Todd Teske on Hurricane Irene back in late-August: "Our call center started getting calls right away that weekend. When you hear stories about how our generators helped save lives, it makes what we do all the more worthwhile."
Briggs & Stratton recently closed a relatively strong fiscal 2011 with sales growth of 4%. However, the company’s U.S. sales dipped by roughly 3% on lower shipments of both engines and power products.
Todd Teske, chairman, president and CEO of Briggs & Stratton, visited with Yard & Garden to offer his take on the U.S. lawn and garden industry—and what needs to happen in order for more robust growth to take place in 2012.
Factors affecting lawn and garden demand
“There are several macroeconomic inputs we look at, but there are a few in particular that really drive business in the U.S.: unemployment, consumer confidence, and the housing market (both existing home sales and new housing starts),” Teske points out. “None of these are stellar by any means.”
Teske says that despite the company’s 3% sales dip in the U.S., Briggs & Stratton has fared better than the industry overall. “We’ve seen data that suggests consumer walk mower and rider shipments to be down roughly 10%,” Teske says.
Until the primary macroeconomic inputs improve, things aren’t going to turn around in any significant way. In the short term, manufacturers have been patiently watching consumers make their way through the equipment replacement cycle.
“There continues to be pent-up demand out there,” Teske says. “We have not seen dramatic shifts in the cycle over the past few years, and it continues to be around seven years in the consumer market for both walk mowers and riders. So if you look at the data and where consumers should be in the cycle, and where the market actually is, there’s a gap.” That gap spells opportunity.
With respect to commercial landscapers, Teske says the market has been much stronger. Professionals naturally have a much shorter replacement cycle. Still, many landscapers are now hanging onto equipment for four or five years as opposed to just two or three.
“In 2007 when the housing market began cooling off, contractors started to pull back a bit because they saw what was coming,” Teske recalls. “Well, that was four years ago. So we’ve started to see the release of some of their pent-up demand this year.”
Turning things around through innovation
Pent-up demand aside, innovative products and features can help pull both consumers and professional users back into the market for new equipment.
“There are pockets of consumers which dealers normally cater to that will pay a little bit more for innovation,” Teske explains. “We’ve seen some innovation over the past several years, but I think there needs to be more.”
For example, Briggs & Stratton is introducing a new overhead-valve engine for mid-market walk mowers. While emissions regulations drove much of the design, Teske said engineers also wanted to develop an engine that would be superior from the standpoint of power-to-weight ratio. “It’s a much lighter weight, but we get tremendous power and torque out of it,” Teske says.
On the equipment side, Teske says engineers are focused on what he likes to call interface-friendly features. For example, “cool seats” represent a new feature on Snapper riding mowers; a mesh fabric replaces the traditional vinyl that tends to get quite hot in the sun. “I’ve been cutting with a prototype of this seat, and it’s amazing what a difference it makes,” Teske relates.
Briggs is doing much more with electronics on some of its lawn tractors—in order to provide more information to the end-user. “Consumers need to easily see what their height of cut is, when certain maintenance procedures need to take place, and so on,” Teske says. “It really has to do with touch and feel. It takes some time for things like this to become acclimated in the marketplace. But we feel pretty good that we’ve given dealers some things they can appreciate over the next couple of years.”
Faith in dealers
Dealers have given Briggs & Stratton plenty to appreciate as well. “I’m very enthusiastic and optimistic about the future of the dealer network,” Teske says. “There are some really, really good dealers out there. We have a responsibility as a manufacturer to uphold our end of the bargain as well. That means providing innovative products that dealers can sell to their customers, and also helping dealers with their businesses.”
Teske sees huge potential in the Internet. Manufacturers need to do a good job of providing thorough information to consumers so they are better educated. Better-educated consumers are more likely to see the value in buying from a local dealer. That is critical because the industry, Teske reminds, desperately needs an adequate supply of servicing dealers.
“The last thing we want to see happen is a shift toward throw-away product in this industry,” Teske says. “That might work when it comes to things like toasters. But there is something fulfilling about having a quality piece of machinery. We need to continue giving that to the dealer channel.”