Green retailing enters the big time
The idea of a nationwide chain of green building material outlets has been dreamed about by many eco-minded business people and investors. But it’s never gotten past the one-off stage, where successful green retailers push past their local markets with a successful model that can work in multiple cities across the country. Until now.
The merger of Ecohaus and Green Depot, announced on Feb. 7, is a West-meets-East event that unites three of the pioneers in the green-building movement. Four, if you count Greenmaker in Chicago, which Green Depot purchased in 2008.
Ecohaus, which has locations in Portland, Ore.; Seattle; and San Francisco, was probably the first LBM dealer in the United States to offer only eco-friendly and sustainable building products to contractors and builders. (Ecohaus was originally two separate companies in Seattle and Portland that merged in 2009; both had been in business for more than 15 years.)
The stand-alone stores focused on products such as certified lumber, tiles made from recycled glass, low-VOC paint, non-toxic caulking and adhesives, formaldehyde-free insulation, reclaimed flooring and other products that were hard to find in the 1990s but have now entered the manufacturing mainstream.
Founded in 2005 by Sarah Beatty, Green Depot now has 10 stores: a Manhattan flagship; Brooklyn; Chicago; Boston; Philadelphia; Long Island, N.Y.; Newark, N.J.; Albany N.Y.; Manchester N.H.; and Newark, Del.
In between cross-country flights and Skype meetings with her new West Coast stores, Beatty, who now holds the title of president over the entire operation, took a few minutes to answer some questions about the merger, her plans for the company and where the green building industry is heading.
Home Channel News: How did the acquisition deal come about?
Sarah Beatty, founder and CEO, Green Depot: We’ve known and respected the people at Ecohaus for a long time. We have very similar missions. We’ve always joked that, like the American railroad back in the [19th] century, at one point there would be that golden spike that would link the East Coast to the West Coast.
HCN: Will you rename the Ecohaus stores in Seattle, Portland and San Francisco?
Beatty: [Eventually] we’ll bring everything under the Green Depot umbrella. Ecohaus has an incredible loyal customer base, and [first] we want to make sure that those customers understand that they’ll be served, and there’s even more opportunity for us to help them as we move forward.
HCN: Can you explain your business model and your relationship to MarJam Supply Co.?
Beatty: We have the knowledge and the insight about green products and how they have to be applied in a building setting. But you also have to be able to plug yourself into a supply chain that will get the products on a truck within 24 hours and get it to a building site. So we’ve aligned ourselves with a logistics provider, one that also allows me to leverage their warehouse structure. Seven out of 10 of our showrooms are next to a MarJam location.
HCN: Will you do the same for Ecohaus?
Beatty: It’s possible that I’ll be looking for a logistics providers on the West Coast.
HCN: The West Coast stores carry a lot of building materials, while the East Coast focuses more on consumer goods. Will there be much cross-pollination?
Beatty: We’ll have to look at that on a case-by-case basis, and look at the markets. It’s not a ‘one size fits all’ equation. We have to maximize the end benefit for builders and consumers, and [factor in] logistics costs for each product. But with positions on both coasts, we’ll be able to develop certain local and regional relationships with product developers, and also from a distribution perspective.
HCN: Surveys show a lot of consumer resistance to buying green building materials because of the price difference.
Beatty: The cost has come down considerably in the last five years. In many categories there’s parity. Eventually green products are going to be the most cost-effective solution. And don’t forget the [green] building codes around the country, plus water conservation stipulations. We’re seeing a shift in the marketplace now. It’s a sea change.
HCN: Where do you stand on this FSC versus SFI controversy?
Beatty: No comment.
HCN: Which do you offer?
Beatty: Currently we carry FSC-certified products.
HCN: Who exactly are your pro customers?
Beatty: We deal with custom builders, institutions, but I’d say our sweet spot is custom builders who are mid-sized shops. When they approach a job, they usually establish their own relationships with the vendors.
HCN: Are you required to do a lot of product knowledge with your pro customers?
Beatty: An immense amount. But once a builder has tried something and they have a good result, that’s another arrow for their quiver on their next job. And it’s not lost on that community when they’re not coughing or sick or have their eyes burning at the end of the job.