Estonia is heating up the global market for sauna stoves
Estonia is best known around the world for its digital services. It not only has an advanced digital infrastructure, but also a staggering number of tech startups. That now includes five so-called ‘unicorn’ startups born in Estonia and now valued at more than €1 billion— Skype, Playtech, TransferWise, Bolt, and now Pipedrive too. Not bad for a mostly forest nation of 1.3 million people. It’s arguably the highest number of unicorns per capita in the world. In addition to that, there are more startups here per capita than anywhere else in Europe. Five times the European average, in fact.
But what about physical products?
Well, there’s a surprising amount of light manufacturing taking place in Estonia too, which you can see while driving around the outskirts of Tallinn, our capital, and Tartu, our university town. This work doesn’t always get as much attention because these components usually go into larger products elsewhere, but it is just as impressive. I recently interviewed the CEO of Comodule, for example, for the Startup Estonia podcast and was staggered by the scope of their activities here supporting a huge portion of the global light vehicle market. They mostly make components and the smart systems needed to connect these vehicles — like scooters and electric bikes — to platforms such as ride sharing apps. However, they have also begun to sell their own scooters and electric bikes directly to the public. They’re incredible well designed, eco-friendly, and the only ones made outside of China.
But there is one burgeoning industry in particular here in Estonia that we think is demonstrating enormous potential. Sauna stoves.
Actually not just the stoves, but all the design and technology required to safely and conveniently heat a sauna. That also includes a high-tech control system with plenty of safety features. Yes, even sauna stove makers and tech companies now. And it’s worth noting that this technology can be sold separately because it works with sauna stoves by other manufacturers too.
Estonia is very well positioned as an exporter of sauna stoves — due to its expertise in design and technology, combined with its ancient sauna heritage. Most tech companies in Estonia have to focus on the global market because we have such a tiny domestic market. The sauna stove market is an exception, of course, as Estonia has a rich sauna culture from our homes to our startup offices.
Some of those unicorn startups, for example, have their own saunas for employees, which we like to think might partly explain their success.
The export of whole saunas from Estonia has also been doing incredibly well in recent years, helped by celebrities such as David Beckham. Estonia was already one of the largest exporters of pre-made wooden houses (mostly to other Nordic countries) so saunas were a natural progression.
However, the export of sauna stoves by themselves reaches a very different market for people who are building their own sauna or sourcing one locally. For many people around the world, the stove is the only component necessary to import.
Finland, of course, is most well known globally for its sauna culture and expertise, not undeservedly. Although a Finnic nation with an equally ancient sauna culture embedded into its culture, Estonia had some catching up to do after the end of the Soviet occupation. To this day, there are even still saunas in Estonia that are marketed to English speaking visitors as a ‘Finnish sauna’ just because the owners think that is easier to explain. That’s changing though. Such is the success of sauna exports that saunas have become more deeply embedded into Estonia’s national marketing. For example, we supported the Estonian Investment Agency this year with a sauna-themed ‘naked truths’ campaign to introduce investors to Estonia. It won a top marketing award for 2020 and is still being used.
There’s also been increased media attention for Estonian sauna culture (that our business helped make happen), including in the Netflix science show Connected this year. The show depicted Estonia equally as both tech-savvy and sauna-loving. Our business, Estonian Saunas, invests in cutting edge sauna design and technology in Estonia, which we showcase at our own saunas and export to saunas around the world — so we do anything we can to help raise the profile of Estonia as a sauna nation.
Until recently, one of the key players in the domestic sauna stove market was the Estonian government, believe it or not. After the occupation, Stoveman remained in the hands of the state for a good reason. Making their stoves provided rehabilitative work to the inmates of Tartu prison.
Rise of HUUM
In recent years, however, Tartu-based HUUM has emerged quite rapidly as Estonia’s top sauna stove maker and has been highly sought-after among sauna enthusiasts abroad. HUUM’s founder, Siim Nellis, comes from three generations of sauna stove makers. (His father is actually the stoveman who established Stoveman, and is now building a new Estonian stove company, Cozy Heat. Their firepits are very cool, by the way.)
The first HUUM stove design, the Drop, was devised by students at the Estonian Academy of Arts.
I’ll save you the marketing spiel, except to say that HUUM’s design and technology has taken off for two main reasons: maximum stones and useful technology. More stones give off a better heat and steam, as well as looking nice. Instead of trying to hide away ugly metal boxes in their sauna, HUUM stoves are displayed like works of art and ensure the stones are the central design focus of any sauna, as they have been for thousands of years previously. And these stoves can be controlled from anywhere by a wall-mounted panel or a mobile app.
The very first delivery of a HUUM stove with a WiFi connection was to our home sauna at our apartment in Tallinn and we’ve loved it.
At the start of 2020, we then took the opportunity to invest in HUUM in order to support their growth. We were among the largest investors when they debuted on the Estonian trading platform, Funderbeam. The fundraising target was reached within a few hours of it going live.
Since then, 2020 has been a major growth year for HUUM. Preliminary results for the first eleven months of this year show a 124% sales increase, 66% of which was exported to 18 other countries. The pandemic certainly played a part in this growth as more people stayed at home and thought about ways to improve both their property and their health. But, to be fair, it was merely the acceleration of longer term trends, especially the increasing popularity of home saunas in places around the world where, unlike Estonia, this hasn’t been normal before.
Our own business has proudly played a role in that, exporting HUUM sauna stoves through EstonianSaunas.com across Europe but mostly through EstonianSaunas.co.uk into the UK where a vibrant community of sauna enthusiasts is emerging. Check out the British Sauna Society, for example, or take a look at the incredible work being delivered by our British sauna building partner, Heartwood Saunas.
We are only a small family business and other retailers are available who we wish success to as well to help grow the market and help more sauna enthusiasts globally. Our customers though include an English Premier League football club, which now has a sauna alongside their training pitch. Sorry, we are just not allowed to say which one! But the vast majority of our customers are not even spas or hotels, but ordinary men and women investing in their own home sauna for the first time. As sauna stove technology develops, home saunas are becoming more accessible to more people.
Just yesterday, we made a one day record by exporting 9 stoves to the UK in one day. It was tough though. There is major congestion at the UK border at the moment due to Brexit stockpiling before the transition period ends in the new year with little certainty over future arrangements. Whatever happens though, we will continue to find ways to keep delivering and supporting sauna enthusiasts there.
HUUM has also begun taking off in the US where the stoves have been reconfigured to meet US requirements and certifications. To support demand there, we also partnered with Cedar and Stone, a quality American sauna builder based in Duluth, Minnesota along the shore of Lake Superior. The first batch has already arrived, which is not nearly enough to meet initial demand, but a larger shipment will be on the way soon. There will also be a sauna tour of America in a mobile unit with a HUUM stove so that more people can try before they buy.
Another notable Estonian sauna stove maker to enter the market is Saunum. Their approach is very different.
Their stoves are designed to control the airflow within the sauna hot room in order to deliver an even heat infused with salt crystals. This will appeal to a different market of sauna enthusiasts to HUUM, but the early reviews have been very positive too.
Saunum customers choose their control systems from other manufacturers so they primarily recommend HUUM’s UKU system, which is another example of how the market is growing collectively.
As a result, we decided to take part in their Initial Public Offering while they floated this week to help their global growth too. The shares were actually oversubscribed by 10 times, which demonstrates the confidence and excitement about Estonia’s entire sauna stove industry at the moment. It means we only made a fraction of the investment that we intended, but we received our shares this morning and are happy that it has been so successful for them and that we could be involved. Public training starts on 18 December.
It also means we will seek new ways to invest in the development of Estonia’s sauna stove industry in 2021. Watch this space.
2021 and beyond
When talking to our customers and other exporters within the sauna industry, one issue keeps cropping up.
A significant proportion of new customers around the world have plenty of enthusiasm for saunas, but very little knowledge. It wasn’t passed down them and the saunas they mostly experience, usually at their local gym, often fail to meet what we would consider as basic standards. The ventilation may be poor, the benches may be too low, there may be not enough stones. In addition, many have even less knowledge about authentic sauna culture. The saunas they are used to may not even allow them to pour water on the stones. To some customers, it is a surprise when we tell them that’s the whole point.
It’s easy to laugh at this, but much more worthwhile to appreciate this as an opportunity to educate more people. That’s what we’ll be doing in 2021, not just exporting more of Estonian sauna design and technology, but also exporting more of Estonian sauna traditions. That will include publishing our own book, which we’ve been working on for a while, and will introduce readers not just to many of the saunas we’ve visited but also the experiences and perspectives of many of the people we’ve met while visiting them.
We’ll continue to do everything we can to celebrate our sauna culture and share it with more people around the world.
Thanks for reading
This Estonian Saunas blog is run by Anni and Adam. We invest in cutting edge sauna design and technology in Estonia, which we showcase at our own saunas, and export to saunas around the world. You can learn more at EstonianSaunas.com.
You can also contact us at email@example.com.