LEDs Lighting the Way as a Growth Play

Ted Konnerth, president of Egret Consulting, the electrical industry’s premier recruitment firm for distributors and manufacturers, spoke last week at the Strategies in Light conference. This conference focuses on high-brightness LEDs and lighting.  Ted lead a discussion on the challenges of selling new lighting technologies into an established buying channel – something he knows well as he was VP of Sales for Cooper Lighting many years ago and has been involved in the industry for “eons” (much more than 15 years!)

In speaking with Ted he commented that the reason he went to Strategies in Light is “that’s where the growth market is.”  We asked him to share some observations:

“Attendance was around 3,000 despite the Northeastern storms that shut down much of the East coast. High brightness LED has now grown to over $5.3B in global sales. That number is ONLY HIGH BRIGHTNESS LED components sold to an OEM.  The fixture and lamp replacement market was assessed at $2.3B in 2009, with projections to 3B in 2010.  The rise in sales reflects several factors: increasing efficacy, decreasing component costs, increased governmental incentives for energy reduction, an overall movement towards environmentally friendly design and the emergence of over 500 companies aggressively promoting their ‘best’ products through any channel strategy they can think of.

One designer termed herself as a lighting anthropologist; with a focus on determining where lighting is needed, when and how to control it.  She demonstrated a McDonalds store she redesigned to a complete connected load for lighting of under 1500 Watts, that includes all site lighting, landscape, interior, production and storage areas.

The LED trend is not just moving, it’s now gotten traction.  The 2.5 days of the conference were all about new technologies, new ideas, an investor forum, new design ideas, new products and new applications. In short… high energy, all growth-related and all positive.

Technology is racing into our industry: solar, wind, smart grid, smart metering, LED, controls… and how are our industry members reacting?
 
Electrical sales are all ‘local’ much like politics… very few aggressive adopters out there.  This is analogous to premise wiring which ultimately created its own channel with CEDIA certification and datacom suppliers stepping into a lurch left by most distributors (Graybar is a notable exception with their aggressive reaction in creating a separate division dedicated to low voltage, but not many followed them). In short… our (electrical industry) business sucked last year.  We cried about dropping construction and resi markets while we ignored the growth potential of selling $200 downlights instead of $20 ‘cans’. The market has changed forever, it’ll be interesting to see how many of the players remain in 10 years.”

Ted – thanks for the input, appreciate it.  Based upon conversations we had at the NAED SouthCentral, just about every lighting and lamp company is focused on LEDs, with some projecting 10% of their sales to be LEDs in 2010. This is a market where a distributor can differentiate themselves, and where customers are looking for guidance.
 
In fact, according to one LED manufacturer, the technology is “there” for many applications, the key now is promoting the benefits and the applications. The ROI story can be very persuading, especially with incentives.
 
As a distributor, expanding your energy efficiency initiative to include an LED focus can be a point of differentiation. And if you don’t have an energy efficiency initiative, your lighting specialist / project department should be conversant with LEDs (and you should have a stable of suppliers to recommend).
 
We’ll have more on LEDs in the coming weeks.
 
What are you seeing in your marketplace re: LEDs?