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Product Innovation

R & D: The Lifeblood of Northwest Manufacturing

Chuck Gagner, president of North­west Manufacturing Inc., anticipates that this heating season is going to be busier than ever. His excitement centers on the company’s introduction of a new WoodMaster Bioenergy Flex Fuel series of furnaces being launched in the fourth quarter of 2009.

“The Bioenergy Flex Fuel furnaces can be used indoors or outdoors, so now we’ll have both. The furnaces can burn cordwood, pellets, or chips. I believe we are the first company in the United States to offer the option of burning three fuels in one unit,” Gagner says.

“Previously, we manufactured outdoor products only,” Gagner says of the company, which was founded in 1989 (when its sole product was an outdoor wood furnace). Today, Northwest Manufacturing has grown to 120 people, with sales, in 2008, of $27 million.

Customers who are not keen on splitting wood all winter can purchase a pellet arm or a chip-feed system and change over their boilers in a matter of minutes. “Maybe they don’t want to tend a stove daily, which is necessary with cordwood. They can now switch to chips or pellets and let it go for a month,” Gagner explains.

The product is the brainchild of Solarsilizium-ForschungsCluster (SOLARFOCUS), an Austrian company, but Northwest Manufacturing is making the product in the United States. The company found SOLARFOCUS when researching how to make a cleaner furnace. “It would take us two to three years, at least, to bring the technology SOLARFOCUS already has developed to market here in the United States,” Gagner says.

Northwest Manufacturing decided to partner with SOLARFOCUS because its work was so far ahead of anything that Gagner had already seen. “The technology is theirs, and SOLARFOCUS will continue to develop new products for us to make here, for the U.S. market. It is the link we need, and we are the link it needs to create a very clean, efficient product that I believe no one else can offer here right now,” he says.

In short, SOLARFOCUS is one arm of Northwest Manufacturing’s ever-growing research-and-development (R & D) department. In late 2008, construction began on a 4,000–square-foot addition to the company’s manufacturing facility in Red Lake Falls, Minnesota.

The expansion, which is dedicated solely to R & D, was finished in spring 2009, at a cost of $250,000 to $300,000. The addition houses a full emissions lab (which is a new and improved version of one that existed in its previous space), along with office space and meeting rooms.

“R & D is a very vital part of our company because we design our own products. We like to put new enhancements on our existing products, and we’re going through the Environmental Pro­tection Agency volunteer program to make cleaner furnaces (which we’ve been doing all along),” Gagner explains. “We’re also diversifying into other products like grills and the European technology boiler, and we’re also looking into larger boilers for more commercial applications, so the department needed to expand.”

Among the new products emerging from Northwest’s R & D department is a new biofuel series of furnaces that the company will showcase at HPBExpo in Orlando, Florida, in March 2010. “This is the updated model, with some new enhancements to make it 5% to 10% more energy efficient than previous models,” Gagner says.

Offering clean-burning furnaces is what makes the company’s slogan, WoodMaster: the Official Furnace of Nature, resonate with buyers. Gagner says, “We don’t use any fossil fuel. Our products strictly use bioenergy-burning products, such as cordwood, pellets, chips, or other agricultural products. We burn a renewable source of energy that is replenished by nature, in time, and is carbon neutral. A furnace doesn’t have to have a negative impact on our environment.”

Also being introduced is the Wood­Master pellet grill. “Cooking with wood pellets is just a whole new thing in cooking food. It gives food a different flavor, and meats are much juicier, to my mind,” Gagner says. Pellets in various flavors—such as mesquite, cherrywood, oak, and hickory, among others—can be purchased to suit a specific taste or recipe.

“The cost of cooking, for normal operation of a propane grill, is $2 per hour, compared with wood pellets, which cost just 75 cents to $1.25 per hour. Furthermore, one 40-pound bag of pellets will give you 30 hours of cooking time,” Gagner notes.

Grilling “is a growing market, and we want to become one of the top five in that area,” he adds. “We feel that we have a very high-end product. As people get to witness or experience the pellet grill and the flavor of the food, the market will continue to grow, and we want to be there.”

Growing the company tops the list of items on Gagner’s agenda, but he doesn’t want sales that end with delivery of the product. “As a company, we take pride in service after the sale by educating dealers to do the proper installation and to show their customers how to use the product. We offer a lot of dealer training, even over the Internet (with live meetings). Keeping our customer-satisfaction rating at the highest level possible is a very big part of our company’s growth,” he says.

Gagner notes that customer satisfaction comes from dependable products. He says, “We are coming out with more sophisticated, higher-end technology, and we’re creating a wider range of products for dealers to sell. That is an attractive package for the right dealer. The WoodMaster name has proven itself in standing for products that are reliable and user friendly, and customer satisfaction is very good.”

A comprehensive marketing plan and communication with dealers and customers also contribute to the company’s customer-satisfaction rating. “We are always keeping customers informed through mailers or the Internet. We focus on providing information for people based on their interests,” Gagner says; he analyzes what the Internet is doing for the company on a monthly basis. “We want to know what people are looking for, and that knowledge helps us target our market or approach people in the right fashion, and in the right areas,” he adds.

Short-term goals include expanding the company’s dealer network, offering more indoor versions of its existing product line, and expanding into the commercial side of the business. Gagner says, “We will stick with bioenergy or biofuels; that is the direction in which we’re still pointed. Having the right product, for the right customer, will keep us moving in the right direction. We want to gain market share every year, and we’re always looking for new and improved technologies to introduce—so look for even more new products down the road.”

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