I am pleased to launch the Blogging Painters Open Mike series with a portion of a recent interview I conducted with Dana Autenrieth of Benjamin Moore. Dana works in a leadership role in the Residential Contractor Segment of Benjamin Moore. Therefore, he has an interest in understanding the issues that are on the minds of paint contractors and clarifying misperceptions between contractors and the manufacturer side of the supply chain in our industry.
Benjamin Moore has changed right along with the economy and the paint industry in recent years. They have entered new retail venues and introduced new lines of product, both of these moves have come under fire from contractors and dealers at times. More competition to the traditionally small, independent Benjamin Moore dealers, and what appear to be more lines of pricier paint being put out on the shelves.
Dana informed me that hardware stores currently represent about 35-40% of Benjamin Moore retail outlets, and that there are no lines of paint product that were specifically created for sale in those venues. This is an important point in an era when previously reputable manufacturers have been cheapening product and selling de-spec versions in big box stores. That does not appear to be the case here. According to Autenrieth, all product lines are available to all dealers, and there are no formulation compromises regardless of where a can of paint is shipped to in order to be sold. With that, we cut to one of the larger issues of the day.
Pricing
BP: In 2011, how many price increases did Benjamin Moore put forth?
DA: I believe we had two this year.
BP: By what percentage did Benjamin Moore products increase in price across the board?
DA: Since we line price, we do not implement across the board increases. Overall, I’d say (percentage-wise) increases have varied from the low single to digit to low double digit, depending on the line.
BP: Are the price increases really all about titanium dioxide?
DA: This year, it has been primarily TiO2, but most raw materials have gone up as well.
BP: Can paint manufacturers find alternatives to titanium dioxide?
DA: I think the entire world is now looking for alternatives to TiO2, or at a minimum finding ways to use it more efficiently.
BP: What function does it serve in paint?
DA: TiO2 is the primary hiding agent in paint.
BP: So, let’s take a flagship product like oil based Satin Impervo. What is current retail pricing on it, and can we count on it being around forever as new waterborne platforms gain traction?
DA: MSRP is around $70. Our customers decide the fate of our products with their wallets. As long as there is decent demand for any of our products, we will continue to make them.
BP: What exactly makes Aura a better can of paint then, say, Ben?
DA: This is like asking what makes the 7 series BMW better than the 1 series. With Aura there is just more of everything that makes a can of paint perform better in application and especially in dry film and color performance. When we say it is our best, it really is.
BP: What is the difference between a $19/gal big box store paint and a comparable line of Benjamin Moore paint, and why should the BM line cost more?
DA: My experience shows that most folks, especially painters, buy for value not price. I define price as the monetary price paid while value is the net benefit received after all price and non-price costs are accounted for. So as for what’s in the can that makes it worth more, it’s the same answer as the previous question about Aura vs. Ben. Then you add in non-price costs that we and our retailers eliminate like lack of service, knowledge, sales support and you will find that we are often the better value overall. With paint, like most things in life, you tend to get what you pay for. I cannot think of a single instance in our category where the lowest cost product garners the highest share – the simple reason is that there are too many other non-price tradeoffs involved and frankly, there is always someone out there that makes it cheaper. If most folks were focused on price, not value, most of the brands we know today simply couldn’t exist.
Stay tuned to Blogging Painters for the next Open Mike session, which will drill a little bit deeper into specific Benjamin Moore product questions with Dana Autenrieth. If you have questions on this portion of the interview, please leave them in the comment section below and we will make sure Dana addresses them for you.