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Tile: Spanish suppliers steal the show at Cersaie 2017

November 6/13, 2017: Volume 32, Issue 11

Bologna, Italy—More than 90 Tile of Spain companies showcased their latest ceramic tile innovations and styles at Cersaie 2017 held here earlier this fall. Spanish tile manufacturers unveiled collections that reflected popular design trends.

It should come as no surprise that Spanish tile manufacturers drew a lot of attention at Cersaie. According to ASCER, the Spanish Ceramic Tile Manufacturer’s Association, Spain is the No. 1 exporter of ceramic tiles in Europe and No. 2 in the world. Alongside years of tradition, knowledge and experience, Tile of Spain ceramic products are present in over 180 countries worldwide.

Following is a snapshot of the major trends observed at Cersaie, as depicted by the scores of Tile of Spain companies in attendance.

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Ceramic: Domestic expansion continues to pick up steam

August 28/September 4: Volume 32, Issue 6

By Ken Ryan

 

Screen Shot 2017-09-05 at 12.38.56 PMU.S.-based ceramic tile manufacturers—as well as several foreign entities—continue to ramp up domestic production with new builds or plant expansions. This latest trend began earlier this decade and has been picking up steam ever since.

Market leader Dal-Tile Corp. has been making the most noise lately. In July the company announced plans to build a second plant in Dickson, Tenn., just down the block from a now completed 1.8-million-square-foot facility that produces large-format 12 x 24 glazed porcelain tiles. Since operations started in March 2016, the original Dickson tile plant has produced approximately 100 million square feet of tile products, according to John Turner Jr., president. The new facility is scheduled to begin operations in late 2018.

Industry observers see many benefits to domestic production. For one, by producing stateside manufacturers are less exposed to uncontrollable factors such as exchange rate fluctuations and ocean freight price increases due to capacity shortages. Faster turnaround times on orders and possibly less expensive access to products are other advantages.

“Domestic facilities offer manufacturers a number of key advantages, including the quality of the local workforce, access to raw materials and an ideal location from which we can ship to a majority of the U.S. population quickly and efficiently,” said Gianni Mattioli, executive vice president, product and marketing, Dal-Tile. “We are now able to produce products that are as visually appealing as the products being imported from Europe. At Mohawk and Dal-Tile we are leading the advancement of design and manufacturing technologies domestically so we can continue to deliver on our promise of providing our customers the best value through these innovative products and exceptional service.”

While Tennessee has become a hotbed for tile manufacturing, it should be noted that other companies have been producing tile in this region for decades. Crossville has been manufacturing tile in Tennessee since the 1980s. Located in the hills of the Cumberland Plateau, Crossville, Tenn., was chosen as home because of its central location to all primary raw materials. To this day, Crossville is no further than 400 miles from the sourcing sites of its porcelain and natural stone raw materials.

Screen Shot 2017-09-05 at 12.39.02 PMLikewise, the vast majority of Florida Tile’s flooring products are manufactured in Lawrenceburg, Ky., which is within 500 miles of the raw materials it uses from surrounding states. Florida Tile is one company that plays up the Made in America story. It is part of the “We Build American” initiative, a partnership with 84 Lumber that recognizes and encourages the use of domestic materials in home construction.

Tennessee is one of six states where Dal-Tile makes products. The company manufactures glazed wall tile in Dallas and El Paso, Texas; porcelain floor tile in Muskogee, Okla.; unglazed quarry tile in Lewisport, Ky., and Fayette, Ala.; and unglazed mosaic tile in Gettysburg, Pa.

Other market leaders are putting their stakes down as well. MS International has been accelerating its efforts in the U.S. with a new innovation center in Georgia. The 20,000-square-foot space within a 150,000-square-foot warehouse supplements its 200,000-square-foot showroom and nearby warehouse. MSI has also updated and doubled the size of its Bay Area showroom and distribution center. Today, the company features more than 500 surfacing products displayed and inventoried throughout 5,600 square feet of showroom space and approximately 160,000 square feet of total warehousing space.

Expanding capabilities
Thanks to technology advancements, particularly in digital printing, companies now have the manufacturing wherewithal to produce higher-end visuals that replicate hardwood, marble and stone looks that rival Europe’s manufacturing prowess, proponents say. “Ten years ago it seemed like new technologies or techniques for ceramics and porcelain product started in places like Italy and were more exclusively found there for a longer period of time,” said Bob Baldocchi, chief marketing officer/vice president business development and sales support, Emser Tile. “Today the advancement, regardless of the country of origin, seems to go global very quickly.”

While U.S.-based manufacturers are investing in new technologies at a feverish pace, there is significant investment coming from non-U.S.-based manufacturers. Several companies have built new plants that are now online while others are in progress—mostly in the Tennessee area. “Certainly the non-U.S.-based manufacturers see the opportunity to produce in the U.S. and serve, or partially serve, this market without having to export from Europe, etc.,” said Rick Church, executive director, Ceramic Tile Distributors Association (CTDA). “Clearly, this makes it more efficient to bring the product to market.”

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Ceramic: Domestic expansion continues to pick up steam

August 28/September 4: Volume 32, Issue 6

By Ken Ryan

 

Screen Shot 2017-09-05 at 12.38.56 PMU.S.-based ceramic tile manufacturers—as well as several foreign entities—continue to ramp up domestic production with new builds or plant expansions. This latest trend began earlier this decade and has been picking up steam ever since.

Market leader Dal-Tile Corp. has been making the most noise lately. In July the company announced plans to build a second plant in Dickson, Tenn., just down the block from a now completed 1.8-million-square-foot facility that produces large-format 12 x 24 glazed porcelain tiles. Since operations started in March 2016, the original Dickson tile plant has produced approximately 100 million square feet of tile products, according to John Turner Jr., president. The new facility is scheduled to begin operations in late 2018.

Industry observers see many benefits to domestic production. For one, by producing stateside manufacturers are less exposed to uncontrollable factors such as exchange rate fluctuations and ocean freight price increases due to capacity shortages. Faster turnaround times on orders and possibly less expensive access to products are other advantages.

“Domestic facilities offer manufacturers a number of key advantages, including the quality of the local workforce, access to raw materials and an ideal location from which we can ship to a majority of the U.S. population quickly and efficiently,” said Gianni Mattioli, executive vice president, product and marketing, Dal-Tile. “We are now able to produce products that are as visually appealing as the products being imported from Europe. At Mohawk and Dal-Tile we are leading the advancement of design and manufacturing technologies domestically so we can continue to deliver on our promise of providing our customers the best value through these innovative products and exceptional service.”

While Tennessee has become a hotbed for tile manufacturing, it should be noted that other companies have been producing tile in this region for decades. Crossville has been manufacturing tile in Tennessee since the 1980s. Located in the hills of the Cumberland Plateau, Crossville, Tenn., was chosen as home because of its central location to all primary raw materials. To this day, Crossville is no further than 400 miles from the sourcing sites of its porcelain and natural stone raw materials.

Screen Shot 2017-09-05 at 12.39.02 PMLikewise, the vast majority of Florida Tile’s flooring products are manufactured in Lawrenceburg, Ky., which is within 500 miles of the raw materials it uses from surrounding states. Florida Tile is one company that plays up the Made in America story. It is part of the “We Build American” initiative, a partnership with 84 Lumber that recognizes and encourages the use of domestic materials in home construction.

Tennessee is one of six states where Dal-Tile makes products. The company manufactures glazed wall tile in Dallas and El Paso, Texas; porcelain floor tile in Muskogee, Okla.; unglazed quarry tile in Lewisport, Ky., and Fayette, Ala.; and unglazed mosaic tile in Gettysburg, Pa.

Other market leaders are putting their stakes down as well. MS International has been accelerating its efforts in the U.S. with a new innovation center in Georgia. The 20,000-square-foot space within a 150,000-square-foot warehouse supplements its 200,000-square-foot showroom and nearby warehouse. MSI has also updated and doubled the size of its Bay Area showroom and distribution center. Today, the company features more than 500 surfacing products displayed and inventoried throughout 5,600 square feet of showroom space and approximately 160,000 square feet of total warehousing space.

Expanding capabilities
Thanks to technology advancements, particularly in digital printing, companies now have the manufacturing wherewithal to produce higher-end visuals that replicate hardwood, marble and stone looks that rival Europe’s manufacturing prowess, proponents say. “Ten years ago it seemed like new technologies or techniques for ceramics and porcelain product started in places like Italy and were more exclusively found there for a longer period of time,” said Bob Baldocchi, chief marketing officer/vice president business development and sales support, Emser Tile. “Today the advancement, regardless of the country of origin, seems to go global very quickly.”

While U.S.-based manufacturers are investing in new technologies at a feverish pace, there is significant investment coming from non-U.S.-based manufacturers. Several companies have built new plants that are now online while others are in progress—mostly in the Tennessee area. “Certainly the non-U.S.-based manufacturers see the opportunity to produce in the U.S. and serve, or partially serve, this market without having to export from Europe, etc.,” said Rick Church, executive director, Ceramic Tile Distributors Association (CTDA). “Clearly, this makes it more efficient to bring the product to market.”

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Ceramic: Next-gen digital printing technologies unlock tile’s potential

July 3/10: Volume 32, Issue 2

By Lindsay Baillie

 

Screen Shot 2017-07-10 at 3.26.15 PMDigital printing has helped to change the tile industry by providing manufacturers with limitless designs that mimic what is trending amongst consumers. Whether it’s natural stone, cement, marble, slate or wood looks, digital printing offers consumers the looks they want, the ability to put it where they want and at a desirable price range—all of which ultimately benefits the specialty retailer.

Case in point is Confindustria Ceramica, which finds digital printing to be one of the key technologies used in Italian ceramic tile production. “When it was first introduced, it could only guarantee satisfactory results for certain materials, but it can now be used successfully for any kind of product,” said Vittorio Borelli, chairman. “Its role has been further strengthened by the emergence of the second major innovation in ceramics, that of large-format panels and slabs, given that digital technology is essential for decorating these products.”

As technologies continue to advance, manufacturers from all over the globe are developing newer visuals and textures. Some of the newer design trends Barbara Haaksma, vice president of marketing Emser Tile, has noticed include Moroccan and Spanish looks, as well as antique visuals that mimic handmade tile. The main development she sees focuses on the manufacturer’s ability to customize products. “Another trend we’re seeing is the ability to create art on tile. Artists are now doing renderings and it’s being reproduced on tile. All of that is great to do now that the technology allows for it. I think in general we’re seeing a lot of customization.”

Haaksma explained that the new customizable features of tile are a bonus for specialty retailers, especially those who have designers or customers who want to create their own images. This trend lets tile take on higher-end looks with greater nuances, not only among tiles but customers as well.

Other tile manufacturers, such as Dal-Tile—the parent company of Marazzi, Daltile, American Olean and Ragno—are also creating more sophisticated products with the help of next-generation digital printing. “The evolution of printing technology has led to manufacturers being able to create unique patterns and designs on individual tiles, similar to the natural materials, like wood or stone, which we are replicating with high degrees of authenticity,” said Gianni Mattioli, executive vice president, product and marketing.

Part of Dal-Tile’s digital printing technology includes what the company calls “Reveal Imaging.” As Mattioli explained: “[It] is our state-of-the-art digital printing process that produces realistic color, detail and veining that is unique on every single tile for a look that’s virtually indistinguishable from natural stone. Digital printing technology is giving us—as well as other tile manufacturers—a competitive advantage over other flooring categories.”

Beyond the ability to recreate various designs and patterns is the ability of the new technologies to apply different materials to the tile. For example, the innovations at Crossville allow its digital printer to manufacture gloss, matte and luster glaze effects on its tiles, according to Craig Miller, R&D director.

Screen Shot 2017-07-10 at 3.26.40 PMMS International (MSI) is also incorporating newer printing technology that enables a quicker production process. “Digital printer manufacturing companies, such as Kerajet from Spain, recently developed an inkjet printer that will be able to apply both glaze and ink in one step,” said Paulo Pereira Jr., senior merchant porcelain. “Since these cutting-edge digital printers can apply both enamels and solids simultaneously—besides the basic graphic effect—products can also incorporate other effects such as metallic, shiny or anti-slip effects in the same, one-step application.”

In that same vein, advanced technologies employed at Emser Tile are allowing the manufacturer to incorporate ink-jet printing deeper into the surface. “It’s not just a print sitting on top of the surface, but it actually becomes ingrained into the bisque,” Haaksma said. “So then the patterns and the colors are now infused into the tile itself.”

Overall, newer printing technologies are allowing manufacturers to innovate throughout the entire production process. For Borelli, this includes “image acquisition techniques that allow for ever higher levels of definition; increasingly powerful graphic design software capable of processing the images; more precise and high-performance print heads; and the development of suitable ceramic glazes.”

Retailer benefits
While next-generation digital printing provides manufacturers with benefits, it ultimately helps specialty retailers sell tile product at higher margins, according to tile executives.

These new technologies are enabling the consolidation of flooring products including wood, laminates, natural stones, etc. “For specialty retailers the requirement for training their sales team goes down as product lines are consolidated,” MSI’s Pereira said. “In addition, it enables more individualism for customers in the design process as the amount of choice significantly increases.”

Screen Shot 2017-07-10 at 3.26.09 PMWith the help of digital printing, consumers can also get high-end looks and high-performance flooring—both of which are available through porcelain tile at a much more affordable price. One example of this is found in tile that resembles natural stone. “[Natural stone] continues to gain strength in the market, but it is not suitable for all applications,” Emser Tile’s Haaksma said. “So you can get the realistic stone look with the performance, durability and affordability of porcelain. This way you can put it in a kitchen countertop, or wet space where you wouldn’t usually want to put a stone.”

Higher margins are available to retailers courtesy of the attractive characteristics made possible through digitally printed tile. “These types of products are letting retailers expand their margin dollars by drawing more consumers to their showrooms to buy products that were once unimaginable for a typical homeowner,” Mattioli explained.

Homeowners, industry expert say, are often inspired by botique hotels, spas and hospitality spaces they encounter through traveling. “In the past, the durability concerns and price points of rare stones and marbles prevented many consumers from bringing these gorgeous high-end looks in their own homes,” Mattioli explained. “However, through Dal-Tile’s Reveal Imaging technology, our brands are able to offer the visuals of rare stones and marbles in a tile product. This lets consumers have the look they love with the performance that real-life activity and real life budgets demand.”

For Confindustria Ceramica’s Borelli, higher margins are attainable by comparing past and present products. “All you have to do is compare these products with those that were available just five years ago to appreciate the progress that has been made. But it is crucial for retailers to communicate this value to their customers so that they are prepared to pay a premium for ceramic products that stand out in terms of innovation, technology and technical characteristics.”

Digitally differentiating
Most digital printing technologies are not proprietary—meaning manufacturers are often using similar machinery to produce hundreds of different products. When it comes to differentiating digitally printed tile, most manufacturers keep a close eye on developing trends to extract key details that will be unique to their product lines.

Screen Shot 2017-07-10 at 3.26.04 PM“While digital decoration technology is capable of creating products with superior technical characteristics, it does mean the same plant solutions are being adopted across the entire Italian ceramic industry,” Borelli said. “What really sets companies apart is their stylistic choices, their use of graphic designs, colors and surface textures.”

Crossville aims to differentiate itself from other tile manufacturers by blending traditional printing technology and ceramic material effects with digitally printed images. “We call it a ‘digital-plus’ approach that allows us to create looks that are unique to Crossville products and are not replicable,” Miller explained.

For manufacturers such as Dal-Tile and its associate brands, differentiation comes from not only creating differing designs, but also from developing multiple products. “The vast array of tile offered by our brands provides every customer with a solution for every challenge they may face,” Mattioli explained.

 

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Ceramic: Suppliers ramp up domestic production, capacity

June 26: Volume 32, Issue 1

By Ken Ryan

Screen Shot 2017-07-05 at 9.38.54 AMCeramic tile remains a heavily imported flooring product, with imports making up 68.6% of U.S. tile consumption (in terms of square feet) in 2016, down a tick from 68.7% in 2015, according to the Tile Council of North America (TCNA). A decade earlier in 2006, however, imports represented 80% of U.S. consumption.

Industry observers say the trend toward lowering imports as a percentage of consumption as more product is made domestically is likely to continue as both U.S.-based and foreign countries begin manufacturing operations in the states. Advances in digital printing technology and increased investments in American manufacturing capabilities have helped elevate the cache of tile products made in the U.S.

The biggest splash was made by market leader Dal-Tile, which began producing tile out of its $180 million, 1.8-million-square-foot facility in Dickson, Tenn. The Dickson plant will employ the latest advanced decoration technology, including the company’s Reveal Imaging capability, to produce ceramic tile. The plant will also have the flexibility to produce larger format and plank format tiles marketed through its five leading brands in North America: Daltile, American Olean, Marazzi, Ragno and Mohawk. The Dickson plant will feature glazed porcelain capabilities as well as technology to meet the need of the commercial market through technical color body products, plus in-line rectification and polishing to meet market requirements.

Foreign investment is also occurring in the U.S. The Wonderful Group, a tile and ceramics manufacturer based in China, is investing $150 million in a 500,000-square-foot manufacturing facility in Tennessee.

Likewise, Landmark Ceramics, part of family-owned Gruppo Concorde of Italy, christened its North American headquarters in Mt. Pleasant, Tenn., in 2016, with a goal of producing high-quality porcelain tile 24 hours a day. The plant’s initial production run commenced June 30, 2016. Landmark Ceramics employs 130, including administration and sales staff, and will add around 40 more with the third shift that is coming online in 2017.

“To invest in the U.S. market is always a good investment,” said Federico Curioni, Landmark Ceramics president. “We are able to reach the largest and biggest supplier when you make the product here. There’s only so much you can do from Italy. The United States is just such a vast market.”

Add Florim USA, part of the Florim Group of Italy, and Florida Tile to the list of ceramic tile companies that invested in new production equipment at existing U.S. facilities.

Industry observers say among the benefits to selling domestically are quality control and quick supply. They note that domestic producers are less exposed to risks they cannot control such as exchange rate fluctuations and ocean freight price increases due to capacity shortages. In addition, domestic facilities offer manufacturers an ideal location from which it can ship to a majority of the U.S. population quickly and efficiently.

Florida Tile, which touts its Made in USA story, manufactures the bulk of its products from its headquarters in Lawrenceburg, Ky., which it said is within 500 miles of 80% of the U.S. population.

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Ceramic: Tile turns in another winning performance

June 26: Volume 32, Issue 1
By Ken Ryan

 

Screen Shot 2017-07-05 at 9.35.49 AMThe U.S. ceramic tile market, bolstered by steady growth in the all-important housing and construction markets, recorded its seventh consecutive year of growth in 2016. FCNews research shows sales rose 5.7% to $2.761 billion while volume increased an estimated 5.5% to 2.31 billion units.

The 2016 numbers were off slightly from 2015, when sales rose 9.8% and volume increased 9.9%. Still, it was another stellar year for a category that continues to grow and evolve with some of the most innovative products influencing the market.

Statistics show growth is coming from all precincts, with builder and overall commercial up an estimated 7%-10%, with retail lagging, yet still at 2%-4% growth. Even at the low end, the 2% increase in retail was in line with the U.S. gross domestic product (GDP) for 2016, which came in at 2.1%. The GDP is regarded as the most important of all economic statistics as it captures the state of the economy.

To shed additional light on the ceramic category, tile is the third-largest sector in terms of dollars, representing 13% of all flooring in 2016, up from 12.7% in 2015. In terms of volume, ceramic tile represented 12.1% of total industry volume, trailing only carpet and rugs (58.7%) and resilient (18.8%).

The seven-year winning streak follows a particularly bleak period for ceramic. Hard to imagine that in 2009 ceramic tile was down a staggering 24% in dollars and 22.5% in volume. It marked the third year in a row that ceramic tile had sustained losses of 20% or greater. While other flooring segments also suffered during that stretch, ceramic was hit the hardest, as it is the most prone to housing swings, experts say.

Clearly, these are halcyon days for ceramic, and there is not much on the horizon to suggest a slowdown. “Much like 2015 we continued to see growth in the ceramic tile market in 2016,” said Jason Roshel, senior director, product strategy, Dal-Tile, the Mohawk brand with roughly 40% market share. “There has been, and continues to be, tremendous growth opportunity for the tile category. Our industry tends to follow overarching economic trends, which impact all major spending. Key economic drivers include new housing starts, commercial market recovery, consumer confidence, credit availability and interest rate fluctuation.”

Domestic production has been a big story in ceramic tile for the past few years, and 2016 saw several companies expand production or break ground on new plants. In March 2016, almost two years to the date that Dal-Tile’s $180 million, 1.8-million-square-foot facility was announced in Dickson, Tenn., the company’s first production run was completed, with large format 12 x 24 glazed porcelain tiles being produced. In June 2017 Mohawk announced a second plant in Dickson that would add 245 jobs at full capacity; it is scheduled to begin operation in late 2018. Construction on the new facility is starting this summer, with several other manufacturers following suit.

Industry observers such as Rick Church, executive director, Ceramic Tile Distributors Association (CTDA), believe that what’s driving domestic production is increased demand and, more significantly, the new plants that are being developed and coming online. Most of those new plants are owned by foreign companies who see the opportunity to produce in the U.S. and serve the market without having to export from Europe. By establishing a local presence, these companies have easier access to raw materials, enjoy closer proximity to their distribution channels and gain insight into trends influencing the U.S. market.

Residential
A stronger and still improving economy and housing market generally bodes well for the ceramic category, and that proved to be the case in 2016. New home starts rose for the seventh consecutive year and were at their highest point since 2007. The 1.17 million units started in 2016 represented a 4.9% increase from the previous year. As encouraging as the gains are, however, there is still ground to be made up to reach the pre-recession level of 2.07 million units started in 2005.

New single-family home sales increased for the fifth consecutive year and hit 563,000 units in 2016, up 12.2% vs. 2015. While this recent growth is encouraging, new home sales were still down 56.1% from the all-time high level of 1.28 million units reached in 2005. Foreclosure filings, another key indicator of the U.S. housing market’s health, declined by 13.9% in 2016 to 933,000 units. This marked the sixth consecutive year-over-year drop in foreclosure filings and the lowest annual foreclosure total since 2006.

“There is a strong correlation between ceramic tile consumption and new housing starts, which contributed to the continued growth of the category in 2016,” Roshel said. “One factor is the increased construction of new single-family homes, which have grown larger in size. These bigger, more expensive homes often use larger quantities of tile because it offers the style, design and luxury many homeowners desire without the maintenance concerns found in other materials.”

Screen Shot 2017-07-05 at 9.35.55 AMBob Baldocchi, chief marketing officer and vice president of business development for Emser Tile, said new home sales will continue to drive much of the growth in the market in 2017 and into 2018. Recent surveys show that homes are selling at a record pace due to tight supply. In May 2017, for example, the average house sat on the market for 27 days, which is the fastest reading since Redfin, a real estate brokerage, began tracking the market seven years ago. The tight supply is pushing home prices higher, which—while good for homeowners—could be a detriment to market growth given the higher entry price point. The median price of a home sold in May jumped 6.8%, which is about triple the average income gains and may already be hurting sales as affordability weakens.

Baldocchi said labor, particularly the dearth of qualified installers in an expanding market, could dampen the full potential of ceramic. “Labor challenges need to be solved for demand in the market to truly be met. Labor solutions and availability still has a longer-term view.”

Commercial activity was encouraging in most sectors, executives said, with growth seen in hospitality, healthcare, education and corporate spaces. “Homebuilder and commercial segments showed continued signs of growth,” Baldocchi added. “Commercial projects and spending continued on its growth path seen from the last couple years. Growth was slowed partially due to continued labor issues in the marketplace.”

Imports vs. exports
Imports in 2016 made up 68.6% of U.S. tile consumption (in square feet), down slightly from 68.7% the previous year, according to the Tile Council of North America. TCNA reported that China remained the largest exporter to the U.S. (in sq. ft.) in 2016 with a 29.4% share of U.S. imports (in sq. ft.), followed by Mexico (23.4%) and Italy (19.4%). Spain and Turkey rounded out the top five with a 9.3% and 5.1% share of imports, respectively.

Screen Shot 2017-07-05 at 9.36.06 AMItaly remained the largest exporter to the U.S. on a dollar basis (including duty, freight, and insurance) in 2016, comprising 35.8% of U.S. imports. China was second with a 24.7% share, and Mexico was third with a 12.6% share.

The emergence of advanced technologies such as 3D printing, digital printing, anti-microbial glazes and nanotechnology have to some degree taken away from global differentiation. Ten years ago new technologies or techniques for ceramics and porcelain product started in places like Italy and were more exclusively found there for a longer period of time. “Today the advancement, regardless of the country of origin, seem to go global very quickly,” Baldocchi said. “Global differentiation still exists but now it is experience, techniques, quality and design that might differentiate on ceramic floor tile.”

[Editor’s note: The value of ceramic tile is calculated at point of entry into the U.S. In other words, it is recorded when it lands at U.S. ports. So, much of the increases seen in ceramic tile shipments was attributed to suppliers beefing up their inventory levels and not reaching first point of sale.]

 

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Scoring flooring: Industry stats for 2016

June 26: Volume 32, Issue 1

 

Screen Shot 2017-07-05 at 9.05.12 AMThe flooring industry in 2016 continued its recovery from The Great Recession. While growth rates pale in comparison to the mid-2000s heydays, the industry last year continued to post steady gains across the board with increases of 5.1% in dollars and 3.8% in volume. This comes on the heels of 4.4% growth in dollars and 3.2% in volume in 2015; 3.6% growth in dollars and 1.8% in volume in 2014 and respective 5.5% and 3.8% growth in 2013. In fact, 2016’s figures represent the seventh consecutive year of dollar growth and fifth straight year of volume increases.

FCNews’ exclusive research reveals total 2016 flooring sales of $21.174 billion and 19.13 billion square feet. (These numbers are in wholesale dollars reflecting the first point of sale.) While the industry remains far off the peak it reached in 2006, when sales of $24.175 billion and 26.36 billion square feet (down 12.4% and 27.4%, respectively) were posted, it has gained back much of what was lost. The low point for the industry was 2009, when sales bottomed out at $16.189 billion and 16.625 billion square feet (in 2010). Since that time, the industry is up nearly 31% in dollars and 15% in volume.

Perhaps more significant is total industry sales surpassed the $21 billion mark for the first time since 2007, when sales were $22.337 billion, and volume is at its highest level since 2008’s 19.905 billion square feet.

Also of note is the fact dollars are growing faster than volume. That is a reflection of consumers buying more expensive goods in addition to a series of price hikes, particularly on the carpet and hardwood sides. The average selling price of all flooring in 2016 was $1.11 (same as 2015) and up $0.02 from 2014 and up $0.04 from 2013). Just to compare, the average selling price of all flooring in 2006 was $0.94. One needs only to look at the resilient category for an explanation. Ten years ago the average selling price for all resilient flooring was $0.64. In 2016 it was $1.04. A decade ago, sheet vinyl, vinyl composition tile (VCT) and the low-cost, peel-and-stick tile commanded 75% of dollars. Last year that number plummeted to 33%. The increased usage of the higher-cost LVT and WPC has been an industry game changer.

But it’s not just resilient. The average ceramic tile price has increased from $0.95 to $1.20 a square foot over the last 10 years, and hardwood has seen an average-square-price jump from $2.21 to $2.48 per square foot. Even the maligned soft surface segment—which has seen its share of the market dip from 63.6% in 2006 to 53.6% in 2016—has seen an increase in average pricing from $0.89 to $1.01. For the record, laminate is the only category with pricing in decline, going from $1.30 a square foot in 2006 to $1.09 in 2016.

Why has the growth been slow and steady and not more robust? For one, housing has not led the recovery from the recession and is actually lagging the economy. Also, in past recoveries there has always been a period of strong economic growth before it settles into normal growth mode. That has not happened with this recovery.

(Editor’s note: FCNews does not include stone flooring in its aggregate total, nor does it account for ceramic wall tile. In addition, rubber flooring numbers now reflect solely sheet and tile flooring with no accessories or cove base.)

Much like the past few years, the resilient category continues to be the locomotive powering the industry and luxury vinyl tile/WPC the catalyst for this explosive growth. In 2016, resilient posted the largest percentage gain of any flooring category, rising 19.7% to $3.499 billion from $2.924 billion in 2014. Since 2010, the category has increased a stunning 103% and is now at its highest point in history in terms of dollars.

In the grand scheme of things, resilient now accounts for 16.5% of the total flooring market in dollars and 18.8% in volume after a 6.5% rise in units to 3.537 billion square feet. In 2015, resilient held a 13.3% market share in terms of dollars, which was up from 12.2% in 2014, 11.9% in 2013 and 11.2% in 2012. Interestingly, its market share in volume had stayed around 15% for eight consecutive years until leaping to 17% in 2015. That suggests resilient’s average price point has increased by virtue of the migration from felt to fiberglass sheet, along with the transition from residential/commercial sheet and vinyl composition tile (VCT) to LVT and WPC.

Screen Shot 2017-07-05 at 9.06.32 AMFCNews research reveals just how much LVT along with its subcategory, WPC/rigid core, is driving growth of the segment. Sales have gone from nearly $750 million in 2012 to $948 million in 2013, $1.142 billion in 2014, $1.651 billion in 2015 and $2.161 in 2016. That represents respective gains of 26.4%, 20.5%, 27.1% and 30.9%. More telling, LVT sales have more than doubled in three years. It also carries with it a premium price tag as it comprises 62.5% of the category’s dollars but only 38.4% of its volume. To illustrate its growth, those numbers were 53.2% and 33.6% in 2015; 47.7% and 26.4% in 2014; 43% and 22.3% in 2013; and 37.4% and 20.6%, respectively, in 2012.

LVT increased significantly in both residential and commercial markets—dollars and square feet—in 2016. Residential LVT saw a 68.3% increase in square footage from 760 million in 2015 to 1.04 billion (including WPC), making up 76.1% of the LVT market. This number was 71% a year ago and 55% two years ago. The big increase can be attributed to the WPC bandwagon, which, to this point, is almost exclusively residential. The commercial market rose from 297.2 million square feet to 326.3 million square feet, a 9.8% increase. While residential brought in more dollars—$1.512 billion—last year, commercial LVT still performed well, posting a 12.5% increase, rising from $576.4 million in 2015 to $648.6 million in ’16.

Proponents of the category say the versatility of LVT—tile or plank—makes it an ideal solution for any number of residential, commercial and project-oriented applications. This multi-tasking ability has allowed LVT to migrate into builder, multi-family and residential-remodeling applications. The large space in which LVT operates, in turn, has afforded manufacturers the means of introducing differentiated product across a wider front, ebbing the march toward commoditization.

Originally, LVT became popular as a water-resistant, hard surface product ideal for mainly kitchens and sometimes spaces such as a laundry room. In the past, LVT would not be considered for bedrooms or other larger living spaces throughout the home. However, this perception has changed in recent years.

As LVT grows, it is taking share from other resilient categories, especially VCT. But it is also nipping from sheet vinyl as well. Sheet vinyl—both residential and commercial—has grown only 2.4% in the last three years, going from $791 million in 2013 to $809.6 in 2016. It actually was down 0.5% from $813.5 million in 2015. Residential has led the way here, but if not for the rebound in new home construction and manufactured housing, sheet vinyl would surely be down. The commercial market has taken the bigger hit, declining 16% in dollars from $254.24 million in 2013 to $213.5 million in 2016. However, the category was only down slightly in 2016, 1.2% to be exact, on the heels of a 1.4% decline in 2015. Sheet remains the volume leader in residential resilient sales with 47% of the market, down from 55.1% in 2015 and 60.2% in 2014, but it comprises only 26.7% in dollars, down from 38.9% in 2015.

Carpet
If you are looking for a bright spot in an otherwise flat year for carpet, there was builder and multi-family, in which the carpet segments fared pretty well in 2016 vs. 2015, according to executives. However, with overall residential carpet dollars down a tick in 2016, executives say that points to a decline in the residential replacement carpet business—further evidence of carpet losing out to hard surface.

FCNews’ research shows that carpet sales fell 1% in 2016 to $8.7813 billion compared with $8.87 billion in 2015. However, total volume—which includes carpet and area rugs—gained 1.2% to 11.22 billion square feet from 11.09 billion square feet in 2015. Residential carpet sales declined an estimated 1.5% in 2016 while units were up 1.3%. The commercial portion of the pie, meanwhile, dropped 0.5% in sales with volume falling about 1.5% year over year.

The carpet story really hasn’t changed much in the last three years, except in 2016 commercial was softer than it had been in the previous two. Flat to a point up or two down is nothing to write home about, but it is a far cry from a decade ago when carpet was in the throes of a deep recession—as were other flooring segments—with double-digit losses in both sales and volume.

Executives say carpet is doing well at the low end, where polyester has been dominant. However, some note that PET is contributing to the shrinking dollars in carpet in what they see as a race to the bottom and, consequently, a devaluation of the category.

The high end ($14 and up) is said to be doing well, with soft luxury goods as well as stain and soil resistance resonating with consumers. Still, it is going to be a challenging road for carpet going forward. One leading executive said builders in the South and Southwest, which is seeing the greatest population growth, are constructing homes and apartments with much less carpet than in the past.

Screen Shot 2017-07-05 at 9.06.51 AMOn the bright side for soft surface is rugs, which for a third year in a row outperformed carpet, with sales rising an estimated 3% over 2015. The area rug business, observers say, is benefiting from hard surfaces; however, many specialty flooring dealers say they are not yet reaping the full benefit of these add-on sales in the same as way furniture stores and other outlets.

Hardwood
A strong residential replacement/remodel market, combined with improvement in certain sectors of the new construction market, contributed to another year of growth for the U.S. hardwood flooring category. FCNews research shows hardwood flooring sales reached $2.23 billion in 2016, a 5.1% increase over 2015’s upwardly revised sales of $2.12 billion. Square footage sold likewise grew to an estimated 898 million square feet, a 4.8% increase over 2015’s 857 million square feet.

Looking at the big picture, hardwood flooring represents 10.5% of total industry sales but only 4.7% of total volume. Compared to five years ago, wood represented 9.1% of total flooring dollars at the first point of sale and only 3.9% of total volume.

Industry observers attribute much of hardwood’s activity in 2016 to the growing popularity and production of engineered floors. While solid wood flooring still remains the go-to product in certain parts of the country, several suppliers have introduced engineered hardwood products that replicate the overall thickness of ¾-inch solid wood flooring. The end result is the traditional solid wood flooring end user—builders and contractors, in many cases—can now nail down an engineered floor in much the same way they would a solid product and still be able to sand and finish multiple times.

Right in line with the swing from engineered to solid is the move to prefinished from unfinished (traditional hardwood flooring contractors being the primary exception). FCNews research shows the share of prefinished products grew to nearly 60% last year—up from just 54% the year prior. Looking back five years ago, the ratio of prefinished to unfinished was just the opposite.

The U.S. hardwood flooring market also saw a bit of a shift with respect to domestic production vs. imports. FCNews research showed imports from Canada rose slightly from 9% to 12% in 2016. At the same time, shipments from Brazil dropped from 5.6% in 2015 to just over 3% in 2016. Although China—which ships more engineered than solid product—still accounts for the bulk of imported hardwood flooring, its share also fell slightly year over year.

Ceramic
The tile segment closely follows the overarching economic trends that impact all major spending. Those drivers include new housing starts, commercial market recovery, consumer confidence, credit availability and interest rate fluctuation. When those indices are positive, ceramic sales and volume follow suit. And so it was again in 2016, the seventh consecutive year of growth for ceramic, with sales rising 5.7% to $2.761 billion and volume increasing 5.9% to 2.31 billion units.

The seven-year winning streak followed a dark three-year period, during which time sales and volume plummeted an almost incomprehensible 20% or more each year, with 2009 representing the low point (24% decline in sales, 22.5% down in volume).

The trend since 2010 has been that single-family homes grow ever larger, and multi-family residences continue to shrink. Since ceramic tile represents a greater percentage of the flooring used in a single-family home than a multi-family property, this has had a positive impact on the category. In 2016, growth occurred in all segments; builder and overall commercial each rose an estimated 7%-10%, while retail—the laggard of the group—was still up an estimated 2%-4%.

Domestic production has been a big story in ceramic tile for the past few years, and 2016 saw several companies expand production or break ground on new plants. In March 2016, almost two years to the date that Dal-Tile’s $180 million, 1.8-million-square-foot facility was announced in Dickson, Tenn., the company’s first production run was completed, with large format 12 x 24 glazed porcelain tiles being produced.

Commercial activity was up in most sectors with growth seen in hospitality, healthcare, education and corporate spaces. Commercial projects and spending continued its upward trajectory as well.

The only discernable drag on ceramic tile is labor. Experts say growth was partially stunted due to continued labor issues in the marketplace. For the ceramic market to reach its full potential, more qualified tile installers are needed. As the flooring industry knows all too well, that is no small task.

For now, however, achieving mid- to high single-digit growth will have to suffice. Compared to the 2007-2009 crater, the industry will gladly take it.

Laminate
In 2015 the U.S. laminate industry began to see a significant drop-off in imports from China. At the same time, many European suppliers—particularly German laminate flooring producers—expanded production capacity to fill the void. Observers say that trend spilled over into 2016 where U.S. laminate flooring sales were estimated at $1.154 billion. Taking the pullback of Chinese product into account, that held growth to just a mere 1.5%—the lowest rate of increase of any hard surface category.

Volume-wise, the category grew at a rate of 2% to 1.054 billion square feet—a reflection of the rise in shipments from Germany plus the increased domestic capacity that came online toward the latter part of the year.

“Europe has shifted from 14% to 19% while China fell from 26% to 21%,” said Travis Bass, executive vice president, Swiss Krono, which puts the domestic/import split around 60/40, respectively. The company, which has production facilities around the globe—including here at home—says its share of the market grew to 12%.

Just as the mix of laminate sources has changed in recent years, so has the sales activity as defined by distribution channel. FCNews research shows the specialty retail sector accounts for roughly one-third of category sales. What’s more, observers say, many of the laminate flooring products sold at this channel represent thicker, higher-margin items not typically sold at the average home center or mass merchant. This includes 12mm and 14mm products vs. the thinner, entry-level boards available at many home centers and discount merchants. All this spells opportunity for the independent or aligned floor covering dealer.

The bigger story, though, was laminates’ decline in terms of the overall share of hard surface activity. In 2011, for example, laminate flooring represented 16.9% of all hard surface sales and a little over 14% in terms of volume; last year, the category’s percentage of hard surface sales slipped to 11.8% in value and 13.4% with respect to volume. Meanwhile, competing products such as resilient and ceramic tile grew their respective shares of the hard surface market over that time period.

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Retailers cite standout intros of 2016

April 24/May 1, 2017: Volume 31, Issue 23

By Lindsay Baillie

When asked to identify the best flooring introductions of 2016, retailers cited a bevy of wood, laminate, carpet and LVT/WPC products. One highly regarded product was Mannington’s Adura Max, which received praise from multiple retailers for its new visuals. Other notable 2016 introductions touched on key product innovations spanning wood, laminate and resilient lines, soft carpets/rugs and industry-wide updates to styles and designs. Following is an overview of the new products that stood out in 2016:

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Coverings 2017: What’s old is new again

April 10/17, 2017: Volume 31, Issue 22

By Nadia Ramlakhan

 

Screen Shot 2017-04-24 at 9.33.33 AMOrlando—Coverings, the largest tile and stone exhibition in North America, returned to a familiar location earlier this month after being hosted in Chicago in 2016. Roughly 1,100 exhibitors from 40 countries showcased the latest trends, technologies and styling techniques in their respective categories across 400,000 square feet of exhibition space.

According to many show veterans, Orlando is an attraction unto itself. “You see a lot of international people,” said Lindsey Waldrep, vice president of marketing, Crossville. “They make it a family trip; everyone comes for the house of [Mickey Mouse].”

Alena Capra, Coverings industry ambassador, noted the difference in introductions on the show floor due to the surrounding areas. “It’s a big draw—people from all over the country and globe come here. But a lot of what we’re seeing is appealing to the markets here. We’re so close to the Bahamas and all of the islands that exhibitors are showing some pinks and blues with that tropical feel. You also see a lot of terrazzo, and that’s because people in South Florida restore terrazzo all day long. It’s original to a lot of the older homes.”

The location of the show wasn’t the only thing that made a comeback this year. Exhibitors and attendees alike agreed that some familiar looks were coming back into play on the show floor, albeit with a few new twists.

“Just like everything I always relate it to fashion,” Capra explained. “I’ve seen trends come full circle so many times; I think about clothes my mom wore and I’m wearing them today. It comes back but it changes each time. For example, subway tiles have never gone away but they keep changing. The classic shape remains.”

Screen Shot 2017-04-24 at 9.33.27 AMSome of these re-emerging trends include warmer tones and industrial looks. Crossville’s Notorious is just one example. The collection comes in six neutral colors, in a range of sizes from 24 x 36 to 3 x 15, and coordinates with the company’s Surfaces wood-look launch: Nest.

“It’s a neutral industry, but what I like here is it’s a nice mix of warm and cool,” Waldrep said. “There are many rustic, carved-into-concrete looks. Ours is very soft, very uniform. There are a couple of marks in it to really suggest concrete.”

Another resurging trend is the return of the traditional cotto look with a little variation. That was evident in Dal-Tile’s Ragno Epoca collection, which comes in three colors. Micah Hand, brand marketing manager at Marazzi, Ragno’s sister brand, called it the “perfect mix of old and new. We saw a lot of cotto in Cersaie, but we’re mixing it with a lot of modern, sleek designs. That’s where I see this coming back in an updated way.”

Hand added that accessories such as furniture or countertops also play a big role in using cotto. “We want to make sure designers and consumers understand how to utilize tile in different ways to achieve a more modern or urban look.”

Beyond flooring
Crossville’s Laminam for the wall also showcased a similar style. Calce is a new cotto look that comes in five colors while Cava is a new stone look available in three colors. Both are 1m x 3m porcelain tile panels. Waldrep noted that although its large panels have given popularity to the Laminam collection in the past, inkjet technologies have allowed the products to advance in visuals as well.

Screen Shot 2017-04-24 at 9.33.07 AM“It’s just a resurgence of retro, and I think part of it is everything has a cycle. Cotto is a classic look and it’s time for it to raise its head again. As technology moves ahead, we think about how and where we can apply it.”

MS International focused largely on wall offerings as well. “While there is no reason a floor tile can’t go on the wall, there are a lot of cool design elements you can create with a wall tile,” said Emily Holle, director of trend and design, national marketing. The company’s Dymo is an upgraded subway tile and incorporates texture into three all-white patterns: wavy tile, stripes and a flat body tile. The tiles come in 12 x 24 with creative 3-D effects. “So if you weren’t so risky and you just want to do a strip of accents you could. However, you can always do a full accent wall of one of these three-dimensional looks.”

Larger formats prevail
In keeping with the trend toward bigger sizes, Marazzi introduced a number of large format collections including Classentino Marble and Château Reserve. Classentino Marble features five natural marble looks in 12 x 24, 24 x 24 and 24 x 48. The polished collection coordinates with a classic weave mosaic while an elongated hexagon mosaic accents the matte finish. Château Reserve is a wood look series that comes in 6 x 48, 8 x 48 and 12 x 48 planks in five colors, with printing technologies being used to target glossy areas for a real wood look.

Outdoor applications
Many exhibitors at the show turned their focus to outdoor flooring options. Ragno introduced Real Stone Quartzite, a drastic, rustic stone look that comes in Screen Shot 2017-04-24 at 9.33.38 AMtwo colors and gives consumers the ability to achieve a natural stone look outside with the durability, cleanability and easy maintenance of porcelain tile. Hand explained that more and more outdoor hospitality commercial spaces are using the 2cm thick paper because it’s easy to install in different areas. On the other hand, it can be used to transition straight from inside to a patio, backyard, etc.

Del Conca USA’s Due2 is also a 2cm thick porcelain tile, with anti-slip and weather-resistant features. Its natural, curved edges are made for quick and easy installations over grass, sand and gravel. It is also suitable for terraces or rooftops because it allows rainwater to flow below the flooring where it is collected on a waterproof membrane.

“Outdoor flooring is a big trend we’re starting to see in the industry,” said Melissa Weisberg, representative for Ceramics of Italy. “We’re seeing flooring not just around pools, but also flooring systems that allow for installation over grass, pebbles or rocks. It allows for more of an authentic feel.”

 

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MSI opens new innovation center

March 27/April 3, 2017: Volume 31, Issue 21

By Steven Feldman

 

Screen Shot 2017-03-31 at 10.30.28 AMAtlanta—MS International recently opened its new innovation center here, a state-of-the-art, 20,000-square-foot space within a 150,000-square-foot warehouse that supplements its 200,000-square-foot showroom and warehouse five miles down the road.

The new building reflects the enormous growth the company has been experiencing over the past decade. In fact, according to Manny Llerena, director of sales and marketing, the company has grown its sales at least $100 million each year for the past five years and is on target to surpass the $1 billion mark this year.

The new innovation center houses the entire MSI marketing team, 18 strong and growing. This includes graphic designers and the digital marketing and product development teams. “The idea was to create a space that was exciting, where you would want to come to work,” said Emily Holle, creative director. “It’s beautiful, comfortable and inspiring. It’s a cool space and shows off much of our product.” The space also includes a training area that doubles as a break room. As well, a creative library space—where MSI designers can design the next wave of product—offers a plethora of natural light. “Here our designers can track home décor trends.”

But it all wouldn’t be possible without MSI’s exponential growth, which Llerena attributes in large part to a philosophy of being affordable and accessible. “We find the best-looking products from around the world. We are low cost from the manufacturer to the retailer. That whole idea is allowing us to expand the market as opposed to taking a share of the market.”

He added that success begins with the product itself. “We are sourcing the latest products, trends and technologies, and are leading in styling and bringing them in at affordable prices. We make even the high-end products very affordable.”

After posting sales of $920 million in 2016, MSI fully expects to eclipse the $1 billion mark in 2017. That will be achieved in part by virtue of four or five new branches, bringing to 27 the total number of locations in the U.S. To support this growth, the company hired 280 new employees last year and projects to bring on the same number or more this year.

“We want to work with many of the large retailers and help them grow their tile business,” Llerena said. But MSI will be very selective regarding its retail partners. “We are looking to grow with retailers who have dedicated themselves to this category. Ceramic is a difficult category to manage.”

At the same time, MSI also hopes to bring more retailers into countertops, a business that generates approximately half of MSI’s total sales. “With the excitement around quartz, it is easier for the retailer to get involved in the category. They don’t have to show a tremendous number of slabs in the warehouse. We can help them by joining them up with our fabricators.”

MSI will be exhibiting at Coverings with a bevy of new products. Llerena says they all respond to five trends:

  1. A focus on the wall. “Today, one out of every five sales is a wall tile sale. People are getting tired of paint. They are using wall tile to replace paint.
  2. A continuation of lineal looks. “They are a little softer, more water color lines running through tiles.”
  3. Black and white combinations for floors and walls.
  4. Outdoor spaces. Taking tiles that can work indoors and coordinating them with outdoors.
  5. Creative floor/wall tile combinations.