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Executive forecast: Wood—Suppliers see the upside of opportunity for the coming year

December 10/17, 2018: Volume 34, Issue 14

By Reginald Tucker

 

Over the course of 2018, the industry saw several big announcements. Some domestic manufacturers shuttered their solid flooring plants, while an industry leader announced plans to sell its hardwood flooring operations altogether. The sector also witnessed greater strategic alliances among wholesalers and producers. Heading into 2019, the industry expects to see more seismic changes amidst modest growth projections.

 

Wade Bondrowski
Director of sales, USA
Mercier Wood Flooring

What is your projection for the growth of the category next year?We are anticipating another year of growth in the overall category of around 5%.

What are the growth projections for your company in particular in 2019?We are currently looking for high, single-digit/low double-digit growth.

What end-use segments and/or products will fuel this growth?It’s still housing, commercial with a little multi-family.

Cite a few major company initiatives for 2019.Having new products and technologies in finishing, along with our new display system should give a push in the right direction for 2019.

Identify the “X” factor that will impact business in 2018.The X factor is the housing market and interest rates, along with an uncertainty in the stock market and regulatory trade.

Where you see the greatest opportunities?We see opportunity all around us, but we need to stay focused and continue servicing our clients with the fashions that consumers are looking for.

 

Roger Farabee
president, wood & laminate
Mohawk Industries

What is your projection for the growth of the category next year?We’re predicting hardwood will be up about 2% in terms of dollars.

What are the growth projections for your company in particular in 2019?We anticipate we will exceed the growth rate of the overall category in 2019.

What end-use segments and/or products will fuel this growth?We expect engineered to continue growing while solid will decline. Within engineered, we still see the bulk of that being in residential remodel, less so in builder.

Cite a few major company initiatives for 2019.We will continue to focus on engineered, especially in our TecWood enhanced platform as well as all of our new products. We are also offering an alternative to solids without giving up the benefits of solid.

Identify the “X” factor that will impact business in 2018.LVT is still the wild card that will impact all categories. We will have to wait to see if that rate of growth continues.

Where you see the greatest opportunities?We still see the bulk of activity come from the residential remodel sector, but less so in builder.

 

Drew Hash
vice president, hard surface portfolio management
Shaw Floors

What is your projection for the growth of the category next year?We’re projecting growth in the mid- to single-digits next year.

What are the growth projections for your company in particular in 2019?We expect to be very much in line with the overall hardwood category growth.

What end-use segments and/or products will fuel this growth?A lot of our growth is geared toward that single-family part of the business, specifically in prefinished and engineered.

Cite a few major company initiatives for 2019.Extension of the Floorte resilient brand into hardwood; second, applying the topical surface-treatment technology utilized on our Repel laminate products on wood; and focusing on thicker, sawn-faced products.

Identify the “X” factor that will impact business in 2019.You’re going to see Shaw Floors delve into a wider spectrum of colors—something that we typically do in resilient but not in hardwood.

Where you see the greatest opportunities?We feel good about that in 2019. Our focus is definitely on the independent specialty retail channel.

 

Christopher King
Vice president of sales
Armstrong Hardwood Flooring

What is your projection for the growth of the category next year?

We are optimistic that demand for wood flooring will remain strong going into 2019 in both the new construction and remodeling markets.

What are the growth projections for your company in particular in 2019?We will enter 2019 with a singular focus on hardwood and supporting powerhouse brands such as Bruce. As an independent wood flooring company, we will enjoy greater flexibility to pursue strategic growth opportunities as we are 100% focused on hardwood.

What end-use segments and/or products will fuel this growth?We expect to see increased activity in the engineered sector, and we also see solid wood flooring remaining a go-to product in certain parts of the country. Wide-plank, long boards and low-gloss finishes will also continue to grow.

Cite a few major company initiatives for 2019.Innovation will continue with solid and engineered structures in all of our brands. Engineered offers opportunity for design innovation combined with its installation flexibility, and we will develop new, on-trend visuals in solid.
Identify the “X” factor that will impact business in 2019.Going into 2019, we will be closely watching the status of tariffs on wood flooring products imported from China and ongoing trade negotiations.

Where you see the greatest opportunities?Look for more in innovations in aesthetics and performance in 2019 with an increased emphasis on speed to market. We also see opportunities in commercial hardwood.

 

Dan Natkin
Vice president of hardwood and laminate
Mannington  

What is your projection for the growth of the category next year? Overall modest growth within the category given the headwinds from LVT. 

What are the growth projections for your company in particular in 2019?  Generally in line with the market.

What end-use segments and/or products will fuel this growth?Primarily upper-end wood products will see nice growth as consumer demand remains strong in that area. Lower-end hardwood will continue to cede share to printed products such as laminate and LVT.

Cite a few major company initiatives for 2019.We have just completed a major capital upgrade of our plant in High Point, N.C., and we will be launching several new products throughout the year that utilize state-of-the-art capabilities.

Identify the “X” factor that will impact business in 2019.The biggest X factor is the overall economy.  

Where you see the greatest opportunities? There is still very strong fundamental demand for hardwood. Capitalizing on the natural aspects of it presents some of the largest opportunity.

 

Paul Rezuke
Vice president, U.S. sales
Wickham Hardwood Flooring

What is your projection for the growth of the category next year?There are so many factors that can and will impact wood flooring positively and potentially negatively next year, namely the proposed implementation of future tariffs and anticipated interest rate hikes.

What are the growth projections for your company in particular in 2019?In spite of a high level of volatility, we are targeting 8% to 10% year-over-year growth. Assuming the landscape does not experience severe changes, this level is attainable.

What end-use segments and/or products will fuel this growth?In 2018, we experienced increased opportunities within the architectural and design segments of our industry. Our expanding engineered products will serve as the impetus for this continued growth.

Cite a few major company initiatives for 2019.We will be expanding our engineered products. You will also see wider planks, more diversity in our product look along with the resurrection of some of the more traditional colors. An acquisition in 2018 also increased our raw materials.

Identify the “X” factor that will impact business in 2019.There is no question pending tariffs and projected interest rates will have a significant impact on the industry in its entirety.

Where you see the greatest opportunities? Our opportunities lie specifically in the expanding geographic areas targeted. Over the past two years our footprint has been expanding, and it will continue to grow in 2019.

 

Brad Williams
Vice president of sales and marketing
Boa-Franc (Mirage brand)

What is your projection for the growth of the category next year? We project the overall hardwood category to have a moderate growth of 3% for 2019.

What are the growth projections for your company in particular in 2019? We project the overall growth to be moderate as well, coming in at 2% to 4% in 2019.

What end-use segments and/or products will fuel this growth? Wider and longer hardwood planks are getting more traction among consumers. New construction will also be a driver within the markets that are experiencing an increased population coupled with a good economy.

Cite a few major company initiatives for 2019. We will continue investing in updating our customer experience via mill tours at our factory. Seeing what goes into making a Mirage product is key for our customers to be able to sell the difference.

Identify the “X” factor that will impact business in 2019. The X factor will be the different innovations that our competition will be launching along with our own product launches.

Where you see the greatest opportunities? We feel our greatest opportunity continues to be within our existing network. We will continue to listen and try to understand our customer needs and focus on creating opportunities for them.

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Wood: Surface treatments expand design possibilities

December 10/17, 2018: Volume 34, Issue 14

By Reginald Tucker

 

Wood flooring manufacturers are pushing the boundaries of style and design by applying various surface finishing/coloring techniques to give consumers a greater range of options.

Case in point is the new Floorté Hardwood line from Shaw Floors. Named after one of the company’s most popular resilient flooring collections, Floorté Hardwood utilizes special surface technologies to create unique products for retailers to sell. With a waterproof SPC core and a hardwood veneer, Floorté Hardwood offers both style and durability.

“To accentuate the beauty of its hardwood veneers, we employed advanced finishing techniques such as reactive staining, wire brushing, balayage highlighting, white and black accent graining as well as band saw marking, to name a few,” Drew Hash, vice president, hard surface portfolio, explained. “These techniques, which are displayed on the brand new Floorté Hardwood’s Exquisite collection, allow us to manufacture products that suit any style preference—from urban or rustic to traditional and modern.”

Innovative surface finishing techniques are also featured on Shaw’s new Repel-branded hardwood offering. Each style in the collection, which plays on the water-resistant capabilities of the laminate line of the same name, features a variety of surfacing techniques to enhance the natural character of the wood.

Mohawk is also utilizing a variety of scraping techniques to render different looks for the consumer. Its TecWood line, for instance, offers various options based on different levels of distressing. In illustration: Castlebriar offers six sophisticated styles of wire-brushed oak enhanced with the company’s “Natural Alchemy” staining process, while Hartwick offers five unique rustic oak colors with smooth surface. Then, there’s Hideaway Ridge, which features five softly scraped oak styles with vibrant color variations, followed by Sheridan, which comprises six unique fashion-forward oak varieties with wire-brushed surface. Lastly, Windrose offers five genuine dry-sawn oak options that reflect the natural beauty of hardwood.

Additionally, TecWood’s thicker, premium veneer provides greater durability with additional benefits that keep floors looking newer longer and performing better over the long term. “Innovation is at the heart of every TecWood product, and our enhanced engineered construction gives our new collections greater stability, density and weight,” said Angela Duke, director of brand marketing.

Other major manufacturers are employing surface finishing techniques in novel ways. Provenza, long known for its artistic approach in coloring, treating and applying different surface textures to its wood products, offers retailers an ever-growing catalog of eye-catching products enhanced by manual artisan techniques.

Among the most popular lines: Dutch Masters collection, a wide-plank, European oak prefinished engineered hardwood offering with a light to heavy wire-brushed surface and multi-stain process; the award-winning Colour Nation Lighthouse Cove collection, also a wide-plank, European oak prefinished engineered hardwood line featuring a multi-color, multi-layered paint technique; and the Old World hardwood collection, which boasts a wire-brushed, hand-distressed treatment combined with an innovative smoking and carbonizing technique.

Provenza takes it a step further by applying a “fuming” technique to add greater depth and dimension. “We combine that with staining and oil looks to create a UV oil, which provides a harder, smoother finish with less maintenance,” said Ron Sadri, principal owner. “The technology has evolved to the point where we went from hard wax finishes to polyurethane combined with reactive stains.”

Experimentation with innovative staining techniques has also produced positive results for companies like American OEM. Take its Controlled Chaos and Dynamic Earth lines, for example. The technology Hearthwood employs on these offerings is very similar to chemical reactive staining but it produces more consistent results, according to Allie Finkell, executive vice president. “Some of the chemical reactive staining processes are really hard to control, making it difficult to be consistent across production over time and from run to run. But we’ve been able to recreate the highlights of those chemicals utilizing a regular water-based UV-cured stain, which is done in our Tennessee plant with low-emitting finishes.”

Controlled Chaos features a light, wire-brushed finish on white oak for a more contemporary look in a 7-inch-wide x 8-foot-long format in colors ranging from, in Finkell’s words, “shocking to subtle.” Meanwhile, Dynamic Earth, which is also in a sliced white oak product, has more of a reclaimed, scraped texture. “Our handscraping technique is not the old, machine-scraped process that’s so common in the industry,” Finkell told FCNews. “Our process delivers more of that reclaimed barnwood look. This way the customer gets a modern format in long lengths and wide widths, but she can still pick a timeless color that she’s going to love for years.”

 

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Wood: Ark Floors sets its sights on strengthening the brand

November 26/December 3, 2018: Volume 34, Issue 12

By Reginald Tucker

 

Ark Floors is doubling down its efforts to build capacity, expand its product offering and develop customized programs for its customers. The goal, according to Ed Goldberg, national sales and operations manager, is to fortify its position with distributor partners around the country while strengthening awareness of the Ark brand.

“Carl Lu, the owner of Ark Floors, told me he wanted to build a great brand,” Goldberg told FCNews at the recent NAFCD conference in Dallas. “‘I want to be like Armstrong,’ he said. Well, I took that to heart, and I carry that with me every single day.”

That explains why Goldberg made it a point to attend NAFCD and share that message with former, present and potential distributors alike. “My goal is to promote our brand and let people know we are still here,” he said. “We have a clear map for success and a direction moving forward.”

Part of that game plan, according to Goldberg, entails instilling a stronger sense of discipline across all facets of the business. “When I took over as general manager of Ark Floors about a year ago, we essentially only had one way to go—and that was back up,” Goldberg said. “Some of those changes I needed to implement were specifically in regard to product and color consistency, although the quality of the product was always good. When I surveyed our partners, there were very little issues with quality but more about color matching the samples. We are going to work more closely with our factories to maintain a higher level of color consistency to those samples.”

Some of those efforts are already paying dividends. “We achieved 15% growth this year; by Sept. 1 we had already matched our gross sales for 2017,” Goldberg said. “More importantly, we have greatly increased our gross profit margins.”

Goldberg attributes that success, in part, to the commitment of the company’s distribution network. “Much to my delight, distributors that I’m resurrecting relationships with as well as new industry partners I’m going after are excited to promote the Ark brand,” he explained. “I’m an old dog, so my go-to-market strategy is predominantly through traditional distribution, and that network is coming along. There are few areas of the country where we have not been able to get a good partner to commit yet, so we are going forward with a direct-to-retailer program. However, the price structure I have put in place will allow that to ultimately be a turnkey system to hand over to the right distribution partner.”

A few of the wholesale partners who are on board include Bay Area-based Medallion, Ark Floor’s longest and most loyal partner; Certified in Pittsburgh, which is moving forward with a new, revamped program; Finishes, which will handle Texas, Oklahoma, Kansas, Arkansas and Louisiana; and Marietta, Ga.-based A&M Supply, which has committed to resuming a business relationship with Ark Floors in the Southeast after a brief hiatus. “Every single day those guys are seeing opportunities with our brand,” Goldberg said.

A&M Supply, looks forward to having Ark Floors back in the fold. “We believe Ark will be a tremendous addition to our product offering,” said Dunn Rasbury, director of flooring. “Its exotic product offering is second to none. We’re also very excited about an updated color palette in oak Ark has introduced.”

Among Ark Floor’s most popular lines is a “genuine” mahogany that Goldberg described as having different characteristics than a traditional South American mahogany. (It doesn’t “amber” or go through photosynthesis, and it replenishes very quickly and takes color stains very well, he said.) The company also offers popular European white oak species in predominantly A and B grades with a “little bit of C grade mixed in. Our Asian birch also continues to sell very well,” he added.

A winning formula
At a time when many distributors and retailers are being inundated with products that are often “force fed” by some of their manufacturer partners, Ark Floors is taking a slightly different tack. In essence, the manufacturer’s wholesaler partners are encouraged to cherry-pick from its wide offering so they may only stock those products that sell well in their respective markets.

How it works: Ark Floors maintains 64 running-line SKUs (25 of which are ¾-inch solids, with the rest being engineered). From that batch, distributors are asked to select their “Top 20” best-selling products or potential movers, and then Ark Floors works to ensure a consistent supply of that inventory based on those specific SKUs. At the same time, distributors are not necessarily locked in; they do have some flexibility. “For example, Finishes, based in Texas, actually identified their Top 36,” Goldberg stated. “And that’s OK, too.”

Bottom line: Whatever distributors decide, Ark Floors will support them with display systems, samples and inventory. In fact, the company is working to develop a better balance of inventory on the East and West Coasts via its warehousing facilities in Baltimore, Md., and Los Angeles, respectively. Part of that lies in improving communications between the various warehouses and factories located in Brazil, Cambodia, Croatia, Ghana and Indonesia. “The factories are going to be responsible for letting us know when containers of specific SKUs are ready to ship, and where those products are going to be shipped,” Goldberg explained.

All that is music to distributors’ ears. “Ark Floors has created a great logistics model that will allow us to great provide service and value to our customers,” A&M’s Rasbury told FCNews.

At the end of the day, Ark Floors just wants to do the right thing for the customer. As Goldberg explained: “Having been in the industry for 30 years, I pride myself on longevity and maintaining relationships and also maintaining my integrity in an industry that can be full of empty promises.”

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Ribadao to boost production capacity in Portugal

October 29/November 5, 2018: Volume 34, Issue 10

By Reginald Tucker

 

Specialty hardwood flooring manufacturer Ribadao Wood Boutique has been quietly building its North American distribution network while simultaneously increasing its presence in the global market via high-profile retail and hospitality installations. Now the company has announced plans to expand its manufacturing footprint by investing in a new hardwood flooring production facility at its home base in Portugal.

The new facility (Plant #2), which occupies nearly six acres in Santa Comba Dao, Portugal, will be dedicated to the production of engineered flooring. At present, both solid and engineered wood flooring products are made in the existing factory (Plant #1). Upon completion, which is slated for May 2019, the new plant will have the capacity to produce 25 container loads—roughly 425,000 square feet—of engineered floors per week.

“It’s amazing,” said Bruce Hammer, Ribadao’s vice president of sales for North America. “The whole operation will be run and managed by a small, highly trained crew. Everything is automated, even the sorting and assembling of cartons for shipping.”

Ribadao’s latest plans follow investments the company has made in its manufacturing facilities and logistics operations over time. Several years ago, it invested in a new finishing line, expanding the covered area to 160,000 square feet. In that same time frame, Ribadao also opened distribution centers in Hillside, N.J., Miami and Los Angeles to better service its customers across North America.

In anticipation of the increased production capacity that’s expected to come online when the new plant is up and running, Ribadao expects to grow its warehouse operations accordingly.

“We’re looking at opening up a third warehouse, also on the East Coast. It will likely be in the Southeast, somewhere between New Jersey and Miami,” said Pedro Tavares, president and CEO. “From a logistics standpoint, it just makes sense for us to have something in between those two points that can serve the East Coast and also serve the middle of the country. We want to continue to keep bringing in inventory to supply distributors if they run short on product.”

Seizing the opportunity
As far as strategic initiatives go, Ribadao’s investment plans couldn’t come at a more opportune moment. Amidst the recent imposition of tariffs on imports from China, Ribadao is looking to leverage its European manufacturing base and diverse sourcing structure.

“This whole tariff situation presents an opportunity for our company,” Hammer told FCNews. “One of our main selling points has always been that the turnaround time out of Europe is better. For example, we can take a special order or container order and normally turn it around in six to eight weeks from the point of being issued to delivery. Our typical lead-time is a month and a half to two months; China is probably 90–120 days out. That’s almost half the time.”

Not only is the turnaround time substantially shorter, but Ribadao also claims it provides other advantages—namely product quality. “Even with some of the tariffs that are being imposed, the Chinese manufacturers do things really doggone cheap over there,” Hammer said. “But we believe we’re much more competitive by comparison.”

As a case in point, Tavares cites Ribadao’s ability to customize products that still allow its customers to turn high margins. “We can develop products to fulfill our customers’ specific needs. Engineered, solid, unique species, different finishes and surface textures, smooth, wire-brushed, distressed, handscraped—whatever they need, basically,” he said.

That’s where owning the plant makes the difference, Tavares explained. “Customers can talk directly with us because we are the mill. We are not just an importer or distributor; we are a true manufacturer.”

More importantly, Hammer noted, Ribadao is a manufacturer that doesn’t trade at the low end of the spectrum. “We’re not a commodity type of company,” Hammer said, citing floors the company has furnished for prestigious retail brands such as Chanel and Banana Republic stores.

More recently, Ribadao’s floors were specified for Sacoor Brothers, a high-end men’s clothing chain with locations in Portugal, Spain and Dubai. “We do mid to high-end work. It’s a more upscale, quality approach,” Hammer added.

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Wood: Wall accent programs complete the package

October 29/November 5, 2018: Volume 34, Issue 10

By Reginald Tucker

 

Hardwood flooring suppliers are providing retailers with additional profit opportunities by looking up (literally) for new revenue streams. Several companies have either launched dedicated collections specifically designed to be installed on the walls, while a few others are encouraging dealers and installers to utilize their existing flooring products in unconventional ways.

Case in point is the Rowlock Plus line of wall accents from Johnson Hardwood Floors Initially launched in 2016, the program has been expanded due in part to the growing popularity of the trend. “Sales have been steadily growing on both the residential and commercial sides,” said Bill Schollmeyer, CEO. “Residentially, most orders are for a feature wall of some sort to complement an already chosen Johnson Hardwood floor. We’ve supplied several smaller commercial projects and have been specified in several hotel projects still under construction.”

End users have their pick from more than a dozen Rowlock Plus SKUs currently available, allowing designers to coordinate with the corresponding Johnson Hardwood flooring product based on their personal taste or style. Schollmeyer reports particular interest in the trendy, newer colors recently added to existing lines. Among them: Copper Mountain Walnut, which he said “coordinates perfectly with our Tuscan Walnut Lucca floor.” Breckenridge Walnut, Aspen Acacia and Loveland Oak are also great sellers, he added.

DuChâteau is another player with a proven track record of success in selling dedicated wood wall programs. In just a short time, the company has refined its offerings, growing its selection of wall accents and panels to 15 styles and 13 colors. This fall the company also plans to launch a new collection, Celestio, which features unique shapes and profiles of wood mounted to acrylic substrates. The addition of the acrylic allows for installation with LED lighting, creating unique atmospheres.

Beyond hard-wax oil and traditional wood finishes for the wall accents, DuChâteau also offers metallic color treatments such as Wave Gold and Kuadra Silver, which have proven to be very popular with its customers, the company said.

“When we first created our wall coverings, we were inspired by the desire to move the beauty and variety of wood from the floor to the wall, opening a whole new way to feature wood in the home,” said Misael Tagle, CEO and co-founder.

Provenza, whose forte also lies in the high-end spectrum of the hardwood flooring market, is reporting success with its dedicated wooden wall accent and paneling programs as well. Popular lines include its Wall Chic brand of wood accents, a peel-and-stick wall panel line geared toward the DIY market. It comes in more than 25 colors—some of which are painted to coordinate with the company’s Beacon Point hardwood flooring line. Also available are wall panels designed to coordinate with its Lighthouse Cove collection—the breakthrough hardwood flooring line that earned Provenza the Surfaces Style & Design award in 2017.

For Surfaces 2019, Provenza plans to kick it up a notch or two. There, the company will roll out its Wall Cladding line, which—unlike the peel-and-stick long boards—consists of an “up-and-down fingerblock pattern” in various sizes. “This product will be more dimensional and needs to be professionally installed,” said Ron Sadri, principal owner. A separate wood wall accent line available through Tri-West, one of its distributor partners, will also make its debut.

Provenza also plans to launch a “charred” wall covering product, which employs a surface-altering technique similar to the traditional Japanese method (known as shou sugi ban) used to burn wood. “It looks absolutely awesome,” Sadri said.

Other major manufacturers are encouraging retailers and designers to utilize hardwood flooring in unconventional ways. At USFloors, for instance, the company’s popular Castle Combe line of handcrafted floors is suitable for both horizontal and vertical installations. The natural oil finish applied to the product provides the look and feel of an ancient reclaimed floor while modern performance features give consumers the durability they have come to expect from wood. According to Philippe Erramuzpe, COO, the wide portfolio of products allows customers to express their creativity. “This allows the designer or homeowner to make a personal statement or add a customized element to the home,” he said.

Customers looking to coordinate their hardwood flooring installations with accent walls have no shortage of options. The Cabin Pine series from Mercier, for example, matches well with the company’s long-plank, rough-textured boards. “Whether the consumer is looking to add to the rustic charm of her home, or simply give a bit of pop to an otherwise bland space, she will find the perfect look and feel in one of the six featured colors that will harmonize beautifully with the rest of the decor,” said Michel Colin, director of marketing. “You can’t ignore the lightness of pine boards when looking for a quick and easy install, as they can simply be glued to the wall.”

Beyond pine, birch floors—which are known for their hardness and durability—also make great candidates for wall accents. “Pricing is similar to other hardwoods, but birch stands out for its color variations that can run from light tones to dark ones and its natural highlights which add visual appeal,” said John Lee, CEO of Arte Mundi. “The highlights are due to the lighter sapwood and darker, contrasting hardwood that birch contains. These provide the appearance of light, creamy shades mixed with red and brown tones.”

Lee cited several birch options in particular that are conducive to wall installations: Nantucket Mist, a tea-like brown tone that provides a smooth surface with natural crevices and mineral streaks; Morning Haze, which provides a creamed coffee tone with heavy hand scraping, natural crevices, saw marks and mineral streaks; and Coffee Bean, the darkest of all the Arte Mundi birch offerings. It is marked by rich, chocolate-brown hues and features a smooth texture that complements its lighter and darker highlights.

Creative reimagining
The surge in wood wall accents has inspired non-traditional uses of products previously designed strictly for the floor. Companies like Naturally Aged Flooring, for example, said its engineered hardwood planks can safely be installed on most wall surfaces as an accent piece to complete a unique interior design.

“Accent walls provide a striking level of style and design and become the focal and talking points of any space,” said the company in a prepared statement. “Engineered hardwood provides natural, warm beauty, and Naturally Aged Flooring’s distinct colors and distressing create a captivating design element that immediately sets a room apart from any other.”

From a functional perspective, Naturally Aged wall panels feature a protective UV coating. In addition, the panels can be easily installed via tongue-and-groove construction. What’s more, multiple species, finish type and levels of distressing are available, thereby allowing for creativity and freedom in design.

“Whether you use the accent wall to complement or contrast a floor, provide a rustic charm, or bring additional warmth to a room, the combinations are endless,” the company stated.

Other specialty hardwood flooring suppliers are getting into the act. Case in point is Ribadao Wood Boutique, which—after launching its signature Exotics line of hardwood flooring several years ago—followed up with a corresponding offering for the wall. Much like the unique species offered on the flooring side, the wall covering collection from Ribadao focuses on various exotic species from South America and Africa as well as wide-plank European oaks planks. “We have a mixed bag of products that bring value and selection to our customer base,” said Bruce Hammer, vice president of sales, North America.

Noted designers such as Emily Morrow, CEO of Dalton-based EF Floors & Design, attribute the craze behind the use of wood on the walls to creative applications often employed by celebrity designers on cable television.

“In the past three or four years, we have witnessed a resurgence of wood finishes working their way from the floors to the walls and even ceilings,” she told FCNews. “Adding elements with character and warmth to interiors has become not just a trend but a major design movement. Thanks to design personalities like Joanna Gaines of HGTV’s ‘Fixer Upper,’ we all find ourselves loving the shiplap treatment on walls, beams and wood treatments to ceilings—which, besides creating three-dimensional authenticity, adds to the home’s actual value. What’s not to love about hardwood on the walls?”

All in the positioning
Not all consumers will be predisposed on supplementing a wood flooring purchase with an accent wall installation. In these cases, the power of suggestion—and some creative merchandising strategies—may be in order.

“This is a product that needs to be sold, or at least enthusiastically presented, by a retail salesperson,” Johnson Hardwood’s Schollmeyer said. “It’s a tactile, three-dimensional product that a consumer needs to touch as well as see. The most successful retail sales seem to start with a floor selection, followed by a design suggestion of a complementary Rowlock Plus product. Whether the home is country or contemporary by design, the retailer needs to make the suggestion, and the consumer’s tastes will take it from there.”

The secret to success, experts stress, is helping the customer envision what a flooring installation with a corresponding wall treatment might look like.

“We believe the key is to show the customer how the wood wall covering can be used,” DuChâteau’s Tagle said. “People love the look and feel of a wood wall covering, but oftentimes they have no idea how they can integrate it into their design plans. Showing varied installations at the point of purchase is critical.”

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Wood: Growth of engineered goods expands opportunities

September 17/24, 2018: Volume 34, Issue 7

By Reginald Tucker

When it comes to hardwood sales in the U.S. today, all signs point to increased consumption of engineered products. Proponents of the format cite—among other benefits—more efficient use of raw materials, improved performance in demand climates and the increased design and application flexibility that engineered products offer.

“There’s never been more changes taking place in the wood flooring segment than what we’re seeing before our eyes right now,” Tom Lape, president, Mohawk Residential, told FCNews. In particular, he’s seeing many consumers moving away from solid at a rapid pace. “We see the engineered category evolving right in front of our eyes from what was historically a 5-ply construction format to an HDF solution.”

As Mohawk seeks to leverage its position as an integrated, vertical HDF engineered wood producer, it continues to benefit from the shift to engineered. “Making all our own HDF internally gives us an advantage in terms of consistency and uniformity of the product,” Lape explained. “In addition, we produce all those products here in North America, which gives us an advantage in terms of supply chain and reliability.”

Other industry observers attest to the trend. Mannington, which moved to an all-engineered format several years ago, saw the proverbial writing on the wall. “While the overall wood category grew by low single digits last year, the growth rates were different between solid and engineered, with solids declining in overall volume and engineered growing by mid-single digits,” said Dan Natkin, vice president, wood and laminate.

But for suppliers that play in both the engineered and solid segments of the market, there’s still room for both formats. As Michael Bell, vice president, hardwood, Armstrong Flooring, explained: “In engineered, we see much of the growth occurring on the bookends of the market with significant increases in the opening price point/value engineered products and the best/premium sliced- and sawn-face engineered products. Solid is similarly seeing increased activity on the best/premium side of the market.”

While it is generally accepted that consumer tastes differ by region and/or climate, some point to inherent limitations of solid products as an impediment to acceptance beyond the core solid markets. “With the demand and overall trend moving toward longer and wider, there are limitations you have with solids that are not there with engineered,” said Clark Hodgkins, director of hardwood and laminate, Shaw Floors.

Longer, wider trend

Suppliers agree that having the ability to go longer and wider has ushered more consumers in the direction of engineered products. It’s simple physics, actually—the wider the board, the more it will flex under stress and temperature changes. This plays directly to the strengths of engineered products, which—by sheer virtue of their multi-ply construction—can better resist this movement.

“We’re giving consumers more of what they want—wider and longer,” Mohawk’s Lape said. “We’re selling planks up to 80 inches long and 9 inches wide, and we’re making better-performing products for contractors, retailers as well as consumers.”

It’s no surprise then that suppliers continue to fortify—and diversify—their product mix. Over the past 18 months, for example, Quebec-based Wickham Hardwood introduced several new engineered offerings designed to complement its solid collections. “What we are seeing is the demand in the U.S. market for a thicker platform appears to be on the rise,” said Paul Rezuke, vice president residential sales, U.S. “With this demand, we are projecting a significant demand for ¾-inch platform engineered products in our U.S. footprint.”

In that same vein, Boa-Franc, maker of the Mirage brand, has bolstered its offering of wider/longer engineered planks. The company now offers new board lengths up to 82 inches. “The new lengths make any room in the house look bigger,” said Brad Williams, vice president of marketing. “Since fewer boards are needed to cover a given area, fewer joints are visible.”

Other major manufacturers are utilizing technology to produce engineered products that are much wider and longer than their predecessors. Case in point is Tennessee-based American OEM, founded by Don Finkell, whose family legacy of producing engineered hardwood floors dates back to 1938.

According to Allie Finkell, executive vice president, the company’s plant has the capability to produce board lengths up to 8 feet in wide widths across a variety of species and platforms. “It is flexible in the constructions it can produce, ranging from veneer core to HDF core, topped with sawn-, sliced- or rotary face veneers,” she said. “Limitless design capabilities are achieved through a talented, hands-on workforce and industry-leading staining techniques for every color of the spectrum. The American OEM/Hearthwood facility is efficient and has capacity to accommodate increases in the demand for domestically produced engineered wood flooring.”

With the continued growth of engineered—and as a means to provide differentiation in the market—suppliers are continuing to push the envelope and expand the possibilities. An example of this is Arte Mundi, the Jurupa, Calif.-based supplier of innovative engineered collections such as Bauhaus, Renaissance and Nouveau. But perhaps the most intriguing offering is the company’s Crystal Elements collection—an engineered hardwood flooring line that incorporates actual crystals in the wood’s surface. Developed in conjunction with world-renowned brand Swarovski, the new line was designed to provide retailers and distributors with a step-up product. “Our product lines embody the most natural elements without chemicals, resulting in a process that is completely organic,” said John Lee, president/CEO, citing Arte Mundi’s approach to high-quality wood flooring production.

The company’s product development teams start each new collection by searching for the most aesthetically pleasing, highest-grade lumber for the top layer. This is supported by top quality, multi-layered plywood. Additional visual enhancements are achieved through 100% hand scraping as well as other proprietary techniques.

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Wood: Domestic species see resurgence in popularity

August 6/13, 2018: Volume 34, Issue 4

By Reginald Tucker

In recent years, much attention has been focused on the highly stylized, European-inspired oak hardwood flooring products that are popping up in retail showrooms around the country. At the same time, industry observers are seeing surging interest in various domestic varieties such as hickory, walnut, maple as well as red and white oak.

“Over the past couple of years, domestic species have been even more popular—specifically white oak, walnut and even hickory in some markets,” said Brett Miller, vice president of education and training at the National Wood Flooring Association (NWFA). “Red oak is still popular, though not as much as white oak.”

Miller attributes this growing interest to the combination of consumer tastes moving away from tropical exotics along with the color/texture characteristics domestic species provide. “With hickory, for example, it’s the variation in color that generates interest and demand. Then there’s walnut, which has a very unique look and has always been regarded as a higher-end species. But white oak seems to be the most popular, most likely because of the color.”

Given this rising popularity, it should come as no surprise that many of these domestic species are increasingly factoring into recent introductions and/or best-selling products from some of the industry’s major manufacturers. “Over the past few years, we have focused our introductions on these species with tremendous results,” said Dan Natkin, vice president, hardwood and laminate, Mannington. In particular, he cited the company’s Carriage oak line, which he describes as “a runaway hit,” along with the Cider Mill collection, which combines the inherent graining of select North American white oak and hickory with a proprietary hand-staining and distressing process to further enhance the visuals. “There is something timeless about North American hardwoods,” he said. “Smooth, elegant graining, great character, and the way they accept stain and other visual effects make them the prime choice for consumers.”

Other major suppliers are capitalizing on the shift toward domestic species. Adam Ward, senior director of wood and laminate, Mohawk, said the company has been using domestic white oak for many of its products.

“There are slight differences between domestic oaks and European oak, but overall we are seeing more demand for hickory, walnut and other domestic species as there has gotten to be such a wide variety of every color, style and design of oak under the sun,” Ward explained. “Consumers who are trying to be more unique are trying hickory, walnut and some other visuals for greater variety.”

In illustration, Ward cited Mohawk’s Homestead Retreat line, which made its debut at Surfaces earlier this year to great acclaim.

“It’s a really great collection of sawn-faced hickory and walnut that has a nice sculpted visual to it that has been very positively received by the market. We’re seeing a lot of interest among consumers.”

Mohawk also launched five oak collections, and it plans to expand its offering of hickory products as well. This includes Canyon Lodge, a 6½-inch-wide scraped product. “We definitely plan on launching more of those products that feature species such as hickory and walnut along with some maple products as we round out our line of oaks,” Ward stated.

Other major suppliers are also tweaking their domestic offerings to keep up to date with trends. Mullican Flooring, which launched its oak-based Wexford collection last year, believes it can provide consumers with that popular “European oak” visual by tweaking the manufacturing process it uses to saw the veneers on its domestically sourced product. More recently, the company rolled out its new Astoria and Dumont lines, which entail a combination of white and red oak. It also offers the Nature Collection, which features wide-width hickory planks in a character grade.

“We’re definitely seeing a lot of demand for these domestic species,” said Pat Oakley, vice president of sales and marketing. “It’s mostly white and red oak, but we’ve also seen pretty consistent demand for hickory and walnut. We’re also expecting to see maple come on a little bit as prices for white oak continue to rise.”

Some industry observers link the popularity of some of these domestic species to overall design trends. “The gray tones of walnut and white oak are really resonating with consumers,” said Clark Hodgkins, director of hardwood and laminate at Shaw Floors. In particular, Hodgkins cited growing sales of the company’s Epic Extreme Nature collection. “These visuals exemplify looks found outdoors and incorporate slight distressing techniques that showcase the wood’s natural variations and beauty.”

By that same token, the latest hardwood introductions from USFloors, which was acquired by Shaw last year, also address consumers’ affinity for domestic species. “We are definitely seeing a resurgence in demand for North American species such as white oak, maple and walnut,” said Philippe Erramuzpe, COO. These species, he notes, figure prominently in the company’s new Enclave collection as well as a solid wood line due to roll out this quarter. A new collection featuring an HDF core with oak and hickory veneers is also available.

Specialty, private-label suppliers are also getting in on the act. American OEM, which markets custom products to distributors in addition to promoting its own Hearthwood-branded line, is making sure it has all the bases covered. “We are still seeing most of the business being driven by white oak, but there are still great selling SKUs in hickory as well,” said Allie Finkell, executive vice president. “Walnut is gorgeous, but it’s still very niche.”

For some industry observers, the trend toward greater domestic wood flooring consumption is not so “new” after all. “At Armstrong Flooring, we have been saying for a while that ‘Domestic is the new exotic,’” said Sara Babinski, design manager. “Like local produce and handmade crafts, the trend is buying local and U.S. home-grown woods. White oak is still the most popular, followed by beautiful domestic exotic species such as maple, walnut and hickory.”

With red-toned woods and tropical exotics fading in popularity, Babinski sees the trend moving toward either dark or light color palettes. These are reflected in top-selling Armstrong collections such as Prime Harvest, which is crafted from select- and premium-grade Appalachian hardwood for a more consistent visual.

Even high-end, specialty manufacturers are capitalizing. Provenza Floors, for instance, is expanding its already deep portfolio of European oak-inspired floors to include domestic gems such as elm, ash, hickory and, of course, American maple. New lines include Artifact, an entry-level line, and Volterra, a long-board offering. “These products reflect the contemporary format that’s so popular today,” said Ron Sadri, principal owner.

Supply and demand

One unintended consequence of the increased consumption of select domestic wood species is the higher prices manufacturers are seeing in terms of raw materials. This is especially the case with select and better grade flooring in white oak.

“As demand rises, prices also increase,” NWFA’s Miller said, citing white oak and walnut in particular. “If you speak to any wood flooring manufacturer or any mill, they will tell you those are the logs for which they are paying the highest prices.”

Manufacturers can attest. “There has been such a demand for oak, especially the wide boards, that prices have increased,” Mohawk’s Ward explained. “There’s also competition for raw materials from the furniture industry as well.”

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Wood: Canadian suppliers in a class all their own

July 9/16, 2018: Volume 34, Issue 2

By Reginald Tucker

 

Most laymen associate Canada with sprawling, breathtaking forests, maple syrup and feverishly devoted hockey fans. But when it comes to flooring, especially hardwood, industry observers agree the country produces some of the highest quality products in the industry.

Case in point is Boa-Franc, manufacturer of the standard-setting Mirage brand of hardwood floors. Over the past 10 years, the company has earned 33 quality awards—more than any other North American hardwood floor manufacturer, according to Pierre Thabet, president and founder. This includes an impressive streak of FCNews Awards of Excellence trophies as well as honors from the Canadian government and private enterprises. Among them: the prestigious Gold Trophy Award at the Canada Awards for Excellence several years ago, and the highest honor at the Grands Prix québécois de la qualité awards in 2017 and, prior to that, 2012.

“Boa-Franc strives to pro- duce the finest hardwood floors,” Thabet said. “Our entire focus is on making superior quality flooring that exudes well-being and gives dramatic new life to consumers’ home décor dreams.”

For the past 35 years, Boa-Franc’s main goal has been to produce the industry’s finest hardwood flooring, according to Thabet. To follow through on that quality promise, he said, the company adopted a management philosophy founded on five core values: passion, respect, integrity, commitment and innovation.

“Innovation is at the heart of everything we do here at Boa-Franc,” Thabet stated, adding that being a leader means being the best, not necessarily the biggest. “It’s what enables us to make superior quality products and maintain our leading position in North America.”

Boa-Franc’s distributor and retail partners appreciate that quality-minded philosophy. Shawn McCloskey, marketing manager for J.J. Haines, the industry’s top-ranked wholesaler, cites one of the company’s best-selling lines—Mirage’s Flair collection, which features an advanced finish called Duramatt. “It is an extremely durable, low-gloss urethane finish that has the appearance of an oil finish without the associated maintenance. It also contains anti-microbial agents and is 20 times more wear resistant than a conventional oil finish.”

Another quality-minded supplier renowned for its expertise in hardwood production and coating application is Mercier, which markets the advanced Generations 2500 Intact finish. The molecules that comprise the coating, named for its numerical performance on the Taber test, interlock with the wood cells to create a waterproof barrier. The finish also features aluminum oxide particles of varying sizes and boasts a multilayered composition for greater flexibility and impact resistance. Generations 2500 also touts antimicrobial qualities and features anti-yellowing properties to combat the effects of UV rays.

“Mercier gives us a first-quality, Canadian-manufactured wood line that fits all possibilities in today’s ever-changing customers lifestyle,” said Steve Flanagan, product and marketing manager, Jaeckle Distributors. In particular, he cited the appeal of Mercier’s matte finish on its Design Plus collection, as well as the Legend Series from the Nature collection. “Mercier fits the consumers need anywhere from a quality entry-level product in their Pro series to the most fashionable 7-inch-wide pine board or other in-demand species such as hickory, maple, red and white oak and their entire Exotics series.”

Depth and breadth of product—as well as high service levels—are also hallmarks of many Canadian wood flooring manufacturers. That’s according to dealers like Mike Caroll, owner of Buffalo, N.Y.-based MP Caroll, a hardwood-only retailer that positions the Preverco line front and center. Although he has only carried the line for a few years, it has quickly become the company’s go-to product. “Preverco is our leading line, which we consider an upscale offering,” he told FCNews. “It’s super consistent with its milling and colors, and their attention to detail is unmatched.”

The same can be said for companies like Wickham Hardwood Flooring, which prides itself not only on consistent product quality but also quick turnaround times on special orders—a rarity in the industry. A big plus, customers say, is Wickham’s unique make-and-ship program. How it works: All stock is kept unfinished and then is finished as ordered. Regardless of species, colors, grades, sheens or widths, retailers can meet almost any consumer specification when participating in the program.

“Assisting the client in order to constantly grow their business is a crucial component of a healthy business relationship, and we are committed to making sure efforts to sell are mutual on both sides,” said J.P. Nittolo, president. “Our sales- force is devoted to assisting the customers, whether it is for product knowledge sessions, travel with the sales representatives or even in helping with product marketing. We also offer a variety of merchandising programs where customers can build their own displays—with joint efforts from the Wickham team—based on the end consumers’ needs.”

Clients like Craig Dupra, president of Installers Warehouse, a Rochester, N.Y.-based distributor, knows this firsthand. “Since assuming a controlling interest in Wickham Hardwood about 10 years ago, J.P. Nittolo has completely transformed the former Wickham Hardwood Flooring company into a brand new entity. From the time when I first visited them to today, Wickham has been in constant transformation. They have evolved from a quiet little mill to a major supplier in the North American market. Benchmarked against his competition, the growth has been remarkable.”

 

Satan Flooring sees opportunities on the wall
Toronto, Canada—Satin Flooring, maker of a variety of trendy, high- performance hard surface flooring materials, is going vertical. Known primarily for its wide offering of laminate, hardwood and resilient flooring products, Satin Flooring is now targeting consumers in the market for decorative wall materials.

With the launch of Decora 3D wall panels, Satin Flooring is targeting the homeowner who’s looking to do a complete room remodel—not just the floors. Featuring a decorative laminate wrap over a high-density fiberboard core, the new decorative panels address one of the biggest trends in interior design.

“Feature walls have become more important in decorating today,” said Ingrid Mancini, senior marketing manager. “People are putting in accent walls using stone or wallpaper, etc. This is not a throwback to the ’70s, when you had wood panel walls, but I think it’s adding texture and dimension to make the space more homey, interesting and more visually appealing.”

Available in five introductory patterns (concrete, slate, light barnwood, brown barnwood and earth pine) the new wall panels aim to complement—but not necessarily match to a tee—the products currently available in the company’s flooring line. “The patterns in the Decora 3D wall collection were created specifically for a certain kind of texture or look, but they will definitely coordinate with our flooring patterns,” Mancini said. “In my home, I have the concrete pattern on the wall and a beautiful, engineered red wood called Twilight on the floor. It’s a little more brown/gray, but it goes nicely with the concrete wall color.”

Another feature of the new wall line, according to Mancini, is it can be installed in a variety of different sizes and blocks to create a multi-dimensional effect. “So, depending on the person, there’s a lot of variation that’s available and there are a lot of trims to match,” she stated.

The new Decora 3D wall line, which was previewed at the NWFA convention earlier this year, makes its official debut this month.

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Wood: Sector maintains share on strong demand

June 26-July 2, 2018: Volume 34, Issue 1

 

By Reginald Tucker

Rising demand for residential replacement projects combined with a strengthening new home construction market contributed to another steady year of growth for the U.S. hardwood flooring industry. FCNews research shows wood sales at the first point of distribution climbed to $2.32 billion in 2017, a 4% increase over 2016. Volume-wise, units shipped increased 3.6% to 930 million square feet, reflecting an uptick in slightly higher-value goods.

To put the numbers in greater perspective, in 2017 the hardwood sector accounted for nearly 10.6% of total industry sales but more than 17% of hard surface revenues. With respect to volume, wood represented only 4.7% of total industry square footage shipped but 11% of all hard surfaces sold at the first point of distribution. Five years ago, wood’s share of total industry sales was 9.5%, while its share of total industry volume was 4.1%. Going back even further—to 2007—hardwood’s share of total industry sales was 9%, while its share of volume sold was 4.4%. However, the size of the total pie at that time was much greater—$22.34 billion in sales in 2007 vs. $17.3 billion in 2012. Ditto with respect to volume; in 2007, more than 22.7 billion square feet of product was shipped compared to just over 16.8 billion in 2012.

While evidence shows competing hard surface categories seem to be growing at a faster clip (save for laminates), wood has not ceded its position relative to its ranking among the likes of tile, resilient flooring, WPC, etc. For example, wood represented the third-largest hard surface category in terms of dollars in 2017, trailing only resilient (19.2% market share of total industry sales) and tile (13.3% of total sales). Back in 2007, wood was also the third-largest hard surface category—although resilient and tile represented a much lower portion of the overall pie at 9.8% and 9.3%, respectively. Ten years ago, wood held a 9% share of the market. The only oddity is the volume of wood sold has been exceeded by the overall square footage of laminate flooring shipped virtually every year since 2009. Industry observers attribute this phenomenon to a variety of factors, including: much lower comparative pricing of laminate vs. wood; the relative ease of installing laminate flooring vs. more complex, intricate hardwood flooring products; and the vast number of retail outlets—including big boxes and discount stores—that sell laminate over the counter and online.

Industry executives attribute hardwood’s consistent performance over time to the strength of key end-use sectors here in the U.S. market. “Single-family construction and residential replacement continue to be the core drivers of demand for hardwood,” said Dan Natkin, vice president, wood and laminates, Mannington. “While the wood category grew by low single digits, the growth rates were different between solid and engineered, with solids declining in overall volume and engineered growing by mid-single digits.”

Other executives, including Natalie Cady, vice president, hard surface marketing, Shaw Floors, concur. “Residential is driving the market, which includes both single family and residential remodel.”

FCNews research supports those anecdotes. In 2017, residential replacement and new construction end-use markets accounted for 55% and 35%, respectively (or 90% collectively), of hardwood flooring sales. That’s up slightly from 2012, when new residential and residential replacement represented about 83% of category sales. One of the biggest shifts over that time period occurred in the commercial sector, which—including specified contract and Main Street market applications—accounted for 17% of sales. Last year, contract commercial and Main Street represented just 10% of sales, research shows.

The fact that hardwood is still be able to participate across a variety of end-use channels is a testament to the segment’s allure and viability. “A more stable economic environment continues to steer the hardwood segment on a course of steady growth, with increases in demand in both the new construction and remodeling markets,” said Michael Bell, vice president, hardwood, Armstrong Flooring. “We also see hardwood opportunities in the commercial marketplace.”

Other industry observers, including Brad Williams, vice president of sales and marketing at Boa-Franc, parent company of the Mirage brand, believe commercial performed better than many expected. In fact, as far as the ratio of end-use consumption is concerned, he feels a shift has occurred. “I believe single-family construction is driving the most growth in hardwood, followed by contract commercial and residential replacement.”

Shifting formats, trends
While several industry executives continue to debate the precise ratio of end-use consumption, there’s no denying there is an industry-wide shift in the types of hardwood floors produced and sold. Take traditional solid hardwood floors— the mainstay in many regional markets—vs. the preponderance of new, technologically advanced engineered formats. Ten years ago, solid wood floors represented more than 60% of the market, anecdotal information shows. According to FCNews research, the engineered/prefinished segment is close to overtaking solids, accounting for roughly 57% of sales.

While solid—what some refer to as the industry “gold standard”—is still preferred by many customers, home builders and designers in markets like the Northeast and Pacific Northwest, the rapid development and evolution of products that fall under the category of engineered floors is opening up opportunities even in hardcore solid markets.

“There’s never been more changes taking place in the wood flooring segment than what we’re seeing today,” said Tom Lape, president, Mohawk Residential. “The biggest trend we’re seeing in the wood flooring segment today is a blurring of the lines within the product categories. For example, we’re clearly seeing many customers, dealers and consumers moving away from solid at a rate that has been running unabated for five years running and continues to accelerate. We see the engineered category evolving right in front of our eyes from what was historically a 5-ply construction format to an HDF product solution.”

Mohawk is so convinced that engineered wood flooring products based on an HDF core are quickly overtaking conventional, multi-ply hardwood flooring options that it is banking on wholesale consumer and end-user acceptance of the emerging format. “When you see high-end custom builders and high-end production builders in the Northeast and Pacific Northwest coming off solid it is eye opening,” Lape said. “Solids are not going away, but where there is a reasonable trade off of in terms of cost, value, etc., I think you’re seeing the market accelerate the move to engineered.”

Boa-Franc’s Williams is in general agreement. “The shift in demand will continue to put additional pressure on manufacturers as the majority of domestic suppliers have solid equipment and capacity. This causes your business to transform when converting to producing engineered, or more engineered vs. solid. Everything changes—from your lumber purchasing to your go-to market channel strategy.”

For others, the continued migration from solid to engineered doesn’t necessarily spell the end of a category. While engineered floors offer opportunity for design innovation combined with its installation flexibility, solids still have their place. As Armstrong’s Bell explained: “The dynamics are different in solid vs. engineered. In engineered, we see much of the growth occurring on the bookends of the market with significant increases in the opening price point/value engineered products and the best/premium sliced- and sawn- face engineered products. Solid is similarly seeing increased activity on the best/premium side of the market.”

While it is generally accepted that consumer tastes differ by region and/or climate, some point to inherent limitations of solid products as an impediment to acceptance beyond the core solid markets. “With the demand and overall trend moving toward longer and wider, there are limitations you have solids that are not there with engineered,” Shaw Floors’ Cady said, citing the tendency of solid floors to expand and contract more easily than engineered. “Having the ability to go longer and wider will help people move more toward engineered. Plus, with single-family home construction on the rise, that represents an increase in concrete slab construction— and that lends itself to engineered. At the end of the day, we believe the solid market— which includes both finished and unfinished product—is steady, not actually shrinking.”

In keeping with the industry’s ongoing transition to engineered, suppliers are also seeing demand move away from traditional strip flooring to wider/longer plank formats. “We’re giving consumers more of what they want,” Mohawk’s Lape stated. “We’re selling planks up to 80 inches long x 9 inches wide, and we’re making better-performing products for contractors, retailers as well as consumers.”

While all this continues to play out, suppliers continue to fortify—and diversify—their product mix to ensure they have all the bases covered. Over the past 18 months, for example, Quebec-based Wickham Hardwood introduced several new engineered offerings designed to complement its solid collections. According to Paul Rezuke, vice president residential sales, U.S., the breakdown seems to follow along geographic lines. “As part of our engineered strategy, we targeted two platforms based on a 1⁄2- and a 3⁄4-inch format. We initially envisioned the 1⁄2-inch product would be most suited for the U.S. market and the 3⁄4-inch line for our Canadian business partners. What we are seeing is the demand in the U.S. market for a thicker platform appears to be on the rise. With this demand, we are projecting a significant demand for 3⁄4-inch platform engineered products in our U.S. footprint.”

The shift in product preference in wood goes beyond the product’s core construction. Industry observers are also gauging changing consumer tastes relative to color, species, surface texture and even board length and width. “The key is making sure we stay out in front in terms of styling and design,” Shaw Floors’ Cady explained. “We’re still seeing the move toward longer, wider planks, but we are also seeing a move toward more traditional visuals.”

At the other end of the spectrum, some suppliers are seeing a mild resurgence in demand not for domestic species—which had been rising in popularity—but for exotic looks. With anecdotal information and consumer purchasing trends showing shoppers gravitating more toward home- grown species such as walnut, hickory and birch, to name a few, others say there’s still a viable market for imported tropical species.

“Brazilian cherry, teak and oak are still in demand,” said Luxia Hong, director of business development, North America, for Grupo Maderero Amaz, based in Peru. “What we’re doing is taking the Brazilian teak, for example, and applying wirebrushing to the top layer. We can also apply stains such as gray, espresso and cappuccino—the colors that are trendy today. Brazilian oak can also take stains and wire brushing very well.”

Mitigating factors
Hardwood flooring has long been linked to its ability to con- tribute to rising home values, and it remains—as suppliers argue—the product that many homeowners covet. But aggressive competition from competing “wood-look” visuals available with LVT, WPC, laminate and, now, ceramic is a cause for concern.

“The growth of wood-look products such as WPC is an issue,” Mannington’s Natkin said. “While cannibalization is minimal for the consumer who really desires hardwood, there is conversion for consumers who are not sure what product is right for them.”

Armstrong’s Bell is in agreement, adding that—with the exception of tile—most of these products cost less than real hardwood. Also at play, he said, is the fact that the quality of the visuals and textures has evolved so much that many consumers feel comfortable using these faux wood products instead of the real thing. “However, there is nothing that can truly compete with genuine hardwood from either a look or value equation. It is a great, long-term investment and can actually become a strong resale argument, exceeding the initial installation cost of the floors. Plus, it’s organic, natural and renewable and, of

course, since it is natural, has less pattern repeat.”

Traditional, hardwood-only suppliers
seem to be taking it in
stride. As Wickham’s Rezuke explained, “Currently, WPC appears to be the category of the month.
We’ve experienced this
in the past with both laminate and LVT. Our position remains that
there will be new products that will present challenges. But in thelong run, hardwood
will always maintain a
significant market share in the flooring industry.”

Price pressures
On the other side of the coin, wood’s classification as a natural product also subjects the category to price fluctuations due to rising raw material costs. In fact, some of the segment’s top suppliers recently announced hikes in the 3%-7% range, mostly on solid goods. Suppliers warn it might not be the last this year.

“We are seeing some upward pressure in raw material pricing,” Mannington’s Natkin said. “Certain regions are more dramatic than others.”

Armstrong, one of the suppliers to pass on increases to its customers earlier this month, attributes the hikes to rising natural gas and electricity prices—all of which impact costs to power the plants. Bell doesn’t see any let up in sight. “We expect this cost pressure to continue throughout 2018.”

Canada-based Mercier Wood Flooring, which instituted a price increase at the start of the year, hinted at the possibility of additional hikes if cur- rent trends persist. “We try to stay consistent,” said Wade Bondrowski, director of sales, U.S. “However, a couple more increases in raw materials and we will be forced to raise prices again.”

Boa-Franc, also based in Canada but services customers throughout North America, is feeling the pinch as well. “We are still sitting at a high point on species such as red oak and white oak,” Williams said. “Hopefully it will cool down and stabilize in the quarters to come.”

Mid-term outlook
Despite raw materials fluctuations, pricing pressure from imported product and increased competition from other hard surface categories, executives remain optimistic about the hardwood sector for the remainder of 2018. “We predict the overall hardwood category will have a moderate growth rate of 3%-5% this year,” Williams said, citing the commitment of its distribution partners. “We feel our greatest opportunity continues to be within our existing network.”

Don Finkell, president and CEO, American OEM, is confident the category as a whole

will grow by at least 6% this year, surpassing the rate of growth achieved in 2017. The prospects look even better from an internal standpoint, he noted. “I expect our company to more than double that growth rate at about 12% to 15%. We are adding new products for our existing distributors, building on our private-label programs and developing coverage of our new Hearthwood brand. Plus, we will be adding more domestically made products to our Hemisphere brand.”

Others are similarly bullish. “We’re still forecasting growth in the wood segment, although I think it’s going to be a different wood segment by virtue of a lot of trends we’ve been talking about,” Lape stated. “The trend is going to be more innovation in the wood category. The industry is not sitting still; it continues to innovate in terms of form, function and value.”

For Mercier, the key to continued success lies in geographic expansion—along with continued development of its engineered program. “In a number of areas, the Mercier line is fairly new,” Bondrowski said. “But with the amount of design and quality we have and continue to pursue, these markets could use a product line like ours.”

For Shaw, opportunities abound both within industry wide. “The launch of our premium brand, Anderson Tuftex, will bring about some exciting new possibilities,” said Drew Hash, vice president hard surface product category management. A strengthening housing market can’t hurt, either. “The greatest opportunities for hard- wood products are within single-family and new construction. We continue to expect an increase in housing starts, which will have an impact on growth throughout 2018.”

 

Rising demand sends lumber pricing higher
By Reginald Tucker

Rising demand for hardwood flooring products resulted in a steady rise in lumber prices across a range of species in 2017, a trend that is expected to continue at least throughout 2018. That’s according to data released by Forecon, a forestry consulting firm with in-depth knowledge of the U.S. lumber industry. Forecon reports high demand for red oak, hard maple, ash and cherry (the latter due to mostly export demand). Red oak, which has set record export levels in volume and dollars this past year, is also seeing robust demand domestically.

Those findings are corroborated by statistics cited in the latest Indiana Forest Products Price Report and Trend Analysis published in January. According to the report, pricing for premium species such as red oak and white oak—often viewed as the primary market/economic indicators in the hardwood industry—is trending higher. White oak lumber (#2/Btr) prices are 3% higher than what was reported in July 2017, while red oak prices are almost 6% higher. Aside from domestic demand—especially among sectors like millworking and cabinetry suppliers, which compete for raw materials—industry observers cite strong

export activity to China. Current pricing for red oak, especially #2/3A red oak, is at levels not seen since January 2015. The most popular kiln-dried grade red oak, #1C, is increasingly high in demand among Chinese and Vietnamese suppliers.

Pricing for green upper-grade red oak lumber (FAS & FIF) peaked at $1,370 per thousand board feet (MBF) in the summer of 2014. Prices for FAS lumber spiraled downward through early 2016 before rising to the current price of $1,150 MBF. Both #1C and 2A pricing have been increasing since January 2016 to $845 and $560 MBF, respectfully.

White oak pricing is also seeing a bump, with most of the upper-grade lumber heading to the Far East and Europe. Here in the States, white oak demand by hardwood flooring producers is rising. Upper-grade white oak pricing has increased steadily since January 2016 to its current

price of $1,650 MBF. This price is also 38% higher than what was reported in July of 2013. Further, #1C and #2A pricing has also firmed quite well with increases of 34% and 7%, respectively.

Other species commanding high prices include: upper-grade green walnut ($2,900 MBF). According to the report, #1C prices are over 47% higher than in July 2013 and 16% higher than the figured reported in July 2017. Meanwhile, the cherry market continues to rebound, primarily due to Chinese demand. Upper-grade cherry prices are trending 16% higher than the year-ago period, with common grades averaging 13% higher than those reported in July 2016.

Lastly, upper-grade hickory lumber prices are nearing levels reported during the summer of 2015—a high point for the product. The overall average of hickory lumber prices are 7% higher than the fall of 2016.

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Xpress Global Systems opens new service center

Chattanooga, Tenn.–Xpress Global Systems, LLC (XGS) has opened a new, 68,500-square-foot service center in Lakeland, Fla. According to Darrel Harris, CEO, the new facility allows XGS to more efficiently service a greater footprint in Florida.

“Analysis showed us that a much larger, more modern facility in Lakeland would provide better service to our valued customers and allow us to improve efficiencies,” Harris stated. “The Lakeland facility fits well with our expansion plans in the Florida market and beyond.”

XGS, which began in 1986 as a long-haul shipper for the carpet industry, employs more than 600 people across 31 facilities around the U.S. With decades of experience serving the transportation needs of the floor covering industry, XGS has a long track record of success in handling a wide range of products, including carpet, hardwood, laminate, vinyl, tile and area rugs.

“XGS remains committed to efficiency and growth in 2018 and beyond,” Harris added. “We are happy to add the Lakeland facility to our portfolio.”