News Release - April 24, 2006

Cellulose Insulation: Lower Installation Costs, Higher Energy Savings Drive Sales

Contractors and DIYers find cellulose insulation to be less expensive, more energy efficient, and easier to install than fiberglass, buyers say. The product is also recyclable, and word-of-mouth spread by environmentally conscious consumers will further increase sales. Retailers are also benefiting from the sale or rental of blow-in machines with the product.

Buyer

Lumberyard Chain

Cellulose insulation sales are up from last year. Our installed centers are pushing the installation of insulation. In addition, most of our stores are stocking the blow-in machine with the product.

We use several brands, but our top sellers are Cocoon and Regal. Regal offers us the lowest cost, but it only serves Pennsylvania through Iowa; U.S. GreenFiber serves the entire country with its Cocoon line.

Cellulose is not as expensive as fiberglass. Since the majority of our sales come from contractors, we sell cellulose insulation in bulk quantities and the pricing is determined by how much insulation is needed for each job. The other advantage of cellulose insulation is it's recyclable and doesn't use much energy, so when energy costs skyrocket it will prove to be more efficient.

Our installed centers have their own specific sections reserved for all insulation, while our traditional locations keep cellulose in an indoor warehouse with fiberglass insulation and drywall.

Buyer

Lumberyard Chain

We recently concluded the period where cellulose insulation sales spike, due to the colder weather and energy concerns; since then, sales have returned to normal. The number of new homes that used cellulose insulation in our market remained steady, but the higher cost of heating led to an increase in the reinsulation of existing homes.

Cellulose insulation is more of a DIY-type product then fiberglass. Not only is it easier to apply, it's also more readily available. We carry Regal and promote that brand in the stores every three to four months, as well as advertise it frequently in our circulars. That said, most of our customers know cellulose is the alternative to fiberglass.

Generally, we keep our cellulose insulation in the cold storage area away from the selling floor. The only time we move it to the sales floor is during the promotional periods I mentioned earlier.

Going forward, the category will benefit from increased awareness, particularly of cellulose's ability to effectively reduce noise as well as insulate the home. The product is also environmentally friendly, so the more that environmentally conscious people talk about cellulose insulation, the more it will be used in homes.

Buyer

Home Improvement Retailer

Sales of cellulose insulation are up considerably throughout the country. Pre-winter predictions about bitter conditions and high natural gas costs combined to increase demand among homeowners and contractors, thus causing our supplier, US GreenFiber, to work 24/7 on manufacturing and distributing Cocoon. As it was, the winter weather was milder than expected, but the predictions helped us generate extra business.

The big advantage four cellulose insulation is its ease of installation versus fiberglass. Also, cellulose is less irritating on skin to install, and can be spread all over the wall, while fiberglass insulation requires a precise measurement in order to effectively cover a joist.

Cellulose insulation is bulky, so our members typically carry the product in their back warehouses. Members don't want to take up too much retail selling space with cellulose insulation, but they also want to keep it dry rather than risk deterioration by placing it outside in the lumberyard area.

We see more members carrying cellulose insulation as an alternative to fiberglass, particularly if they're unable to obtain enough fiberglass insulation shipments to keep sales strong.

Buyer

Home Improvement Distributor

Sales are up at least 25% in the fourth quarter, and all signs indicate that growth continued in the first quarter. The trend toward energy efficiency appears to be driving cellulose insulation sales. We've received twice s many calls for cellulose insulation in the last three to six months. Our strongest markets are the Northeast and Midwest because of the higher gas and utility prices, as well as the colder weather. As energy awareness increases, so will our sales of cellulose insulation.

US GreenFiber has been our primary cellulose insulation vendor for about 10 years. In Cocoon, it offers us a competitively priced product. The company also participates in our bi-yearly shows and helps our retailers by providing national advertising and mailings geared to benefit them.

Cellulose, depending on the type of home, can be a DIY product, because it can be blown into wall cavities and attics. It can also be installed professionally without tearing the walls down. The retailers and distributors we serve tend to stock cellulose insulation with batt and rolled fiberglass products, in the back warehouse area, and in their lumberyards depending on the best opportunities for sales growth.

Buyer

Lumberyard Chain

Our cellulose insulation business is up dramatically as more contractors install it in their homes and rent our blow-in machines. It's not a physical irritant during the installation process, and can be installed in existing walls without having to tear down the drywall.

Cocoon has gained awareness among our customers through advertising in home improvement-oriented magazines. Our locations stock cellulose insulation in the same area as fiberglass insulation.