As the fast-growing security market evolves, new profit opportunities may open up for electrical manufacturers, distributors, and contractors in a business once dominated by a handful of large distributors and manufacturers.
Byron Brewer Jr., vice president of Northeast Marketing Group, Wallingford, Conn., says a "dramatic new market" (involving as much as $50 million in new sales opportunities in security products for electrical businesses) may emerge because of changes in the security market's distribution channel.
Brewer says he has found "major" manufacturers and distributors quite interested in becoming involved in the new distribution network being organized by his firm that would compete head-on with the dominant player in the security field, Chicago-based Pittway Corp. and its captive distribution arm, ADI. He expects this new network to go live before year-end.
Since Honeywell bought Pittway earlier this year, Brewer said its attention was diverted to this acquisition. During this time, its stock and market credibility have taken a beating, he says. As a result, he predicts Honeywell will sell ADI, and that it will no longer have a lock on as much installation work. This will open up the market for contractors.
Brewer says the companies will remain formidable competitors for new entrants in the security business, but the security market is now shifting toward the electrical channel. To take advantage of the shift, "companies are looking for partners," he says.