Riding the ‘Green’ Wave

There are a number of factors that separate success from failure in business, and no entrepreneur would dare understate the importance of timing in that mix.

Not the owners of Skybus, and certainly not Denis Gagnon.

He launched what many observers consider to be a breakthrough product, the Xlerator, in the challenged but potential-laden hand-dryer market — only about 10% of the estimated 22 million public restrooms in this country are outfitted with such devices — and he did so at just about the time the nation and the business community were starting to toss around the phrase ‘going green.’

The potent combination of a product that is changing perceptions of the long-hated hand dryer and a growing desire to be more environmentally sensitive has fueled a 700% rise in sales for East Longmeadow-based Excel Dryer — the company Gagnon purchased in 1999 — since the Xlerator first hit the market in late 2001.

But he stressed repeatedly that the ‘green’ phenomenon is simply part of the equation, and that businesses and institutions need much more than green ambitions to ultimately remove the paper-towel dispenser. First, the hand dryer has to work in a way that it hasn’t historically (meaning it has to work, period) — and the Xlerator has that covered, as anyone who has used the facilities at the Basketball Hall of Fame can attest. Meanwhile, the numbers, meaning those referring to energy savings and overall cost reduction, also have to work.

And they do; the Xlerator, says Gagnon, is three times faster than competitors’ products, and it uses 80% less energy.

“I don’t think ‘green’ has changed people’s attitudes about hand dryers — the Xlerator has changed those attitudes,” he told BusinessWest. “A hand dryer that works can stay on the wall by itself, because people don’t mind using it.”

This combination of factors, as well as a weak U.S. dollar, have helped put the Xlerator in facilities like Heathrow Airport (there are some 800 of them in place there) and the new Wembley Stadium, both in London. It has also made it necessary for Gagnon to expand his plant in East Longmeadow — a 10,000-square-foot addition used for warehousing and distribution was recently christened — and also expand his workforce from roughly 30 to 42.

Add all this up, and it provides an effective lesson in the importance of timing, and equals one of the more intriguing and inspiring manufacturing-sector success stories being written in the Pioneer Valley.

“This goes to show that manufacturing can thrive in this region,” said Gagnon, “if you stay ahead of the curve. We invented the perfect product in the hand-dryer industry for the green movement; we’re now the standard.”

In this issue, BusinessWest reviews the latest chapters in the Excel story, complete with triumphs and some growing pains, and what is likely to come next for a company that is helping end-users ‘throw in the towel.’

Helping Hands

That phrase is one of many the company uses in its marketing, which is one realm that has been considerably altered by the ‘green’ movement, said Gagnon. Where once the focus was squarely on performance (and in many ways, it still is), there are some new pages to the script — several of them, in fact — focused on the environment and the prevalence of green building and design.

They detail all of the memberships, certifications, and testimonials that Excel and the Xlerator can now put on the resume. Here are some examples:

The Xlerator can help facilities earn coveted LEED (Leadership in Energy and Environmental Design) credits, as set by the U.S. Green Building Council, in two categories — ‘minimum energy performance’ and ‘optimizing energy performance.’ Gagnon noted that the council will be putting Xlerators in its new corporate headquarters building in Washington, and Excel will work to maximize exposure from that contract;

The dryer was voted one of the top 10 products of 2002 by the editors of Environmental Building News, a leading newsletter on environmentally responsible design and construction;

The Xlerator is endorsed by the Green Restaurant Assoc. as the best environmental solution in the hand dryer category for the restaurant industry;

Excel Dryer is an ally member and approved vendor of the Green Hotels Assoc., and the Xlerator is the recommended hand dryer for green hotels;

Excel is a registered supporter of the Green Building Initiative, which has as its mission the goal of accelerating the adoption of business practices that result in energy-efficient, healthier, and environmentally sustainable buildings, and is also a member of the Sustainable Buildings Industry Council, a national leader in defining the whole-building approach to design; and

The company also prints some statistics giving prospective clients and green- leaning businesses some food for thought. For example, 17 trees are consumed to make one ton of paper; one ton of paper production pollutes 20,000 gallons of water; and one ton of paper consumes three cubic yards of landfill.

Add up all those numbers, and it’s clear that Excel dryer has the right product at the right time — when businesses large and small are realizing that going green isn’t just the right thing to do, but is also becoming increasingly necessary to earn some clients’ business.

Gagnon acknowledges that his company is in a good place, and that things are most likely to improve, because the ‘green’ wave will only grow in size and importance to business owners. But despite all this, the hand dryer remains a comparatively hard sell — it still fares best in facilities like airports, schools, stadiums, and schools, where there isn’t a premium on customer service — and there is considerable work for his company to do moving forward in this changing environment.

This work comes in several areas, from physical expansion and new production strategies designed to reduce lead times and cycle times to ever-more-aggressive marketing; from continued R&D to make the Exelerator even faster, more germ-free, and perhaps even less noisy (although that’s proving to be an extreme challenge) to sales strategies aimed at positioning the company for new building projects and renovations. Excel is also expanding the product line by customizing models to match an institution’s color or include its logo.

Gagnon is addressing all these issues simultaneously. He told BusinessWest that one of his growing pains was reducing a lead time (eight weeks) that was costing him some new customers down to three weeks, and he’s done it through his addition and some Kaizen projects that have brought some new efficiencies to the production process.

Meanwhile, he has stepped up his marketing efforts and continues to find new ways to put the Xlerator front and center. The latest is a two-minute piece shot at the Hall of Fame that will be part of a series on environmentally friendly products that will be shown on public television this spring.

The spot features Hall of Fame President John Doleva talking about how the shrine was focused on environmentally friendly building products and practices as it was preparing to open its new facility in 2003, and made the Xlerator part of that mix, said Gagnon, adding that he expects the message to resonate with institutions planning new construction or renovations.

And while pursuing new and existing markets in the U.S., the company is also looking abroad, and the timing is right in that regard as well. The weakened U.S. dollar has helped most companies that export products, and Excel is no exception. The Wembley Stadium and Heathrow contracts, the latter of which includes the new T-5 terminal, have put export volume at roughly 30% of total sales, and Gagnon says that number could go higher still because ‘green’ building is an increasingly global phenomenon.

“Our export business has grown dramatically,” said Gagnon, adding that the weakening dollar has been one of many converging factors that have produced 50% sales increases the past four years.

As for customizing the Xlerator, Gagnon says the company can match a PMS color or a swatch to suit a college’s or corporation’s color schemes, and it can also put a company logo on dryers, as it has for Office Depot.

Overall, Gagnon expects that his company probably can’t sustain its blistering pace of growth, but he does foresee continued improvement in sales figures here and abroad as the green movement swells, and also as more people come to like a product they have traditionally disdained.

High and Dry

As he surveys the situation, Gagnon sees a number of signs of success. The new addition is perhaps the most visible, but there’s also the growing sales numbers, press accounts that include such outlets as the Wall Street Journal, network television news, the Learning Channel, and more, and even a patent-infringement lawsuit against a company that produced knockoffs of the Xlerator.

“They say imitation is the greatest form of flattery,” said Gagnon. “There’s a sure sign we’re doing something right.”

Excel is doing a lot of things right, but challenges remain. There’s a reason why only 10% of the public bathrooms in this country don’t have hand dryers — many people still aren’t sold on them.

The ‘green’ wave will help sell them, and that phenomenon is only part of the reason why — for Gagnon, Excel, and the Xlerator — the timing was perfect.

George O’Brien can be reached at[email protected]