Future looks green for California dealer

COMPANY: Hayward Lumber

HEADQUARTERS: Monterey, Calif.

1999 SALES: $110 million

CUSTOMER MIX: 89 percent pro (82 percent building trades)

UNITS: 7

When it comes to selling certified wood, Bill Hayward believes that if you stock it, customers will come.

Hayward has started a green building materials division at one of his seven lumberyards. A true believer in responsible environmental stewardship, Hayward sees no reason why he can't make money and save the planet at the same time.

"We started selling certified wood products in 1998, but it's taken two years to get where we are today," explains Hayward, whose great-grandfather founded the business in 1919. At age 37, Hayward is president and CEO of Hayward Lumber, an operation that also includes two kitchen and bath showrooms, a door and window store, a truss manufacturing plant, two door-assembly facilities and a custom door shop.

Before launching his green division, Hayward hired Michelle Randall, who recently earned a master's in business administration specializing in environmental studies, to research the idea, develop a business plan and cultivate contacts in the environmental community. Earlier this year, Hayward took what he considers to be a critical step: he set aside a "green" section in his 13-acre Salinas, Calif., yard.

"If we put the inventory on the ground, then builders can pick up the phone and order it for tomorrow, just like they do with regular wood," Hayward explains. The current selection, which covers approximately 10 percent of the yard, offers a full-breadth assortment of dimensional lumber and timbers in several different grades. Hayward also stocks certified plywood, although the demand for green sheet goods outstrips the supply.

Although a number of third parties are now certifying wood products, Haywood only buys those accredited by the Forest Stewardship Council, which monitors the chain of custody, harvesting and reforestation practices, treatment of water resources and chemical use. Hayward doesn't want to part with the names of his certified wood suppliers, most of whom are located in Northern California and lower Oregon. But he will talk about his eco-friendly builders and contractors, whom he divides into two categories: green and dark green.

A green contractor won't use wood from endangered forests but will seek better-sourced products instead. A dark green contractor will refuse to build fireplaces because they adversely affect air quality. Both shades tend to be custom homebuilders who use their laptops as much as their power tools. They're willing to tolerate some material delays, and they expect to pay a higher price for certified products -- but only to a point.

"There's a value added to [certified wood], but there can't be an extreme variation in price," says general manager Steve Hardy, who oversees the green division at Hayward's Salinas location. (The retail operation is also FSC certified, requiring separate sku files, special labeling and chain-of-custody record keeping.) Hardy is also trying to take material delays out of the equation, which means ordering inventory on blind faith. The Salinas outlet currently stocks $200,000 worth of green building materials, which it ships direct to building sites in Hayward's other territories. The company dedicates an outside salesperson to the green lumber division, and next year it hopes to double its $2 million in sales and stock certified wood at other Hayward locations.

Some likely candidates are the three yards Hayward just purchased from County Lumber in Santa Barbara. (The Oct. 26 acquisition also included a door shop.) The area is home to an environmentally conscious population, as are Hayward's primary markets in coastal San Luis Obispo and Monterey counties. "There are many more customers than builders who want to build green," observes Hayward, who wants to swell the end-user ranks ever further. His company supports community groups and foundations that advocate environmentally conscious building practices. Hayward Lumber is planning its own conference that will bring in experts to address contractors, architects, building inspectors and others interested in green construction. It also plans to promote its new division at the PCBC Western Building Show in San Francisco next year.

"We're working to tell a whole story," says Hayward, explaining how the green philosophy has permeated his entire operation. Every capital improvement, from skylights to entire buildings, is evaluated from an ecological and conservational standpoint. All the yard forklifts are propane powered, and trucks are being retrofitted or replaced by vehicles that run on compressed natural gas. The newest company cars are Honda Insights, a gas-electric hybrid that gets 50 miles to the gallon. The company's recycling goal for waste products is 100 percent.

Hayward is also rebuilding his Santa Maria truss plant -- which may be the only manufacturing plant in the country that makes FSC-certified roof trusses --into a showcase of green building materials and conservation practices. One of the more noticeable innovations will be waterless urinals, one of several eco-friendly products that Hayward Lumber offers. Selling certified lumber has led the company into related product lines like strawboard, wheatboard and solvent-free Gorilla Glue. Hayward also contracts with a company to make its pressure-treated lumber without using arsenic and other toxic chemicals.