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New Residential Construction Trends & Distributor Relationships - PODCAST TRANSCRIPT

New Residential Construction Trends & Distributor Relationships - PODCAST TRANSCRIPT
April 8, 2024 at 12:00 p.m.

Editor's note: The following is the transcript of a live interview with Jeff Leyden from ABC Supply Co. and Stephanie Lyons from West Region. You can read the interview below or listen to the podcast.  

   

Intro: Welcome to Roofing Road Trips, the podcast that takes you on a thrilling journey across the world of roofing. From fascinating interviews with roofing experts to on the road adventures, we'll uncover the stories, innovations and challenges that shape the rooftops over our heads. So fasten your seat belts, and join us as we embark on this exciting roofing road trip.

Heidi J. Ellsworth: Hello, and welcome to another Roofing Road Trips from Rupert's Coffee Shop. This is Heidi Ellsworth, and we are here today to talk about new construction. Yeah, the thing that kind of starts everything for us in the roofing industry. And we wanted to talk to the experts on what is happening out there around new construction and also the labor market. So much is happening. So we invited our friends at ABC Supply, Jeff Leyden and Stephanie Lyons, to visit with us today about new construction. Welcome!

Jeff Leyden: Hi. Thanks for having us.

Heidi J. Ellsworth: This is a great discussion, so excited. Let's start with some introductions. So first, Jeff.

Jeff Leyden: Jeff Leyden. I am Vice President of Residential New Construction for ABC Supply and actually LW Supply too. We have two teams that I head up for both companies. Stephanie's part of our team, she'll talk to that in just a minute. And so I focus on the residential your new construction builder. So this is perfect for this segment.

So, my Greece history got my start actually chasing Hurricane Andrew down in Florida in the 90s. See how I got sawdust in my veins, they say, I started in the lumber business, that's how they referred to that. And so I was one of those lumber guys for many years down there. Then I found my way up to Bradco Supply back to the Northeast where I'm from. And I spent many years at Bradco Supply until they were acquired by ABC Supply in 2010. And I've been at ABC Supply 14 years now as the Residential New Construction Vice President.

Heidi J. Ellsworth: I love it. Welcome. So happy to have you here today. Stephanie.

Stephanie Lyons: Yeah, good morning, Heidi. Thanks so much for having us. This is real exciting for us. My name is Stephanie Lyons, I'm the Business Development Manager for the West at ABC Supply. And I've been with ABC for just over a year. I began my career in my early twenties, with a small regional builder in California. That builder was then acquired by a large national builder not long after I started. And I worked for that company for about 13 years before I shifted gears and went back to working for a small private builder. And I was with that company for eight years before joining ABC Supply.

All 20 plus years in the industry have been in the purchasing department for these home builders, and I really enjoyed my time with them, but I'm super excited to be over at ABC now. My decision to join ABC started kind of with a desire to try something new, and the opportunity presented itself, and it was just the right fit for me. So it's been a bit of a whirlwind the last year. Learned a lot. Jeff's still taking my calls, so I feel like we're doing good. Thank you-

Jeff Leyden: [inaudible 00:03:00] she's a superstar, really. [inaudible 00:03:00], yeah.

Heidi J. Ellsworth: Well, what a great background too, to bring such a strong perspective into the distribution, and to really understand the market. I think that is so important. So let's kind start out with a little bit of what's happening and what you're seeing in new residential construction from that distribution perspective. So Jeff, why don't you get us up to date on what's all happening out there?

Jeff Leyden: Yeah. Look, we're all going to love what's going on. We all see the data. The data suggests that we're going to see several years in front of us of growth, continuous growth through residential new construction. There's a shortage of housing. You read it, you see it, you feel it. That translates to more business for our roofing contractors, of course. So, really excited about what's in front of us. So I think it's just for a positivity in the industry. It's going to play out well for all our customers. And for our customers, so our challenge, our right to exit is a service to roofing contractors. That's what we do. And so we will talk about things that make it easier for them, but we want to make it to one-place shop, help you grow with what's going on with the business that we see. So we're really excited about what's coming in the next few years. Yes.

Heidi J. Ellsworth: Yeah. I mean, what we're seeing trending out there too is really, the contractors what I'm seeing from roofing side, but this really goes back into the builders, is how much they're diversifying. And we have some roofing contractors who are builders, who are small builders, but also, on the builder side of it, there's a big mix of products out there right now. Maybe talk a little bit about that, Jeff, on what you're seeing when it comes to solar and to new products within the new construction area that really we're going to be seeing down the line.

Jeff Leyden: Yeah. So the roofing contractors, I mean, that's where we are. It's all lifeline to our business. This is our core right to exist, there's no question. So part of that, what we need to serve to the customers, is a good mix of products. So that's what we try to do. So, we try to make it the one-place shop for our contractors, our roofing contractors. Everything on the exterior, the roof, the walls, the cladding products, the window products, the accessories. We've introduced solar over several years ago. Now we have over 80 branches stocking solar components for our customers. With that, we have the machinery and equipment to load it on the roof, which is kind of unique in the industry. Typically, it's a guy on a ladder with a solar panel on their back. And so that we [inaudible 00:05:45] up there safely for them, and also to save times for the roofing contractor for them as well.

We have also, LLW Supply was purchased, this is almost our seventh year now on the drywall side. So we have a direct connection to our drywall group of branches. And so that also is now added to the mix for the builder customers, the roofers of new building as well. And finally, last thing I really want to mention, Tally Country. Tally Country is a group of branches, many branches that support hurricane and storm protection products, pool enclosures and screen enclosures as well. So trying to make it the workplace shop easy for the contract to shop through us so we can service our business.

Heidi J. Ellsworth: Right. And really focusing in on that small builder, which I mean, with all the history, we know those lines blur, right? There's a lot of small builders who are doing everything. They're doing the roof, they're doing siting, they're doing the whole building. They aren't subcontracting it out. But then you have your large builders, of course. And this is, Stephanie, really where you come in, with your great experience of how when distribution is looking at visiting with or working with builders large and small, what are you seeing from the small builders' perspective on working with distribution and what's going on in the market right now?

Stephanie Lyons: Yeah, absolutely. Now that I'm on the distributor side, I definitely see how valuable that relationship with distribution could be. I know that with new construction, the schedule is so very critical and we put a lot of faith in the roofing trade partners, so the product's going to they need is going to arrive on time and as ordered. And for the most part that works. We've got a lot of great roofing trade partners who do a phenomenal job. But every now and then, it helps to build that relationship at every level from manufacturer to distribution, installer. Because we're all humans, and stuff happens. And so when one of those legs of that tripod starts to wobble, you've got the other two that can kind of come in and pick up as needed. But if you don't have those relationships built, it makes that more of a challenge, especially with the smaller builders.

And I know that I can say for certain that I didn't do my due diligence and fostering that distributor relationship when I was on the builder side. So that old saying, "If I knew now what I know then, I would definitely do things differently." I think there's a lot of challenges that small builders face where the relationship with a distributor can help. We have resources that the builder may not have with software, programming or even at our branch level, where they can help with estimation. We've got access to the manufacturers that they may not have at every level, so we can assist with them finding product literature, finding products that meet municipality requirements sometimes. See supply chain disruptions, we can assist in finding product from either manufacturer or other branches in the area and can communicate in advance with builders when shortages are likely so they can shift how they're doing business, whether they're ordering earlier or moving product, those kinds of things.

So having all those relationships in place really kind of helps ensure that product gets to where you need it as that small builder. And then the health and the viability of the turnkey installers. That's really prevalent in the West, I think, because predominantly a turnkey market. So, if create partner goes out of business, it's difficult for builders to pivot quickly no matter what their size, which equals delays, which equals margin erosion and most importantly, unhappy homeowners at the end of it, which is not good for anybody. So I think there's a lot of value in what distribution can bring to the builder's table.

Heidi J. Ellsworth: Yeah, I do too. And I love the fact that both of you were builders and involved before you got into distribution. And when you look at that, we always talk about the importance of the relationship and how important it is to have that relationship with distribution. One of the things you said, Stephanie, that really hit in my brain was that relationship that you have with the manufacturers. And that you're able to bridge that gap between the manufacturers and the builders to really help them understand new products, what's happening, just like we were talking with Jeff about some of the new products that are coming out, the new designs, energy savings, solar, all of those different kinds of things. From your experience, how important is that? And really, were you able to take advantage of working with your manufacturers, with distribution, getting those introductions? Maybe share a little bit of that?

Stephanie Lyons: Honestly, I didn't talk to distribution too much. Even though I had friends on the distribution side, it didn't really occur to me. I had manufacturer contacts. I'm not convinced that they were the right contacts sometimes, but I didn't know any better. You don't know what you don't know. So it would've been really helpful had I known the right person to talk to. And I think that's where your distributor could really help point you in the right direction of the right person to talk to, to get exactly what you're looking for.

Heidi J. Ellsworth: And exactly what you need. And it kind of comes back around too, Jeff, when you're looking at some of these challenges that the small builders are having that Stephanie talked about. I mean, to have a partner who has such deep resources and I think that's what ABC Supply brings, is just an abundance of resources no matter what you're looking at. How important is that? And give us some of what you're hearing and as you're talking to small builders and large builders out there and their relationship with ABC.

Jeff Leyden: Yeah. So Stephanie, you hit a lot of the key points. I mean, look, we're the roofing contractor's advocate to the industry. And that's really clear to us. Small, big, medium contractors, builders. We go to the market, we go to the manufacturers looking for the best source, free supply, pricing, quality, all those things. And we'll bring that very in a neutral response to you. Again, we're not going to savor one of the over necessarily, we're going to bring it what we think is the best price, product, service, associates, that your job goes efficiently. That's really what we do.

So, even as a small roofing contractor, I mean, you can still get that. That's what we do. We'll go to market, we'll come back to you with options. And you'll look at the options, you'll make decisions based on what we delivered to you. And that partnership makes it really strong. It's a very powerful thing. So move forward about that.

Heidi J. Ellsworth: You're still right in the middle, a labor shortage that's really not going away anytime soon. And so this is another area where ABC Supply has really been supporting contractors who are being impacted by that workforce shortage. And it doesn't matter if you're a builder, or if you're in roofing, any trade, construction overall is having really dealing with this labor shortage. So Jeff, what are you seeing out there on the labor shortage, both with the new construction builders and also in the roofing?

Jeff Leyden: Yeah, it's real. And if you ask the builders what it keeps them up at night, land. Labor's number two. And then housing affordability. So it's number two, it's hit this industry hard. We're aging out, not speaking of anybody, no jokes, but we're aging out, how do we attract young talent into this non-sexy category, roofing products? And that's the challenge we have. So we all need to take our part in this. And so at ABC L&W Supply, we support a lot of NAHB in those groups, so they have trainings groups for bringing trades into the industry. We provide training internally for low-slope training, from commercial roofing products, we do that as well.

We provide something that's really exciting, we're going to talk about just for a minute, it is we have something called path to CDL. And so yeah, yes, for ABC Supply and L&W Supply. But what we can do, as we know, truckers, trucking. That's all part of the industry. It affects every delivery for every contractor we have. It's a big shortfall in the industry. So the path to CDL is essentially this. We have 60 centers, training centers, within ABC and L&W, to train upcoming employees rate for both groups, right? Warehouse folks, outside salespeople, new people. They're coming to our company and we spot them, we train them and get them CDL licenses.

Now, last year, I just got this new number, the new number for 2023, we had 178 CDL trainees come through and get a license through our system. And they are employees today.

Heidi J. Ellsworth: Wow.

Jeff Leyden: Yeah. This is all part of doing our part, and just trying to make sure we always show up the labor piece, bring people into it, negative signing for the young folks to come into the industry.\

Heidi J. Ellsworth: Yeah. Well, that's the whole key, is to really be bringing more young people into the industry. And we want them to be involved, we want them to think we're cool. And so those kinds of things with CDL training, but also just helping contractors find more labor. And I'm going to kind of step back there just a little bit, because it's about finding labor, finding that next generation who's coming in, but it's also about really time savings, when you're looking at the time savings so that we don't need as many people. So, are we using technology? Are we automating? Are we using the tools there that can help bring that about? So Stephanie, what are some of the things that you are seeing with roofing contractors on how ABC Supply is helping on those time savings and technology?

Stephanie Lyons: Yeah, I think ABC Supply, I think we're trying to stay current with technology trends and people use their mobile devices for everything in their lives these days.

So we've got the MyABC mobile app that can be used for on the go ordering, you could check status of upcoming deliveries, you can pay invoices, you can probably enroll your child in college. There's all these things you can do in there. Not quite that far, but it covers everything, every aspect of what a roofing contractor needs, it can basically be done through the app. We had a meeting recently, and they were talking about even applications. You can just send a text to apply, which is wild to me to apply for a job that way.

We also have express pickup, which I think is super helpful for the roofing contractors. You can skip the line and get right back to the job site faster. I know we can help in other ways as far as we can generate reports, real-time reports for job costing, historical needs, rebate reporting. We've got a lot of tools at our disposal. Yeah.

Heidi J. Ellsworth: Well, my ABC supply, I mean, it's just an amazing technology tool for the industry.

Stephanie Lyons: Oh, yeah.

Heidi J. Ellsworth: And Jeff, you have obviously builders, small new construction builders who are using ABC Supply, very ingrained. And they're also using MyABC supply and the technology available out there too, right?

Jeff Leyden: Oh, absolutely. The technology, like Stephanie said, we're trying to stay ahead of it. And so we have a lot of resources into that segment. It's time-savings, time is money. We get it 100%. These are simple things. We can do this thing. You can order an estimate for the house through your app. We have Huger, we have EagleView, will be technology to our website. You can just click, click, get an estimate. Faster, better, easier. The tools is a priority, and we realize that. All this is part of the shortfall on labor, is just more productivity for the contract to our customers. So yeah, so it's really important to us. Thank you.

Heidi J. Ellsworth: It's a lot. I love it. And I want to, so my dad was general contractor, he built new homes, he did all of that stuff, so I grew up in those trades. And there is this beautiful entrepreneurial spirit that I inherited. I have a little bit of it myself. And I think is what you really see every day with roofing contractors who have started, they're obviously owners of the businesses, small builders, Stephanie, large builders, it doesn't matter. They've all started somewhere and very entrepreneurship. But I love the fact that ABC Supply tends to really think outside the box and help that spirit, that entrepreneurial spirit.

Jeff, talk just a little bit about that, and how builders and of course roofing contractors, but builders are working with ABC to kind of think outside that box and save time, be more profitable, all the good things that you can bring.

Jeff Leyden: So, immediately my mind goes to the pandemic, right? Well, boy, right? Do we learn how we all had too many SKUs, too many windows selections, too many colors, too many products. And soon as the supply chain failed us, it was like, "Wow, what were we thinking?" So we learned so much on that. So that brings us forward to today. And so now we see simplification by most builders. We see better practice, we see forecasting by all sizes of customers now. If you're smart and we'll help, the data's really, really important. So we should be able to forecast your needs. You should forecast your needs to your distributor.

So we have the product on the shelf ready to go. A lot of the products are still, the manufacturers don't typically manufacture whole large inventories anymore. It's manufactured on demand, per order. So we've got to stay ahead of it. So all these things are really important. We're just going to encourage our roofing contractors as working with the builders, same thing. The forecasting take advantage of the resources and the data. The data will really provide you with some of the guidance you need to stay ahead of the industry and the challenges that we say. So all those things are really important.

Heidi J. Ellsworth: Right. Yeah. There's so much to think about there. When I think about the builders, I think the custom home builders, the production builders and everything in between, right? Between the big mansions too, the production and all of the developments that are going in right now. You said the number one concern is land, right?

Jeff Leyden: Is land.

Heidi J. Ellsworth: Yeah. I mean, there's so much out there. And so to your point, what you just said, the roofing industry and the roofing contractors really need to be aware of that, especially the ones who are really tuned in. And I know a number of contractors who are really tuned into that residential new construction builders and really providing the kind of services they need. And usually, always, is with the support of ABC and the great distribution.

So some final thoughts. As we're thinking about small builders and kind of that relationship between small builders and distribution, and also then with our roofing contractors, what are some of your final thoughts? Stephanie, let's start with you.

Stephanie Lyons: Yeah, my final thoughts, I would say the small builders shouldn't underestimate their value. They still make up roughly 50% of the new homes that are delivered across the US. And I think they provide a diversity of product and architecture, and are just as important to us as a distributor. And I think great relationships are key. I think that we take care of our customers, roofing contractors, builders of all sizes. It feels like an extended family to us. And it's never a bad idea to get to know who you're working with and put a face to their name, and take that relationship from an email to a more personal level. I think that really is the foundation for success in our industry.

Heidi J. Ellsworth: Yeah. Get to know your sales reps, get to know your branch managers. Go to the barbecue during this summer, right? Be involved. Jeff, what are some of your final thoughts?

Jeff Leyden: Yeah. So, a lot of what Stephanie just said, but she said several different times, but taking advantage of the resources that are out there, we have a vast amount of resources out there, the industry. Even the manufacturers, and we could make that connection like we spoke to, take advantage of it. You're not out there alone. You're our customer. Our right to exist is you, the contractor and our builder customers. So, if you don't take advantage, we can't help you. But I can tell you, the ones who do take advantage of it, I think they have an advantage. Resources won't cost you any money, we're happy to do it and we ask how we build business together. So that's my message.

Heidi J. Ellsworth: That's how you build your business. It really is. We tell people that all the time. There's so much out there that distributors and then manufacturers are doing to help them grow their business. And so for contractors, I don't care what kind of contractor you are, that's what you need to be doing. Whether you're building general contractor, roofing contractor, it's all about that relationship with your distributor and really using those resources. So I love these conversations. I can't wait, we'll have to do it again. I want to hear more about what's happening out there. I always liked looking at the pipeline.

So, both of you have a great day. Thank you again so much for being here today.

Stephanie Lyons: Thanks, Heidi. Have a great day. We appreciate it.

Heidi J. Ellsworth: Thank you. And thank you all for listening. This is great stuff. Be sure to check in with your distributor, get to know your local builders. Build those relationships in your community. It can only lead to more business for you and your business. Also, be sure to check out all of our podcasts under the RLW navigation on rooferscrappyshop.com, under Roofing Road Trips or on your favorite podcast channel. Be sure to set the notifications so you are subscribed and set the notifications so you don't miss a single episode. We'll be seeing you next time on Roofing Road trips.

Outro: If you've enjoyed the ride, don't forget to hit that subscribe button and join us on every roofing adventure. Make sure to visit rooferscoffeeshop.com to learn more. Thanks for tuning in, and we'll catch you on the next Roofing Road Trip.

  

       



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