May, 2008

In Depth: Fasteners

Premium products gain popularity and durability becomes a key selling point.

By Craig A. Shutt

Even with a slow housing market, fastener companies are seeing interest in their premium products rise as new materials are introduced and more emphasis is put on durability. Building material dealers, in turn, are selling packages of products to generate the margin available in higherend materials and fasteners, and ensuring contractors and homeowners understand the value those products provide.

“As new-home starts decrease, the remodeling market typically lights up,” says Roelif M. Loveland, president of Maze Nails in Peru, Ill. “This often means new siding, a re-roof, or a deck addition—all of which require nails. For those fastener manufacturers and suppliers that don’t get a large piece of the prefab-home pie or new housing, the remodeling market represents a great opportunity to build sales in a period of active remodeling. Our diverse customer base also helps offset downturns in the residential-housing market.”

Mirco Walther, president of GRK Fasteners in Thunder Bay, Ontario, reports that last year’s fastener sales at GRK were up 9% overall. “We’re being asked for more of everything,” he says. “We’ve had solid growth, given the market we’re in.” He credits the increases to key high-end product categories in particular, such as decking, which has experienced significant new-product introductions in recent years.

“Overall, there is a shift to quality products,” agrees Clark Allen, product manager for the Quik Drive product line at Simpson Strong-Tie, which is based in Pleasanton, Calif. “On the one hand, consumers are much more educated due to their Internet search capabilities, and they can learn the value [of quality products]. On the other, the market has depressed, so contractors want to upsell customers to gain more margin on their projects.”

Education Drives Sales
Education is a key ingredient in today’s market, stresses Bill Tucker, product-development manager at Baltimore-based Swan Secure.

“Our goal is to educate homeowners so they better understand the benefits and the need to use high-end fasteners for these projects, so they will last the lifetime of the product,” he says.

“[Selling high end product] can be difficult, because the homeowner doesn’t install the products; he hires the contractor, who may use lower-quality fasteners to save money. We have to make the contractor aware, but we also have to educate the homeowner so the contractor doesn’t have to explain the need [for our products] and that there can be more issues with corrosion than just with pressure-treated wood.”

Fasteners represent a small percentage of most projects, so upselling customers often isn’t a problem, marketers agree. “We sell a lot of high-end projects, and we have had no pushback on the higher pricing for our premium products,” says Paul Mehok, vice president of business development at National Nail in Grand Rapids, Mich.

 “The people purchasing those products see it as an investment, and it’s an insignificant amount in the cost of the project.” Adds Allen, “Some regions of the country, especially the coastal areas, are always open to using premium fasteners.”

But with pencils being sharpened throughout the industry, low price still attracts attention. “There isn’t much market in the middle of the road,” says Walther. “Projects are either using highend fasteners or the cheapest available.” Allen agrees. “Price is always a factor, but today it breaks one way or the other— there isn’t much middle ground.”

Pricing became a more sensitive issue in January, when the Department of Commerce imposed varying duties on steel nail imports from China and the United Arab Emirates. Cash deposits or bonds will be collected until a final determination is issued July 28. The department determined that the exporters were selling nails in the U.S. for anywhere from 4% to 118% below fair market value.

Marketers don’t expect the added costs to greatly impact the market, as they will equally affect everyone buying from those producers. Many fastener companies buy from a variety of overseas markets and that diversity dilutes the impact of these increases. Some marketers suggest that the Chinese manufacturers may be able to avoid long-term penalties by moving their operations to another country where they already have facilities.

Some dealers are encouraging the use of high-end fasteners by creating packages that include the premium-grade products.

“More often today, fasteners are being considered part of the structural components of the housing system,” explains Doug Holmberg, product manager for Grabber Construction Products in Concord, Calif. “There is more bundling of products with other materials to meet the specifications and ensure the proper ones are used. The dealer is handling that to create the best package, and we help them to determine which products should go together.”

In some cases, upgrades are done to ensure contractors don’t run into unanticipated problems. National Nail, for instance, offers only outdoor-graded fasteners for joist hangers, rather than offering several grades. “We want to cover the worst-case situation to protect us, the dealer, and the contractor,” explains Mehok. “You could save a slight amount if we offered both interior and exterior grades, but it could create problems if the contractor doesn’t make the distinction, and different packaging isn’t enough of a safeguard once he has them out of the package.”

Materials Generate New Needs
The proliferation of new products also has led to upgraded and expanded lines of fasteners. “As suppliers of an accessory product, fastener manufacturers simply keep a close eye on the new building materials being introduced to the market,” says Maze’s Loveland. “It is then our job to design the best fasteners for the job that are cost-effective and that will complement the long warranties now offered on most exterior building products.”

Composite decking has spurred the most changes, with the introduction of a variety of new products, such as fasteners with painted heads to match the colors of the deck boards. Hidden-fastener systems also have become popular, eliminating the “mushrooming” effect that can occur when fasteners push PVC material out of the way to make a hole.

“The trend toward composite decking over lumber has expanded the market for exterior composite deck screws,” says Paul Redwood, vice president and national sales manager for PrimeSource Building Products in Carrollton, Texas. Simpson Strong- Tie’s Allen agrees. “The composite-deck fastener we introduced last year was our fastest-growing new product in years.”

Of most interest to fastener companies is the growing popularity of softer and lighter deck products, says GRK’s Walther.
“Because they are lighter, there are more screw options that you can use.” The company already had produced some screws for use with specific brands of composite decking, and now those are being expanded for use with other similar products, he notes.

The growth of these products helps the move toward higher-end products, notes Allen. “A composite deck is a green product that will last many years, and a premium fastener goes along with that.” Mehok agrees. “The market is leaning toward composite products, with people investing as much as $25,000 in their deck. So they want to make sure the fasteners look good and are going to last.”

That doesn’t mean that pressure-treated lumber will disappear, notes Tucker. “The pressure treatments are changing, but they’re staying similar enough that they won’t change the type of fastener or the need to use them.” Adds Holmberg, “ACQ treatments have proven to be more corrosive than previous treatments, so we have seen an increase in demand for coated and stainless-steel fasteners.”

He also is seeing growth for treatments that cover more than corrosion, he notes. “Fire treatments also are becoming popular. It’s a great idea, but it carries some corrosive aspects that require contractors to use a certain fastener. So we’re seeing more use of stainless-steel fasteners all the time.”

Hidden Fasteners Grow
Hidden fasteners are gaining popularity with all types of decks, notes Chris Fox, marketing manager for Universal Forest Products in Grand Rapids, Mich. “Most people are requesting slotted decking for a blemish-free surface, so hidden fasteners are needed for both wood and composite,” he says. Fasteners that install from above, that eliminate pre drilling, and that automatically provide the proper spacing cansave labor time for contractors, he notes.

These systems require more education for both the contractor and homeowner, and Fox encourages dealers to aid contractors by stocking the merchandising pieces that can help make the sale. “Most homeowners aren’t familiar with hidden fasteners and slotted decking,” he says. “You have to introduce homeowners to the products with sample mock-ups and other pieces.”

Hidden fasteners provide a clean look, but they can take more time to install than traditional fasteners, notes Walther. “Hidden- fastener systems became popular because screws had a difficult time going through the composite materials,” he explains. “Now, as lighter materials come onto the market that are easier to use, we expect that hidden clips will take a little bit of a hit.”

Other Markets Expand
Other product categories also are creating new opportunities. “Standing-seam metal roofing is growing across the country, and we saw a niche for a tool in that market,” says Simpson Strong-Tie’s Allen. Safety concerns are higher for that type of installation, creating interest in an auto-feed tool with an extension, so fasteners can be driven quickly and comfortably. The company’s tool was introduced in February.

Changes in the products that builders prefer impact the fasteners that are in demand, especially if the materials are structural in nature. Structural Insulated Panel (SIP) systems, for instance, are growing in use, and they require “a whole new round of fasteners and new approaches,” says Grabber’s Holmberg. Typically, these panels require significantly longer fasteners— as long as 12 ins.

The growing popularity of fibercement siding also is bringing new fastening systems, notes Maze’s Loveland. Other key growth areas are cellular-PVC trim products and new composite and lumber decking materials. “Low-maintenance building materials continue to be the popular trend,” says Holmberg.

More builders also are framing homes with metal studs, roof trusses, and floor trusses, adds Holmberg. Fasteners for those products typically have not needed to be rated for structural loads, but they require that capability in these new systems. “With all of the connections being part of the structural components, quality and performance characteristics become more significant,” he says. Collated screws for a variety of product categories are growing, notes PrimeSource’s Redwood. “The proliferation of pneumatic joist-hanger nails has led to a steady increase in collated joist-hanger fasteners,” he notes. Such products relieve the need for installers to hold the fastener while they try to drive it, while also speeding the process by having the next nail ready for the pneumatic driver.

Although PrimeSource is not developing the product, there has been “buzz in the industry” about the development of a collated fastener featuring a ballistic point with the shank and head of a screw, Redwood adds. The fastener is driven with a pneumatic nailer, but it provides the holding power of a screw and can be backed out with a screwdriver.

Packaging Evolves
Other types of packaging also are evolving. National Nail, for instance, has created smaller packages for different customers. Boxes of 4,000-count nails now are supplemented with packages of 2,000, he says. “There seemed to be a real need for half-size counts, which appeal particularly to the ‘weekend-warrior’ type of customer,” says Mehok. The smaller sizes also benefit remodelers, who don’t need a large number of fasteners for each project. Such products add to the dealer’s SKU count, he notes, but also adds margin. (The packages are not half the cost of the larger sizes, due to
distribution and other overhead costs being similar.)

“This customer would rather spend more per nail than have to buy far more than he needs,” Mehok explains. “It does create stocking challenges for dealers, so the dealer needs to understand his niche and stock and display the products that appeal to his unique customers.”

Packaging also is evolving to aid environmental efforts spearheaded by manufacturers, retailers, and customers. A number of companies have switched from plastic containers to recyclable cardboard boxes. PrimeSource took another tack last year by introducing plastic containers that can be reused.

Grabber has switched from large, plastic buckets to cardboard boxes, both because the boxes can be flattened and recycled and because it’s more likely they will be recycled, says Holmberg. “The plastic could be recycled, but we found that, at the site, the buckets got contaminated with sealants and paint and couldn’t be recycled even if the intent was there.”

Green Efforts Flourish
Such efforts, of course, are driven by the growing desire to support “green” building efforts, a trend which everyone in the industry is watching. Fastener manufacturers are careful not to overstate their green case, wanting to avoid charges of “greenwashing” that proliferate. “Achieving green standards can be confusing,” says Swan Secure’s Tucker. “It’s hard for a product that is mined from the ground to justify a ‘green’ standard. But stainlesssteel fasteners can be said to be green because they aid longevity of the project.”

Most companies manufacture fasteners with recycled steel as much as possible. Maze, for instance, uses remelted steel to minimize mining and refining operations, says Loveland. The steel scrap generated during the nail-making process also is returned for remelting and used with other sources of recycled steel. Maze also reclaims most of its nonsteel raw materials, such as zinc, acid, and other processing chemicals. Waste zinc byproducts are recycled into useful materials or resold to galvanizers.

Companies put considerable investment and effort into minimizing the impact of their coating processes on the environment, and they continue to look for new coatings with better efficiency and less impact. “There will always be research into developing new and the most cost-effective coatings,” says Loveland. “However, in the case of nails, nothing has been found to date to be superior to a genuine hot-dip galvanized coating. It is cost-effective and offers the best corrosion resistance. It is precisely for these reasons that many building codes specify that either hot-dip galvanized or stainless-steel hardware be used on many exterior applications.”

But some manufacturers are hoping that will change—not to lessen standards but to help improve them by adding flexibility.“I’d like to see the codes change to reflect what’s happening in the coatings industry,” says GRK’s Walther. “Some coatings are perfectly good, but the code is far behind. It doesn’t offer a specific test to prove that coatings will achieve the performance being sought.”

National Nail’s Mehok agrees. “Coatings that exceed hot-dip galvanized standards are available, but building inspectors
have to be up to speed on technologies to know if the coating has enough microns of galvanization to be comparable. And it takes extra time to explain that new coatings do meet standards. New coatings are introduced all the time, but the key is how well they are marketed and how well the users understand them. But they will continue to evolve.”

So too will fasteners in general, especially as local codes tighten in response tonatural disasters. The unification of building codes was seen as a way to simplify standards, but now more municipalities are adding their own restrictions. “Keeping up with all of the code changes is challenging,” Mehok says. “The localized additions make it more difficult to keep abreast of everything.”

Education—of builders, contractors, homeowners, inspectors, and code officials— will continue to be the key to growth and progress. “The best way to get customers to upgrade to better fasteners is to educate them about the choices—and the results of those choices,” says Maze’s Loveland. “It’s easy to save a few bucks and end up with real problems in the long run. Since fasteners are such a small part of the overall project investment, it always pays to specify and buy the right products for the job—not just the cheapest.”

CRAIG A. SHUTT, a senior contributing editor of LBM Journal, has nearly 30 years of experience covering the LBM industry.