Burning Impulse

Fire log manufacturers are stressing just two things: location and displays and displays and location.

And nowhere is that battle for space and visibility more intense than the supermarket. According to a number of retail executives and fire log suppliers, supermarkets appear to be in the best shape to sell fire logs. However, retailers are unwilling or, more likely, unable to give the category the space it needs to perform at adequate levels.

A number of supermarket nonfoods buyers say fire logs demand upfront space to maximize sales. While many say that the category does well during particular seasons, especially the Halloween to Christmas corridor, they say they run into a lot of resistance from other supermarket executives to expand the display into other times of the year.

"Retailers have been dealing with the fire log category for several decades now, and they know that the category can, in the right circumstances, produce solid sales numbers and margin rates that can reach 40 to 50 percent," says one retailer. "On the other hand, this category is extremely dependent on the weather, so retailers do not want to take too much of a risk with it. This struggle has been going on for decades."

Suppliers have a different point of view. They say there is actually very little risk involved with the category, because fire logs are not used by most people for heat. In fact, they produce very little heat.

"If you put up a display versus inline shelf, you are going to increase your sales by up to 600 percent," says Brad Hertz, vice president of sales and marketing for Pine Mountain, which is second to Duraflame in sales. "This is because fire logs are basically 99 percent impulse. And if the weather is right, people will buy logs no matter what?as long as they are there."

The fire log category continues to be interesting for both retailers and suppliers. On one hand, sales have been relatively flat over the last few years. On the other hand, sales did experience an uptick due to the strange weather effects caused by El Niño last winter.

Still, there are a number of success stories for retailers who are willing to take a chance with fire logs.

Chris Caron, vice president of marketing for Duraflame, cites an example of how a display turned this category around at a Midwest chain. "About six years ago, this chain sold about 5,000 cases of our product each season," he says. "They put it on the shelf and ran an occasional feature, but never put it on display. We then involved them in our display contest. The first year, their sales doubled. They are now selling about 65,000 cases per year."

Now, not only is the chain involved with the Duraflame contest, it also has created its own chain-themed display contest.

Another reason to stress displays is practicality. The product moves so quickly when the weather is bad that stores often run out of stock. With a display, retailers are going to have significantly more inventory on hand when the inclement weather arrives. Otherwise, time will be lost restocking the shelves and getting inventory up to where it should be. And by then, the opportunity might be missed.

To catch the attention of both consumers and retailers, suppliers are reaching for promotional tie-ins. Links to such categories as beer, spirits, snacks and beverages are considered natural because of the entertaining aspect of the fire logs. Duraflame, which has an estimated 65 percent market share, is planning some regional tie-ins in the western U.S. with the E&J Gallo winery. "We encourage retailers who are going to build a beer or spirits display to include some side stacks of fire logs, because a display with impact will generate the impulse to buy," Caron says.

Looking to further establish itself in the category, Forest Technology, a division of First Brands Corp., is planning to tie in with Glad and Glad Lock products, also made by First Brands. "Our offer includes a free sample or free offer for one of our products?StarterLogg or HearthLogg?with a purchase of a Glad product," says Dennis Mullin, director of marketing for the company. "We are giving the retailer the chance to cross-promote, which is more efficient than trying to promote just one category. This cross-merchandising also leverages the high penetration of the plastics category."

Retailers tend to merchandise products based on price. Fire logs don't fit that paradigm. "Based on our past analysis, retailers don't get a lot of incremental sales from a feature or price reduction," says Caron. "In fact, we have found that they will get more out of an impactful end aisle or entry area display than they would from a 25 percent price discount." Mullin agrees: "Price is not the issue. We are planning to drop 135 million national FSIs next season to generate trial and multiple purchases. We know that once a person tries a fire log, they are hooked. We have no plans for cents-off couponing."

According to Hertz, over the last 10 years grocery has held its own in terms of sales growth, but with the advent of home centers and clubs, there are a lot more points of distribution for fire logs. So although this has helped build the category, it has also increased the competition. And the growth in competing channels has been stronger than in food. One reason for this is merchandising.

Suppliers note that mass merchandisers have more room to devote to fire logs than supermarkets and that this space advantage is starting to pay off in terms of greater consumer awareness and additional sales.



"Grocery has not done as much in terms of display," says Hertz. "Their sales reflect it. I think they could do a lot more. People go to the grocery store more often than to a non-grocery store. They have the ability to attract more sales, but because it is an impulse purchase, they must display it to sell it. People aren't going to walk to the inline section and buy fire logs. They need to see them."

While fire logs are winter, or "burning" season, products?essentially from late September through March or April?Mullin sees one merchandising problem as a "tendency for some stores to delay getting the seasonal products out. We know there is a certain segment of the population that buys early and in significant quantities to stock up for the season, so delays can cause lost profits that won't be regained."

He encourages retailers to be prepared as soon as barbecuing season ends. "When the autumn air comes in," Mullin says, "people begin to think about stocking up on winter items."

"Holiday periods also have a major effect on sales," notes Hertz. "Thanksgiving and Christmas are holidays when the family comes over. They are important times to promote fire logs." Caron adds, "Even in January, with football playoffs and Super Bowl parties, the product is going to move even in the absence of severe weather. As long as there is product in the stores, people are going to buy it."

The coldest areas in the country are not necessarily the best places to sell fire logs. "On a per capita basis, product moves better in southern markets than in northern markets because people in the South look at this as an atmospheric, ambiance type of product," Caron says. "Los Angeles is the biggest market for the category. People living in these warmer climates are not likely to purchase large amounts of natural firewood. Having fire logs available is an easy and clean solution."

Suppliers are also putting a big emphasis on fire logs' ease of use. And one thing that is likely to become a more important factor in the future is that they are environmentally friendly.

Fire logs, although artificial, burn substantially cleaner than natural firewood. "Our product produces about 70 percent less smoke emissions than a natural wood fire," says Caron, adding that fire logs are made with sawdust and wax. The wax allows the whole product to be aflame, whereas a wood fire has flames dancing around the wood. Most of the pollution is from the material that is being heated up but not completely combusted.



"Because our product is made with very fine particles for the wood material, it quickly becomes fully engulfed in flames and is more completely combusted than solid material. There hasn't been much attention on the emissions from fireplaces in the eastern United States, but it is an issue in the western and northwestern areas."

Caron says he believes this will continue to become more important all over the country, and he stresses that fire logs offer a cleaner way to enjoy the fireplace.

A fire is a delight to the senses?the beauty of the flames, the smell of the burning wood and, of course, the sound of the crackling wood. In response to this, Forest Technology has added a new product, Crackling HearthLogg. According to Mullin, many consumers who burn wood would try an artificial log because it is convenient, easy to light and burns without a lot of work. "But the one thing they don't like is that it is not as natural as a wood fire. They want to see it burn and to hear it crackle. So we are introducing an artificial fire log that crackles as it burns?Crackling HearthLogg."

Of course, there will always be those who would have nothing but a real wood fire burning in their fireplaces. For them, the fire log manufacturers have created artificial fire starters, products used to light regular wood fires quickly, without countless matches, crumbled up paper or piles of kindling. Fire starters work regardless of the condition of the wood

Fire starters are also providing Forest Technology with a way to expand its business by extending the product's season. "We recently got approval to use StarterLogg as a charcoal starter," says Mullin. "So we are recommending that retailers keep StarterLogg in stores during the summer season, as an alternative to liquid starters. We are confident in our ability to build this side of the business in the coming years."