“If it wasn’t for the business WoodRight brought us in 2010 and 2011, we wouldn’t still be here.”
— Gary Fuller, Co-Owner, Abingdon Millworks
Early attempts to encourage a viable green construction materials industry in Central Appalachia fell short of the mark. But a new social enterprise is showing success, thanks to a decentralized business model that offers a win-win for everyone involved—especially the region’s small, family-owned forests, sawmills and woodshops.
Idled sawmills and wood shops. The numerous small and medium family-owned sawmills and millworks in central Appalachia draw on the region’s abundant hardwood forests. But the depressed housing market and economy of recent years, and steep competition from China, proved devastating. From 2005-11, 19% of the firms closed, nearly 300,000 jobs were lost, and remaining industry slowed to 60% capacity.
Green building on the rise. Before the Great Recession of 2008, most Central Appalachian forest landowners, sawmills, millworks companies and contractors had little interest in producing or using green building materials. But demand for certified sustainable wood has grown steadily since then. With poverty on the rise and skilled workers idled, the rising market for green building materials has come to look like the best game in town.
Partners with enterprise. Appalachian Sustainable Development (ASD), a regional nonprofit, had long championed use of wood certified as sustainable by the Forest Stewardship Council (FSC). Financial losses had forced ASD to close the sustainable wood products business it launched in the 1990s, but growing demand rekindled their interest. The key question: Could ASD retool its business model to collaborate with a distributed regional network of small, family-owned manufacturers?
The numerous small and medium family-owned sawmills and millworks in central Appalachia draw on the region’s abundant hardwood forests
Photo courtesy Daniel Case via Wikimedia Commons
Central Appalachia’s biologically diverse forests are important to the region’s economy. But sustainable management practices are scarce in the region, placing the overall health of the forests at risk. Small family-owned wood firms know their livelihoods are likewise at risk, as is the future of their communities.
So when the bright “green” spot emerged in the sluggish construction industry, they took notice. Steadily growing demand for sustainably sourced hardwood products—flooring, ceilings, walls, stairs, moldings, countertops, lumber and custom-milled fixtures—smelled like opportunity. But serving this increasingly lucrative market was no small feat, and most local firms weren’t ready for it.
For example, green buyers look for “chain of custody” certification—a voluntary practice that assures customers that wood products are grown and harvested in ways that protect forests over the long term. Gaining the leading certification, managed by FSC, is complex and costly for most small suppliers. But being FSC-certified would help local mills and shops woo buyers who want to construct LEED-qualified buildings that use best-in-class building practices. So to land LEED buyers, the Central Appalachian firms needed FSC certification.
Marketing posed an equal challenge. It’s difficult for each firm on its own to assure the reliability of its chain-of-custody claims, much less handle the cost and time of reaching customers—especially since most green building projects are outside the region. So producing and delivering the product seemed daunting, much less at a competitive price. Still, it seemed their best opportunity.
That opportunity was confirmed when locals began to look for—and respond to—actual demand.
In 2010, Heartwood, Southwest Virginia’s Artisan Gateway, came to ASD with a problem. Heartwood’s design team wanted local hickory for the facility’s new interior. Using the network it had developed, ASD was able to source the desired wood from firms within a 60-mile radius of Heartwood.
That local success propelled more examination. ASD learned that U.S. green building starts grew by 50 percent from 2008 to 2010—rising from $42 billion to $72 billion. FSC projected that 25 percent of all new commercial and institutional building starts and 20 percent of residential construction would build green in 2013. Industry analysts expect the value to reach $135 billion by 2015.
ASD also found high-volume markets not far from the region. Mid-Atlantic builders would likely buy Central Appalachian sustainable products if the price and logistics were right—and they often have higher-paying customers.
Appalachian Sustainable Development’s success in sourcing local wood for the new facility at Heartwood helped propel the network’s growth.
Photo courtesy of FAHE
ASD and its colleague organizations in the Central Appalachian Forest Alliance began to rethink the business model. The challenge: Figure out how to collaborate rather than compete with small mills and woodworks to reduce costs, market efficiently, serve diverse customers—and preserve local jobs and firms.
The solution—WoodRight—emerged as a pilot program involving ASD in Virginia, Rural Action in Ohio, and the Mountain Association for Community and Economic Development in Kentucky. WoodRight acts as a clearinghouse for a network of wood products manufacturers in the region, especially in struggling com munities, that share a commitment to sustainable development and forestry.
WoodRight facilitates FSC certifica tion, simplifies pro cess and paperwork, and supports packaging and logistics for firms in its network—and jointly markets them to green building customers. WoodRight also brokers deals between suppliers and customers. This relieves small firms in its network from having to interpret complex job specifications and manage all the customer relationships.
WoodRight also reaches out to customers well beyond Central Appalachia. Its decentralized network sources wood products from mills that are closest to each customer, reducing transportation costs and enabling many customers to confirm that they are also “buying local.”
Working with the Center for Forest and Wood Certification at the University of Kentucky’s Department of Forestry Extension, WoodRight also provides certification assistance to forest landowners, loggers, and primary and secondary manufacturers. And it provides carbon offsets through the Appalachian Carbon Partnership, generating proceeds that go to local landowners to promote forest stewardship.
WoodRight’s chain of partners and activity is generating new income, preserving rural livelihoods, bolstering the forest industry and improving forest management and resilience. The 2010-12 pilot phase brought in $250,000 in sales. Based on recent sales history, WoodRight projects $475,000 in revenue in 2014 and $875,000 in 2015. Even better, the average wood products industry wages in WoodRight’s 14 most active counties, across five states, now surpass 2010 per capita income by large margins—five by more than 50%, and only three by less than 25%.
Significant challenges remain—but so do new opportunities. In five years, WoodRight hopes to top $4 million in annual sales. It is eyeing markets reaching northwest to Chicago, northeast to D.C. and New York, north to Cincinnati and Columbus, and south to Charlotte, Columbia, and Atlanta. It aims to introduce at least 3,000 building professionals to Central Appalachian wood products and to grow the number and quality of regional wood-sector jobs. And it plans to transform, to a cooperative, employee-owned, or other locally owned business model that will keep the new wealth in the region.
Overall, WoodRight is quietly and proudly fulfilling its deepest purpose: Steward the use of Central Appalachia’s forest resources to ensure long-term benefit for local people, their livelihoods, and their communities. That’s the real wealth they seek from forests.
The average wood products industry wages in WoodRight’s 14 most active counties, across five states, now surpass 2010 per capita income by large margins.
Photo courtesy Abingdon Millwork
To do right, WoodRight’s network looks at more than just dollar signs and zeroes. It wants to strengthen resilience, self-reliance and future livelihood. So they monitor these elements of wealth:
Specialties: Local Food, Placemaking, Renewable Energy
States served: Minnesota
Additional details: Enhancing the vitality and quality of life in Cass, Crow Wing, Morrison, Todd and Wadena counties is the mission of Region Five Development Commission. Resiliency, inclusion and collaboration are guiding concepts in achieving mutually shared goals that continue to evolve with local municipalities, state, federal, philanthropic, non-profit and social advocacy agencies.
Contact: Cheryal Lee Hills, 218-894-3233
200 1st Street NE, Suite 2
Staples, MN 56479
Alternative contact: Dawn Espe, 218-894-3233
Specialties: Food, Forestry/wood products, Tourism
States served: Idaho, Oregon, Washington
Additional details: RDI was formed in 1991 in response to the timber industry crisis facing the Pacific Northwest. Our nationally recognized programs and services help communities help themselves with effective and results-oriented training and resources necessary for individuals living in rural communities to build and sustain a better future in their communities. Our work is based upon our genuine commitment to build rural capacity through Leadership Development programs and strengthen Rural Economic Vitality through moving capacity into action.
Contact: Amy Hause, (541) 255-9590
Rural Development Initiatives
91017 S Willamette St
Coburg, Oregon 97408
Alternative contact: Heidi Khokhar, (541) 684-9077 ext. 7011
Specialties: Food, Forestry/wood products, Housing, Tourism
States served: Alaska, Arizona, California, Colorado, Hawaii, Idaho, Montana, Nevada, New Mexico, Oregon, Utah, Washington, Wyoming
Region details: RCAC serves 13 western states including: Alaska, Arizona, California, Colorado, Hawaii, Idaho, Montana, Nevada, New Mexico, Oregon, Utah, Washington, and Wyoming. We also work in the U.S. territories of the Marianas Islands, Marshall Islands and the U.S. Virgin Islands.
Additional details: RCAC Value Chains, economic development and Wealth Works are embedded in RCAC’s Building Rural Economies program. With over 10 years of experience in these arenas we technically assist communities who wish to envision and create their future.
Carol Cohen, 435-671-7068
3120 Freeboard Drive
West Sacramento, CA 95691
Alternative contact: Ellen Drew, (575) 421-0261
Specialties: Energy efficiency
States served: Iowa, Kansas, Minnesota, Missouri, Montana, Nebraska, North Dakota, South Dakota, Wyoming
Additional details: Midwest Assistance Program (MAP) has been helping communities and tribal nations find solutions to their infrastructure and development needs through information, resource management, expertise, and technical assistance since 1979.
Contact: Chris Fierrros, 660-562-2575
303 N Market Street, Suite 2
Maryville, MO 64468
Specialties: Bio-energy, Food
States served: Arkansas, Louisiana, Mississippi, Oklahoma, Tennessee, Texas
Region details: Communities Unlimited serves seven southern states: Arkansas, Mississippi, Tennessee. Texas, Oklahoma, Louisiana and Alabama. This is an area that includes 60% of this country’s persistently poor counties, including large percentages of African Americans, Hispanics, and Native Americans.
Additional details: Communities Unlimited has 40 years of community economic development experience in the South. It seeks to move rural and under-resourced places toward prosperity by identifying a community’s assets and the market demand for the products or services created from those. We then build value chain collaboratives based on WealthWorks principles to create new economic opportunities. Since 2013, we are demonstrating the success of this approach through a farm-to-fuel value chain in the Arkansas Delta.
Martha Claire Bullen, 479-443-2700
3 East Colt Square Drive
Fayetteville, AR 72703
Alternative contact: Debbie Luther, 870-509-1331
Specialties: Arts, Food, Forestry/wood products, Tourism
States served: Connecticut, Maine, Massachusetts, New Hampshire, New York, Rhode Island, Vermont
Additional details: Community Roots, LLC is a Vermont firm specializing in rural community and economic development consulting. Melissa Levy of Community Roots, LLC has been working with the WealthWorks framework over the past several years. She’s been a trainer, coach, workshop facilitator, and presenter in the WealthWorks community.
Contact: Melissa Levy, 802-318-1720
Location: Hinesburg, VT
Specialties: Arts, Energy efficiency, Food, Forestry/wood products, Manufacturing, Tourism
States served: Kentucky, North Carolina, Ohio, Tennessee, Virginia, West Virginia
Additional details: The Central Appalachian Network is a regional network of six anchor organizations that pursue collective sustainable economic development strategies across the Appalachian region of Ohio, West Virginia, Kentucky, Virginia, and Tennessee. CAN builds regional partnerships and also works deeply at the sub-regional level around sectors and opportunities including local food value chains, forestry, new energy, small business development, social enterprise, recycling/upcycling, implementation-focused research, advocacy, and organizational capacity-building. CAN’s members are Appalachian Center for Economic Networks (ACEnet), Appalachian Sustainable Development (ASD), Coalfield Development Corporation, Community Farm Alliance (CFA), Mountain Association for Community Economic Development (MACED), Natural Capital Investment Fund (NCIF), and Rural Action.
Contact: Leslie Schaller, 740-592-3854
1456 C Patton Avenue
Asheville, NC 28806