More Than Meets the Market

   Keep a close eye on the Product Review and News sections in the next few months, and you’ll find interesting machines, tools, materials and other goodies I spy when walking the five miles or so per day through huge exhibition halls. The annual Italian excursion includes other highlights, such as the usual drive-for-your-life down the A4 autostrade and watching my boss eat an entree of almost unbelievable origin.
   But, every year, there’s also something that I hide. Here’s the secret: I’ll never tell you about all the swell new things I see in Verona, because you’ll never see them.
   I don’t do this out of some mean streak, or a perverted notion that I’ll know something you won’t. Call it the Filter Effect.
   It’s a convergence of market forces and other factors that limit what you’ll be able to buy in the United States. It’s nothing evil … it’s just the facts (with one notable exception) of economic life.
   The United States remains one of the top consuming markets of stone and stone-related products in the world. Domestic stone and fabrication goods can compete with the best on the planet, but it takes a massive amount of imports to keep countertops and other products rolling out of U.S. shops.
   Marmomacc remains one of the key places for everything that’s stone in the world. You may not see every stone and tool available (although, when dragging through Hall 9 with two more to go, that’s hard to believe), but it’s the central meeting place for international trade.
   The acreage that holds Marmomacc could easily hold several Coverings and possibly a dozen StonExpos. So why aren’t we seeing all of this over here?
   Credit the Filter Effect. The field of players winnows down to what we see in the United States due to several factors – none of which are limited to Verona’s Marmomacc. The same thing occurs at other major shows, whether they’re in Germany, Spain and other exotic locales.
   One thing that should be the main sieve in all of this – language – isn’t as much an obstacle as you might think. As the euro is the common currency of much of continental Europe, English is becoming a de facto general language. (Unlike the Internet, though, don’t look for the Stars and Stripes to denote English-language services; in Verona, it’s the British Union Jack.)
   Instead, consider these for building that filter:
   • Currency. The disparity between the euro and the U.S. dollar remains the main trade-stopper in any deal. Europeans often feel that they can’t compete with their higher-priced goods – especially with the close tracking of the yuan to the U.S. dollar giving Chinese stone and tools a an economic edge.
   • Distribution and support. Hop over the money hurdle, and the concept of actually serving the U.S. market worries – no, strike that, frightens – more than a few Marmomacc vendors. Those without established distributor relationships in the States need to find partners they can work with and trust, which can be a tall order. The massive size of the United States can be daunting to those in the Continental markets.
   Distribution can be a headache, but support can be a nightmare in the U.S. market. The distance in mileage and time – the closest U.S. outposts on the East Coast are thousands of air miles away and haven’t even started work when many Europeans break for lunch. A good U.S. business partner is essential, unless a company takes on the considerable expense of opening a facility in this country.
   • The factory gap. There’s nothing in the stone industry that’s as impressive and imposing as a massive gang saw, a multi-wire cutter or a production-line slab polisher. Verona’s halls offer them all, with very few U.S. buyers.
   The U.S. market isn’t one – particularly with granite – that imports boulders and blocks. We like our stone coming out of containers in neat and tidy slabs and tiles, ready for cutting, shaping and installation. All of the giant factory equipment at Marmomacc isn’t a fit at all for U.S. customers.
   • Politics. Remember that remark about the one thing that isn’t related to economics? Stone in the U.S. market can be an international hot potato, which is handled by its own filter operation.
   A nice slice of one hall in Verona, as well as a few large outside exhibition areas, features products from Iran, which happens to be the fifth-largest quarrier of dimensional stone in the world. Trying to haul a block of this home to the United States is not going to be a pleasant experience.
   The proclivity for cut-up stone in the U.S. market provides its own solution, however. The import status of a stone coming into this country is based on where it’s processed (or worked), and blocks of Iranian stone end up in a factory in another country (or two).
   This isn’t a nefarious scheme; Baltic Brown granite, for example, hails from Finland, but the import data for any slab will be from where it’s cut and polished (likely Italy or China). The Iranian stone I see in Verona may show up here, but with an entirely new name and origin.
   The Filter Effect isn’t bad for the U.S. market; if anything, it makes the stone industry a lot more efficient. (Do you really want to face triple the choices for anything you’re currently buying?) The changing relationships in the distribution channel also offer more products every year.
   If you feel like you’re missing something, though, there’s an easy way to beat the Filter Effect: Go to Verona. You may find exactly what you want, or that you really aren’t missing what you haven’t seen before.
   And, if you happen to see me, maybe I’ll take you out for a dinner you won’t forget. And you won’t be eating spaghetti, either.

This article first appeared in the November 2006 print edition of Stone Business. ©2006 Western Business Media Inc.