Changes and Challenges in the Industry

By Diane M. Calabrese / Published June 2022

Inauspicious? Time will tell, but on April 12, 2022, the Bureau of Labor Statistics (BLS) issued the Consumer Price Index (CPI) for March 2022. 

     In short, the trajectory of the CPI is up—and it’s up for all items tracked. Used as a measure of inflation, the CPI tells us that the cost of life and business increased 8.5 percent across the last 12 months. (BLS warns the seasonal adjustment has not been made yet, so the number may change.)

     We begin with inflation because it’s a change that poses a significant challenge for our industry (and all economic activity). It’s just one of many challenges that have come to the fore in the two most recent years. 

     At this juncture, the challenges are so numerous that members of our industry tend to sort them by priority or immediacy. “Biofuel is the biggest problem” from his perspective, says Delany Johnson, senior sales engineer at Wayne Combustion Systems in Fort Wayne, IN. 

     The Environmental Protection Agency (EPA) administers the Renewable Fuel Standard (RFS) program, which began with the Energy Policy Act of 2005. RFS requires a designated minimum volume of renewable energy in transportation fuels. The volume of biofuel that must be in the mix keeps increasing.

     Biofuel categories are cellulosic, biomass-based, and advanced. For 2022, EPA proposed a volume requirement of 20.77 percent for renewable fuel in transportation fuel. 

     The difficulty with the initiative is that the federal government and its EPA regulator one mandating the transition, but the mechanics of making it work are not in place. That is a challenge for the industry, explains Johnson.

     “Getting parts and all the stuff you need to make everything” is a challenge, too, says Johnson. “Growing lead times” are an outcome of that, he says.

     Trials for the industry have a way of feeding into one another. “Keep-ing up with production with parts problems” is one example, explains Johnson.

     But keep up is what members of our industry do. When we caught up with Johnson he was in the midst of a heavy schedule of travel. With his can-do and will-do approach, he follows the tried-and-true course of those who have been in the industry for decades.

Perspective

     Al Bonifas, owner of All-Spray in Swanton, OH, has been in the industry since 1980. Thus, he started his business during a decade synonymous with high interest rates and inflation and when pressure washers were unknown to most.

     Bonifas’s distributorship began with personal customer contact. Machines were taken out to demo to customers. “It wasn’t hard to help most customers save significant time and money and solve some of their more difficult cleaning problems.”

     The quick adoption of pressure washers generated fast growth. “Many dealers grew their businesses without even having some of the best business practices, me included,” says Bonifas.

     “As their businesses grew and competitors popped up, it forced them to run their businesses better, have salespeople, and hire service people to fix all the equipment they sold,” explains Bonifas. Manufacturers took advantage of more channels for selling, such as paint stores, rental yards, and industrial catalogs. 

     The pressure washer industry grew and matured in a relatively short period of time, says Bonifas. With the internet and mass merchandising of pressure washers to homeowners through box stores, competition grew for dealer/distributors. 

     Distributors responded to the challenge by broadening their reach, explains Bonifas. They began “selling more complex equipment and systems to heavy users in the agriculture, industrial, municipal, and transportation industries, where they demanded excellent service on heavily used cleaning equipment.” For the short term it worked.

     But change keeps coming. “Fast forward to the present day, and though we have been through some consolidation of manufacturers, [now] we are seeing a major transition of ownership and consolidation of dealerships,” explains Bonifas.

     How will the transition play out? That’s a question manufacturers and distributors ask, says Bonifas. 

     “Manufacturers still have quite a need for service on their equipment, no matter what channel it was sold through,” says Bonifas. “I believe one of the biggest opportunities for pressure washer distributors to make money today is for them to have a well-run and profitable parts and service department.”

     The opportunities are there, says Bonifas. There are end users “starving for good service,” and machines that ought to be replaced. The sum of the two is more sales. 

     “As margins on new equipment continue to be eroded, I believe it is the only way for a dealer to survive.”

     So many changes are occurring in the industry that it’s easy to focus on one and neglect the others. Don’t.

     Bonifas advises making the best use of all data available, such as that on customers and competitors. He uses the benchmarking program available to CETA [Cleaning Equipment Trade Association] members as part of membership to track the performance of his company. 

     “We must consider the future of our industry as far as gas engines are concerned,” says Bonifas. “There have not been any major technological changes in pressure washers, hot or cold, in the last 30 or 40 years, but the future and the agenda of electrification will provide much incentive to change how pressure washers are used and how they are powered. With exhaust emissions of engines being scrutinized, it stands to reason that exhaust on burners will also be on the radar in the future as well.” 

Problem Solving

     “The past 10 years have seen a lot of change in the pressure washer industry,” says Curtis Braber, owner of BE Power Equipment in Abbottsford, BC, Canada. “We continue to see consolidation of manufacturers and distributors, a trend that is increasing as some of the early pioneers of our industry look to retire.”

     But many individuals sell their businesses and other individuals start new enterprises. “Even with the consolidation, we continue to see the overall pressure-washer market in North America continue to grow year over year,” says Braber.

     Problems in search of a solution lead to innovation. “As environmental concerns become more important, we have seen new innovations and technology that help manufacturers adapt to the changing regulations,” says Braber.

Photo by iStockphoto.com/Florence and Joseph McGinn

     Stagnation is shunned by industry members. “Our industry applauds [changes] and works closely with engine manufacturers to ensure we can meet the customers’ demands while adapting to the changing regulations,” explains Braber.

     Just a few years ago, many in our industry were adopting or reviewing just-in-time manufacturing practices. The last two years have demonstrated there is a liability in every approach, and some approaches work well in one economic climate but not in another.

     “Supply chain challenges continue to be the most pressing issue in our industry over the past year,” says Braber. “There is a strong demand for cleaning equipment even as we are coming out of the [pandemic], but long lead times on parts are a constant challenge.”

     Certain problems are so complex there is no immediate solution. That does not mean we give up, but instead we work harder to find one. 

     Looking at his immersion in the industry, Braber says the most challenging problem to date has been the supply chain issues that are ongoing.

     “Most of the other challenges we have faced in the past had a line of sight to what was happening and a clear path to overcoming the obstacle,” says Braber. “With the container shortage this past 24 months, there just appears to be a lot that is out of our control.”

     There are many positives in challenges and problem solving. One is the opportunities that arise. 

     “The commercial contract cleaners have become much more knowledgeable and are now pushing the manufacturers to produce the ideal machines they need to work as effectively as possible,” says Braber. “An example of this is the shift towards soft wash from a traditional pressure washer.”

     End users are a critical source of information. “There is a lot of innovation coming out of [our company] right now in soft wash equipment manufacturing driven by the input from contract cleaners,” says Braber.

Plenty of Possibilities

     Pamela Callegaro, commercial manager at IdroBase Group, which is headquartered in Borgoricco PD, Italy, sees a world of possibilities in changes during the last 10 years. “Digitization at 360 degrees for both the company and the customer” has occurred, she says.

     “Thanks to the web and social media, the customer arrives more and more prepared for the purchase with a complete picture of products, competitors, and prices,” explains Callegaro. “Until recently, the only opportunity to meet the customer was at trade fairs and targeted visits. Now, however, through video calls it is possible to reach the customer at any time and in a very short time.”

     Callegaro takes a very positive view of globalization. “Thanks to globalization, the service offered is increasingly high-performance with the ability to deliver goods all over the world, while still guaranteeing short delivery times at low costs.” 

     The digital world enables connections among business entities. Identify and foster connections, and there is the potential to build a stronger industry. 

     “The most ambitious goals become accessible with faster results,” when groups of companies are created with the “aim of perfecting and optimizing work,” says Callegaro. Responsiveness to an acute need—a much-coveted result—is enhanced by optimization.

     For an example of what can happen, consider the last year or so. “There has been a strong collective awareness of the importance of creating a healthy environment in which to live and work,” says Callegaro. An accelerator of the process was the pandemic, which “has led all companies to include air and surface cleaning in their daily routine.”

     Moving to (and then immersing in) the digital sphere pose challenges. Callegaro acknowledges the implication of a “radical change in the approach to work.” The process demands “the training of staff” to better equip them “in techniques for proposing solutions” and the importance of doing so as quickly as possible.

     Change goes on even when the immersion in/cohesion with the digital world has been realized. As such, realizing all the possibilities for our industry in the future requires “openness to change” and the rapidness of it, says Callegaro. The commitment ensures the industry keeps pace with “the development of new technologies, tools, and programs.”

     There are challenges for the industry in every direction. “To continue to offer professional and innovative solutions while respecting the environment is one of the biggest,” says Callegaro.

     “The main challenge is to stand out, emerging in a market where customers are increasingly aware of products, thanks in particular to digitalization,” says Callegaro. “We believe that the winning weapon is to offer the complete solution by taking care to anticipate customers’ needs and requirements.”

     That complete solution, explains Callegaro, typically centers on customization. And customization hinges on “deploying our know-how and experience to provide customized services for each individual customer.” 

Big Picture

     There’s an adage that the more things change, the more they stay the same. It encapsulates well the changes and challenges in our industry. 

     Bonifas trucked pressure washers to demo at the sites of potential customers and to provide information and answer questions. Now, Callegaro starts with a different channel—the one facilitated by the digital world—to do the same thing. 

     Of course, Bonifas uses the digital channel, too, in 2022. And when a truly custom solution is required, those that had their first immersion in the industry with the virtual world in place are ready to get into the real world and meet face-to-face with a customer.

     No matter how many changes and challenges there are in the industry, customers continue to place a premium on service. Whether it’s getting them more information on the parameters of fuel requirements, providing excellent and expeditious service to repair equipment, or meeting an urgent need for a part or ancillary, service unifies all the entities working in our industry—in all channels.

     To know where we are going, we have to know the place we started. Otherwise, we lose our sense of direction. That’s the corollary of the change adage, and it’s worth recalling.