November 20, 2013
Contact: Jim Howard, 404.792.2290
Atlanta, GA – I would like to share my perspective on why I believe a checkoff is imperative for the long-term health of our industry. For ten years prior, I served on the Hardwood Council, two years as the co-chairman. This predecessor organization was charged with our industry-wide domestic hardwood promotion effort. See www.hardwoodcouncil.com. Our target audience was specifiers, architects and pro-sumers. We solicited donations from the various industry associations and private companies. The majority of the funding came from HMA and NHLA. Sue Regan, who served as executive director, had an advertising and marketing background and initiated numerous programs. Sadly, our number one challenge was lack of consistent funding.
During this ten year period, our annual budget averaged under $250,000/year and we never received donations from more than fifty individual companies in a given year. Although we had talented, creative advertising consultants, with minimal revenues it proved impossible to move the needle. I personally don’t believe you will ever achieve a sufficient promotion revenue stream relying on voluntary contributions. Raising revenue for needed research (i.e. life cycle analysis or public education on forestry issues) is even more difficult. My experience as an industry CEO has been it is virtually impossible for our fragmented industry to coalesce and collectively invest in research, promotion or education. During the late 1990’s, the hardwood industry exceeded 12 billion board foot production, yet despite billions in revenue and a profitable business climate, we have never invested sufficient resources in research, public education or promotion. Without a checkoff initiative, we will always be selling a commodity without money for marketing or product research.
Today, the various trade associations lack the budget resources for promotion and consequently the Hardwood Council was sunset. Traditionally as an industry, we’ve only marketed to ourselves. Even a million dollar advertising budget is insufficient. It would take a long-term multi-million dollar campaign to change consumer behavior. Despite hardwoods’ overwhelming green credentials such as low embedded energy, low carbon impact and sustainability, many believe using wood is detrimental to the environment. How can we tell our story without funding? During my tenure as NHLA president, Mark Barford and I approached Carlton Owen, president and CEO of the U.S. Endowment for Forestry and Communities, for assistance with hardwood promotion. From Carlton’s perspective, a checkoff is the only proven sustainable program that works. During the last fifteen years, thankfully AHEC has invested approximately $8-10 million per year in overseas American hardwood promotion. Without the AHEC investment helping to create new overseas markets for our industry, I’m doubtful our company would have survived the Great Recession.
The compelling question is should we stay the course and forgo industry-wide promotion, research and public education? Or alternatively do we collectively allocate approximately 1/10 penny per board foot sold toward industry vetted programs for promotion, research and education? To me, the definition of insanity is to do nothing and continue to allow our market share to erode. The steel industry has spent millions to promote steel studs. The checkoff draft order will be published next month for public comment. As drafted, the legal document creating the hardwood checkoff requires third party audits to track performance and a follow-up checkoff referendum in four years. If the future checkoff board members are not good stewards of our finances, we can rescind the checkoff order. The USDA and other checkoff boards have a long-term track record of success. I can personally accept the risk. It’s a long-term investment in my family’s future.
I hope you will keep an open mind and participate in the checkoff vote. I look forward to a prosperous and healthy future in the hardwood industry for my kids and our employees. From my perspective, the checkoff is a wise insurance policy.
Jim Howard, Atlanta Hardwood Corporation