I have been writing a Distributor series for/with Modern Distribution Management this past year where we profile large public distributors (WATSO, Ferguson, WESCO, Fastenal, and MSC Industrial). We write about the available information they release publicly to the market.
That has been a fun experience taking a deep dive into the public side, but the independent distribution side does not release the same amount of material to take a similar editorial approach.
To help close that limited analysis into independent distributors for HVACRTrends readers we reached out to some HVACR friends to share a deeper look into independent distribution.
A great place to start is with one of the largest distributors in HVACR – Johnstone Supply. The Johnstone story started as a co-op and is one that I have followed closely and been involved in for a number of years.
Writers Note: In my HD Supply days, I reported to John Tisera, who later became the Johnstone Supply CEO, leading up the restructuring of the co-op and the conversion agreement with Redwood Capital in 2021.
So, we reached out to Ryan Kalmbach from one of the largest Johnstone Supply Group’s (Orion) and asked him a series of questions on their approach as a team. Ryan and the Orion team have for many years been public about their culture, strategy, and approach. I would personally recommend following the Johnstone Supply Orion Group team on social media.
My original plan was to condense and edit the interview, but the content was so good that we are sharing it below directly from the Johnstone Orion team in their words.
By Ryan Kalmbach-
A Legacy of Growth, Innovation, and Radical Care
Q. Please tell us about Johnstone Supply Orion Group (JSOG) – Where you started and where you are headed?
Johnstone Supply Orion Group (JSOG) was born out of a dream and a determination to make a difference in the HVACR industry. In 1984, my parents, Dan and Kathy, sold their HVAC contracting business in Arizona, packed up our family—including my brother and me—and moved to Fresno, CA, to open the first Johnstone Supply location. It was a leap of faith, driven by their firsthand knowledge of the challenges contractors face and a mission to make it easier for them to do business.
From day one, JSOG blended the values of a family-owned business with the resources of a national brand. Over the past four decades, we’ve grown from that single store into a thriving regional group, driven by a passion for innovation, relationships, and client success.
Our growth story continues today. My brother Michael and I are honored to lead JSOG, focused on being a transformative force in the HVACR industry. We strive to empower contractors by providing solutions that make their businesses more efficient, profitable, and sustainable. Whether it’s through advanced technology, hands-on training, or tailored productivity solutions, we aim to be the trusted partner contractors turn to when they want to save time, increase profitability, and gain control over their operations.
Looking ahead, our focus includes expanding our training programs and facilities, including our recently launched Training Center in Fresno. We are also investing heavily in digital tools to enhance our client’s experience and strengthen their businesses. Our vision is clear: we want to help people grow, achieve their full potential, and transform the way the HVACR industry operates.
Q. What has changed about the business in terms of service your end customers over the past 5 years?
The HVACR industry has seen significant changes in recent years, and we’ve worked hard to stay ahead of the curve. The number one challenge our clients face—and have faced for decades—is finding and retaining quality field talent. This challenge has been compounded by demographic shifts, such as the retirement of experienced workers (“silver tsunami”) and a societal focus on college over trade education.
To address these challenges, we launched the JSOG Training Center in 2021, located in Fresno. Our training programs are hands-on because we believe this trade is best taught in a real-world environment, not by PowerPoint. We offer:
- Programs for new installers and technicians
- Continuing education courses for experienced professionals
- The Johnstone Internship Initiative, pairing recent high school graduates with partner contractors for summer internships combined with technical training.
This initiative not only provides opportunities for young, non-college-bound individuals but also creates a pipeline of talent for our partners while promoting the industry at a grassroots level.
Another key development has been the evolution of our Productivity Plus solutions to reduce transactional costs and improve efficiency for contractors. Whether it’s our Install Box, Truck Stock, or integration with contractor CRM systems like ServiceTitan, we’re focused on meeting clients where they are—digitally, in-person, or through a hybrid approach.
The supply chain disruptions of COVID and regulatory changes like the A2L transition have underscored the critical importance of reliable product availability. We’ve strengthened our inventory planning by collaborating closely with contractors to forecast their needs and integrating that data into our purchasing models. By leveraging Johnstone’s strong and diverse manufacturer relationships and maintaining multiple supply channels, we ensure our clients have what they need when they need it.
Q. How have things changed for your Johnstone Supply Group since the changes to the Johnstone model (no longer a co-op)?
The transition from a co-op model has been a pivotal moment in Johnstone’s history, and one that has made us stronger. While this is often a popular (and gossipy) topic in the industry, the changes have been overwhelmingly positive.
The transition allowed for generational leadership changes, with older owners retiring and a younger, more aggressive group stepping up. These new leaders are investing heavily in technology, training, and supply chain infrastructure to better support contractors.
Additionally, our new financial partner has brought a fresh perspective and the resources to strengthen core areas like technology and logistics. The Johnstone model remains unique in its ability to combine entrepreneurial ownership with the collective power of a national brand. This balance continues to be our greatest strength.
HVACR Trends Editor Notes on Ryan’s article.
The three big themes that jump out to us from the above are –
- Passion and Pride – The pride of being a family held distributor is evident. I love the “California or Bust” approach that the founders took of moving to Fresno and taking a chance to build a distribution business from the ground up to support HVACR contractors. The story of starting as a contractor family business and then going into distribution to support contractors and the passion that Johnstone Supply Orion has is very clear. My first distribution mentor Dick Schmid used to say often “people/customers do not care, until you show them how much you care”. I was reminded of that quote when I read the above from Ryan. The passion and pride in who JSOG is, and what they do is obvious.
- It starts with the customer – The teams’ commitment to launching a JSOG Training Center to help their end customers stay on top of big issues like A2L transition and help them find that next generation of contractor installers all starts with a simple foundation- Understanding what your customers need and want.
- The Johnstone Supply Model change in late 2021 has brought an understanding and investment in technology and logistics as being the future for Johnstone Members. The HVACR business has changed more significantly in the past 15 years than it had the entire 100 years prior in my opinion. The way end customers order and communicate with you has changed from face-to-face to an ever-evolving mix of digital, phone, email, text, and more.
Key Takeaways for the HVACR Channel
- Understanding what your customers need today and learning/anticipating what they will need in the future are crucial to continued success. Johnstone Supply is obviously plugged in with their customers’ needs today and working to anticipate the ever-changing future needs. I would recommend making end-customer feedback be a key business foundation to help you make decisions – it is best to have a balanced approach – of what you hear every day and augment that with organized surveys. Consistent statistical customer surveys are needed to balance that direct from the customer feedback you receive every day. That survey says data is an important check point, that many channel partners do not take as seriously as they should.
- Training and Support for End customers is Crucial – If you are distributor or manufacturer your picking, packing, and shipping excellence is important… but if all you is do is sell product then how secure is your business? The technical expertise is what sets you apart from an online player and JSOG obviously understands that is key part of the value they deliver.
When you read what Ryan shared it is apparent they are clear on the answer to “Why should I choose Johnstone Supply Orion vs their competition?”
I think the JSOG answer in twenty words or less might be something like…We Care, we show we care, and we are investing in X, Y, and Z to help grow your business.
What are you doing for your HVACR channel business as manufacturer, rep or distributor to do the same?
As always, we appreciate your comments and suggestions. In Part 2 of this series, we will dive further into the JSOG story to share additional insights from channel leaders.
