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Tile consumption down slightly, execs stay upbeat

October 27/November 3, 2014; Volume 28/Number 10

By Louis Iannaco

Screen Shot 2014-11-03 at 10.59.34 AMBy most accounts, domestic tile consumption thus far in 2014 has fallen off slightly, but most tile executives remain optimistic about the rest of the year heading into 2015. The consensus seems to be that despite a slower than expected improvement in U.S. housing and remodeling, the tile segment remains strong following last year’s rebound and subsequent growth.

As Lindsey Waldrep, vice president of marketing at Crossville, observed, 2014 has been a good year, but not the great year originally expected. “There are a few factors at play. The economy didn’t return at all levels as anticipated. Also, at the beginning of the year we were plagued with extreme weather that affected construction starts, ability to ship product and even the number of days showrooms were able to be open. In spite of these challenges, we’re satisfied with the year overall.”

The Tile Council of North America (TCNA) also noted economic factors affecting the industry, reporting that through July 2014 U.S. ceramic tile consumption was 1.44 billion square feet, down 1.8% from July 2013 year to date (1.47 billion square feet). In the U.S., dollar value consumption was $1.7 billion (July 2014 year to date), up 3.9% from July 2013 ($1.64 billion).

“We did not expect the market to be down this year in square feet,” said trade data analyst Andrew Whitmire, “given the positive housing and construction data and other economic indicators we’ve seen this year.”

Ceramics of Italy and industry consultant Donato Grosser, who is also president of D. Grosser and Associates, said current ceramic tile sales are flat and projected to be so for the whole year. “The economy is stop and go. Housing is basically flat. Consumers do not have enough money, and salaries are lower than before. About 40% to 50% of the people who were unemployed and found a job are earning less than they were in the previous job. Many are underemployed and working part time.”

While some noted economic indicators as reasons for the downturn in consumption, others offered a more positive outlook, especially regarding the commercial sector. Bart Bettiga, executive director of the National Tile Contractors Association (NTCA), noted that in talking with the organization’s commercial members, the group believes 2014 has been markedly stronger than 2013.

“Overall, both residential and commercial work and profits have increased approximately 10%,” Bettiga said. “In some markets (South and West), these numbers seem even stronger.

“With the uncertainty we’ve been faced with in recent years,” he added, “our members have kept their expectations at a minimum. Overall, it is safe to say 2014 exceeded expectations.”

Dal-Tile, the country’s largest tile producer, reported ceramic increases in dollars and volume, and estimated growth from 3% to 4% for the industry overall.

“Dal-Tile sales continue to exceed expectations,” said Lori Kirk-Rolley, vice president of brand marketing. “Simplifying and improving our product portfolio and customer service, driving productivity and strengthening our manufacturing capability in North America and China have been the focus.

“We’re delivering strong results in the short term,” she explained, “but preparing for a stronger market in the future.”

At Tile of Spain, representative Rocamador Rubio Gomez was also bullish on the future, believing the market is completely recovered as shown by construction data in recent months. “According to a new Kitchen and Bath study by GMP Research, U.S. construction grew 12% in 2013, fueled by private expenditures (+20.6%).”

George Larrazabal, national sales manager of Mediterranea, reported the company has experienced a very strong year thus far. “We’ve seen double-digit growth in both our commercial and residential product offerings and beat our expectations for 2014. We surpassed our goals despite having them set very high. We feel this is due to innovative product designs that continue to offer our customers new design options and formats.”

Green, installation initiatives

Screen Shot 2014-11-03 at 11.13.14 AMThe tile segment’s consensus regarding recent green and installation developments was a positive one. As TCNA standards development/green initiative manager Bill Griese noted, Green Squared/ANSI A138.1, enacted in 2012, continues to strengthen the tile industry’s presence in the green building community.

“With continued influence and an emerging presence in today’s most well-known green building standards and rating systems,” he said, “awareness of this standard and the overall demand for Green Squared-certified products are on the rise. This has resulted in increased A&D familiarity with Green Squared.”

As Kirk-Rolley noted, Dal-Tile and American Olean were among the first companies to endorse the Green Squared program. “All of our U.S. facilities and our Monterrey, Mexico operations were included in the third-party audit process, so architects and designers can be confident that a selection of Dal-Tile products meet the standard’s requirements.

“In 2013,” she added, “we successfully completed all the process changes needed, and now 100% of our Daltile and American Olean manufactured products meet the Green Squared certification to the ANSI Standard–A138.1, Sustainable Tile & Installation Materials.”

While sustainability is gaining importance across the board, some industry figures report a wider acceptance of the efforts in the commercial community. “Thankfully, we’re seeing an increasing level of awareness of the Green Squared ANSI standard in the A&D community,” Larrazabal said. “However, we haven’t seen quite the same awareness in our residential channels yet.”

Crossville is another company continuing to progress with the green movement. It recently released its 2014 Sustainability Report as gleaned through a formal survey and follow-up discussions conducted by a third-party sustainability consulting firm, and is based on the Global Reporting Initiative (GRI) sustainability reporting and ISO 26001 frameworks. Crossville’s 2014 report meets the requirements of LEED V.4 MRc3 credit, and is the first such sustainability report in the company’s 28-year history. It is also the first GRI-based document released by a tile-only manufacturer, denoting a significant milestone for the tile industry.

“This report is a comprehensive compilation of the many measurable aspects of our sustainability initiatives,” explained John Smith, Crossville’s president. “It will serve as a resource for our customers in the design and building communities and, hopefully, be a standard bearer for our industry.”

Another industry initiative—this one on the installation front—is the Advanced Certifications for Tile installers program (ACT), enacted in 2013 by the Ceramic Tile Education Foundation (CTEF). Kirk-Rolley said the installation professional is one of Dal-Tile’s core customers, and “we support industry initiatives like ACT that assist in their professional development. ACT takes that training to the next level. The end result of certification is a visually stunning installation that will last in its designed purpose for a lifetime.”

Waldrep noted Crosville’s support of ACT. “We’re proponents of any program that encourages and recognizes excellence for installers, including ACT. Every aspect of our industry stands to benefit when installers are compelled to advance their skills and capabilities.”

Bettiga, also a major proponent of ACT, added, “We recently were successful in getting the ACT language approved for inclusion in the TCNA Handbook for the installation of ceramic tile. We’re trying to shift the emphasis for specifiers and general contractors to move from accepting the low bid on a project to the lowest ‘qualified bid.’ ACT certification will create a level of confidence when project owners, architects, consumers and specifiers consider awarding the bid to the most qualified tile contracting company.”

And the program’s momentum seems to be picking up speed. Just recently, CTEF, working in conjunction with Schlüter Systems, hosted the first hands-on testing of the ACT program for open shop tile contractors at the Schlüter headquarters in Plattsburgh, N.Y. The installers taking the ACT tests first had to be recognized as having successfully completed the CTEF certified tile installer (CTI) testing of their skills and knowledge.

During the two-day testing, the pre-qualified CTEF-certified tile installers demonstrated their hands-on abilities in skill sets including large-format tile and substrate preparation, membranes (both sheet and liquid), mortar bed (mud) floors and shower receptors. “Prior to taking the hands-on portion of the ACT test,” Bettiga said, “each installer was required to successfully complete the online knowledge test, proving their command of the test subject.”

Environmental developments

Screen Shot 2014-11-03 at 11.14.35 AMAnother top-of-mind subject in tile is the development of environmental product declarations (EPDs). At press time, this subject was to be discussed at the Total Solutions Plus (TSP) conference in San Antonio.

“We will be providing an update on TCNA’s effort to release an EPD for ceramic tile made in North America,” said Eric Astrachan, TCNA’s executive director. “At TSP 2014, we will announce this EPD’s completion, publication and certification by UL Environment.”

The North American ceramic tile EPD is a report that quantifies the environmental impacts of generic North American-made ceramic tile throughout its life cycle. It contains information about tile’s carbon footprint and resource depletion potential, among other things. With the North American Tile EPD, Astrachan noted, the environmental qualities of tile can be compared to those of other types of flooring products.

“Also, tile producers can compare the qualities of their products to those of the reported industry averages from the EPD in order to identify environmental strengths and areas needing improvement,” he added. “With the North American ceramic tile EPD completed and certified, products from manufacturers that submitted data will be automatically eligible for point contributions to LEED and other green building standards and rating systems.”

Trends

There continues to be a strong movement toward larger formats, wood looks, rectangular sizes and thin tiles in the segment.

“Wood looks are clearly among the hottest trends in the marketplace,” Kirk-Rolley said. “The use of tile that emulates wood is a style gaining momentum in both floor and wall applications for several years. Designers have specifically been leaning toward long, linear plank sizes. What was first introduced as a traditional take on hardwood floors has evolved to include more colors and textures to choose from than ever.”

In addition to warm rustic visuals and various structures, “water-stained and brushed visuals have recently been introduced,” she explained. “These products typically are offered in multi-color blends that are very authentic looking.”

When it comes to larger formats, Larrazabal continues to see an increasing demand for 8 x 48 leading the way, “as with our plank format offerings Dream, Boardwalk and American Naturals. Rectangles continue to be popular and we recently introduced an 18 x 36 in several of our series (Soho, Elements, Stonehenge) with strong success.”

As the style of thin, large-format porcelain tile continues to be popular in the U.S., the industry is rallying to create parameters for product use and installation. To that end, the NTCA, Tile Contractors’ Association of America (TCAA) and the International Union of Bricklayers and Allied Craftworkers (IUBAC) came together midyear to offer a shared position statement regarding acceptable thickness of 5.5mm or more for thin, large-format porcelain tile panels used in flooring installations.

“Our Laminam by Crossville 5.6 collections (5.6mm in thickness) launched earlier this year, already exceed the stated requirements, putting us ahead of the game in terms of the evolving standards for the large format, thin porcelain panel category,” Waldrep said.

According to many manufacturers, thin tile is also the future of ceramic.

For example, Ryan Fasan, technical consultant at Tile of Spain, said, “With the same strength and properties of regular ceramic, thin tile can be offered in large, groutless formats for counters, showers, walls, facades and more. It’s less costly to ship and it’s easier and more efficient to install. As the tile becomes more popular and is used in more projects, standards and training will help make it even more mainstream.”

Screen Shot 2014-11-03 at 11.15.16 AMAs Grosser noted, work is being done at ISO level to set standards for large format tiles and panels with various thicknesses. “The future of tile is headed in that direction and new standards are needed to meet the challenges of evolving products.”

Meanwhile, at the recent Cersaie show, Italian manufacturers exhibited a move beyond tile’s traditional role as a floor or wall covering and into the realm of smart materials. ABK Group unveiled a technology called Auto Leveling that adds elasticity to porcelain tile, ensuring perfectly flat installations, while Piemme’s Cottage tiles include embedded photovoltaic cells that create self-illuminating outdoor flooring.

In terms of innovative formats, Florim showcased some of the largest thin slabs in the industry—5.5 x 11 feet and only 6mm thick—and Faetano introduced a new tile that is part of its Murales series, designed to wrap corners.

Trending styles presented by Tile of Spain companies at Cersaie included matte black finishes, distressed wood planks, vintage patterns, delicate motifs, mix-and-match patterns, gradients, subtle reliefs, geometric designs including hexagons and metallics with mirrored effects.

Future outlook

As for the rest of 2014 and the start of next year, executives appear to be positive about ceramic’s future. As Waldrep noted, current market reports indicate 2015 will bring an increase in commercial building projects, which is “a positive forecast for our industry. As for Crossville, we’re poised to make an impact on our industry by advancing our messaging on sustainability. These advancements will be a driving force for Crossville and our customers in 2015.”

Tile of Spain’s Gomez noted, “We feel that the U.S. market is a priority for Spanish exports. Ceramic tile use is on the rise, and the number of distributors and retailers are also growing. Spain is perfectly positioned with technology, design and sustainable product especially made for the U.S. market. Many companies have worked hard to improve their distribution to the U.S. so that tile is stocked and ready to be provided quickly for projects.”

In addition to its planned construction of a glazed porcelain manufacturing plant/distribution center in Dickson, Tenn., scheduled to open in late 2015, Dal-Tile is also undergoing expansion and adding additional capabilities at its Sunnyvale, Texas, manufacturing facility. This will allow it to meet the demand for larger sizes and more sophisticated graphics/textures on the domestic front, Kirk-Rolley explained.

“These facilities provide us with a number of key advantages,” she added, “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.”