to make their purchasing decisions for this coming winter? We’ve been working with an outside financing company on special deals that will help relieve the [financial] burden of making equipment purchases. In my opinion, people are being very cognizant with their cash flow and their cash position, and rightfully so with all of the [economic] uncertainty out there. I think people are going to start looking a value-based purchasing and what they are getting for their money. For the cost, what are they getting in return? And from our perspective, we believe [return on investment] is one of our strengths.
Voice of customer is an important component to your business. What are you hearing from the market about snow contractor needs and how is this directing you for future product decisions? From day one, this is how we go about doing our business. We talk to the people who use our equipment to learn what they want and what they want that equipment to do. Pre-pandemic, we have multiple meetings per year where we invite dealers, distributors, and contractors to our facility to meet with our product managers and engineers to suggest design changes. We want to know if we fell short at some point with a particular piece of equipment. I much rather have to make an improvement than have users not say anything.
We certainly feel we’re strong on the salt spreader side of the business. And I have multiple conversations with industry professionals about liquid treating [equipment] and two years ago we introduced a spray line and we’re going to continue to fill this line out. And at the same time, we’ll explore any opportunity where the customers are telling us it’s equipment they want, they’re having trouble getting, or they feel the value is not there in the market. We look for those opportunities and if we can provide solutions that improves the market, then we will.
Snow pros often ask me about salt price and what I'm hearing for their market from my industry sources. But since pricing can vary state-by-state, unless I know for absolute certain it's difficult to provide an accurate estimate.
However, the other day an industry source tipped me to the website of Ninja Deicer, a salt and deicing distributor serving primarily Wisconsin and some nearby out-of-state boarder markets. The good folks at Ninja have compiled the "Bulk Salt Price Guide: What You Can Expect to Pay In 2020." The listing provides a per state look at present-day production, consumption and, best of all, the state of rock salt prices in 2020, which are based on average DOT costs.
Some of this pricing info may be helpful as you finalize your purchasing or completing the ice management pricing to your winter contracts. Or, you may view this as common knowledge for your market. At the very least, it's worth a look.
An image of who could be Morton Salt's new owner came a little more into focus this past week.
Meritage Group LP, an investment firm for the family of hedge fund investor James Simons of Renaissance Technologies, has partnered with U.S. salt producer Kissner for its bid to acquire Morton Salt, according to an Aug. 4 Reuters' article.
Private equity investors Advent International, American Securities and Cerberus Capital Management also made it to the second round of the bidding to acquire the world's largest salt supplier, according to the report.
German K+S, owner of the Morton Salt brand, recently put its salt portfolio up for sale to reduce debt that had soared following an investment in a new Canadian potash mine. Insiders anticipate a deal to be inked by the end of 2020 and no later than first quarter 2021.
Kissner is owned by buyout group Stone Canyon Industries, which bought Kissner for $2 billion in April.
Elsewhere, in response to an analyst's question Compass Minerals' top exec stated they were not a contender for Morton Salt. When asked about the possibilities of absorbing all or parts of Morton Salt that K+S had placed up for sale, Compass President and CEO Kevin S. Crutchfield alluded to industry analysts that it was unlikely.
"I don't think there's any doubt from a Justice Department standpoint that the Morton asset is -- would be highly problematic for us. And I don't think it takes a rocket scientist to figure that out." Crutchfield said, according to a transcript of an Aug. 5 earnings call provided by The Motely Fool.
Crutchfield went on to add that an investment to grow its salt business was not out of the question if the right opportunity presented itself. In the meantime, it was continuing efforts to increase efficiencies and lower costs at its Goderich mine.
