Insulation demand heightens as energy prices soar

by | Jul 14, 2022

A combination of government financial stimulus packages along with low-interest rates have not only escalated new housing starts and renovations throughout the pandemic but significantly increased the demand for insulation products in Australia and around the world.  

Fletcher Insulation’s National Marketing Manager Roger Pecnik says that the combination of global demand and supply chain challenges on local importers is placing increased pressure on Australian insulation manufacturers like Fletcher Insulation. 

“The pandemic, and especially lockdowns, created a shift to consumer spend on home builds and upgrades and focused their attention on the importance of thermal and acoustic insulation for more comfortable living.”

“There is still a considerable backlog of projects that require insulation and this will continue to drive demand in the next term. There is also now the added complexity of energy shortages which is driving greater demand of insulation products to reduce energy usage in housing,” Mr Pecnik said.

This is just another reason why insulation demand will remain high for some time, according to Mr Pecnik, as it is still one of the most cost-effective methods of reducing energy usage in a home. This will also see major home builders up-selling quality insulation during the design phase of a build as energy costs become more topical. 

“Sales will be highly dependent on consumers understanding the benefits of well-insulated homes on rising energy costs and government incentives that will lower the burden on energy providers. Retailers have the opportunity to remind their customers that there are a number of products that can be used to combat a reduction of energy from Pink Batts to Sisalation to Permastop roofing blankets,” he said.

When it comes to industry issues, although Fletcher Insulation manufactures all of its Pink Batts in Melbourne, Mr Pecnik says the company has some exposure to a number of challenges when it comes to its ‘brought-in’ lines.

“Having an extensive distribution network and inventory holding reduces our risk to international supply chain disruptions. We see the whole building industry is currently being impacted by supply chain issues, however, Australian businesses are less exposed to these disruptions. There is a strong message for consumers to avoid the stress by buying Australian,” Mr Pecnik said.

“The increased demand for insulation has also seen retailers having to pivot to find alternatives that will meet supply, which is why suppliers like Fletcher Insulation have supported retailers where they can, in partnership, with alternate product solutions.”

“Amongst the unprecedented demand, Fletcher Insulation has also managed to launch its Firmasoft range which is designed specifically for the retail market. The DIY market was looking for a softer product and after our investment in our Australian factory we were able to create a specific range for this market,” he said.

While maintaining stock of the right products in store is vital, Mr Pecnik says that maintaining knowledge on regulation changes is also important so retailers can pass on any building code changes to their trade customers where required.

“The 2022 NCC revision for energy provisions has just been released. The key change is the focus around thermal breaks and we also expect some change to wall wrap and sarking requirements. They are subtle changes but retailers will need to know about these changes to ensure they guide their customers in the correct selection of products,” Mr Pecnik said.

Retailers also need to maintain their knowledge around inferior products released into the market that do not meet Australian standards and the National Construction Code, Mr Pecnik said.

“Cheap products that meet relevant standards and codes do not bring down the integrity of the segment. The challenge is around the products that do not meet code and that customers are not aware the products they are buying are not compliant. At Fletcher Insulation we have invested considerably to guarantee the constancy and performance of our products ensuring they meet regulatory requirements.”

In response to how retailers can increase sales of the insulation category retailers need to remember that every time a customer buys or asks about timber or plasterboard they should cross-sell the benefits of insulation, “Mr Pecnik said.

“At Fletcher Insulation we have spent a lot of time making it easy for retailers to sell insulation with our point of sale, collateral and supporting material being a big part of helping the retailer. As a supplier, we work as a business partner to help the retailer drive and capitalise on demand,” he said.