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In 2014, Rinnai Corp. a manufacturer of tankless gas water heaters, was in search of a visionary leader to move the company forward and upward. The search led to Frank Windsor, a gentleman with more than 23 years’ experience in the industry, having worked his way through the ranks at Kohler, resulting in Windsor being vice president of sales – Plumbing America’s. With his knowledge base, skill set, and integrity, Rinnai named Windsor COO, and he has already put his stamp on moving the company forward – and hitting the next peak.
Since his taking the helm, accomplishments have been many, starting with Rinnai becoming the first to manufacture a tankless gas water heater in North America. In late 2017, the company announced it would begin the manufacturing and assembly operations in an existing factory in Griffin, Georgia, with the plan of moving into a new facility in Griffin in 2018. Just eight months after the announcement, the first unit has been manufactured and will be commemorated in the lobby of the new Rinnai America Manufacturing facility in Griffin, Georgia. In addition to the new manufacturing plant, Rinnai is currently in the process of expanding its North American headquarters in Atlanta, with scheduled completion in 2020.
Another accomplishment is that Rinnai is the first tankless water heater manufacturer to feature Amazon Alexa integration with its products. This groundbreaking innovation allows users to tell Alexa, “Alexa, ask Rinnai to start circulation” or say, “Alexa, tell Rinnai I want to take a shower,” and the Rinnai tankless water heater will spring into action.
The momentum is strong, and we wanted to know what is on the horizon for the company. We sat down with Frank Windsor to discuss manufacturing, training, and what sets Rinnai apart in the industry. Here is what he had to say.
Ruth Mitchell: The PHCP industry is built upon relationships. Through TEAMWORK, TECHNOLOGY, AND INNOVATION (TTI - Rinnai’s tagline), Rinnai has developed relationships within the wholesale and contractor community. Tell me about these relationships, and how TTI helps to strengthen these connections.
Frank Windsor: Rinnai believes in selective distribution. We have great wholesale and distributor partners that we work very closely with to promote our products and grow our businesses together. We work together to ensure they have complete visibility of the products we are launching, and we work to increase awareness to drive pull-through demand.
RM: Outside the U.S. tankless water heaters are the norm, but the U.S. is slow to embrace. How do you address this issue?
FW: We have seen the tank market declining over the past few years and tankless adoption increasing. As the industry leader, Rinnai has consistently invested in consumer advertising to help drive category growth. This year, to help train the trade on tankless, we have deployed seven branded vans throughout North America that are completely outfitted with our newest product innovations on a 26-week tour. We believe that getting as many people as possible trained and comfortable with tankless is the key to growing the category.
RM: Let’s talk sales. How has the market been the last few years, and where do you see it headed?
FW: The market for tankless is growing, and Rinnai is well positioned to support this market growth. Our largest opportunity is in the repair and replace segment, which is why we’ve launched our new Sensei tankless water heater. It was designed with the pro in mind and offers the simplest install with flexible venting options, including 2-inch PVC, and many other features and benefits. We expect unit growth of approximately 25 percent this year.
RM: Are there any milestones that you want to hit within the next year or two?
FW: One of our primary focuses this year is the launch of our new Sensei tankless water heater. We believe that this product sets us apart from our competitors. We are also in the first phase of introducing domestic manufacturing in Griffin Georgia, making Rinnai the first major tankless water heater manufacturer in North America. We also expect to sell our 3 millionth unit within the next two years which shows how fast we are growing. We sold our 1 millionth unit in 2009 and our 2 millionth in 2016, so you can see the momentum we have in the North American market. We additionally expect to train over 50,000 contractors and plumbers this year which will be a significant milestone for the organization.
RM: What are some of your key issues to tackle?
FW: We must consistently be working to innovate and develop products that enhance lives by changing the way water is heated. We do see a shortage in skilled labor, so Rinnai is working on initiatives to enhance our training offerings to make sure we can either get them here for training or get to them in their markets.
RM: What are your plans for the North America Innovation and Training Center? Who are you training and who is there? Do you have class schedules, on-demand or education via the web?
FW: Rinnai is in the process of tripling the size of our corporate headquarters in Peachtree City, GA. Our entire existing building will be converted to a state of the art training and R&D facility. We currently bring in plumbers and contractors from all over North America for hands-on training on Rinnai products. This year we will bring in over 750 people for our Rinnai Experience trips. These trips include one full day of training at our corporate office, a visit to our new manufacturing facility in Griffin, and a trip to the Atlanta Motor Speedway where they see live product installations and get to do a complete NASCAR driving experience. Additionally, we offer in market and online training programs. As I stated previously, this year we expect over 50,000 contractors and plumbers.
RM: What are the new trends in tankless, and how can they be applied to both commercial and residential usage?
FW: We see a few trends related to the tankless market. First, we see increased adoption and demand, so we believe that consumers and business owners understand the benefits associated with using tankless. Additionally, we see a shortage in skilled labor, which makes it extremely important that we develop products that are easier to install and service to reduce the amount of time that our customers need to spend on the job sites. As I’ve mentioned, our new Sensei Tankless Water Heater offers a streamlined and flexible installation that one person can complete much faster than in the past. We see an increased need for on-demand recirculation, which allows homeowners and business owners to have faster hot water at their faucets via push button, motion sensor, or voice activation, resulting in less waiting and less waste. On the commercial side of the business, we offer preassembled Tankless Rack Systems where multiple tankless units are mounted to a rack with gas and water manifolds completely assembled. This significantly reduces the time required to install in many commercial applications. We also offer our Demand Duo which combines a tankless unit with a tank. This innovative product heats the water outside the tank, thereby removing any strain from the tank and resulting in a much longer product lifespan. It is a cost-effective direct replacement for a traditional commercial tank that will last twice as long.
RM: In late 2016, Rinnai launched an E-Commerce program. Tell me about the program and its progression.
FW: Our initiative was to implement an IMAP program that eliminates unfair pricing for online sales. We have invested in resources to monitor online sales. We currently have 13 approved vendors to sell online that adhere to our minimum advertised pricing requirements.
RM: What do you consider to be the clear and consistent difference between Rinnai and its competitors?
FW: We have some strong competitors out in the market, but what separates Rinnai from our competition is our product quality. We believe that “Quality is our Destiny” and focus on that statement in everything that we do. Rinnai is known in the marketplace as the top quality tankless water heater. Additionally, we always try to put the customer first in all that we do. We want to walk in their shoes before we decide. Though we are far from perfect, we continue to focus on these two fundamental beliefs. The final point is that we are now the first tankless manufacturer to manufacture in the United States, and investing over $90MM to accomplish this. milestone.
RM: How do you increase the visibility of the Rinnai brand?
FW: We have consistently advertised to consumers on television, print, and digital channels. This year we really wanted to engage our trade partners to make them aware of our new Sensei tankless water heater. In February we brought more than 700 plumbers and contractors to Atlanta for an introduction to the product and a complete VIP experience including a trip to the College Football Hall of Fame, a VIP comedy performance by Larry the Cable Guy, and the opportunity to attend the Rinnai 250 at the Atlanta Motor Speedway. Immediately following that event, we deployed our Try Rinnai Tour with our seven branded, upfitted vans that will be in the market for a 26-week guided tour. Our plan during that tour is to reach more than 20,000 plumbers and contractors, so I’d say we’re doing a lot this year to increase the visibility of the brand.
RM: Which product are you most excited about and why?
FW: There is so much to be excited about! Our Sensei tankless unit is most exciting right now because it answers the challenges our trade partners have had with tankless adoption. This gives us a real competitive advantage and positions us to continue to drive the tankless market growth.
RM: Describe the brand in 10 words or less.
FW: Our vision is enhancing lives by changing the way water is heated. Enhanced lives mean that those people touched by our product and services have a better day. Changing the way water is heated means friends don’t let friends use tanks.