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Executive Forecast: Tile—Technology, pent-up demand to fuel consumption in 2017

December 5/12, 2016; Volume 31, Number 13         

By K.J. Quinn

The outlook for ceramic tile has never been better, as new production technologies are enabling producers to introduce game-changing formats and designs. Fresh off a year where sales and volume approached 10% spikes, marketers are bullish about growth prospects for 2017, as key economic indicators such as the new housing market and a rebounding economy are trending in the right direction.

Bob Baldocchi, CMO, VP, sales support, Emser Tile
screen-shot-2016-12-16-at-10-14-55-amWhat is your projection for category growth next year?
We believe the flooring industry will see solid growth next year that will range between 8% -12%. The growth will come from new home construction and commercial activity.

What segments and/or products will fuel this growth?
The continued increase in the ceramic, wall and decorative categories. Consumers continue to expand their use of tile in the remodel plans that extend beyond just new floors. Walls, decorative accents have all contributed to growth.

What is the predicted growth of your company in 2017?
Our plans are to outpace the industry’s flooring growth. This will be driven primarily by our consistent market expansion. We opened up 10 new design and distribution facilities in 2016 with plans for additional locations in 2017.

What is the “X factor” that will impact business next year?
2017 will see many of the same “X factors” that were present in 2016. Labor continues to put a regulator on growth opportunities, but is also contributing to a sustained housing boom as supplies still seem to lag behind demand.

Where do you see opportunities for next year? Challenges?
We are excited to see our aggressive expansion plans of the last three to four years continue to show positive returns and high year over year growth. The biggest challenge is staying in front of all the amazing growth opportunities.

What are some of your biggest initiatives for 2017?
We are excited about our expansion plans. Our new East Coast distribution center opening in Q1 will provide our national footprint with enhanced service capabilities in the region.

Donato Grosser, president and chief consultant, D. Grosser & Associates
screen-shot-2016-12-16-at-10-15-00-amWhat is your projection for category growth next year?
The housing market is recovering quite nicely and is the main driver for sales of ceramic tile in this country. The remodeling market is relatively stable. We thought we would see an increase of 8%-10%, but it looks like it won’t be more than 5%.

What segments and/or products will fuel this growth?
Large tiles and slabs are being used more and more. Sizes like 3 x 10 are very common in the commercial market. Large tiles are 16 x 16, 20 x 20 and 24 x 24 in the residential market.

What is the predicted growth of your company in 2017?
N/A

What is the “X factor” that will impact business next year?
There is always the danger that a new product will come into the market and compete with ceramic tile. Someone may invent a product that will drive ceramic out of business.

Where do you see opportunities for next year? Challenges?
There are a lot of unknown factors. We just had a Presidential election in this country and no one knows what is going to happen in the future. If the value of the U.S. dollar stays this way, it will be good for imports from Europe.

What are some of your biggest initiatives for 2017?
N/A

 

Gianni Mattioli, executive VP, product & marketing, Dal-Tile
screen-shot-2016-12-16-at-10-15-06-amWhat is your projection for category growth next year?
We have seen positive growth in the tile segment, a trend we expect to continue in 2017. Right now we predict that the category will grow by 4%-6%.

What segments and/or products will fuel this growth?
The housing market, specifically new residential, continues to positively impact the tile sector. Many of the trends in the residential segment are positive signs for the ceramic tile industry, as they will lead to increases in sales.

What is the predicted growth of your company in 2017?
Dal-Tile sales continue to exceed expectations, and we anticipate overall strong growth. We’ll do this primarily by continuing to introduce new products that match trends, improving our product portfolio.

What is the “X factor” that will impact business next year?
In 2016 we made key investments in our manufacturing capabilities, specifically with our Dickson facility. Dal-Tile is leading the advancement of design and manufacturing technologies so we can continue to provide great service.

Where do you see opportunities for next year? Challenges?
Through new innovations we are able to develop tile lines that meet consumer demands. We are going to continue to explore new tools to ensure we are providing the most cutting-edge products on the market.

What are some of your biggest initiatives for 2017?
We will continue to focus on the key areas that are vital to our success: brand identity, product innovation and availability, exceptional service, value to our customers and unmatched logistics.

 

Raj Shah, president, MSI
screen-shot-2016-12-16-at-10-15-11-amWhat is your projection for category growth next year?
I predict the category will grown 6%-8%.

What segments and/or products will fuel this growth?
Tile continues to take market share. Also, significant growth in wall tile is occurring. We should see a lot of growth as Americans install more tile on the walls.

What is the predicted growth of your company in 2017?
Our expectation continues to be to significantly outpace industry growth.

What is the “X factor” that will impact business next year?
There are numerous “X factors,” including the political climate. This is especially true as it relates to tax and immigration reforms.

Where do you see opportunities for next year? Challenges?
We are looking at each channel, including builders, retailers/dealers and architects and designers to grow the business. Ultimately, we need to keep making tile more affordable and accessible, and the consumer is responding.

What are some of your biggest initiatives for 2017?
The biggest initiatives would be to increase growth in our newer channels, including builders and A&D, and continued product introductions with the proper marketing support.

 

Lindsey Waldrep, VP of marketing, Crossville
screen-shot-2016-12-16-at-10-15-15-amWhat is your projection for category growth next year?
The tile market is growing both commercially and residentially at a pace exceeding that of America’s new build growth. Clearly, the preference for tile is strong now and poised to continue this strength into the coming year.

What segments and/or products will fuel this growth?
With both commercial and residential markets consuming more tile, we’ve seen an increase in international and domestic production. This has resulted in the availability of more designs offered in a broader range of price points.

What is the predicted growth of your company in 2017?
N/A

What is the “X factor” that will impact business next year?
It’s essential that manufacturers focus on educating the market about the differences between products. This includes specifiers in both the interior design and consumer communities, as well as installers.

Where do you see opportunities for next year? Challenges?
N/A

What are some of your biggest initiatives for 2017?
Crossville is focused on highlighting the way our products bring creative solutions to challenging scenarios. We’re working with our distributors to reach specifiers with innovative ideas and alternatives.