Propane marketers partner with appliance manufacturer to add burner tips to homes

November 2, 2012 By    

Earlier this year, a small group of propane industry members, led by Randy Doyle from Blossman Gas, began meeting with Rinnai to explore ways to add gas load to their residential propane customers and attract more residential propane business.

All propane marketers have been suffering through warm winters, conservation and the load-shaving effects of a bad economy, but this group came together in a partnership with Rinnai to find ways to overcome losses due to energy switching, especially to electricity. The partnership “group” is exploring ways to add burner tips to each existing propane home and to maximize the number of burner tips in new homes being built. The group is committing to try harder to control the controllable.

Rinnai appeared to be a logical choice for an initial partnership with the propane industry member group. Rinnai is the No. 1 selling brand of gas tankless water heaters in North America. A substantial amount of Rinnai’s tankless water heater business is in propane models. When you examine Rinnai’s global marketing perspective, it also offers a wide range of kitchen and laundry appliances, heating and air conditioning units and other unique gas equipment for residential use. Many of these products are not currently being offered for sale in the United States, and the group is exploring that portfolio of products to see where new burner tip opportunities may lie.

The group also functions with Rinnai as an advisory panel on new product development, design and commercialization. The group’s objective is to “organically grow residential gallons by displacing other fuel sources, mainly electricity, with propane-burning appliances that are: 1) high quality, 2) dependable, 3) functional, 4) innovative and 5) priced competitively to meet the wide range of customer needs served by the propane partners.” This objective is meant to help all propane marketers willing to commit to trying harder, along with the group. Rinnai seems to have lots of potential to assist with the objective.

There are more than a dozen initiatives under study by the partnership group, with seven of them dealing directly with bringing unique new residential propane products to market. The group is also looking at effective ways to market to the residential channel; sales training for the propane industry; and plumber education to make these contractors believers in tankless water heaters, and the opportunities list goes on.

What the partnership is not
This is not a plan to interrupt or interfere with the nationwide distribution system that Rinnai has established. Rinnai’s distribution system has been successful to date, but there may be ways to make that system even more productive and effective as we go forward. I am sure distributors will have full voice in those types of decisions, if it comes to that.

This is not a buying group to get cut-rate prices from Rinnai or its distributors. Price is not the issue here. The issue is having the right products in the hands of the right marketers with the right knowledge to sell those products to propane consumers. If more sales volume ends up bringing better pricing, so be it.

This is not a move to cut the Propane Education & Research Council (PERC) from the picture or duplicate its efforts. In fact, PERC President Roy Willis and Bridget Scanlon, PERC director of residential and commercial programs, have given full support to the group’s efforts and recently became involved in the group meetings to find ways to assist and provide PERC resources, if needed.

Others from the PERC staff and Swanson Russell, PERC’s advertising agency, also have been involved in the meetings. PERC has budgeted heavily in the autogas and engine fuel market for next year, but seems eager to help in the residential area where new gallons are available. Propane marketers are starting to speak up about the need for more help from PERC in protecting and growing the residential market, the largest segment of the retail propane market in the United States, and PERC seems to be listening.

If you are interested in joining the partnership group or finding out more about it, contact Randy Doyle at rdoyle@blossmangas.com or me. Our motto is: There is no reason for an all-electric home in the United States.

Tom Jaenicke is the owner and principal adviser at ATomiK Creative Solutions LLC, a company that provides marketing services, technical advice, continuing education solutions and business development assistance to energy companies and support organizations. He can be reached at 810-252-7855 or tom@atomikenergysolutions.com.

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