Filling the gap: Lumberyard sees opportunity in green distribution

When MeadClark Lumber began setting up a wholesale division for green building materials, the Northern California dealer knew it was entering virgin territory. Some of the old rules would apply—dealing with brokers, for example, or negotiating for exclusive distribution rights—but this venture would require a very different model. Blake Rid gway, who started the separate business for MeadClark, would get pulled so far into the supply chain that he found himself tramping through the woods to find suitable trees.

“Buying logs and timbers is not the retail lumber guy’s world,” admitted Ridgway, who previously served as MeadClark’s outside sales manager.

Natural Forest Distribution, the name of the new venture, now operates on a five - acre lot in Windsor, Calif., 10 miles from MeadClark’s head quarters in Santa Rosa. Using common carriers, it ships to lumberyards and home centers in California, Hawaii, Nevada, Arizona, Oregon and Washington. The wholesaler stocks a wide assortment of wood products certified by the Forest Stewardship Council (FSC), the most widely recognized criteria for forest management practices. Its assortment includes lumber (Douglas fir, dimensional and pre-cut ); plywood (kiln-dried Douglas fir and Southern Yellow Pine); oriented strand board (sheathing and subfloor ); timbers; engineered wood products; and pressure-treated lumber.

Through a net work of contracts and relationships, Natural Forest Distribution can supply FSC-certified products on demand, without a special order or two - week wait. It also has access to hard - to - get—some might say impossible—products like FSC-certified cedar panels and decking.

Sourcing all these products took almost two years and a lot of road trips. Ridgway and Duncan MacKenzie, an independent FSC consultant, began driving around Washington and Oregon in 2005, calling on timberland owners and mill operators, often without an invitation. Once they got in the door, they would broach the subject of FSC certification.

“Sometimes the mills would politely throw us out,” recalled Ridgway, who tried his best not to come across as a tree hugger. MeadClark knew that, in order for the venture to succeed, the division would need a steady supply of FSC products. And that meant starting, quite liter-ally, at the ground level.

Ridgway has negotiated deals between landowners and mills, and Natural Forest Distribution has also purchased timber and entered into its own agreements with FSC-sanctioned sawmills.

“You have to take everything that comes out of the log,” explained Ridgway, who has a lot of FSC-certified 1x6s in his yard. “Maybe we’ll make pallets or posts someday,” he said.

In panels, Natural Forest Distribution carries plywood in six dimensions and OSB in four. Its OSB comes from Ainsworth, the Vancouver- based manufacturer with three FSC-certified mills in Minnesota.

Harbie Bahd, an OSB sales rep for Ainsworth, said the company has the capacity to produce “a lot more volume” of FSC-certified panels. But it can’t sell them to just anyone.

“We had about 30 inquiries [last year], but very few of them had their chain of custody in place,” Bahd explained. Because all products at Natural Forest Distributors are FSC-certified, Ainsworth knows it can ship there without questions arising about its OSB certification further downstream.

“We work very closely with Natural Forest Distribution,” Bahd said, adding, “They’re in the top quadrant.”

Natural Forest Distribution must exercise a similar caution. Ridgway recalls getting a call last month from a Southern California lumberyard that wasn’t FSC-certified. Ridgway had to tell them that, without that designation, the dealer couldn’t keep the chain of custody intact for a load of FSC lumber. Ultimately that could cause problems for the builders and their customers who are seeking points from Leadership in Energy and Environmental Design (LEED) from the U.S. Green Building Council.

Natural Forest Distribution does a tremendous amount of product knowledge training for its customers, a long with green building seminars and presentations for architects, builders and municipalities. Sometimes it finds itself caught between warring sides in the green political debate over the Sustainable Forestry Initiative (SFI), a forest management and wood certification program with broad sup-port among lumber producers.

On the other side of the debate are proponents of the LEED designation. Like it or not, LEED only gives points for wood when it is FSC-certified. For its part, parent company MeadClark is happy to sell any kind of lumber—certified or otherwise—and sold $87.6 million in building materials in 2005.

Natural Forest Distribution uses its Website, www.fscsales. com, as both a position statement and a resource for its customers. The Website has brought inquires from lumberyards across the United States. “We got a call yesterday from a guy in Vermont who wanted 186 feet of [FSC- certified] 8×14s,” recalled Ridgway. “Trucking it back there would have cost more than the wood.” After making some calls, Natural Forest Distribution can usually find an FSC-certified mill or dealer nearby to fill the order.

Lumber dealing has always been a relationship business, and so is the green version. Natural Forest Distribution is forming cross- promotional relationships with its suppliers, and some have agreed to exclusive distribution agreements. The company that makes its glue- laminated beams agreed to a five - stateterritory after the wholesaler introduced it to the idea of making FSC-certifiedglulam.

Ridgway often gets a heads up on new sources of FSC-certified wood products, given his connections in the green industry. “We’ve sponsored a lot of forestry tours,” he noted.

Things get a little delicate when the distributor finds itself selling to MeadClark’s competitors. “I knew we’d be bumping in to each other on FSC jobs,” Ridgway said, referring to bids where everyone, including MeadClark, is using his yard as a supplier. But strict confidentiality—mixed in with a bit of trust—has overcome misgivings in most instances, according to Ridgway.

Natural Forest Products is run as a separate business from MeadClark, although it relies upon the parent company for its information technology platform, human resources department and other corporate functions.

Matt Petersen, executive vp of MeadClark, said the company entered into the distribution business reluctantly, after it couldn’t find a green wholesaler to fill that function. “There just hasn’t been anyone in the middle, and we saw it as a good opportunity, especially during the downturn.”

The company’s investment has gone mostly toward inventory so far, but word of mouth is bringing in new customers every week. Many of them say they can’t get FSC-certified products at their local lumberyards, a situation Blake would like to remedy.

“We’re not in this to cannibalize anyone’s territory,” he said. His goal is not to sell direct to contractors but to supply a network of lumberyards and home centers that keep FSC-certified products on the ground. So far, Beronio Lumber in San Francisco; Ecohaus in Seattle and Portland; and Green Spot in Carbondale, Colo., are listed as “stocking dealers” for Natural Forest Distribution.

“There’s still a lot of darkness around this,” Blake said, referring to the perception that green building products are astronomically priced and hard to get. “We’re trying to make this as simple as possible for dealers, so their sales force sees it as an opportunity.”