What You Might be Surprised to Learn about Material Costs
By Mike Tilden
Over the last several years there has been a lot of interest in using green building materials in the fabrication of permanent POP displays and retail store fixtures. There also seems to be many misconceptions about what qualifies as a green building material and what environmentally friendly materials cost.
An illustration of this occurred recently when a customer suggested using recycled wood for some store shelving. Our customer liked the look of the used and weathered wood and also figured that since it was old and recycled it would be less expensive than “new” wood. Furthermore, our customer thought it would be better for the environment because new trees would be saved. Our customer was partly right; no new trees would be harvested. Beyond that, however, our customer was shocked to learn that the cost was more than double for the recycled wood finished shelves.
The Back Story on Recycled Wood
By its nature recycled wood with a similar visual character is limited in supply and not necessarily available in the sizes and shapes most suited for a particular job. In addition, it is not cheaper to “harvest” it. The reason is that old barns need to be located, and their current owners need to agree to have them torn down. Nowadays owners also want to be paid for the wood. So if you are in the recycled wood business you need to find possible product, pay for the raw materials and also the labor needed to tear down the building or otherwise remove it from wherever it is. This is also the case for warehouse flooring, old fencing and barn siding for example. Then the nails need to be removed. The wood needs to be hand stacked and transported to the desired location. So as you can imagine, harvesting recycled wood can be an expensive proposition. In fact, recycled wood runs about 3 to 10 times the cost of freshly harvested and milled lumber.
The Truth about Beetle-Killed Pine
What is true with recycled barn wood is also true in most cases with other types of cool-looking perceived green materials. For example, blue stained pine was very popular in the design world a few years ago. Again, the thinking was that there was a huge quantity of “beetle” killed pine out west, and it was all blue stained and was not wanted by traditional lumber mills. Most people thought that since there was so much of it and very little demand, designers could do the environment a favor by utilizing this unwanted material to make less expensive retail fixtures and POP displays. While that sounded great, the problem was that it wasn’t true.
It is true that there is an abundance of beetle killed pine in the Western United States. However, the prized, cool-looking “blue stained” pine is far less abundant. The blue stained trees may have been originally killed by beetles, but the blue stain was caused by a fungus that sometimes grows under the dead tree’s bark and stains the wood from the outside in. The penetration of the blue stain depends in part on how long the tree has been dead as well as the available moisture. As it turns out, this happens fairly rarely in the forests being harvested. The relative scarcity is due to the fact that the Forrest Service and forest land owners try to harvest the beetle killed wood before any of it can develop blue stain. Hence, this blue stained lumber is in relatively short supply, needs special handling, and as a result costs a lot more- sometimes as much as 3 times more.
There are good practical and environmental reasons for using green building materials for custom millwork, in point of purchase displays, and in wooden store fixtures . However, it is important to understand the relative cost of these materials compared to other material choices. In a future blog post we will go into more detail on the economics of other really cool, sustainable recycled display materials.
Jim Hollen is the owner and President of RICH LTD. (www.richltd.com), a 35+ year-old California-based point-of-purchase display, retail store fixture, and merchandising solutions firm which has been named among the Top 50 U.S. POP display companies for 9 consecutive years. A former management consultant with McKinsey & Co. and graduate of Stanford Business School, Jim Hollen has served more than 3000 brands and retailers over more than 20 years and has authored nearly 500 blogs and e-Books on a wide range of topics related to POP displays, store fixtures, and retail merchandising.
Jim has been to China more than 50 times and has worked directly with more than 30 factories in Asia across a broad range of material categories, including metal, wood, acrylic, injection molded and vacuum formed plastic, corrugated, glass, LED lighting, digital media player, and more. Jim Hollen also oversees RICH LTD.’s domestic manufacturing operation and has experience manufacturing, sourcing, and importing from numerous Asian countries as well as Vietnam and Mexico.
His experience working with brands and retailers spans more than 25 industries such as food and beverage, apparel, consumer electronics, cosmetics/beauty, sporting goods, automotive, pet, gifts and souvenirs, toys, wine and spirits, home improvement, jewelry, eyewear, footwear, consumer products, mass market retail, specialty retail, convenience stores, and numerous other product/retailer categories.