86•
VIEWPOINT
BY MARY JO MARTIN Editorial director
W
ith the tremendous uncertainty that has been looming for the past few years over the U.S. economy and its effect on our na-
tion’s businesses, it is always refreshing to hear peo- ple “in the know” share their optimism — be it somewhat guarded — for the future. Earlier this spring, WIT & Co. members were
treated to the insight and candid opinions of Fortune Brands CEO Bruce Carbonari during their annual
Distributor/Vendor Conference in Dallas. Fortune Brands is the parent com- pany of Moen Inc., as well as such iconic consumer brands as Titleist, FootJoy, Jim Beam and Makers Mark. Fortune Brands realized in excess of $7 billion in sales last year; its three divisions (Spirits, Home & Security and Golf) were up 8%, 8% and 7%, respectively. So when someone who has as much insight — and advisors — as Carbonari speaks, it’s a little like the old E.F. Hutton commercials; you know, “When E.F. Hutton talks, people listen.” Carbonari shared a well-prepared presentation with the WIT membership
on his views of the state of the economy — particularly the housing market — and where he sees it going in the near future. He noted that among the things Fortune Brands very carefully monitors are the attitudes and drivers behind consumer purchases. “We analyze how consumers shop and buy,” Car- bonari said. “We look at how their confidence translates into their actions. It all starts with how a person feels about their net worth.” According to Carbonari, those indicators point to consumer confidence trending upwards. Following are a few of his key observations: • Consumers want to buy brands of higher quality and are willing to sacrifice other things in order to make these purchases. • People are still spending money. They want freshness. They want new. They want style. • In housing trends, homes now being built are, on average, slightly smaller
than in the past five years, but those homes are being built with higher-quality upgrades and materials because consumers don’t want to sacrifice the quality
Advertisers Index
A.Y. McDonald.............................26
www.aymcdonald.com Activant Solutions ........................44
www.activant.com Anderson Metals.............................6
www.andersonmetals.com
Bavco............................................30
www.bavco.com Bonney Forge................................71
www.bonneyforge.com
Bootz.............................................40
www.bootz.com Boshart Industries .........................52
www.boshart.com Bradford White .............................63
www.bradfordwhite.com Bradley..........................................34
www.bradleycorp.com C&C Industries.............................41
www.candcvalve.com CBM Sales....................................35
www.cbmsales.com CD Sales .......................................39
www.centraldistributionsales.com Central Components .....................65
www.centralcomponents.com Clearwater.....................................54
www.scaleblaster.com Contrac..........................................45
www.contrac.ca
Core Pipe.......................................11
www.corepipe.com Control Supply Corp.....................23
www.controlsupplycorp.com Dahl Brothers................................69
www.dahlvalve.com The Distribution Point ...................4
ww.thedistributionpoint.com
Forgings, Flanges & Fittings ........28
www.onestoppvf.com Franklin Electric ...........................67
www.franklin-electric.com/lg General Pipe Cleaners, a Div. of General Wire Spring..........IFC, 68
www.drainbrain.com Global Stainless Supply................29
www.onestoppvf.com Holyoke Fittings ...........................62
www.holyokefittings.com
JMF...............................................42
www.jmfcompany.com
Kissler...........................................75
www.kissler.com Legend Hydronics...........................9
www.legendhydronics.com
LG.................................................17
www.lghvac.com Liberty Pumps...............................15
www.libertypumps.com
•THE WHOLESALER® — JUNE 2011 Carbonari shares candid observations on economy, housing at WIT
they have become accustomed to in their larger homes. • Unfortunately, we are going to continue to see some waves in housing
prices. But while we still need housing prices to stabilize, in many markets home prices are inching upwards. • 70% of household growth in the next 10 years will come from minorities and immigrants. • Economic recovery will not be achieved quickly, but we are going in the right direction. • Consumers are feeling more confident as we get reports that jobs are being created and incomes are rising. • The ratio between home prices and incomes are finding a much more
healthy balance than when mortgage lending was a little out of control. Mort- gage rates are still below 5%, which is very attractive for consumers who have the stability and funds to buy a home. The mortgage lending process is much more stringent and banks have gotten much tighter. But that was something that needed to happen. • Forget about the heyday years. Instead, look forward to what is ahead of us and how we are going to get there. • Be flexible; use this time and opportunity to challenge yourselves and your companies. “Getting through the recovery is really about flexibility and lever- age,” Carbonari said. “There is no way we can predict when the recovery is going to happen and what it’s going to look like. At Fortune Brands, we had to resize quickly and be as flexible as possible to deal with whatever the mar- ket threw at us. It was critical that we make a lot of adjustments in our supply chain to deal with the instability of the market. In fact, there were a lot of things on the drawing board in our supply chains that we had to excellerate.” • Create your own differentiation now and be a winner at the end of the day. “We look at the rest of this year with optimism and are hoping for continued improvement,” Carbonari said. “We are in a much better place than we were a year ago. The U.S. economy is getting better, and consumers are gaining confidence. I believe we have bottomed out and it’s now just a process to make our way back. I’m very bullish about the long run.”
Mary Jo Martin is editorial director of TheWholesaler. she can be reached at 972-315-9803 or
editor@thewholesaler.com.
Matco-Norca...................................3
www.matco-norca.com Merit Brass....................................57
www.meritbrass.com Metropac.......................................53
www.metropac.com Midland Metal ..............................83
www.midlandmetal.com Mueller Steam...............................79
www.muellersteam.com MultAlloy .....................................66
www.multalloy.com
Navien.....................................51, 73
www.navienamerica.com
Neuco............................................43
www.neucoinc.com PVFshare.com...............................20
www.pvfshare.com
Rheem...........................................55
www.rheem.com
Rinnai............................................27
www.rinnai.us
Service Metal Products.................25
www.servicemetal.net
Sloan Valve Company...................59
www.sloanvalve.com Smith Cooper..................................5
www.smithcooper.com Speed Clean ..................................60
www.speedclean.com Stiebel Eltron ................................10
www.stiebel-eltron-usa.com Stingray Systems ..........................21
www.buystingray.com
T & S Brass...................................77
www.tsbrass.com
Ta Chen........................................BC
www.tachen.com
Taco...............................................85
www.taco-hvac.com
Tapco........................50, 80, 81, IBC
www.tapcogenuinepartscenter.com tekmar Controls ............................33
www.tekmarcontrols.com
Titan Flow.....................................56
www.titanfci.com
Tyler Pipe......................................61
www.tylerpipe.com United Pipe ...................................13
www.united-pipe.com
UPA...............................................38
www.upaonline.com
Val-Fit ...........................................49
www.valfit.com
W.O.I.............................................47
www.woihouston.com
Walworth.......................................48
www.walworthvalves.com
Warren Alloy...................................7
www.warrenalloy.com
Weldbend ................................18, 19
www.weldbend.com
YOW.............................................37
www.yourotherwarehouse.com Zoeller Company ..........................31
www.zoeller.com
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