FROM ACHR NEWS Companies that made the list totaled nearly $13 billion in sales last year The results are in.
Companies with household names in the HVACR world dominated the top third of the latest Distribution Trends Top 30 Distributors list, while several firms not among last year’s Top 30 appeared, or maybe reappeared, on the second half of the list.
Four companies — Ferguson Enterprises LLC, Winsupply Inc., R.E. Michel Co., and Russell Sigler Inc. — listed 2022 sales of more than $1 billion each, and those four accounted for sales of more than $7.7 billion, or about 59% of the total sales among those in the Top 30. Last year’s list also included four companies with sales of more than $1 billion each.
The annual Top 30 contest, sponsored by The ACHR NEWS, ranks HVACR distribution companies by reported gross sales for the previous calendar year. Entrants, typically the CEO, marketing manager, or chief financial officer, are also encouraged to answer questions about the HVACR distribution market, and their responses this year represented a range of outlooks on the Inflation Reduction Act (IRA) and new and coming industry regulations.
OVERALL TOP 50 HVACR SALES RANKINGS
$1 billion and up
$250 million to $1 billion
$151 million to $249 million
$61 million to $150 million
TOP 30 (HVACR SALES)
1 Ferguson Enterprises LLC
2 Winsupply Inc.
3 R.E. Michel Co.
4 Russell Sigler Inc.
5 The Habegger Corp.
6 Gustave A. Larson Co.
7 Sid Harvey Industries Inc.
8 AC Pro
9 Temperature Equipment Corp.
10 Hercules Industries Inc.
11 Auer Steel & Heating Supply Co.
12 ABCO HVACR
13 Conklin Metal Industries
14 Behler-Young Co.
15 American Metal Supply Co. Inc.
16 American Refrigeration Supplies Inc.
17 Refrigeration Sales Corp.
18 Century A/C Supply
19 Johnson Supply
20 APR Supply Co.
21 CCOM Group Inc.
22 Young Supply Co.
23 S.G. Torrice Co.
24 HVAC Distributors
25 Charles D. Jones Co.
26 M&A Supply Co. Inc.
27 2J Supply HVAC Distributors
28 Duncan Supply Co. Inc.
29 Crescent Parts & Equipment
30 Northeastern Supply Co.
REFRIGERATION AS A PERCENTAGE OF OVERALL SALES
(all survey participants)
Duncan Supply Co. Inc. 50%
Young Supply Co. 46%
ABCO HVACR 40%
Crescent Parts & Equipment 35%
Nance International HVACR 30%
American Refrigeration Supplies Inc. 30%
Sid Harvey Industries Inc. 30%
Lee’s Maintenance Plus LLC 25%
Gustave A. Larson Co. 25%
HYDRONICS AS PERCENTAGE
OF OVERALL SALES
(all survey participants)
Crescent Parts & Equipment 30%
Sid Harvey Industries Inc. 20%
Charles D. Jones Co. 15%
APR Supply Co. 14%
R.E. Michel Co. 13%
CCOM Group Inc. 13%
Auer Steel & Heating Supply Co. 12%
Temperature Equipment Corp. 12%
The six companies rounding out the top 10, each listing 2022 sales of more than $250 million, totaled another $2.19 billion-plus in sales; added together, the distribution firms in the top 10 accounted for more than three-quarters of the Top 30’s 2022 sales, which reached nearly $13 billion.
Companies making this year’s Top 30 that weren’t on the list last year were Temperature Equipment Corp. (9th), ABCO HVACR (12th), and Behler-Young Co. (14th), plus Charles D. Jones Co., M&A Supply Co. Inc., 2J Supply HVAC Distributors Co., Duncan Supply Co. Inc., Crescent Parts & Equipment, and Northeastern Supply Co. (25th through 30th, respectively).
Average 2022 sales increase for the 26 companies, out of the Distribution Trends top 30, that reported sales increase percentages to The NEWS.
Nearly every respondent to the Distribution Trends Top 30 survey reported sales growth in 2022, and the growth at many companies was in the double digits.
“HVACR industry growth continues to outpace GDP (gross domestic product),” said Matt Bedard, CEO of S.G. Torrice, in Wilmington, Massachusetts. “Demand is steady from new construction, maintenance, and renovation of commercial and residential buildings.”
“If the lodging industry continues with the remodels and the new construction we have seen in the past, 2023 will be another great year,” said Mike Luongo, president of Total Home Supply, in Pine Brook, New Jersey.
Kinks in the supply chain, however, continue to be major headaches for distributors.
“We have been placing orders months in advance to make sure we were ahead of the delays caused by the supply chain,” said Luongo.
“Like most independent wholesale distributors, we brought on secondary equipment lines to fill gaps created by supply-chain challenges,” said Bedard.
Several wholesalers expressed concerns about the refrigerant transition and the phasedown of HFC refrigerants.
Christopher Hendricks, president and CEO of Duncan, in Indianapolis, said federal regulators are overreaching with the refrigerant phasedown and the industry will not be prepared for what comes next.
“With the current plans of a hard stop (of HFC refrigerant manufacturing and importation) in 2025, that means manufacturers now have to start producing the new equipment, which is going to cause delays in current equipment,” Hendricks said. “There is panic setting in, with confusion and no clear path forward that any manufacturer can predict.
The phasedown timetable, Hendricks said, is unreasonable given that the supply chain has not recovered from problems caused by the coronavirus pandemic. Hendricks also objected to the Environmental Protection Agency (EPA) plan to ban nonrefillable refrigerant cylinders by 2025.
Some respondents criticized other aspects of government policy for their impacts on the HVACR industry.
“The feds’ continued attempt to head off inflation with interest-rate hikes will negatively affect sales of higher-SEER-rated equipment,” said Ron Kinman, president of Charles D. Jones, in Riverside, Missouri. “Consumers will opt for minimum efficiency instead of financing.”
“The major push on electrification has me worried, as it’s moving too quickly,” said Jim Anley, executive vice president at Charles D. Jones. “Gas products still have a place in the industry and will for years to come.”
“Our industry is challenged by government interference of dictating equipment efficiencies that are not economically justified; electrification in the face of (a) poor electric grid,” said Doug Young, CEO at Behler-Young, in Grand Rapids, Michigan. “I could go on.”
Others took a more philosophical view of government-driven industry developments, such as the IRA’s consumer incentives for home electrification, suggesting they see opportunities in them.
”The Inflation Reduction Act and associated tax credits and rebates should spark interest for many homeowners and have a positive impact on demand,” said Bedard. States in the Northeast, because they’ve previously had electrification rebates, should be better prepared to administer rebate programs, Bedard added.
“The electrification of many areas we serve is becoming something we need to pay close attention to,” said Patrick Newland, marketing and business development manager at Hercules Industries Inc., in Denver. “The move toward heat pumps has been more significant in the past year than I have ever seen.”
John White, president of American Refrigeration Supplies Inc., in Phoenix, said that staying on top of government regulations, understanding their effects on the HVACR market, and relaying that knowledge are increasingly important.
“Our industry is undergoing some of the most significant regulatory changes in history and will be for the foreseeable future,” said White. “While consumers continue to face inflation and rising costs in both residential and commercial sectors, our industry will need to meet the challenge by understanding the impact not only on the customers we serve, but on their customers. Education and knowledge will be premiums and it is up to distributors to provide the connection to understanding between contractors and consumers in this environment.”
Three smaller distribution companies saw big sales growth in 2022
They’re not on this year’s Distribution Trends Top 30 Distributors list, but three smaller HVACR wholesalers are finding big success in their respective markets.
Total Home Supply, CTC Supply Co., and Associated Equipment Co. saw sales growth in 2022 that averaged 26%, according to information the companies submitted for the 2023 Top 30 Distributors contest. That’s nearly nine points above the 17.1% average sales growth seen by the 26 Top 30 firms that reported percentages. (Four other companies among the Top 30 said they had seen growth in 2022 but did not supply figures.)
Mike Luongo, the president at Total Home Supply, based in Pine Brook, New Jersey, west of Newark, said new construction is a big factor in the company’s sales success.
“If the lodging industry continues with the remodels and the new construction we have seen in the past, 2023 will be another great year,” Luongo said. About half of Total’s business is in the commercial market, and the other half in the residential market.
Loungo said Total increased stock levels in 2022 in order to stay competitive, and has tried to work around supply-chain delays by ordering products months in advance. “We also increased our offerings by adding more water heaters and hydronics equipment,” he said.
Total carries more than five dozen product brands, including Amana, Airzone, Daikin, Goodman, Modine, Honeywell, and GE Appliances.
Product availability also helped make the difference at CTC Supply, according to Roger Barnes, director of operations.
“Product availability was the biggest issue” that contributed to sales growth, Barnes said. “We spent extra money to have the inventories in house.” That was a deliberate move and, given the supply-chain challenges of the past few years, one that paid off, he said.
Barnes also credited an uptick in both new construction and equipment changeouts, CTC’s focus on customer service, and a dedicated, seasoned workforce.
Based in Jacksonville, North Carolina, north of Wilmington and near the Atlantic coast, CTC offers products from well over 100 brands, including Heil, Emerson, A.O. Smith, Bosch, Panasonic, and Modine. Some 80% of CTC’s business is in the residential market, with the rest in the commercial sector.
At Associated Equipment, chairman and chief operating officer Luther Clemons said the company’s long history with heat pumps was a big factor in its success.
“We have always been strong with heat pumps,” Clemons said.
Clemons, who recently marked his 50th anniversary with Associated, said the company has carried heat pumps since the late 1960s and that heat pumps are increasingly catching on.
“It’s obviously the hot thing in the industry,” he said.
Between increased public awareness of heat pumps and the consumer incentives for electrification included in the Inflation Reduction Act, “We feel pretty good about where we are right now,” Clemons said.
The easing of supply-chain problems, leading to greater product availability, and investment in employee training also contributed to the growth at Associated, Clemons said.
Associated, based in Nashville, carries equipment lines from Daikin, Amana, and Goodman, and also sells parts and supplies such as line sets, air cleaners, drain pans, plenums, thermostats, and humidifiers. About 90% of Associated’s business is in the residential market.
Matt Jachman is the legislation editor at the ACHR NEWS. He has 30-plus years of experience in community journalism and a bachelor’s degree in English from Wayne State University in Detroit.