Dan's Been Reading!

Updated: Jan 11

“Can I take the Jeep?”


The daily request coming from my daughter Buck Wheat. Home for the summer with nothing to drive except her own car. A free to use (for her at least!) Subaru. The last remaining connection to my pre-pandemic employment with Benjamin Moore: 15-months left on a lease on a Subaru WRX I lease for the commute to Montvale. But that car has a roof.


And I’m told “no vibe!”


Preferring to keep the Jeep’s rush of fresh air and sunshine to myself during the summer, which I’m told is selfish of me, I thought a few rules governing use of my topless joyride would make for less whining for Padj to listen to.


Making rules for a 23-year-old who complains of boredom halfway through most Tik Tok’s I knew had to keep it short! Just two rules to establish THE Jeep’s provenance for the summer.


1. “Dibs” on THE Jeep goes to the first person to pay the rent each month.

2. If I ever agree to let you drive my Jeep, when the fuel gauge gets to half, stop for gas.


When summer’s sun made obeying rule # 1 too burdensome for the itinerant Buck, I changed gears. With the Jeep spending most days helping Buck Wheat work her tan, I focused my energies on rule # 2.


Figuring that if the Buck ever brough my Jeep back in time for an evening drive to one of Stamford’s beaches, at least I wouldn‘t have to stop for gas to make the four-mile round trip!


Giving Buck my credit card, I implored the child to “please, don’t leave me on empty?”





Independent Paint Dealers are Running on Empty


My Jeep is not the only thing running on empty these days. Dealers I speak with continue to share the stresses of being a paint dealer during the summer of 2021. Exhausted from the efforts needed to overcome product shortages, labor shortages and Covid outbreaks, dealers are breathing in the hot vapors of their empty tanks.


At least they have plenty of money to refill their tanks.


When the coronavirus outbreak sent millions of workers running for the home office independent paint dealers got the call! If I’m going to have to work from home America said, I’m going to need to give the walls a schmere.


Consumer demand for architectural coatings remains strong. The pandemic-fueled spike in demand currently going into its seventh quarter, has dealers reporting to me that yearly-to-date sales increases of 10%-20%.


One multi-store dealer reported to me that they had a 70% year-over-year increase for the first half of 2021!


Many dealers also share that there is more to the current sales trend than just workers under “house-arrest” wanting to add an accent wall to impress on the Zoom.


Shortages in the raw materials needed to make many paints are leading to out-of-stocks at most Sherwin-Williams branch stores. Customers of the $18 billion brand, many of them painters and painting contractors desperate for coatings to apply, find themselves walking into, calling, or searching dealer’s web sites. In need of another source of supply. Many looking for the type of low-priced commercial products which Sherwin-Williams is known for.


And Benjamin Moore is not.


With many of the raw materials needed to make paint still being made available under a force majeure, manufacturers including Sherwin-Williams, are allotted raw materials based on previous years purchases.


And it’s not so easy to cover the whole earth when you’re receiving raw materials by allocation!


As the world’s largest paint manufacturer, the Cleveland, Ohio based Sherwin-Williams of-course receives their fair share of raw materials. Even during allocations! On a call with investors and business writers last week Sherwin CEO John Morikis shared his view that the paint giant was at an advantage as it relates to acquiring raw materials, sharing that their raw material needs are primarily being met.

Primarily!


With raw materials in short supply and shifts at the factories difficult to man due to labor shortages and Covid outbreaks Sherwin is forced to make some difficult choices when it come to prioritizing what products get to make and when to make them. Often choosing to spend raw material and production resources on aerospace, auto and marine coatings rather than the architectural coatings typically found in their stores.


In 2020, those performance groups accounting for almost $5 billion of Sherwin’s total revenue.


With Sherwin reporting record revenues and earnings, investors and business writers on the call barely noticed a mention of the shortages relating to professional products.


Wow’d by the billions in added sales, no one bothered to ask Morikis how many fives of Pro-Mar 400 eggshell the company had in stock in the St. Louis market.


But that’s the question the painters in St. Louis are asking!


And the answer is, "not enough!"


Creating an opportunity for Ben Moore dealers.


Despite spot shortages in some frustrating SKU’s, Ben Moore dealers have shared with me that they have generally been able to get enough professional quality products to satisfy SW customers looking for any product to roll or spray on a wall. Allowing them to “steal” business from the local out-of-stock Sherwin-Williams.


Creating the best opportunity for measurable gain in market share for Benjamin Moore and their dealers in 30-years!


And it's not just me saying that. Benjamin Moore CEO Dan Calkins recognizes that opportunity as well!


Recently, Benjamin Moore shared with their dealer network via an email that they had “partnered with a few toll manufacturers to supplement production.”


The email went on to say of their new toll manufactures, “will focus on non-premium products where we are seeing strong growth.”


Despite that good news, the email is an otherwise difficult read.


Like most dealer-facing communications from Benjamin Moore the email lacked any semblance of detail or information of import. Dealers short on products are having trouble getting answers to the specific questions of “When?” and “How many?”


This email did little to answer any of those basic questions.


Absent even a FAQ, the unsigned and unattributed email is the communications equivalent of the thumbs up emoji.


“Don’t worry dealers, we got this.” 👍


Classic Benjamin Moore.


But dealers looking to manage their inventories during this complicated time look to Benjamin Moore for better answers than that. This email, like most communications from Montvale, comes up short as it relates to supplying the information which dealers need. Considering the infrequency of the company’s outbound communications to their “partners” it seems that Benjamin Moore dealers missed their chance this quarter to learn anything meaningful when It comes to the current shortages crisis.


The only product specific news shared in the 307-word email: some products may start showing up on your docks with gallons now packed six to a box.


Meaningless information to a dealer who doesn't know when the four or six gallons will get there!


Dealers should get better than that from the segment’s largest paint maker. Particularly now when clear communications can help dealers cash-in on the opportunity presented by the current Sherwin-Williams production woes.


On the investor call I referred to earlier, Sherwin-Williams CEO John Morikis shared that the company estimates it lost 3.7% of sales due to shortages in raw material.


That's $370 million of their $10 billion architectural coatings business.

One Man's Garbage


An amount so small that it may never really reflect on Sherwin’s income statement becomes a tsunami of opportunity for Benjamin Moore and their independent dealers.


Reading between the poorly formed lines of their August 5th email, you can hear Benjamin Moore CEO Dan Calkins sharing with dealers that he recognizes this opportunity and is willing to whip his notoriously slow-moving organization to respond rapidly and help his dealers capitalize on this once in a generation opportunity.


Dan was smart to move fast. He knows that the window on this opportunity is going to shut fast.


Sherwin-Williams will not be out of the Pro-Mar 400 business for long. If Dan’s dream comes true, S-W stores will be out of the professional products he’s aching to make for painters until the end of the year.


But with a staff of 60,000, billions in cash and all the resources of the world’s largest paint maker at his disposal, it won’t take Sherwin CEO Morikis that long to get this figured out.


Giving Dan and dealers exiguous months to convince Sherwin-Williams painters and painting contractors currently willing to wander due to shortages, that the independent channel should be their preferred vendor or at-least a consistent number two, even after shortages abate.


Dan’s Been Reading!


Readers of this blog are aware of my belief that in every crisis there is opportunity. I'm happy to share with dealers of the brand that Dan's been reading.


And taking notes!

Despite his early stumble over THE Montvale Massacre, I grade Benjamin Moore CEO Dan Calkins an “A” for managing his supply chain with aplomb during this crisis and generally keeping his dealer’s shelves full of premium paints. Products which (until recently) represented 50% of Montvale’s total volume. t


Six-months ago this sort of seismic shift in the buying habits of painters and painting contractors would have seemed folly to speak of. It was the shortages and other macro-economic factors which gave Dan this shot.


But Dan knew that to have any chance of hanging onto this business when the shortages end, he needed to deliver for these customers, now when they need the help.


Hence the poorly written email.

But by recognizing the opportunity this crisis presented him and by moving quickly to address the moment, Dan proves that a year after THE Montvale Massacre, he still likes to read what his former Strategic Counselor has to say!


A+ Dan!


If you only had a better writer on staff to tell dealers how well you’re doing?!