Riding Growth Wave
Wood-based products such as decks, chairs, gazebos, decorative fences, and other additions to the backyard landscape can be called "hot," "in vogue," "all the rage," or just about any description that translates into "increasingly popular." And as a result, the market for coatings and finishes for this booming "outdoor-living" product segment is expanding dramatically, says Gregg Riskin, vice president of Marketing for Newburyport, MA-based Samuel Cabot Inc.
Cabot, something of an icon in the wood-coatings industry thanks to its storied history and origins as a New England formulator of wood stains, is riding high on the wave of this "outdoor living" phenomenon with a combination of marketing savvy, product innovation, and technology and manufacturing expertise, says Riskin. The privately held company doesn't disclose specific sales figures, but ranks among the coatings industry's top producers of what Riskin calls exterior wood-care products -- stains, coatings and other protective finishes.
Cabot also produces a full line of interior wood finishes and related products such as cleaners, paint strippers, and other sundries. But exterior wood products constitute 90% of the company's business.
Cabot traces its origins back to 1877, when Samuel Cabot, a chemist, went into business as a maker of wood preservatives for application to shingles -- a logical market niche to pursue, what with all those weatherbeaten New England wood shingle-sided homes to consider. Over the years, the company introduced significant new products and processes involving wood finishes, including the collopaking method of grinding and dispersing pigments to provide a finer and more precise particle size and distribution. Other noteworthy developments included early titanium dioxide-pigmented house paints in the 1940s and the first stains designed to provide long-term durability on decks in the 1960s.
Cabot's manufacturing operations were located in Chelsea, MA, near Boston, from the company's start until 1985, when Cabot opened a new, technologically advanced production plant in the coastal town of Newburyport, not far from the Massachusetts-New Hampshire state line. The 100,000-square-foot facility has a daily capacity of 25,000 gallons and features high-speed dispersion and batch processes, filling and packaging systems, and a closed-loop materials-handling system that supplies solvents and other raw materials from outside storage tanks housed in underground vaults. The company says byproducts from all processes are recycled within the facility.
The company was headed by a Cabot family member until 2000, when Samuel Cabot III handed day-to-day operating responsibilities to company veteran John Schutz, who was named president. From its original market base in the northeastern United States, the company has expanded its reach across the nation and overseas, and in recent years has deftly positioned its products to derive maximum benefit from the outdoor-living boom and consequent growth in sales of products catering to this market.
Emerging as the star in this outdoor cast of players is the wooden deck, that ubiquitous add-on to the American home's back door. All those millions of new square feet of wooden substrate call for preservation and beautification. Enter the supplier of the various materials that make up the "deck-care" category.
"That's where we've seen most of our growth in the last five years," says Riskin. Cabot traces a good portion of that expansion to the phenomenal growth of the do-it-yourself (DIY) wood-care market. Ironically, much of this boom has been driven by the marketing and advertising muscle of the home-center retailing industry, a distribution channel in which Cabot is not a participant.
"Since 1994, there's been a much greater focus on the DIY consumer thanks to Home Depot and Lowe's," Riskin says. These retailing giants have helped fuel the growth in the popularity of decks and other outdoor wood products while at the same time hammering home the message that the DIY user can easily protect and beautify his back-yard investment over the weekend.
Tailoring Message, Products to Target Premium-Product NicheWhile Cabot doesn't directly benefit from this home-center marketing prowess, the company has adroidtly exploited the exterior wood-care market boom with effective product and marketing strategies. "We've ridden their coattails," Riskin admits candidly. He estimates the deck-care product category has grown at a rate of 8% a year, while architectural-coatings volumes have risen only 2-3% annually. Major advertising programs by some of the big national deck-finishes manufacturers -- Sherwin-Williams' Thompson's brand and PPG's Olympic label are two significant examples --have also help to drive overall growth of the deck-care segment, he says.
Cabot, meanwhile, has tailored its message and its products to the consumer looking for top performance and appearance for a range of wood-finishing products. The company, which has not deviated from a reliance on distribution through the independent dealer, in 1995 rolled out a point-of-purchase marketing campaign with its "Outdoor Living Center," which brought together a range of deck-care and other finishing products in one place on the dealer floor. The company also took this marketing tool to "new retail destinations for our brand" in the Midwest, South and West, Riskin says. "We've gotten retailers into this field who were not in the field before," he says.
Riskin says the "hot, stylish and trendy" outdoor-living market segment runs the gamut of wood-crafted accessories, from gazebos to decks to Adirondack chairs. "And we make a line of products that fit well with that trend. It's been an integral part of our growth program."
Also giving a big boost the boom in Cabot's deck-care business are top ratings in quality analyses and comparisons issued by Consumer Reports. Cabot captured the number-one ranking in an initial report on such products in 1997 and has held that spot in follow-up reports since then, Riskin says.
"That has really helped to provide recognition of Cabot as being premium wood-care products."
Just as dramatic as its sales-growth initiatives has been Cabot's dramatic revamping of its product offerings. Long gone are the days when the company churned out low-viscosity, oil-based stains in "five shades of brown and five shades of gray," Riskin says. By the 1990s, the company had expanded its pallette to 74 standard colors for oil- and waterborne stain and paint products, with custom tinting that can provide virtually any color requested by the customer.
And like other coatings manufacturers, Cabot has made a major shift to waterborne products, a technology in which the company produces only all-acrylic products in all its lines. Riskin is sold on the performance advantages offered by the waterbornes. "They're better in application and faster drying, and they simply outperform most oil-based products," he notes.
Still, oil-rich products retain a strong following, and Cabot, in a nod to this user segment, last year introduced a new oil-based paint treatment for "exotic " hardwoods that have gained in popularity among consumers.
Riskin estimates that 20 years ago, 95-98% of Cabot's products were oil-based. That evolved to a 70-30 breakdown 10 years ago, and currently the mix is "about 50-50." He said Cabot is able to offer VOC-compliant coatings for its entire product range anywhere in the country -- including California, home to the nation's toughest VOC regulations.
Recent notable product introductions include Cabot's "Clear Solution," a finish that provides a natural tone effect in clear and translucent versions. Cabot continues to produce a line of solid-color stains that make up its well-known "Old Virginia Tints," or OVT, line that retains a following decades after its debut. The shades were inspired by colors found in Old Williamsburg, the colonial Virginia settlement
"The Finish" is the name given to the company's line of low-luster 100% acrylic exterior paints and solid-color stains containing Teflon as a surface-protection additive. The exterior product line also includes semi-transparent and semi-solid stains, primers, wood strippers and cleaners, and waterproofers.
Conventional paints make up a small share of the company's products, and thus offer room for more growth, Riskin says.
Factory Finishes Division Provides New Growth SourceAnother major Cabot growth initiative got under way in 1993 with the launch of the company's Factory Finish Division, which is dedicated to the supply of OEM products for the prefinished-wood materials industry. Such materials include siding, shingles, deck lumber, trim wood, and other products that can be coated in automated, highly controlled settings. Here, Cabot again has benefited by carving out a "premium-products" niche, Riskin says.
From a nonexistent market presence in 1993, the company has turned the business into a multimillion-dollar revenue producer.
Primers make up a substantial portion of the Factory Finishes product line, with some specialty stains and paints also included. The pre-primed wood building products market is experiencing growth due to performance advantages and the reduction in labor that would be required for painting after installation. Such finishes are skillfully applied in carefully controlled settings, which improves performance results, Riskin noted.
Despite the company's impressive growth trend, Riskin says there's plenty of room for more. He sees expansion potential both geographically and within specific market niches that include stains, urethanes and paints. "We have plans to become a much bigger player both inside and outside of our key categories in the future," he says, explaining that the Cabot brand remains best known for its long and distinguished history of making top-quality stains and related finishes.