Buy Ice Melt Early, Even After A Mild Winter
The winter of 2011-2012 was one for the record books. It was the fourth warmest winter on record for the United States, according to the National Oceanic and Atmospheric Administration. In addition, the winter produced the third lowest snowfall total in the United States, according to data from Rutgers Global Snow Lab. The warm temperatures and small accumulation spelled disappointing ice melt sales for jan/san distributors and, most likely, a surplus of stock for the coming winter season.
Bob Harper, business director of consumer/industrial deicing at North American Salt in Overland Park, Kan., says that if he had to guess, the current average surplus would be exceeding 50 percent of original stock.
With so much inventory left over from last year’s winter, jan/san distributors face a challenging purchasing dilemma for both themselves and the clientele they serve. It’s essential to be prepared for a snowy, icy winter, but also keep the ice melt inventory levels manageable for both storage and financial reasons.
Distributors remember last season’s mild weather and as a result, will probably be conservative when buying ice melt this year, perhaps not ordering their traditional inventory levels, says Jackie Van Norden, product line manager for food processing and packaged deicing at Cargill Salt in Minneapolis.
Before deciding whether to buy ice melt, distributors should first examine current product to see how much of it survived the spring and summer storage. Even if product is OK, it is unlikely that distributors have enough ice melt on hand from the surplus to cover the entire winter.
Inventory levels will begin returning to normal as soon as winter starts, says Heather Stadler, product marketing specialist with Occidental Chemical Corp. (OxyChem) in Ludington, Mich. Some summer ordering is warranted.
But even if distributors decide not to take the plunge to place pre-season orders, they should, at the very least, contact ice melt manufacturers about product pricing and availability. It will be easier for ice melt manufacturers to commit to meeting distributors’ pricing and supply needs if they get a commitment in return, says Mary Kay Warner, marketing manager with International Salt in Clarks Summit, Pa.
If distributors wait until the snow starts falling before planning their ice melt needs, they probably will be left out in the cold.
How Much Ice Melt To Buy?With plenty of ice melt already in stock, how should distributors approach the 2012-2013 winter season?
When selling ice melt, the oldest product should be moved out first, says Harper, but only if the product is at the quality expected by the end user. Then move on to sell the newly purchased products.
With so much inventory already on hand and paid for, it’s hard to know how much to ice melt to buy and still keep cash flow fluid and not tied up in products sitting on warehouse shelves, says Van Norden.
However, a distributor does not want to be stuck in a situation come January with a heavy snowfall, but not enough product in stock. If that occurs, manufacturers will first fulfill the commitment they made to existing customers before filling any extra orders, says Warner. This is good incentive for distributors to reach out to ice melt manufacturers before the winter season.
Despite last year’s mild winter, distributors can work with their suppliers now to determine what the average amount of ice melt would be. Weather forecasting has become a popular guide for the winter season, but it’s still unpredictable, says Warner. Many distributors (and manufacturers) work off a minimal 7-year average to determine the amount of ice melt to buy.
Distributors should not look exclusively at the high or low years, because they are random events. The best approach is to always plan for an average winter, says Harper.
“I say average, not normal, because no one can say what a normal winter is anymore,” he adds.
Summer is the best time to plan for the coming season and buy ice melt, surplus or not, says Warner. Manufacturers can provide forecasted production numbers and schedules and offer pricing quotes. Distributors can lock in prices now, and just as important, the amount of product they anticipate they’ll need. Manufacturers also are offering monetary incentives for early buys, even with the knowledge that customers have stock on hand.
“Our focus every year is on helping our distributors succeed,” says Stadler. “We are focused on long-term mutual success so they can be prepared for severe winters and get through periods of soft demand without undue financial burden.”
Jennifer Bradley is a freelancer based in East Troy, Wis.
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