Industry Update: SRS & The Home Depot - PODCAST TRANSCRIPT

Editor's note: The following is the transcript of a live interview with  Kent Gardner of SRS Distribution. You can read the interview below or listen to the podcast.

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Heidi J. Ellsworth: Welcome to another Roofing Road Trips from Roofers Coffee Shop. My name is Heidi Ellsworth, and today's episode is epic. I'm telling you one of the biggest things to hit the industry this year was the acquisition of SRS by the Home Depot, and we get to have a one-on-one conversation with Kent Gardner about all that's happened and all that's going to be happening in the future. So Kent, welcome to the show.

Kent Gardner: Good to be here, Heidi. Thanks for having me. Excited.

Heidi J. Ellsworth: I'm excited. Wow, what big news. We're all just... I mean, let's just say, the industry's atwitter. It's crazy. I don't even know if I should use that word anymore, twitter, X whatever, but.

Kent Gardner: It's a next step.

Heidi J. Ellsworth: Let's start with some introductions. So Kent, if you could introduce yourself, tell us what you do at SRS for those few who do not know.

Kent Gardner: Well, my name is Kent Gardner and I am proud to say, happy to say that I'm president for SRS on the building product side. So I have the opportunity to run all the great locations in support of our great contractors from a roofing, windows and siding distribution standpoint. So excited to be here and excited to have the role, and I'm excited to be a part of this Roofers Coffee Shop conversation.

Heidi J. Ellsworth: I love it. I love it. We love these conversations. So, okay, let's start with the big picture. What's happened? I mean, since the announcement and even a little bit before, this is such big news with the Home Depot. Give us a little bit of a history and a little feel for what all has gone on.

Kent Gardner: Well, so this is a logical extension of what we've been trying to do for our contractor base over the course of our 16-year history. So we've just been trying to provide the best products, the best quality service to our contractors where they are, whenever they need it, where they need it, as they need it. And so as you think through our growth trajectory over the course of the last 16 years, it's just we've gotten so big, our scale has expanded to a certain point where the contractor's needs are changing.

And so the partnership with Home Depot is really an opportunity to support the customers even greater, even bigger than how we've done it in the past. So now we've gone from a building product standpoint over 400 locations, to partnering with and trying to layer the relationship with the Home Depot locations, which is 2000 plus in all of North America. So this gives our contractors an opportunity to get the great quality products and services that we provide above and beyond what our current footprint was now with the expanded footprint with Home Depot.

Heidi J. Ellsworth: And when you think about, everyone knows where the Home Depot is, everywhere they go. I think a lot of people all know where the SRS branches are too. I mean, can you share just a little bit more on, or is that still in the works, is there going to be any cooperation there or is this still in the works?

Kent Gardner: Well, we were a big company in our own right, and then when you partner with Home Depot, which is a huge company to the tune of 150 to 160 billion, it takes time to integrate those businesses. And so they acquired us for who we are because we are able to deliver to the specialty contractor in a last mile fashion, the products that they need to their job sites, whether it's a residential job site, a commercial job site, those kinds of things. And so Home Depot really wasn't configured to do that.

And so really over the course of the next six months or so, it's still business as usual for us. We will capture some sales synergies, we will try to partner together, but what we don't want to do is try to slam this thing together and mess some things up for our customers. And so as we continue to figure out what's best for the customer, we will start rolling those initiatives out. But in the short term, and I would envision in the short term being between now and the end of the year, we're going to continue to operate business as usual on our side. They'll be business as usual on their side. And then we'll capture the sales synergies with the collective smart people on both teams pulling together in support of what the customer needs in the future.

Heidi J. Ellsworth: Yeah, that's great. That makes sense. I think a lot of people in this industry have been through these kinds of situations. You know it takes time. And how much is going to influence one way or the other?

So SRS has an amazing culture. I've been to your office many times. I work with a lot of different people. Two questions, Kent. How do you see the cultures of the Home Depot and SRS, kind of similarities or how they go? And then how do you see really honing in and keeping that culture as you go forward that SRS has been so known for?

Kent Gardner: So I'll tell you, the Home Depot could have been a better partner. As we thought through the acquisition possibilities and who those partners might be, we had always in the back of our mind had hoped that it would be Home Depot. And so when I think about Home Depot and their keys or core to growth, it really is involved around their people in support of their customers, creating a frictionless experience that's all built on relationships.

And so when you think about that and then you go over to our approach which has been very similar. We've always wanted it to make money, have fun and give back. That's our mission statement. So that make money is for us, it's for the contractors, it's for our employees and it's also for the vendors. Have fun is the same. And then give back is the same.

So everybody has a piece of this what we call the American Dream. And so when we think about Home Depot, they give back. They donate large sums of money to veteran organizations, as do we. They've really focused on their people and their customers. And so that relationship, it's not hard to slam those two together. So above all, while we have to integrate and capture the synergies that will be better for our customers in the next four or five months, what is real easy is the fact that we're both focused on the same thing, and that's customer success.

Heidi J. Ellsworth: I love that. I love that. I have the pleasure of speaking to many of your branch managers. We've been involved a couple of things. Everything I have heard has been so positive, but I would love just to hear some of your feedback, what you're hearing from the branch managers, the drivers, what's some of the reactions?

Kent Gardner: Well, first and foremost, Home Depot is a recognized brand name. And so when you think about the Home Depot and the marketplace, it's really kind of cool to say that we've built a company that was attractive enough to partner with such a cool, well-marketed, customer-focused organization like Home Depot. So that in itself is energizing and really fires people up.

And so then when you think about the number of locations that we had in support of our contractors, plus the number of locations that Home Depot has to further support our contractors, the excitement and the charges is endless. I mean, everybody is really, really fired up to pull a better support network in place for the contractor and their needs, not only for today, but in the future as well.

And this isn't high probably, everybody is just, every single, there was no distraction, there was no what's in it for me. Because now it's in it for the contractor can be even bigger and better. And it's a new chapter not just for us, but I think for the whole industry.

Heidi J. Ellsworth: So expand on that. What kind of benefits do you see for the contractors and also for the industry overall with this partnership?

Kent Gardner: Well, so one, I think there's a lot of different benefits and you could speculate and think through them, but I think just product availability is one. The network optimization is number two. Because you think about, we started 16 years ago and we had a few branches there in Florida, and we've expanded across the country to all the white space that was opened up to bring the products and services to the contractors in areas that they needed the support and the help.

And so as I think through it today, I mean you go from four or 500 building product locations now to 2,500 building product locations, plus you throw in our pool, you throw in our landscape, we're a total of seven to 800 locations. Now they're 2000. I mean, you really start getting the scale to support your contractor. So our goal has always been to deliver anything 40 to 40,000 pounds anywhere in the United States within two hours. And so you want to talk about taking a huge leap forward to get that done, well, the partnership with Home Depot does that.

Heidi J. Ellsworth: Yeah. As you see what this is going to do for the industry, I mean, just such a... Roofing as we've known, as we sit in these NRCA meetings, research and things, we're always worried and we're always working on the professionalism, the image of the roofing industry. To me, having the Home Depot understand and want to be a part of this roofing industry through and siding and only siding and exteriors and everybody out, I think that sends a huge message too, to just the construction industry overall.

Kent Gardner: I'm proud to be a part of the roofing industry and I know you're proud to support it. And so when you think about what we do, we build America and we rebuild America. And so one of the things that we add to the Home Depot offering to ensure customer success is that last mile distribution. And so we understand the specialty contractor. And so we are the logistics trade credit, product knowledge arm of Home Depot.

And so they have tried to put that together over the years. And it's just very hard when you're in a retail based organization to really understand what distribution means and what the specialty contractor needs. And so what's been fun about this whole process is when we sit and talk with the Home Depot folks, they understand that we're really good at distribution and they're really good at the retail side of things and their e-commerce platform and all that piece.

But when you pull all that together and string it together, you've got retail of which Home Depot I think is the fifth-largest retailer in North America, I'm sorry, e-commerce company in North America. And then you've got the retail where you have millions and millions of people going into the retail stores. And then you've got that last mile when they need a doghouse, they need a shed, they need a roof, whatever it might be. And so if you can connect that, not if, when we connect that, there's an end-to-end supply chain solution that we're providing collectively as a team that otherwise had we not come together, we wouldn't be able to complete the loop.

Heidi J. Ellsworth: Especially in this day and age of e-commerce, but also changing consumer demands on when they want it, how fast they want it, how they want it delivered. And when you look at right now, just overall, Kent, at what we're seeing this year with storms and with demand, and I mean the roofing industry just is... I mean maybe there's a couple of pockets slowing, but for the most part we're not seeing that. How this all can start really helping the industry even out in places that have before been maybe not as represented, now you're going to be across the country.

Kent Gardner: That's right. That's right. And so when you think about what we do... So look Home Depot, wonderful, beautiful company and we're so glad to be a part of it. But when you think about the specialty distribution and the way our trucks are configured, the way our employees are built, there's rooftop deliveries, there's roof edge deliveries, there's commercial crane deliveries, there's all those kinds of things. And so Home Depot realized and recognized the fact that those are the areas that we're experts at. Those are the areas that the contractor that they've been trying to earn the business of needs that kind of specialty support. And so as a result of that, the match is just great.

And then you mentioned the consumer change. So I think through it, a customer wants to be, I'll use the term that we've all heard, omnichannel. So distribution over the years has sold to the customers the way they like to sell. And that was we buy product, we break it down, we distribute it to the job site. Well, as generations change and the way they've been morphed and grown up with technology, people want to buy a little bit differently. So there's still room for great relationships and the territory managers being the product experts and bringing that to the contractor. But there's also folks that want to order digitally and they want to participate in that.

So when you think about Home Depot and their digital platform, you think about SRS and our digital platform and as we connect the dots, it's not what we do today, it's when it comes together, what it's going to be tomorrow for the folks and how they want to buy and how they want to purchase, how they want it distributed to their job sites, whether it's commercial or residential, whatever it might be. It's all going to change, and we've just got this big engine now that can figure that out and support where the contractor is going to be tomorrow.

Heidi J. Ellsworth: It's really true. And when I think about what the contractors are doing, they are changing their models also, digital, they're dealing with extreme weather. And so as Home Depot is looking at the roofing professionals, the siding professionals, the exterior professionals, to me there is, and can't we hear this all the time? People say, "Ah, the roofing industry is just different. There's such a camaraderie."

To me, it seems like the ability for them to be a part of that culture through SRS and really start understanding, because even though technology is driving force with us, we still are a relationship business. And I think about your amazing concerts, how much SRS gives back, the Tailgaters, really focusing in on the industry and all the contractors out there. To me, that seems like that's going to be a pretty exciting opportunity for the Home Depot.

Kent Gardner: Well, it really is. And so when you think about all the things that we do to show our appreciation for the contractors, one, it's great quality service and products that we deliver to the job sites, but two, we do it, as we talked, our mission statement is make money, have fun and give back. And so that have fun piece is a big deal because being a part of SRS, there is a transaction where we make the deliveries, you pay for the deliveries and we continue to roll it forward and do those kinds of things, but we also want to have fun in what we're doing.

And so when we interact with the Home Depot folks and they hear about the fun that we have and how we really support our contractors on the give back front too, where we support the areas of veteran needs and battered women and children, disaster relief and all those kinds of things, we have found a way to do it to the specialty contractor that really not a lot of other distributors have done. And so when Home Depot looks at that, they're as fired up to be a part of our events as we are of theirs.

Heidi J. Ellsworth: I'm just saying roofing has a lot of fun.

Kent Gardner: It's fun, it's great. It's a great industry. I love it. And I wish everybody that was in it would appreciate and respect it as much as I do. Not saying that they don't, but I think about, I mentioned earlier, build and rebuild America. I mean, that is cool. That's really fun. Yeah.

Heidi J. Ellsworth: And every day protecting families, assets, everything across the country, that's what roofing does, along with the whole building envelope is so important.

So Kent, what are some of the things that people should be looking forward to looking in the future? What are some of the things that you see happening that you might be able to share with us?

Kent Gardner: So as I mentioned, there's a lot of stuff that still needs to be determined and things that we need to pull together. But I think through some of the benefits, our contractors, they buy at a couple different places. And sometimes on the weekends they buy at Home Depot and they don't have the opportunities to buy at the specialty contractor SRS distribution spots. So at some point I think there'll be a seven-day offering, which would be pretty cool for the contractor. That wouldn't be tomorrow. That would certainly be shooting for 2025 to make that happen. But that's a pretty cool thing.

I think career opportunities and growth across the two different companies. If I'm internal, I'm thinking, wow, there's close to 500,000 people that work at Home Depot, and that's across all of North America. And still, if I'm a career-minded person, even though we had a cool company that could facilitate careers in finance and sales and operations and all those kinds of things, well now if you go from 11 billion to 160 plus billion in all these different locations, there's just customer support in the field as well as employee growth opportunities. So that's really cool. I anticipate that being a big factor.

And just having access to more products, more categories in support of the contractors as they start to expand their product offering and the things that they do for the homeowner, I think the potential is just limitless.

Heidi J. Ellsworth: That is such a good point, and I want to tap on that for just a second, is that we see the contractors are differentiating. They are expanding their offerings from outdoor living to obviously interiors across the board. And that is such a great point, Kent, that now through the Home Depot, you're going to be able to expand even further into some of these areas that you've had, but maybe now it just blooms.

Kent Gardner: Yeah. And I anticipate that to be the case. Right now, we're roofing, windows, siding, landscape, pool supply, all those kinds of things. And I would imagine that at some point it extends into other product categories from a distribution standpoint. But when you think about the complex pro, the general contractor, that person, they work with multiple different trades to complete their project. And so we're just focused on a handful. At some point when we focus on more than just a handful, but the complete basket of offering for the general contractor, for the complex pro, being able to deliver that to the job site in a collected package, that's pretty cool.

Heidi J. Ellsworth: That is really cool. That is really cool. I'm excited. I'm excited to watch that.

Okay, I do have to say I just was in San Antonio and saw what we have going for IRE, and I know you also have the Las Vegas Bowl coming up at the end of the year. Any exciting things you want to share outside of the Home Depot, just on things that are happening with SRS?

Kent Gardner: I think the biggest thing is the Home Depot, SRS combination. And the fun thing that I talked about earlier is that SRS was purchased by Home Depot for who we are. And so the good news for our contractors, we will continue to bring you the same level of quality service, the same level of quality products, but more importantly, we're going to be able to double down on all the cool, fun stuff we do too. No spoiler alerts or any cool things that I could announce now and let you know about in the future, but other than we're going to keep doing what we're doing on steroids.

Heidi J. Ellsworth: Love it. Well, as soon as you know some of those things that are happening into next year, I'm going to be calling you Kent and saying, "Hey, let's get on and talk about it."

Kent Gardner: Absolutely. The roofing contractors are not only connected with us, but they're connected with you, Heidi, and the Roofers Coffee Shop. And so we know that this is a great venue to get our message out. We know you're a huge supporter of what we do and how we try to support the contractor base, so we're just blessed to have the time on your airwaves to share our message and show our love and support for the contractor.

Heidi J. Ellsworth: I love it. Thank you, Kent. We love having you guys on here. And I just have to say congratulations.

Kent Gardner: Thank you.

Heidi J. Ellsworth: What an awesome trend and experience for the industry, and especially for all of our friends at SRS, and for you and Dan.

Kent Gardner: Well, we're excited, and we're excited to partner with you as we continue down the road and do some great things and continue to do those together, Heidi. You've been great support and we love working with you.

Heidi J. Ellsworth: Thank you. And thank you for this inside look, I so appreciate it.

Kent Gardner: You got it.

Heidi J. Ellsworth: I want to say thank you to everybody who's listening. Wow. This is the kind of stuff, this is what you can find out. I love it. I love where we're going as an industry. And just, again, huge congratulations to SRS. So one last time, thank you, Kent.

Kent Gardner: Thank you, Heidi. We appreciate it. Thank you very much.

Heidi J. Ellsworth: Thank you. And thank you all for listening. Really excited to continue to share all this information. So check out all of our podcasts under the read, listen, watch navigation on Roofers Coffee Shop. And on your favorite channel, be sure to subscribe and set those notifications so you don't miss a single episode. We will be back again soon on Roofing Road Trips.

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