Glowing returns | A small Maine lighting company takes on a big contract and bigger competitors
Photo/Tim Greenway
Bill Stauffer, vice president of sales at Eco-story, hopes a contract with a restaurant giant will generate new business
Eco-story
468 Forest Ave., Portland
Founded: 2007
Products: LED lighting systems
Employees: 6
Revenue, 2010 to date: $5 million
Contact: 774-9889
www.eco-story.com
A more than sixfold jump in sales for Portland-based lighting company Eco-story — prompted by a national contract it landed — is leading to a considerably brighter future for the business.
The $2 million contract with Brinker International of Dallas, Texas, the parent company of Chili’s and Maggiano’s Little Italy restaurants, represents the largest single roll-out of LED light installation in the United States, according to Bill Stauffer, Eco-story’s vice president of sales.
“We weren’t the lowest (bid), but we had the best product and we had a great track record with (products that have) less than a 1% failure rate,” Stauffer says, pleased that his six-employee company beat out the likes of lighting giant Osram Sylvania for the contract.
The highly efficient lighting systems were installed this year in 827 Chili’s restaurants, a change that is expected to net savings of $87 per week per restaurant for a total savings of $3.7 million annually. Stauffer says the Eco-story lights are 85% more energy efficient than incandescent bulbs, last seven to 10 years and provide a warm glow similar to incandescent and a far cry from the harsh hues of CFLs and halogen bulbs.
“Our team studied LED lights for a long time and tested many makes and models and we feel our stores look better now than before,” says Kevin Falconer, Brinker’s senior director of design.
Eco-story previously designed lighting systems for 100 Red Robin restaurants, as well as hotels, retail outlets, hospitals and other places where ambiance is a key component of customer service. The three-year-old company embraces a philosophy that environmental stewardship and economic vitality can go hand in hand.
Flipping the switch
Stauffer and his business partner, Mark Shoemaker, wanted to design an LED lighting product that would appeal to the restaurant, retail and hospitality industries, a niche market in need of lower electricity costs and enhanced environments.
The two men invested $50,000 in research and development and worked with engineers and a design team for nearly two years to create the company’s custom LED light. Eco-story’s lights are made in Shenzhen, China, where 90% of the world’s lights are manufactured, says Stauffer. He hopes to bring some of that manufacturing and light assembly work back to Maine to provide new jobs.
Once the LED light was perfected, he and Shoemaker wasted no time marketing it to as many businesses as they could, says Stauffer. Shoemaker owns Lighting Finance in Denver, which owns a 7% stake in Eco-story, and was able to market Eco-story’s products to prospective customers out West.
The company’s LED lights feature a soft glow that can be dimmed and include different colors to help restaurants, retailers and hotels showcase food, clothing and lobby areas. Stauffer says hospitality and retail industries recognize that presenting their products to consumers in a more attractive way can generate increased sales. Combined with lower electricity bills, the lights offer quick returns on investment, he says.
Inside Eco-story’s Portland office, Stauffer has a display that shows how the company’s LED lights use 4 to 6 watts to provide the same light as a traditional 60-watt bulb without giving off as much heat.
His Forest Avenue office and the Maine Green Building Supply store in Portland are the only two places where people can purchase Eco-story’s products in the state. Stauffer says the company is not big enough to sell its LED lights in national home improvement chains like Home Depot and Lowe’s, yet he sees great potential to sell them to Maine businesses.
Portland’s Old Port is home to several restaurants, retailers and other businesses using expensive incandescent light bulbs that collectively cost them thousands of dollars in electric bills each year, Stauffer says. But it continues to be a tough sell to get those businesses to spend the initial $3,000 to $4,000 to change out their lights, despite Maine’s high electricity rates.
Frustrating him further is the ineligibility of Eco-story’s LED lights for rebates under the state’s Efficiency Maine program to help businesses install energy- efficient lighting. The program is funded by the system benefit charge included on electric utility bills.
Bruce Harrington, Efficiency Maine’s delivery team director in Augusta, says a business that doesn’t meet the program’s payback and benefit/cost criteria wouldn’t qualify for the rebates, which amount to about one-third of a lighting installation project. For example, Harrington says that if a business installs $10,000 worth of LED lights, it can receive up to a 35% rebate if it can show it will save the equivalent of $10,000 in avoided energy costs over so many years.
Harrington acknowledges it is harder for smaller businesses such as restaurants and retailers to take advantage of the program because LED lights similar to those made by Eco-story cost as much as $30 to $40 apiece, a price that puts them outside the state’s payback and benefit/cost criteria. He says it is harder for those businesses to recoup their initial installation costs because they can’t demonstrate that they will save enough in avoided electricity costs over the required time frame to equal the initial installation cost.
“Since the technology is so new and the demand has not gotten to where it needs to be, the cost of the technology is still quite high,” he says.
Harrington believes the tipping point is when the cost of those smaller LED lights comes down, making it easier for small businesses to meet the program’s requirements.
Stauffer says one of the keys to making Eco-story’s LED lights more affordable is to keep investing company profits into R&D to create new products to meet demand. For example, potential growth exists in creating LED lights for office buildings. The company also wants to develop a candelabra LED bulb with a simulated flickering flame, Stauffer says. This product could appeal to hotels, function halls and convention centers to make ballroom chandeliers more energy efficient without sacrificing ambiance, he adds.
Stauffer says developing new markets is important because lighting giants like General Electric, Phillips and Osram Sylvania are investing more in building better LED lights to capture more of the market that innovative firms like Eco-story have carved out. “The challenge is we are still a small player,” he says.
Meanwhile, the $2 million Brinker International contract represents a ray of hope that the company can stay ahead of its larger competitors and tap into new markets.
“With the Chili’s contract, we’re hoping it will give us an even bigger track record to get other accounts,” says Stauffer.
Bob Cook, Mainebiz staff reporter, can be reached at bcook@mainebiz.biz.
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