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Last month’s edition of the magazine highlighted several buying groups within the industry channel and how they evolved into powerful networking communities. We promised a deeper dive into BLUE HAWK, an HVACR-focused cooperative owner of IMARK Group.
The existence of BLUE HAWK allows independent businesses to use their combined purchasing power to attain competitive pricing for the goods and services they use. But it doesn’t end there; its mission and vision are set on core values and beliefs of commitment to independent business and strength in community. Its focus is to ensure that the independent HVACR distributor, in an environment of consolidation and larger competitors, can compete, thrive, and prosper today and in the future.
The group hosts three meetings each year for members, vendor partners, alliance partners and solution partners. It recently held its 2022 Winter Summit Jan. 12-14, 2022, at Sun Valley Resort in Idaho. With more than 80 members and guests, the cohesive group leaned into its networking foundation and shared best practices — cementing member strength and partnerships.
Lance Rantala, CEO, is at the helm; he shares with us a deeper dive into the group, its mission, and offerings. With 217 member-owners (wholesalers), 134 vendor partners (manufacturers/suppliers), and 57 solution partners (service vendors), the group packs a powerful punch in helping member-owners stay competitive and provide a network of support and tools to thrive.
Knowing there is strength in numbers and community, we sat down to hear more about the group. Where direction and leadership meet — here’s the view from Lance Rantala.
Ruth Mitchell: What is the group’s mission statement, and how does it support this cornerstone?
Lance Rantala: BLUE HAWK was established to ensure the survival and growth of the Independent HVACR distributor. It is a 100 percent member-owned, fully transparent HVACR cooperative. We continually strive to support our members to help them successfully run their businesses. We provide opportunities to enhance their profitability, network with fellow members and vendor partners, and offer succession planning and programs such as a group 401(k), benchmarking, and health insurance, to name a few.
RM: The definition of a buying group and a cooperative has extended beyond the focus of combined purchasing power. Groups incorporate tools to help members grow and expand their business, such as e-commerce platforms, marketing tools, payroll services, peer networking support. What are the key member benefits offered by your group, and how do the offerings support growth within a member company?
LR: We offer BLUE HAWK Retirement; a group 401(k) plan that helps participating members provide a retirement program for their employees. By combining the assets from multiple employers, the program reduces administrative fees, removes personal fiduciary liability from the company’s owner, and reduces administrative duties. In addition, there are no audit fees, no 5500 filings, yet it includes professional investment oversight.
We also offer a health insurance captive, which is a medical insurance option that provides relief to members who face ever-increasing healthcare costs. Members of BLUE HAWK can take advantage of the health insurance captive, part of the oldest and largest medical captive in the United States. This captive gives our members the same purchasing power, claims cost containment and clout as a Fortune 100 company.
RM: Navigating through a pandemic wasn’t easy — and wholesale distributors leaned into their buying groups for support. What existing avenues of assistance did members lean into, and what new tools/offerings were developed? Are the new items now permanent offerings?
LR: We launched the Recover Strong Program powered by our Benchmark BLUE financial benchmarking platform during the pandemic. Participating members submitted their quarterly trial balances anonymously and securely through our web-based benchmarking platform. The goal was to help members compare their performance to see where they performed well and areas they might improve.
Benchmarking also helps minimize the pandemic’s impact by comparing members’ vital financial metrics with their peers. The Benchmark BLUE program has been wildly successful and is a permanent offering to our co-op’s member-owners.
RM: How did the group strengthen relationships and partnerships between members and suppliers over the past 20 months? How does this bond help members in their daily book of business?
LR: BLUE HAWK is all about relationships. We feel that being a good partner is one of the most critical aspects of our cooperative’s business model. When times get tough, partnerships become even more critical. So, we’ve maintained frequent contact with our members, suppliers, and service providers.
RM: Many would say that it’s not a buying group, but a community. Can you share with us how members supported one another over the past 20 months?
LR: We launched our Peer-2-Peer networking groups. These groups consist of noncompeting members who are similar in size and have a similar customer base. In addition, the Peer-2-Peer groups are permanent, so members can get to know each other and feel comfortable sharing best practices and financial benchmarks to help strengthen their businesses.
RM: The way business is conducted has drastically changed since the pandemic — supply shortages, labor shortages, transportation and logistics issues have made for the perfect storm. What resources are available to members to help their companies navigate the challenges?
LR: Members have access to The Dashboard, a web-based purchasing and rebate analytics tool. This data-driven platform is 100 percent financially transparent. It displays near-real-time rebate performance with approved vendor partners and conversion opportunities away from unapproved suppliers. It allows our members the ability to make informed purchasing decisions.
RM: In what areas do you see growth potential for your members?
LR: Through The Dashboard rebate analytics tool, our members can see conversion opportunities to make informed purchases to help grow their bottom line.
In addition, the BLUE HAWK Growing Forward Acquisition Program allows members interested in selling their businesses to confidentially market them to other members looking to expand through acquisitions before going to the broader market. As a result, BLUE HAWK Growing Forward has kept our purchasing power within our cooperative rather than pushing them to a national player. It also helps members looking to expand through acquisitions.
RM: For a company on the sideline that is not a member, what would you say to encourage them to contact your group for more information?
LR: BLUE HAWK has always been a 100 percent member-owned, member-controlled, and financially transparent HVACR purchasing cooperative. Member-owners have full access to all rebate program details, terms and conditions, and audited financial statements. We are about relationships and working together.
RM: Let’s make it easy for them — where can they go for additional information and an individual to contact?
Tony Burks, vice president of business development