By Daniel Winningham
Steve Bailey, vice president, of Perryville Stave Company Inc. knows the family business he’s worked at for years is in a transition.
In the large building where machinery was used to build staves for barrels, it now sits mostly empty. The equipment has been purchased and some of it is awaiting pickup.
“We’re just not doing the stave part anymore, it’s an entirely different product,” Bailey said. “Not that the quality of the wood or the lumber doesn’t matter but it’s more of a secondary type (of product).”
The right trees — and large quantities — were needed for the production of staves
“When we were making staves we had to have white oak logs, and big volumes. We process logs through the mill. And we would separate out what was suitable for this. What was not suitable for barrels was suitable for these products.”
In years past, Bailey selected timber on his own. However, he doesn’t do that anymore.
Demand for the production of barrels went way down.
“We started receiving emails and telephone calls from our barrel stave customers canceling orders, and they were canceling orders because it couldn’t sell barrels. These were long-term customers that we just, we couldn’t sell anything. We accessed the (federal) PPP program that the government had, that little infusion of money got us over the hump.”
For a time, the company laid everyone off.
“We started laying out (our) strategy for the future,” Bailey said. “We’ve been selling these products all along.”
He holds up a plastic bag filled with the processed oak chips.
“Volumes of this went down pretty significantly, too, (but) we knew it would come back,” Bailey said. “These products, they’re not absolutely essential, you can make wine without this, but it makes a far, superior wine with these products and they’re cheaper.”
A detailed analysis proved beneficial, according to Bailey.
“We bought a market research study from a company that does such things, and we did a little due diligence of our own. We talked to people that we know who are in the industry and well versed.
“It was done before the whole COVID thing was really taking place,” Bailey said. “It was pretty easy to draw some draw some conclusions and the conclusions were that there was a future in this product. There’s a lot of it used, (but) there’s no one company that dominates (the market). The biggest company out there has pretty small market share three or four percent.
Changing, or finding a way to adjust the business model, is part of the times.
“We’ve been doing it for a while we’re developing some partnerships with some other companies that want to do this sort of thing,” Bailey said. “There’s a future of this, no doubt. It’s going to require a lot of work. It’s not going to be easy. But we feel pretty good about it.”
In addition to the production of the oak alternative products, Bailey explained how his company is doing debarking to rid fresh timber from bugs.
“We were contacted to do it,” Bailey said.
Admittedly, Bailey said he didn’t know much about the process. However, it was a quick learning curve.
“We didn’t know about that until we were contacted,” Bailey said. “These other guys explained the situation and we said, ‘Yeah, sure, we’ll do that.’ We have the equipment and we have the knowhow to do it. We have everything we need here to do that. So we said, Yeah, let’s do it. That’s experimental, at this point in time. For the most part it wasn’t done.
This component of the business is not a major part yet. Bailey is optimistic that it will improve in the future, though.
“It’s not huge right now,” Bailey said. “It’s going to be a while before it is huge. In fact, it’s down a little bit below what we anticipated.”
A lot of the debarked logs get shipped to China, and Bailey said geopolitics and COVID-19 are still impacting the industry.
“Shanghai is a big place for logs, but Shanghai (right now) is essentially shut down,” Bailey said. “The Chinese government’s doing weird things. They’re analyzing logs for COVID virus, they are literally doing that. There’s no rhyme or reason for it, but they’re doing it. We were contacted and brought up to speed and had the equipment.”
