In last month’s edition of The Wholesaler magazine, we highlighted several buying groups within the industry channel. This month, we wrap up with BLUE HAWK, the HVACR-focused cooperative owner of IMARK Group. BLUE HAWK (www.bluehawk.coop) was established to ensure the survival and growth of the independent HVACR distributor. To date, the 100-percent member-owned, fully transparent cooperative includes 198 distributor member companies with more than 1,590 locations, and more than 130 manufacturer partners and 70-plus service partners to help its members with its core beliefs of strength in community.

The cooperative’s mission and vision is simple, guided by its core values and beliefs:

Independent businessowners have a crucial part to play in the industry and should be “preserved and protected.”

Working together creates strength in the HVACR community. 

Abide by the Golden Rule: “Treat others as we would want to be treated.”

In “helping our vendor partners, we help ourselves.” 

The “dedication and drive” of BLUE HAWK members, combined with the power of community, can “outperform large corporations in head-to-head competition.”

The group believes in integrity, honesty, honoring commitments, consistency and fairness. 

BLUE HAWK hosts three meetings each year for members, vendor partners, alliance partners and solution partners. It recently held its 2023 Winter Summit Jan. 18-20, 2023, in Steamboat Springs, Colo. With more than 105 members, partners and guests, the cohesive group leaned into its networking foundation and shared Face-to-Face meetings — cementing member strength and partnerships.

At the helm is CEO Lance Rantala; he shares with us a deeper dive into the group, its mission and offerings. 

Ruth Mitchell: Lance, what are the top three member benefits/tools a distributor couldn’t find elsewhere? 

Lance Rantala: The BLUE HAWK Cooperative culture. We were established to ensure the survival and growth of the independent HVACR distributor. We are a 100-percent member-owned, fully transparent HVACR cooperative. We continually strive to support our members to help them successfully run their businesses. We provide opportunities to enhance their profitability, network with fellow members and vendor partners, and offer succession planning and programs such as a group 401(k), benchmarking and health insurance, to name a few.

BLUE HAWK Retirement is a group 401(k) plan that helps participating members provide a retirement program for their employees. By combining the assets from multiple employers, the program reduces administrative fees, removes personal fiduciary liability from the company’s owner and reduces administrative duties. In addition, there are no audit fees or 5500 filings, yet it includes professional investment oversight. 

IMARK Group Health Insurance Captive is a medical insurance option that provides relief to members who face ever-increasing health-care costs. Members of BLUE HAWK can take advantage of the health insurance captive, part of the oldest and largest medical captive in the United States. It gives our members the same purchasing power, claims cost containment and clout as a Fortune 100 company.

RM: Have you added a new program or member tool/service within the past year and, if so, tell us more about it. 

LR: We launched our Peer-2-Peer Networking Groups. These groups consist of noncompeting members that are similar in size and have a similar customer base. In addition, the Peer-2-Peer groups are permanent, so members can get to know each other and feel comfortable sharing best practices and financial benchmarks to help strengthen their businesses.

RM: What strategic goal and new initiatives will the group focus on in 2023? 

LR: We have several new initiatives we are launching at our annual conference in May. We are very excited to announce them to our members. Unfortunately, we can’t reveal them publicly before the meeting, but they will enhance our member engagement and help BLUE HAWK members’ profitability.

RM: For a company on the sideline that is not a member, what would you say to them, or ask them, to encourage them to contact your group for more information?

LR: As a cooperative, BLUE HAWK returns every cent of our net income to our members and does not retain any earnings such as other buying groups. So, whether you’re a small, medium or large independent distributor, your company would earn 100 percent of your patronage dividends with the vendor and solution partners (value-added business services) you support.

Additionally, our Growing Forward Program has successfully matched dozens of BLUE HAWK members interested in expanding through acquisitions. As a shareholder, your company would have an inside track to acquire BLUE HAWK members looking to sell their operations. 

BLUE HAWK MEMBER SPOTLIGHT
Victor Distributing Co.

Established on May 1, 1965, Victor Distributing Co. is an independently owned and operated HVAC distributor with three locations covering the west coast of Florida. With more than 100 employees, the third-generation ownership upholds and foster’s the company’s philosophy: “Your Partner in Profit.” As its website states: “We strive every day to support our contractor(s) to earn their orders with our ability to provide better solutions; we are more than just a number on the bottom of an invoice. Our value is measured by our professionalism and the profitability of our customers.” 

At the helm is President Kevin Barnum, who drives home what the distributor is known for: customer focus and service. We talked with him about the company’s participation in BLUE HAWK.

Ruth Mitchell: Kevin, belonging to a cooperative provides tools to help you succeed in business. Please tell us about a challenge you have encountered and were seeking a solution.

Kevin Barnum: Providing an excellent retirement plan for your employees can be challenging for an independent business owner. Cost, administrative time and fiduciary risk are all issues when running your 401(k) plan, especially when you have a small staff. Of course, you want to provide your employees with the best solution possible, but it can be cost-prohibitive if you are a smaller distributor. 

RM: What BLUE HAWK product/tool/program was able to assist, how did it solve the problem and how long did it take to implement?

KB: Leveraging the scale of fellow members’ retirement assets, Victor Distributing decided to transition our 401(k) plan to BLUE HAWK Retirement. As an elected board member, I had the chance to observe the Group 401(k) Plan as BLUE HAWK developed the program. Also, I was lucky to be able to ask questions of the early adopters who pioneered the plan for our co-op. There was an overwhelming satisfaction with adopters of all sizes and needs. 

Though BLUE HAWK Retirement had a few early challenges with the mapping and administrative side of transitioning plans, the road was paved after the first few went through, and our company had a much easier time. As a result, the process has become more streamlined and efficient. 

Lincoln Financial has excellent online retirement planning tools and resources for our HR department and individual employees. Our employees have total control and do not need to talk to HR to complete loans, contribution changes, beneficiary updates or moving investments. BLUE HAWK Retirement is agile enough to cater to large retirement plans or to help a smaller distributor start a 401(k) program from the ground up.

RM: What were the results?

KB: The results are better investment options, less administrative headaches and time, and no fiduciary responsibility. Our financial advisor, Andrew Thompson, is dedicated to managing the Group 401(k) Plan and helping BLUE HAWK and IMARK Group employees prepare for retirement. Andrew is a high performer and a problem-solver. He has plenty of real-world market and investment experience to make me extremely comfortable with him at the helm. 

A BLUE HAWK Retirement Investment Committee holds quarterly meetings and ensures the plan remains compliant. It removes the fiduciary risk away from the individual business owner. For that reason alone, the move was worth it. Financially speaking, pooling members’ 401(k) assets and administrative work means BLUE HAWK Retirement can drive a better bargain. The discounts we now earn on the unique investment products are far superior to what we were as an individual-managed plan.

Having the BLUE HAWK Retirement plan for my employees makes me feel good. I am using the power of the cooperative to provide a superior path of retirement for my employees and myself.