FRONT PAGE Trendspotting 2008 Guest Interview INDUSTRY ADVISOR PROFILE in the news EVENTS

David Fell is an industry advisor and FPInnovations-FPInnovations market researcher who investigates and reports on wood product market trends and opportunities.


Q. Dave, Trends Report 2008 for the secondary wood products industry has just been completed. Why is trend spotting so important for secondary wood product manufacturers to remain competitive and what are the challenges when it comes to picking a trend?

A. Traditional market research is based on the numbers from last year and as a result, your product line is based on last year. Trend spotting is taking the traditional market research one step forward. While you cannot predict the future, you can get a handle on trends, which basically means taking advantage of change and converting risks into opportunities.

If you want to get ahead of the competition, the ability to spot trends first or early in a trend cycle is vital. It’s the companies that are ahead of the curve that make the most innovative products or focus on a niche market. They are able to reap bigger profits or set the price. However, most manufacturers bid on jobs and end up competing on price. From a marketing perspective, price competition is the last thing you want to rely on as it is not a way to differentiate yourself and survive in a globalized world.

For example, as a consequence of the general trend to decreasing floor space in housing and, correspondingly, a possible decrease in number of interior doors, one opportunity for the door sector is to introduce higher-end interior doors that focus on quality and design. As market research shows, wood has a 99% share in the door market, but 80% of that is lower value wood. Thus, manufacturers could offer more solid wood doors or doors made of higher value materials like specialty veneers and market the products in a way that elevates the interior door to a design priority. Do we have a guarantee that customers will make the shift to higher end doors? No, but as an early innovator, a manufacturer has the biggest opportunity to turn a risk into a highly profitable product.

The main challenge for small and medium sized companies is having the time to track developments in their industry and market. If I am in the furniture industry, I might subscribe to furniture manufacturing and design magazines. But it would also be of high value for me to watch general design, fashion and lifestyle trends, scan them in corresponding trade and consumer media and attend relevant trade shows.

After identifying a number of interesting trends, the next step for a manufacturer is to find out which trend they want to capitalize on. Some trends are pitfalls, some offer opportunities. To make an informed decision, companies have to look at their raw material supply, production and design capabilities, what kind of sale force they have, and what the overall best fit is. Doing this preliminary work is far more effective than reacting to the market.

 
Q. Where do you see the biggest opportunities and what can you do to help a manufacturer pick/use a trend?
Currently, there are numerous trends for the value-added wood products industry. There are macro trends that apply to the whole industry as well as smaller trends that apply only to a single sector. There is a wide array of trends that manufacturers can choose from.

A. This is where we come in. We are removing one barrier for the manufacturer - not having enough time and resources to do the trend watching. Our industry advisors are well attuned to what’s going on in the market as well as in trends publications. We are constantly watching design trends, upcoming legislation and how it affects the market.
In order to help manufacturers select opportunities, we are launching a number of lunch talk series across the west this year. Over lunch, we’ll give participants a presentation mainly on the macro trends in the value-added manufacturing sector followed by an open floor brainstorming session. As each company deals with different issues, one might have labour problems, whereas another one struggles to make the shift to waterborne finishings, we will address individual company situations. Lead by a facilitator, we will explore together how a trend is going to affect your company and can be turned into a business opportunity.

For more information on the lunch and learn mini workshops, please call Dave at 604-222-5683.

Dave is a market researcher of wood products at FPInnovations – FPInnovations Division. He is involved in a variety of projects dealing with existing and potential wood markets in Canada, the US, and Asia.

David’s focus is on product and user innovation and the value-added sector; recently co-authoring A Value-added Roadmap for the Canadian Forest Service and a series of sector specific fact sheets and trends reports. He is also past chair of the Forest Products Society’s Marketing Technical Interest Group.

Back to Contents