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Preparing for Powerful Storms Means Business

June 20th, 2006 No comments

From Fueled Generators To Satellite-Phone Kits,Firms Find Readiness Niche
The Wall Street Journal
By CHRISTINA CHEDDAR BERK

With the National Oceanic and Atmospheric Administration predicting another active hurricane season this year, many small businesses see an opportunity — by marketing products to meet the storm-related needs of other companies and residents alike.

The need for reliable power during a hurricane, for instance, has generated business for Power to Go LLC, a small firm in West Palm Beach, Fla. The company, which started operations in October, markets generators, as well as a fuel-storage solution for businesses that have to keep their operations running on generators for more than a short time. Power to Go, which stores towable generators at its facilities and guarantees its customers fuel, expects to sell between 300 and 500 generators this year, says Rusty Walker, vice president of sales. He sees strong demand, especially from franchise owners who have several locations. Since the generators are towable, they can be moved to wherever the need is, he adds. “The business owner can even tow it home at night for use at his residence,” Mr. Walker says. The towable generators also can help business owners who don’t own the building from which they operate, says Mr. Walker. At these sites, it’s either impossible or impractical for businesses to install large generators with underground fuel tanks, he says. A new law in Florida that requires that gas stations along evacuation routes and owners of more than 10 stations to have generators to power their pumps in an emergency is likely to boost business, too, he adds.

Online Preservation

Data protection is another area where small companies, such as AmeriVault Corp., of Waltham, Mass., and Arsenal Digital Solutions, of Cary, N.C., have seen growth, especially in hurricane-prone areas, though the companies declined to provide specific sales figures.

“Every industry is data-dependent today,” says Bud Stoddard, president and chief executive of AmeriVault. “Katrina and the other storms have just brought an awareness to people that this can happen to them.”

Arsenal is seeing an increase in small and midsize businesses planning ahead. “I think this year is a little bit different,” says Steve Siegel, vice president of marketing. “Last year, we were getting the frantic calls when there was an approaching problem.”

Lela Lofton, office manager of University Animal Clinic in Lake Charles, La., says the clinic had less than 12 hours to prepare to evacuate from the path of Hurricane Rita when the storm changed course. But the veterinary business used AmeriVault’s online service to back up and store its data. “If the building would have blown away, all our files would have been safe,” Ms. Lofton says.

Other small businesses are marketing emergency-preparation products for residential consumers. Some of those products benefit from a sales-tax holiday the state of Florida grants for certain goods for two weeks before the June 1 start of the hurricane season in order to help residents become self-sufficient for the first 72 hours after a storm.

Flashlights, lantern batteries and alkaline batteries were in demand at franchiser Batteries Plus LLC stores, which saw sales increase more than 29% during the two-week period ended May 31, compared with the same period a year earlier, says Russ Reynolds, chief executive of the Hartland, Wis., company.

But the most popular item sold during this year’s tax break was hurricane shutters, says Bill Herrle, vice president of the Florida Retail Federation. This includes a variety of shutters made from lighter materials that are easier to install and store.

Emergency Dining

Heeding advice to have more food and water on hand, consumers also are looking to purchase military-style rations and even satellite-communications systems, for those who can afford the high-tech equipment.

For example, meals ready-to-eat, or MREs, typically were manufactured for the military and rescue personnel and relief agencies such as the American Red Cross. But with residents now looking to stock their own supplies of food in the event of a disaster, GA Food Service of Pinellas County Inc., St. Petersburg, Fla., will market products directly to the consumer market. The company says it has recently identified this as a market for expansion and is now tailoring products to it. Demand also is coming from retailers, financial institutions, and other employers who want to have food on hand for their workers.

Keeping in Touch

Assemble Communications LLC, a Davidson, N.C., satellite-communications provider is working with Inmarsat PLC, a British firm, to market a personal hurricane-communications kit. It contains a small satellite terminal and access to BGAN, a new high-speed voice and data service recently launched by Inmarsat. The kit, which recently has been placed on the market, sells for about $5,000. It’s packed in a small waterproof case, and will allow a customer to send and receive email, browse the Internet at high speeds and make voice calls.

The company expects the demand for the product to be fueled by the desire to stay in contact with loved ones no matter where one is.

“There is this idea that nobody is going to take care of me better than me,” says Cromwell Evely, director of marketing for Assemble Communications.

Copyright 2006 The Wall Street Journal. All Rights Reserved.

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