Indusparquet: What you don’t know may surprise you

Home Featured Company Indusparquet: What you don’t know may surprise you

The Largo collection, shown here in Chestnut Autumn, measures 7 3/4 inches wide and features a 3.2mm, sawn-faced veneer.

By Steven Feldman Miami—If you think you know hardwood flooring manufacturer Indusparquet, you probably don’t. You may know the name. You may know that the company produces Brazilian hardwood. But much has changed over the past few years—changes that create significant profit dollar opportunities for flooring retailers.

While Indusparquet has been producing hardwood for 50 years, its products really landed along these shores back in 2006, when it was the major supplier to BR-111, the company that created the demand for exotic species such as Brazilian cherry. It seemed like exotics became one of the largest hardwood flooring categories overnight.

“When people refer back to that period, nine out of 10 dealers and distributors would tell you BR-111 made some of the best solid flooring in the world, bar none,” said Jodie Doyle, Indusparquet’s vice president of U.S. sales and marketing. “But 100% of the solid products they sold were made by us—everything. And the mill that made those products is that same factory that makes our products today. It’s the same premium quality.”

Once Indusparquet and BR-111 parted ways, Indusparquet embarked on establishing its own brand in North America. It experienced some success, but a few years ago the company felt the need to change direction and reposition to move forward. The goal in the repositioning is to be more relevant and efficient to the distributor, retailer and, hence, the consumer. This is where the hiring of Doyle became one of Indusparquet’s greatest assets given his 16-year background at Gilford Johnson in Kentucky. He replaced Jason Strong, who opened up the Fuzion Flooring USA business in Texas. Strong had led the U.S. sales efforts for Indusparquet from the beginning.

“Jason will always be part of our family and we owe him so much thanks for getting us where we are in the U.S. today,” said Flavia Baggio, general manager for Indusparquet U.S. “I think sometimes change is good for everyone involved, and we’re so happy that Jason’s new company agreed to take on distribution of our products down there. I mean, who knows our products better than him?”

Less is more

One of the first things Doyle did was rationalize the number of Indusparquet’s SKUs. “Typically, manufacturers tend to make more SKUs so they have production,” he explained. “I come from a distributor mentality, so I really know what distributors’ pain points are. When I came here, I noticed there were just too many SKUs. Distributors don’t want too many SKUs, especially in a niche product category. They want a nice, tight line that is relevant.”

To that end, Doyle eliminated about 50% of the SKUs. “We went from roughly 100 to 50,” he told FCNews. “The ones we eliminated weren’t good sellers or were past their prime because of the visual or price point.”

Cutting SKUs also leads to improved service. “One of the value propositions we give our distributors is the fact we back up everything in running line in the U.S.,” Doyle said. “Not everybody does that. It’s much easier to have fewer SKUs that are meaningful. Because then we can make sure we have enough of it when our distributors need it. They know when they’re out of stock, we have it. That’s a value we add to them.”

After rationalizing the number of SKUs, the next move was to downsize the merchandising system. “What we had was the Design Tower, which is still in the marketplace today. There are three towers that hold 36 SKUs—actually more because some products are multiple width,” Doyle said. “But I was convinced if we were able to go into a distributor and say, ‘We’ve got this engineered stacker that looks a little nicer than everyone else’s and holds 12 samples, we believe we can sell more product that way.’ Every distributor that has put them out would tell you it’s a better merchandising system than what we had and is producing more results.”

Doyle said Indusparquet has placed about 1,000 of these compact units since the summer of 2020. They are fully customizable so distributors can tailor the display to mirror what they stock. “What we did is we make the distributor’s life easier. Because they’re able to focus on what they’re stocking, where they have the best landed cost, etc., which then makes them more profitable, which makes the retailer happy because they have it in stock. It’s not rocket science.”

Once the SKUs and merchandising units were scaled back, the next thing on the docket was to address pricing. Doyle said that although the Indusparquet product is unique and different, it still needed to be priced competitively relative to similar category options. “I went back to our management and ownership in Brazil and told them we don’t set the price for these products—the market does. We have been able to discount pricing to distribution so they have the very best chance to compete in the category. We win when they win.”

Wholesale strategy

Speaking of distributors, the roster looks a bit different than when Doyle started. Gone are Haines, All Tile and BPI. In are Custom Wholesale Flooring, Derr Flooring and a direct-to-retail model in the Midwest. “It wasn’t easy,” he said. “Back in 2019, LVT was fully on fire. The number of distributors that wanted to add a wood line was small. The ones that wanted to add a premium exotic line was almost non-existent. But we were able to replace Haines with two distributors, and today I could tell you we do more business in those markets than we did before with two fantastic partners: Custom Wholesale, which is now owned by Horizon, and Derr Flooring. They’re killing it with our line.” BPI was replaced with Strong’s Fuzion group, which is also experiencing tremendous growth with the brand in its markets.

Indusparquet is going direct in the Midwest simply because it could not find a suitable distributor to take the line. However, it’s returning dividends. “We are already doing more business in the footprint than with our previous distributor,” Doyle said. “We have hired a new business development manager to give us feet on the street in those areas, so we are planning on growing that market big time.”

Baggio said Doyle was the perfect fit for what Indusparquet needed to become relevant again. “One very important thing that he brought to the company was focus and execution of the strategy in which he believed,” she said. “We were missing that. If you don’t have focus, you cannot execute. He has a very strong strategic mind, is super organized and his distributor background and knowledge is a big asset.”

Doyle said he brought a fresh look to the company. “The mill is Brazilian. And the family, even though they let Flavia and I run the North American business, has strong beliefs on what they think should be selling. They needed somebody to push back on the sales side to say, ‘This is how it works in the U.S., and this is what we need.’ And because I came from that distribution background, I have a much broader view of the industry and current needs of our stakeholders than somebody in Brazil. Now that they are seeing real results from these changes they are really excited about what’s going on here.”

Don’t call it exotic

Indusparquet’s offerings have evolved plain, natural-looking South American species to products featuring wirebrushing and texturing techniques. Pictured is Brazilian oak java.

Indusparquet and flooring retailers are bearing the fruits of all these aforementioned efforts. But that’s not to say dealers don’t need education on certain realities and myths surrounding the company.

“Today, the niche we’re in is South American premium hardwood flooring,” Doyle said. “We don’t want to use the word ‘exotic.’ It’s unique, it’s different. Look, the reason Brazilian cherry became popular is because people were tired of seeing 2 ¼-inch red oak butterscotch. We’re currently in a situation where people are tired of having LVT jammed down their throats when they really wanted wood. And when they get to the hardwood flooring section, seeing lots of European oaks and more of the same. They are telling us that they want different and something that can help them make money.”

Baggio cited Brazilian oak as a species with which dealers might not be too familiar. This is the new Brazilian cherry as far as South American species given today’s trends. “It’s different but a tremendous replacement for oak at a great price. With the current shortage issues with red and white oak, the product is now really relevant, and you are seeing more and more larger companies adopting to that. We actually developed that name over five years ago. Dealers who put that sample close to the American oaks are killing it.”

The actual species is Tauari, which is harder than white oak and red oak. “The product looks like a rift and quarter-sawn product,” Doyle said. “So it is inherently more clean than a normal U.S. oak. Everybody we talk to is saying they want cleaner looks. Tauari gives you that look. And there’s an abundance of it in Brazil.”

Another unique species Indusparquet offers is Sucupira, referred to in the U.S. as Brazilian chestnut. “That product that tends to come off brown to gold,” Baggio said. “Those are the next big colors based on what you hear from designers. They’re warm, and the grain is beautiful.”

Of course, Indusparquet still sells a tremendous amount of Brazilian cherry. “We have to balance the line between unique and on trend with timeless product,” Doyle said. “The people who say Brazilian cherry doesn’t sell are 100% wrong. It’s been selling well up and down the East Coast as well as California and the Midwest. And those sales have ramped up significantly over the past 12 months.”

Indusparquet’s brand new Largo collection epitomizes that continued focus on moving the category forward. It’s 7 3/4 inches wide with a 3.2mm veneer on the top that is dry-sawn face. “It’s like you’re looking at a solid,” Doyle said. “And it has eight SKUs that are completely unique.”

And the product is available with an attractive retail price point that provides tremendous margin opportunity for retailers. “Retailers who think they can make 40% every time they sell wood are probably not selling wood,” Doyle said. “Because the truth is that in the hardwood category it’s not about margin percentage, it’s about margin dollars. You can’t spend margin percentage. Typically, the really strong retailers have margins around 30% on our products and are thrilled with the profit dollars those sales generate.”

Investing in forests

forest
Indusparquet embarked on an extensive new effort to develop a complete sustainability compliance program.

Up until now Indusparquet did not own its own forest, but that is changing because of the challenge to get lumber right now. “During COVID-19 there was lumber but they wouldn’t go harvest,” Baggio said. “We’re currently invested in a partnership right now with a saw mill to extract logs, and then we will be buying a forest that already has the permits from the government to extract. This will really help us with sourcing on several key species, including Cumaru (Brazilian Teak) and Ipe (Brazilian Walnut)”

The company recently embarked on an extensive new effort to develop a complete sustainability compliance program to utilize for the U.S. market specifically. “We need our customers to know and understand what we do and how we do it,” Baggio said. “Sourcing from managed forests has to be communicated better to enable people to really understand how we are sourcing the raw materials. Lots of different groups have dominated the narrative when it comes to the Amazon and wood products from Brazil. It’s time we start to set the record straight and educate retailers and consumers on how this really works. We owe it to our distributors, our customers and our employees around the world.”

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