CMU Checkoff Update

Words: Kiersten Schroeder 
Photos: Anderson Williams

What would it look like if one industry came together, collectively pooling their resources to better position themselves for the future? To capture market share. To fund research that could build even more demand and expand into markets previously unimaginable. To start telling the story of not just their industry, but their competitors. 

In the early 2000s, softwood lumber producers were facing a nearly two-decade streak of decreasing demand. Competitive products had been aggressively eating away at markets and customers long dominated by softwood for years. Something had to change. A group of producers began working toward a national mandatory checkoff. What’s a checkoff? Checkoffs are funded by individual producers in a specific industry to promote, market, and provide research that will drive demand for that industry without reference to anyone brand or company. We encounter checkoffs every day as consumers, from eating a steak, drinking a glass of milk, or eating a pork chop. Even filling up a propane tank or a tank of diesel fuel has a checkoff story behind it. 

In 2011, softwood lumber producers voted to implement their own checkoff. Work funded by the checkoff included research to influence domestic and international building codes and expand the use of softwood lumber in tall buildings and campaigns to specify wood targeting architects, developers, engineers, and commercial and residential contractors. Fast forward to 2020 and the softwood lumber industry has experienced 6.3 billion board feet bbf of new demand and an incremental $2.4 billion of revenue, directly attributed to the checkoff. 

Over the same period of time, the masonry industry has seen a significant drop in companies, production capacity, and unit sales. But over the last ten years, a group of block producers has aggressively been working to turn this decline around, taking notes from both the softwood industry and several agricultural commodity checkoffs. CMU producer efforts have focused on a national, mandatory CMU checkoff, funded at the rate of a penny per block at the initial point of sale. 

Today the masonry industry is in the final stages of establishing that checkoff, with a vote by producers expected within months. While producer leaders believe the checkoff will help capture lost market and build new demand for masonry, they see the benefit as even bigger than that.

“At the end of the day, everything we do with the CMU Checkoff is going to build awareness around concrete block and build demand,” said Major Ogilvie, Cemex, and chair of the CMU Checkoff campaign. “We’re going to be looking at programs targeting developers, engineers, architects, regulators, government procurement, and even consumers and showing them the versatility and resilience of concrete masonry. That’s going to benefit us all, from material suppliers to concrete producers to our contractor customers.”

A recent straw poll with block producers showed the top two priorities for checkoff funding out of the gate. The highest priority, ranked by more than half of the producers polled, was educating designers, architects, and decision-makers. That could also include the development and dissemination of new software and design tools to reflect the more cost-effective design of modern masonry solutions. The next highest priority, selected by a third of producers, was marketing the benefits of CMU construction to a variety of audiences, potentially targeting both decision-makers such as designers, developers, and contractors, as well as end-user customers, consumers. 

Other priorities that have been identified by producers over the last 18 months include messaging around the economic and long-term value of concrete; conducting research to support building code provisions that recognize masonry strengths, and supporting high school vocational programs to attract the next generation of masons into the industry.

The decision to implement a checkoff is ultimately up to producers of concrete block units. To pass the checkoff, a majority of manufacturers voting who also represent a majority of the machine cavities in the operation of those manufacturers voting in the referendum must vote yes. If the checkoff is approved, a board of directors will immediately be appointed. The board will be comprised of block producers who are representative of the manufacturer population.

Board members will identify overarching strategic priorities. From there regional advisory committees across the country will identify priority programs in their area and the CMU Checkoff board will fund programs that will benefit the whole of the industry. Like all national checkoffs, there is an oversight role by the government, primarily in the area of compliance and representation. The CMU Checkoff would be overseen by the Department of Commerce. 

In the coming months, block producers who have manufactured concrete masonry units in the last 180 days preceding the start of the voting period will be eligible to vote. CMU Checkoff leaders are encouraging contractors and others in the industry who would benefit from this program to share their support with their block producers, particularly with those producers who may still be on the fence about the checkoff. 

“As a producer, if I know my customer sees the value of the checkoff and sees the return on this penny per block for both of us, that’s going to sway me. It’s information I would appreciate before I cast my vote,” said Ogilvie. “And I think it’s a fair statement to say that we will all benefit from this small investment in big ways that will very likely last a long time into the future.”  

Masonry contractors share their thoughts on what a CMU checkoff could mean for the industry as a whole.

"In our market, we are seeing cinder block walls being replaced with metal stud and drywall. This is happening on both interior partitions and exterior walls. When I heard about the checkoff program and found out that it's only a penny a block I thought, 'this is a no brainer.'  When I bid on a masonry job there are many factors that go into it, including labor, scaffolding, insurance, and materials. A penny a block is not going to affect my bids or drastically increase the total job cost for me. I view the checkoff as a small investment that can reap great rewards. 

-- Scott Bryan and KaRon Masonry of Maryland, Inc.

“Block used to be the thing we always thought would be there. But now that's changed and we're seeing the effects of it in revenues on both the contractor and supplier side. We would love to see the generations to come building with block. If I could vote in this referendum, my vote would be yes. I believe the CMU checkoff will help all of us and have a direct revenue impact on our communities. The CMU checkoff will push this industry into the future long after all of us are gone.”

--Tim Norton, Hagerman

“The CMU Checkoff is so important for our entire industry. We have an opportunity right in front of us to make a change and to take control of the future of masonry.  Fellow contractors, please take this opportunity to reach out to block manufacturers to make sure they know you support the checkoff program and that you want them to support it as well.  ”

--Paul Odom, Legacy Masonry

“We're fortunate to have a local checkoff in Arizona and as a contractor, we see the benefits of that consistently. But there are some things that are too big for a state or a region to take on. Things like influencing building codes, which is something our competitors have done so well with. We need to get in there with research and development. We need to have a narrative with designers. We need technology that makes it easier to design with masonry. And really, the only way we are going to stay competitive is a national checkoff program.”

--Melonie Leslie, G&G Masonry LLC