Volume 28/Number 6; September 1/8, 2014
‘Phase 2’ of high-end, groutable LVT
By Steven Feldman
Toronto, Ontario, Canada—While the ever-increasing popularity of luxury vinyl tile seems to generate a new player almost every week, in most instances the product seems to arrive without a true differentiation story. But when the person who was at the helm of the company that basically pioneered the category joins the fray, a compelling story is almost assured.
To that end, American Biltrite, which 10 years ago as the majority shareholder of Congoleum launched the groundbreaking DuraCeramic, is taking the wraps off UltraCeramic, billed as “engineered stone” and the second generation of high-end, groutable LVT. Two years in the making, the collection marks American Biltrite’s first foray into the residential market. What’s more, the company is co-owned by Roger Marcus, who for 20 years guided Congoleum to residential vinyl prominence.
What makes UltraCeramic different? A lot, according to Marcus. For starters, the product is harder and stiffer than most of the other high-end groutable LVTs in order to truly replicate ceramic and stone. Next, UltraCeramic is available in the more traditional 18 x 18 as opposed to 16 x 16.
“Larger is becoming better,” Marcus said. “When I was involved with Congoleum, we created a high-end, groutable LVT that was the cornerstone for the whole LVT market in a 16 x 16. Why? Our equipment inhibited us from making any other size. Everyone followed suit with a 16 x 16. That was Phase 1 of the upper-end LVT market. Now it’s time for Phase 2.”
Retailers enjoyed significant profit opportunities with DuraCeramic from the outset as the first on the scene, and Marcus believes the prospects of similar high margins exist with UltraCeramic. “It took what we believe to be the best manufacturer in China, along with American Biltrite, a year or two to figure out how to make this product. Thus, we believe we have one, maybe two years before competition figures out how to knock it off. The key is getting displays placed fast.”
Additional profit will be generated through installation as UltraCeramic is available only in dryback. “It affords the retailer very strong margins on a high-end product along with the ability to utilize and sell the installation,” Marcus said. How strong? “Dealers can make desirable margins on a product that will retail to the consumer up to $4.99 a square foot.”
Last but not least, margins are protected through American Biltrite’s digital policy that stipulates UltraCeramic will be unable to be purchased via the Internet—neither through the company nor a distributor.
Despite what many believe to be an oversaturated LVT landscape, Marcus believes there is plenty of room for a product like UltraCeramic. “There are many companies into LVT, but not into upper-end, groutable LVT. This is the product that has driven the LVT market and what retailers need to have today. We believe UltraCeramic will be the cornerstone of the next phase of the groutable LVT market through product construction, design and display.”
Visuals
Marcus believes UltraCeramic is the most authentic looking product in the market due to its PVC wear layer, rotogravure finish and urethane coating, which helps it achieve a perfectly balanced gloss level. “High gloss makes the product look plastic and fake, low gloss dulls the actual image.”
UltraCeramic launches with 35 SKUs designed by industry veteran Leonard Ludivico, who was responsible for creating the original DuraCeramic line. The visuals do not stray far outside the box with a clear and distinct focus on neutrals.
“In my experience, the cutting-edge colorations never became popular,” Marcus said. “Some colorations here are different, but when you are looking at stone and ceramic, without a doubt the neutrals are the top sellers.” The collection emulates all stones from granite to travertine to marble and everything in between in rustic, classic and contemporary styles.
Every product in the line will have the same retail price point. “The idea here was to make it easy for the retail salesperson to sell,” Marcus said. “The beauty of UltraCeramic is one product, one price point and one size offered two ways: groutable and ungroutable.”
Experience through and through
Aside from being powered by the team that launched DuraCeramic, UltraCeramic is produced by possibly the most experienced LVT manufacturer in the world. “So, you are marrying the pioneers of groutable LVT to the pioneers of Chinese manufacturing of vinyl products,” Marcus said. “Our affiliate has been around for decades. In fact, well over 50% of its competition started by working for this company. Together we engineer a quality product that would equivocate or exceed anything that could be done in North America.”
The magic of UltraCeramic from a quality standpoint, Marcus said, is to have a certain hardness the consumer perceives is not vinyl but rather a composite product. “You will find no reference to vinyl in our marketing strategy. Marrying that hardness to a good, deep, well-defined rounded edge in a thick vinyl product is not easy. There are versions out there that have a far less rounded edge or are significantly more flexible than our product.”
Another departure from the latest LVT products to hit the market is that UltraCeramic does not subscribe to the “click is better” theory. As mentioned earlier, the entire line is dryback.
“In my opinion, click has yet to prove itself in the vinyl tile arena, especially when it comes to groutable tile,” Marcus said. “The tile products all have a certain degree of flexibility, which is a detriment to a good seam, especially when that seam has grout in it.”
Merchandising
Another component of the UltraCeramic launch is the display system, which screams “contemporary” as well as “consumer and salesperson friendly.” Each pattern in the line is showcased in a large format with actual samples of all colors in each pattern. Large room scene photography backs each sample.
The center panel highlights key features of UltraCeramic with all nine grout colors shown at the bottom. Grouted and ungrouted tiles are featured at the bottom of the display, and at almost 7½ feet high it is visible from anywhere in the store.
“Consumers are paying literally thousands of dollars for a high-end, groutable LVT floor, and the visual of what they buy is important,” Marcus said. “We’ve created a display that, in our opinion, is in a category by itself. It is both modern and attractive. It shows every pattern in a size larger than 18 x 18 so the consumer can witness the beauty of a groutable floor and the beauty of an overall edge treatment.”
UltraCeramic rolled out the week of Aug. 25 to the Canadian marketplace through Centura Tile, the country’s second-largest wholesaler that will distribute the product nationally. Marcus anticipates UltraCeramic being available to U.S. specialty retailers within six months. And, unlike other LVT importers, this company is not intending to create a private-label brand. Rather, the intention is to build its own brand through distribution and select retailers.
According to Marcus, Centura was chosen to handle UltraCeramic because it is one of the strongest distributors in Canada. The wholly owned company has been doing business for 85 years and has more than 150 sales reps calling on the A&D community, contractors and dealers. It specializes in both hard and soft surfaces as well as accessories. “And if anyone knows the ceramic and stone business, it’s Centura. That’s what they are known for.”
Ross Keltie, vice president of sales and marketing for Centura, called UltraCeramic a “fabulous” program. “For us it’s unique to the programs we already have in place and will only enhance our offering to retailers. I think the display system is well designed and easy for a consumer to use in a retail showroom. The product itself has excellent patterns and colorations for today’s customers and is priced right. I also like that it’s exclusive for Centura across Canada, so our reps will gravitate toward that concept immediately.”
Keltie anticipates a strong retailer reaction and sees placing between 300 and 500 displays within the next 18 months. “The colors we are introducing are today’s colors vs. competing products that have been around for two or three years with colors that have not been altered.”
He also thinks UltraCeramic will complement Centura’s ceramic offering and will be attractive to consumers seeking a different product but the same look. “This product has a unique advantage because of its thickness vs. traditional ceramic—1⁄8-inch vs. a minimum of 3⁄8-inch. UltraCeramic can go over an existing floor without having to worry about the height.”
American Biltrite will be exhibiting UltraCeramic at Surfaces in Las Vegas in January 2015. The U.S. launch will be supported with a trade advertising campaign.