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Resilient state of the industry: Sheet, LVT combine to drive category sales

Sept. 16/23; Volume/number 11

By Jenna Lippin

Screen Shot 2013-09-25 at 10.26.15 AMAs the industry nears the end of the third quarter, the resilient market continues to boom with developments in both sheet and luxury vinyl tile, commonly known as LVT. With many acknowledging this to be the year of LVT, the resilient category as a whole grew leaps and bounds over the last nine months. Rounding out a successful 2013, top manufacturers anticipate strong numbers for the year and foresee continued success.

“We have seen growth in the category skyrocketing the last couple of years and it is still very much the hot category,” said Emil Mellow, vice president of marketing at Karndean. “We are seeing figures of growth in dollars estimated anywhere from 10% to 15% from last year. This trend reminds us of the gain in laminate, but since LVT is more durable and versatile, we believe the growth will keep increasing and not level off in the near future.”

Jonathan Train, vice president of Earthwerks, believes the resilient category is up just about the same amount, with an increase of “at least 10% for glue down products and around 25% for click and loose lay.” Armstrong estimated a smaller increase, but still saw numbers in the resilient market rise and have “projected to be up about 4% this year,” said Kevin Biedermann, senior vice president, residential, Armstrong Flooring Products.

All companies that manufacture resilient products approximated growth for the category overall, and many believe their individual entities are at or above the market projections. For example, Screen Shot 2013-09-25 at 10.30.37 AMRuss Rogg, president and CEO of Metroflor, saw the company’s business increase 14.6% in dollars from January through August, with its volume in square feet increasing approximately 12% over the same period.

Forces behind resilient growth

There are a number of factors contributing to resilient’s increase in market share, but the rising popularity of LVT seems to be the major reason. LVT is reliable in performance, offers environmentally friendly benefits and comes in a vast array of styles, designs and visuals.

“We think the underlying value delivered by LVT, including enhanced aesthetics coupled with performance at a reasonable price, is the primary theme [for expansion],” Rogg said. “No longer does a consumer or commercial client have to sacrifice high-end aesthetics to secure the inherent performance benefits that LVT provides. It’s a product that solves many problems—whether those are care and maintenance concerns, moisture, wear or performance expectations—and now that LVT’s visuals are so advanced, more and more clients are becoming comfortable with this category.”

While IVC touts the developments in both its sheet and LVT products, Paul Murfin, co-CEO, cannot deny the strength of the latter. “More and more customers are appreciating the combined benefits of performance, looks and value compared to other flooring options,” he explained. “Also significant is the arrival of floating options in addition to glue down and the use of the products in more and more commercial applications.”

The easy sell for retailers and enthusiastic consumer response are major drivers for LVT and proof that it will continue to be a success. “LVT is a growing product platform, but market strength and consumer confidence are mostly driving resilient growth,” Biedermann said. “Retailers certainly are winning with vinyl, selling its value proposition: performance, moisture resistance, softer underfoot, stain resistance, etc. These are floors the consumer doesn’t have to worry about and will look great in her home for a long time. Customers also like the idea of faster, easier installations.”

Multi-family applications have become a significant factor in resilient’s growth, as well, as the housing market turns around and the economy allows larger residential projects to pick up. As notedScreen Shot 2013-09-25 at 10.28.16 AM by Ed Duncan, senior vice president, residential marketing at Mannington, “New construction and multi-family markets are all gravitating to the category based on the winning combination of aesthetics and performance.”

Train shared Duncan’s sentiments, stating that the “biggest driver [for LVT] is the multi-family market and making a big push in single-family housing. The designs and durability have made many consumers consider it as a viable alternative to other flooring categories.”

Behind the scenes: Backing and installation options

The rising popularity of fiberglass has also significantly impacted the resilient market and will continue to do so with further developments and pricing differences, namely fiberglass coming down.

“We still use both [felt and fiberglass], but the vast majority of dealers and users want fiberglass-backed products, which is growing at a quicker pace now than maybe the industry thought a year or two ago; we saw this coming,” Said Bruce Ziegler, director, product management, residential for Tarkett. “The fiber-based, dominant manufactures are well positioned, but those that aren’t might meet a challenge—they will have to go after the fiberglass or fiber-backed product. It is easier to install and typically does a good job against moisture resistance. This emergence of fiberglass will continue into 2014.”

Murfin has noticed pricing of products based on backing influencing consumer response. Fiberglass is becoming more affordable, creating strengthened competition against felt. “With U.S. production, we are able to offer more affordable versions of the product, which is exposing more customers to the benefits of fiberglass,” he said. “Felt continues to be less expensive to make but when prices get close, customers seem to be willing to pay a little more to enjoy the benefits of glass.”

Various installation options are also becoming an appealing factor to both consumers and installers, providing an easier process, lower costs and a more readily available opportunity to create and change looks.

Floating floors are especially noteworthy, allowing manufacturers to create more expansive product lines and allowing for use in different segments. “The floating systems that suppliers are making available is definitely contributing to the growth of the category overall, and we believe innovating in this area and creating more designs and SKUs in our Karndean LooseLay range is evidence of the impact floating floors are having on our sales and growth,” Mellow said.

According to Rogg, Metroflor is also “continuing to see more rapid growth in floating varieties of LVT, which for us comes primarily through brands such as Konecto, Engage and Aspire.” However, the company’s dryback business remains strong. Rogg noted Metroflor’s products are picking up significantly in residential remodel and replacement markets as well as multi-family applications and retail, corporate and hospitality environments.

“Installation methods have caused a significant impact [in the resilient segment],” Ziegler said. “Floating floors are definitely adding some spice. The ability to be easily changed out, or lifted up and reused, gives consumers design flexibility.”

Armstrong has also noticed an upward trend in floating LVT options, “with all channels seeing a value in the installation and repair benefits that method brings,” Biedermann no-ted. “However, glue down LVT also continues to grow as the market simply shifts from other product categories.” Essentially, while floating becomes a more popular choice, the more important installation factor overall is the number of options now available.

Response to trends

In the past year, manufacturers have responded to consumer demands with fashionable styles and colors, the addition of new sizes and innovative design platforms.

At Earthwerks, Train believes numerous options and variety is key. “[I]t is important to have a broad and diverse line of products. We are adding more exclusive, proprietary designs to our line. A supplier needs to offer items to supplement and enhance a dealer’s offering. Too many companies are coming out with the same items.”

Mellow agreed, noting that Karndean has been consistently expanding product lines. “Some of the trends we anticipated becoming popular are the shapes and sizes,” he said. “We have introduced larger tile and plank sizes, along with a random width/ length product in the last year. From a color or design perspective, we are finding the distressed wood looks are gaining popularity, as well as concrete looks.”

Ziegler reflected upon Tarkett’s observations over the past year, especially “the desire for longer planks on the LVT side. We’ve lengthened our plank size, introducing 3 x 3 and even longer- length planks. Having 12 x 24 tiles, whether glue down or floating, is another trend we are addressing. Also, the more realistic the floor can look to the consumer, the better. And color and design direction is just as important at this point as a competitive product with bells and whistles.”

Mannington is also continuing with its design efforts, Duncan said. “Of course there is always innovation around style and design in all resilient products—our styling experts are constantly on the hunt for new looks. Aside from that, in [LVT], rectangles and other shapes like wider and variable-width planks are seeing a rise in popularity.”

Distributor thoughts

Scott Roy, vice president, sales, marketing and customer service for Haines, can attest to resilient’s surge from a distributor’s point of view. The demand Haines receives from its customers reflects which products are becoming popular in the marketplace.

“We believe the driver within resilient is LVT,” he said. Haines has witnessed double-digit growth in LVT in both residential and commercial use. “I believe this is due primarily to the value-oriented pricing and overall strong performance story associated with LVT.”

In terms of trends, Roy agreed with manufacturers, citing realism as a major factor in appealing to consumers. “The realistic visuals continue to improve each year. Certainly the trends continue to be all about color and design, however, the realism is what truly differentiates the resilient products for the consumer. Visuals, combined with product durability, are very important. The ease of installation is also now becoming paramount, which is why you are seeing a rapid increase in fiberglass products vs. felt backed; this has a real performance story associated with it.”

Roy encouraged retailers to focus on the numerous benefits of resilient products, particularly LVT, due to the plethora of advantages they offer to consumers. “My main concern is that LVT remains a profitable product line for the entire channel,” he concluded. “Every retailer should focus on selling the value of LVT products, not just price; they provide tremendous value to a consumer.”