The lighting industry has been in a constant stage of change (some folks might say turmoil) for decades. In the early 1980s, many lighting manufacturers focused on squeezing out more energy savings from fluorescent tubes. Fast-forward a few years, and there was a ton of action in the conversion to electronic ballasts and the development of compact fluorescent lamps. At the dawn of the 21st century, the LED revolution was just getting started, and it’s amazing to think that the only places you saw LEDs back then was in exit signs, traffic lights and eventually some theatrical lighting.
What a difference a few decades make. LEDs are everywhere now and in some applications their color and intensity can be controlled by a smartphone. LEDs have reshaped the very structure of the lighting industry and the manufacturers that develop the products, the reps that sell, and in spec-grade categories, stock the product, and the full-line distributors that still count on lighting products for up to 30% of their sales. Electrical Wholesaling’s editors did some thinking about all of the changes in the lighting market and made their picks for the trends that will have the most impact on the business over the next few years.
#1. The tiers of lighting manufacturers are more distinct than ever
In the lighting world, there’s a relatively small group of lighting manufacturers with annual revenues of more than $1 billion; a larger group of mid-sized players with revenues of between $100 million less than $1 billion; and smaller lighting vendors with annual revenues of less than $100 million. According to public documents, published articles and other credible online sources, the members of the “billion-dollar club” include Signify, Acuity, LEDVANCE and Current. The mid-sized lighting manufacturers include Lutron, and the lighting product business units in Legrand and Leviton at the high-end of the tier, as well as Ideal Industries’ Cree Lighting business, TCP, Maxlite, Halco, RAB Lighting, WAC Lighting, Nicor Lighting and Keystone Lighting Solutions. Smaller lighting manufacturers including Earthtronics, Energy Focus, Tivoli Lighting, USAI Lighting and Edison Price.
Lighting equipment manufacturers of all sizes — from the largest billion-dollar companies to the smallest specialty manufacturers — have access to most of the same LED semiconductor chips and fixture or control manufacturing/fabrication processes, so the name of the marketing game in the years to come will be how these large and small companies differentiate themselves in the market.
The largest lighting manufacturers market dozens of lighting brands. At last year’s LightFair show in Las Vegas, the three largest exhibitors — Signify (including the Cooper Lighting brand portfolio); LEDVANCE; and Current (including brands purchased in the Hubbell Lighting acquisition) controlled 83 different lighting brands. Add in Acuity Brands, which did not exhibit at LightFair, and these four companies sell at least 114 lighting brands.
Many of these brands got their start as small independent companies that eventually became part of a larger lighting manufacturer’s product portfolio. After acquiring new lighting brands, new parent companies always must decide whether to invest the marketing dollars to maintain these brands or to promote their corporate identity. Brands live or die based on these decisions.
Look no further than GE Lighting’s journey of more than 100 years, from an iconic brand with roots in Thomas Edison’s original lamp business, to a prominent place in the GE portfolio of companies, and more recently to its new identity as part of Current, which now blends GE’s commercial/industrial lighting business with what was once Hubbell’s lighting division.
#3. Marketing customizable white LEDs that enhances productivity and improves mental focus
Tunable LED lighting can be customized to specific applications, including classrooms, factories, hospitals and senior living facilities. There’s a lot of research into how certain types of lighting can increase students’ attention spans, help productivity/safety on the factory floor, and affect the moods of patients in hospitals and seniors in nursing homes. The concept of tunable white light isn’t new, but manufacturers now have a new generation of LED chips that can be matched more accurately to specific applications and more insight into the impact of white LED light on health/well-being from an ever-growing body of research.
#4. The horticultural lighting niche? Believers expect it to grow, baby, grow
While programming LED chips to provide the unique lighting spectrum needed for marijuana in the cannabis industry gets all the ink, manufacturers are also marketing LED growth lights for the broader horticulture and farming verticals in what’s called CEA (Controlled Environment Agriculture) applications. These verticals include flowers, food crops and urban farms, where plants are grown in warehouses or multi-level buildings turned into greenhouses.
Facility Solutions Group (FSG), Austin, TX, operates a specific business unit that focuses on helping growers and farmers increase crop yields in a broad array of CEA applications. Another interesting distributor in this niche is Ultra Yield Solutions, with offices in Reno, NV, and Mamaroneck, NY, which was started up by Chris Brown, an electrical lifer who spent decades with Wiedenbach-Brown, Purchase, NY. Ultra Yield Solutions sells CEA products from Acuity Brands and a stable of smaller specialists in this area.
#5. New app-based lighting controls continue to enter a crowded market
Over the past few years, a dizzying array of app-based lighting controls that can be controlled from a smart phone have hit the market. While these apps are aimed at smaller to medium-sized applications and hard-wired control systems are used on more complex lighting jobs, it’s still amazing to think how quickly these lighting control apps replaced much more complex lighting control systems that a few short years ago only lighting engineers could understand and program.
#6. The power of LEDs allows fixtures to get smaller
Because evermore powerful LEDs can pack a bigger lighting punch in an increasingly small package, lighting fixtures are shrinking in size. Think of how wafer-thin LED downlights have replaced thousands if not millions of those clunky downlight troffers in retrofit applications, or how thin LED panels for fluorescent lighting replace 2 x 4 troffers. This trend represents cost savings for lighting manufacturers to be sure, but it also cranks out plenty of good environmental vibes because it cuts down on manufacturing materials and the energy needed to power the factories that make them.
#7. Lighting rep mergers are reshaping sources of supply and expertise in local markets
Over the past few years, we have seen some notable rep regional acquisitions and they show no sign of stopping. SESCO Lighting, Maitland, FL, quite possibly the largest lighting rep in the nation, has made the most deals, merging with four different Southeast lighting reps. These companies were G2 Lighting, Birmingham, AL (2017); Marvin Bochner, Miami (2020); Schneider Co. (2021); and WHOCO Lighting & Controls, Raleigh, NC (2022).
Convergence Partners Inc., North Kansas City, MO, also expanded its regional reach with mergers with its 2022 partnerships with Integrated Sales Inc., Lavista, NE; and Lighting Solutions of Iowa, Van Meter, IA. Synergy Electrical Sales, Fairless Hills, PA, was also involved in a notable regional merger, with its move into the New York market through its 2020 merger with Pyramid Lighting Group.
The next wave. The lighting industry is always evolving, and it will be fascinating to see what trends develop over the next few years, and which new players and technologies will make their mark. Some lighting pros are already speculating about “LEDs 2.0,” when the first wave of LED installations that revolutionized the industry need to be replaced as they near the end of their life span. Fasten your seatbelts — it will continue to be a most interesting ride.