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Domestic production remains at American OEM, Hearthwood Floors’ core

Burns, Tenn.—The family behind American OEM and Hearthwood Floors has a long-standing legacy of manufacturing quality engineered wood floors in America. Keeping manufacturing in the United States is a central tenant of the company’s promise to provide their customers with the most beautifully designed, highest quality products and responsive service possible.

For over 80-years, the Finkell/Anderson family has been committed to producing hardwood flooring in the United States and continues that commitment in a time where imported material has become the industry norm. In the last 10 years, Asian production of hardwood flooring has slowly increased, going from around 15% being imported in 2008 to more than 50% today. Even in such a difficult economic climate, the leadership at American OEM and Hearthwood has remained dedicated to “Made in America.”

“We are extremely proud to produce our flooring right here in the United States,” said Allie Finkell, executive vice president at Hearthwood, and great granddaughter of Andy Anderson, the inventor of engineered wood flooring in 1938. “Our legacy over the past four generations includes manufacturing everything from plywood to veneer to flooring in our domestic facilities. By doing so, we can maximize control over quality and service so our customers know they are receiving a superior product and the shortest lead times.”

Currently, there are no specific country of origin label requirements at the point of sale, so it can be very difficult to determine where products are made. “Made in America” is a prestigious designation because it requires “all or virtually all” of the components be of U.S. origin, and the manufacturing must be done on U.S. soil. At American OEM and Hearthwood, all of the wood sent to the state-of-the-art manufacturing plant is grown in the U.S., and all parts of the process are completed under the same roof in the company’s plant outside of Nashville, Tenn., to earn the “Made in America” label.

The mill features the longest wood floor finishing line in the world, to produce lengths up to 8 feet, as well as wide widths in 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. 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 therefore has capacity to accommodate increases in the demand for domestically produced engineered wood flooring.

For more information about Hearthwood flooring, email info@hearthwood.com.

To learn more about private labeling programs, email info@americanoem.com.

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William M. Bird launches Hearthwood program

Charleston, S.C.—William M. Bird brings the Hearthwood flooring line to its customers throughout the Southeast. In support of the launch, William M. Bird will provide merchandising, marketing materials and product knowledge training to its customers. The American-made, premium hardwood flooring brand is the seventh new product line the company has launched since March 2018.

The Hearthwood collection comprises beautiful, responsible and enduring engineered hardwoods all made at American OEM’s facility outside of Nashville from 100% American hardwoods. Hearthwood is rooted in a four-generation legacy started by Andy Anderson, the inventor of the American engineered wood floor in the 1940s, continued by Bob Anderson, the founder of Anderson Hardwood, and furthered by Don Finkell, who began Cumberland Products Group. Allie Finkell, executive vice president, American OEM, developed the Hearthwood brand as a way to honor her legacy in a fresh approach for future generations. Hearthwood is committed to making quality hardwood floors from American raw materials, as well as has a strong focus on environmental and social sustainability.

“We are very proud to partner with Hearthwood,” said Maybank Hagood, CEO of William M. Bird. “Their family legacy in the flooring industry and deep history truly resonated with us. We are excited to introduce this new brand in the Southeast. We know our customers will appreciate the high quality, craftsmanship and modern design of the Hearthwood collections.”

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Carr Newton joins American OEM as executive VP of sales

Burns, Tenn.—American OEM has brought on Carr Newton as executive vice president of sales. Newton will be responsible for the overall strategic planning and execution of sales for all products and channels of American OEM.

In this position, Newton is relocating to the American OEM headquarters in Nashville, Tenn., and will report directly to the CEO, Don Finkell. Randy Schrecengost will continue to serve as vice president of sales, managing distributors of American OEM products and the Hearthwood brand.

“Carr has been a respected colleague and friend for many years, and his tireless work ethic and experience in the industry make him an ideal add to American OEM,” said Don Finkell, founder and CEO. Newton marks the second executive hire for the company in the past 30 days, joining newly appointed COO, Harry Bogner. “The addition of these two executives to our already outstanding team positions us to achieve long-term growth and success,” added Finkell.

Bringing 20 years of industry experience, Newton has served in senior sales and marketing positions at both Shaw Industries and Anderson Hardwood Floors. In his most recent position as vice president of hardwood and laminate, he had responsibility for managing multiple product categories and sales channels, as well as product development, supplier strategy/relations and inventory management.

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Hearthwood Distribution Group partners with William M. Bird

Burns, Tenn.—American OEM has expanded the Hearthwood distribution group to Charleston, S.C.-based William M. Bird. This is the latest distributor to bring on the company’s brand, serving the Southeast market beginning in June.

William M. Bird has a long legacy of excellence and integrity since their founding in 1865. “We are proud to partner with a company that, like Hearthwood, has such deep roots in the industry,” said Randy Schrecengost, vice president of sales, American OEM. “The Bird company values of fair play, hard work, and caring for customers and employees makes them an ideal distributor of the Hearthwood products.”

The Hearthwood collection is comprised of 24 enduring engineered hardwoods, made at the American OEM facility outside of Nashville, from 100% American hardwoods. The company’s flagship brand continues the four-generation legacy started by Andy Anderson, the inventor of the American engineered wood floor, in the 1940s.

“Hearthwood is a way to honor our family’s 70-plus year history in the wood business,” said Allie Finkell, executive vice president, American OEM. “It leverages the vast experience of our past but is packaged in a modern way that appeals to a younger, predominately female demographic. It’s an honor to partner with William M. Bird.”

To inquire about Hearthwood products or distribution coverage, contact Allie Finkell at allie@hearthwoodfloors.com.

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Made in the USA: U.S. suppliers leverage advantages of domestic production

April 30/May 7, 2018: Volume 33, Issue 23

By Mara Bollettieri

Many domestic flooring suppliers cite numerous advantages in producing stateside. A huge benefit that Don Finkell, CEO of American OEM, pointed out is the ability to respond quickly to changing design trends in the industry. “We are closer to the market, so we are more aware of consumer preferences,” he explained. “In addition, consumer trends favor locally made products. American made has become a whole movement of its own.”

Others cite much shorter lead times as being a key benefit. “We have the ability to deliver product for large installations within four weeks,” said Michael Raskin, CEO of Raskin Industries. “In addition, we can fill in our domestic inventory to support distribution and our distributors can bolster their supplies if needed, which provides excellent support and turnaround.”

Matt Rosato, director of portfolio management, Anderson Tuftex, concurred. “When you have domestic production vs. something that’s sourced overseas, we are more agile and able to quickly hit lead times, especially for some project work. If it’s overseas, you’re looking for, after production time, 12-16 weeks of transit time into the U.S., where we can turn it around in a couple of days.”

For executives like Jimmy Tuley, vice president of residential resilient, Mannington Mills, being able to innovate and bring products quickly to market go hand in hand. “We’re also in control of our process. It’s one of the cores of Mannington—to be able to control your own destiny. And when you produce, you control that whole supply chain.”

Tom Lape, president, Mohawk Residential, can attest to that notion. Mohawk Industries is in the middle of a major push toward domestic production, with $700 million invested in five different plants. He noted that 90% of what the company produces is being sold right here at home. Beyond that, he said, “there is a high level of supplier reliability; the more you in-source, the more you create a more reliable customer and there are fewer big surprises.”

Onshoring creates jobs

Opening plants here at home, suppliers say, has increased the number of employees that suppliers need to hire. Paul Stringer, vice president of sales and marketing, Somerset Hardwood Flooring, shared that the number of employees has increased exponentially over the years now that the company has onshored production. “I started work at Somerset in 1999. At that time, we had roughly 225 employees; today, we employ more than 900 people throughout all of the Somerset operations.”

The creation of more jobs, in turn, sparks work in other industries as well, executives say, thereby stimulating the overall American economy. Mannington’s Tuley illustrates how opening plants throughout the U.S. has done precisely that. “If you look at a plant that’s growing and expanding, chances are there’s a restaurant in that area that’s opening, there are roads that are being worked on—all sorts of service industries spring up around manufacturing facilities.”

Anderson Tuftex’s Rosato also believes there’s a direct correlation between plant openings and the creation of jobs in surrounding communities. “We have a large project in Alabama with Shaw that we are investing millions of dollars in, stimulating local jobs in that state as well as other states in which we manufacture—be it California, South Carolina, Tennessee or Alabama. This is definitely impacting and increasing the workflow and job creation in those states.”

Don Maier, president and CEO, Armstrong Flooring, also feels his company is contributing to the increase in jobs in certain states. “Our domestic manufacturing supports local jobs, and we are a significant employer in many of the communities where our U.S. plants are located,” he stated.

Inherent challenges

Despite all the advantages to onshoring, there are some inherent challenges. The most prominent is the void associated with the rise in manufacturing job openings vs. the lack of a skilled workforce to fill those positions. Somerset’s Stringer can attest. “I think this new generation has frowned on factory work or production work,” he told FCNews. “Young people today want to work on computers or sit in front of a screen. They don’t see themselves doing physical labor.”

Vance Bell, chairman and CEO, Shaw Industries, concurs that finding employees in this modern age is difficult. However, he said, the company is trying to encourage people to work in this field. “We believe we have an opportunity to educate students about the rewarding careers available in manufacturing and the diversity of career paths they can take here at Shaw.”

But even in cases where you have skilled employees, there’s still somewhat of a learning curve—especially when opening up a new plant. “It’s extensive and it takes time to train people, to get equipment exactly how you want it,” Mannington’s Tuley said. “It’s a major undertaking to be able to do manufacturing in the U.S.”

Other challenges that suppliers face is the competitive pricing of products from overseas. “The most notable is the battle against cheap imports,” said Frank Douglas, vice president of business development, Crossville.

Some consumers, he noted, are indifferent when it comes to the whole Made in the USA movement, opting instead for less expensive goods.

Potential impact of tariffs

Many flooring industry executives say it’s too soon to tell whether policies instituted by the Trump Administration have helped accelerate domestic production (see related story on page 20). On some level, though, many feel the mere threat of U.S. tariffs on some Chinese imports could indeed enhance domestic production.

According to Gregg Link, senior director of product management, Dal-Tile, those who make products overseas may be at a disadvantage if these tariffs are enacted. But that’s a big if. “For those that don’t have manufacturing capability and have a heavier reliance on sourced goods—and in particular China—that’s obviously going to be something that they’re going to question,” he said. “I don’t think there’s any definite direction.”

American OEM’s Finkell sees the threat of tariffs on some imported goods as beneficial to Made in the USA. “I do believe that uncertainty around what President Trump will do with tariffs is helpful to the domestic industry. Prudent buyers are increasingly hedging their bets so as to not to have all of their eggs in the import basket if a trade war breaks out or significant tariffs are imposed on imported wood floors.”

Mannington’s Tuley is uncertain about the threats as well but feels those who onshore have the upper hand. “It’s so difficult to tell in our current environment what could happen. Certainly, tariffs could change the pricing structure of flooring products if they’re taxed in certain ways. And that could give companies that manufacture in the U.S. an advantage. But it’s so hard to predict what’s going to happen.”

Shaw’s Bell feels that regardless of whether the tariffs happen or not, Made in the USA is the way to go. “We just believe it makes economic sense for any company to have some level of in-market production for their products,” he said. “That is the overall trend globally.”

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NWFA conference delivers value for installers, vendors

April 16/23, 2018: Volume 33, Issue 22

By Reginald Tucker

 

Tampa, Fla.—Scores of hardwood flooring contractors, manufacturers and distributors converged at the Tampa Bay Convention Center here recently for the 33rd annual National Wood Flooring Association (NWFA) conference and expo. As advertised, the event offered something for everyone in attendance—new products galore, networking and educational opportunities, technical tips and even some entertainment.

“It was a great event,” Michael Martin, NWFA president and CEO, told FCNews. “In terms of numbers, we had about 3,000 people attend the expo—which has been pretty steady when you look at our shows over the past few years. We felt really good about it.”

Martin has good reason. The NWFA conference and expo was named one of the 50 fastest-growing trade shows for the past six consecutive years. Beyond the sprawling showcase of hardwood flooring products, installation tools and accessories, a big draw for attendees is the depth of technical, marketing and management sessions offered. In fact, the conference portion of the event boasted 20-plus hours of educational programming.

“We try to devise seminars that address the needs of all the channel segments we serve,” Martin explained, citing the mix of attendees who come to the show. What’s more, conference sessions are structured in such a fashion that encourages audience participation and interaction. “It’s not people talking ‘at you’ all the time. To that end, the sessions are arranged so participants are vocal and active during at least one-third of the sessions to keep them engaged. This allows everyone to learn from each other.”

Indeed, training and education remain a top priority for the association—and this extends beyond the instruction provided during NWFA’s renown installation schools held at its headquarters in Chesterfield, Mo., as well as regional training events across the country. During his opening keynote address to attendees, Martin provided an update on NWFAU—the group’s online training program. Since its inception in the summer of 2016, more than 30,000 courses have been completed by roughly 5,000 users—that translates into about 45 courses taken daily.

“We’re very encouraged by the participation we’re seeing in our online NWFA University,” Martin stated. “At the end of the day, the program benefits retailers, installers and consumers alike.”

Vendors see the value

Many of the exhibitors FCNews spoke to during the product showcase applaud the efforts NWFA management has made over the years to provide value for all members involved. Not only does the NWFA develop programs designed to raise the skill level of the dozens of professional hardwood flooring contractors in attendance, but the association goes above and beyond to deliver a captive audience for manufacturer members and vendor partners

“We’re here to support the industry and the association,” said Dan Natkin, vice president, hardwood and laminate, Mannington. “Many of the attendees here service the new home construction and residential replacement markets—both of which are important sectors for us.”

Pierre Thabet, president and CEO of Boa-Franc, maker of the Mirage brand of hardwood floors, agrees. “If you’re looking to reach the specialty hardwood flooring contractor, then this is the place to be,” he said. “This is where you meet the installers who really know all about hardwood flooring.”

Mannington and Mirage are not alone. Paul Rezuke, vice president, residential sales, USA, Wickham Flooring, also sees the value in exhibiting at the NWFA expo. “It’s been a really great show for us,” he told FCNews on the second day of the exhibition. “We feel it’s important to have a presence here as we expand our go-to-market strategy in the U.S. We’ve had some pretty good leads.”

Others see attending the expo as an opportunity to not only get in front of professional contractors, but also wood flooring distributors. “We’re here to show our new offerings in our branded Hearthwood line as well as products on the American OEM side that we can offer to distributors on a private-label basis,” said Allie Finkell, executive vice president.

Show stoppers

Among the key highlights of the 2018 NWFA show was the Plank Tank contest the association created to encourage members to submit their industry-related business ideas. Modeled after ABC Network’s “Shark Tank,” contestants in NWFA’s Plank Tank pitched their idea during the opening general session.

The competition was hosted by Jim Tselikis and Sabin Lomac, owners of Cousins Maine Lobster, who appeared on “Shark Tank” in a previous season. The businessmen, known for growing their small food truck start-up into a national franchise success, also shared their experiences with attendees during the keynote presentation. The celebrity judges, along with a team of wood flooring professionals, reviewed previously submitted business ideas to determine their merits.

The contest winner, which was announced on the last day of the show along with the NWFA Floor of the Year finalists (see page 8), was Insight Flooring Technologies. The company was recognized for QuoteHero, an app that allows contractors and estimators to measure the square footage of rooms, estimate jobs and close sales on the spot. Insight Flooring Technologies received a $15,000 customized package of NWFA marketing and education products and services.

NWFA’s Martin applauded the concept. “It was good to see NWFA members up there on stage talking about new tools and innovations that will help the industry.”

Look for more coverage of the 2018 NWFA expo in upcoming editions of FCNews.

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American OEM achieves CARB-exempt status

April 2/9, 2018: Volume 33, Issue 21

 

Burns, Tenn.—American OEM, a private-label hardwood flooring manufacturer, has obtained renewed status of its CARB ULEF exemption on engineered wood flooring products. This renewal was granted after a perfect record of passing indoor air quality tests for formaldehyde emissions and was also extended to include product with HDF core materials, which the company will manufacture beginning in the second quarter of 2018.

Essentially, this exemption grants American OEM the ability to reduce submittal samples for VOC testing and establishes the company’s products as ultra-low risk for off gassing.

HPVA Laboratories, a third-party association, performed the tests. Highly respected and independent, HPVA has been testing and certifying North American manufacturers of engineered wood products for more than 50 years.

“The health and safety of our consumers is of upmost concern to us,” said Don Finkell, American OEM founder and CEO. “We will continue quarterly tests for VOCs to ensure that we remain compliant with all regulations, even though it is no longer required.”

In addition to CARB-exempt status, American OEM has also achieved Indoor Advantage Gold certification for ultra-low emitting materials, verifying that all hardwood produced in the company’s Tennessee facility contributes to healthy indoor air quality for customers of American OEM private-label products, as well as all flooring sold under the company’s new Hearthwood brand.

This type of continuous quality assurance provides customers with peace of mind, something many lost after the “60 Minutes” TV special exposed unsafe levels of formaldehyde in wood-based products sold in a major retail chain, according to Finkell.

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U.S.-China tariff tiff troubles some flooring executives

April 2/9, 2018: Volume 33, Issue 21

By Ken Ryan

 

Flooring executives are acting with trepidation amid the escalating trade dispute between the U.S. and China, which ratcheted up a few notches last week when the Trump administration threatened to impose tariffs on some $50 billion in Chinese imports across 1,300 categories of products.

The imports targeted for 25% levies range from high value-added goods, such as medicines and medical equipment, to intermediate products like machine tools and chemicals as well as durable consumer goods such as dishwashers, TVs and automobile parts. The list also includes machinery used in the production of some flooring products, including carpet and rugs, as well as milling or molding machines for products such as wood, cork, hard rubber, plastics or similar hard materials.

The day after Trump’s announcement, the Chinese Ministry of Commerce announced plans to impose a 25% tariff on $50 billion worth of U.S. exports. The 106 affected products included soybeans and chemicals and came one day after China announced tariffs on $3 billion in imports of U.S. food and other goods, 128 categories in all.

The penalties will not happen right away, if at all. The designation of targeted products will be followed by a comment period in which American companies can provide feedback to the Trump administration on the product choices. The administration will hold a public hearing on the submissions on May 15 in Washington, and companies will have until May 22 to file final objections.

The move stems from a White House investigation into China’s use of pressure, intimidation and theft to obtain American technologies.

Flooring executives argue that in a global economy, any trade war between economic powers would ultimately result in a slowdown of the world economy. Thomas Baert, president of CFL Flooring, a China-based LVT supplier, said issuing large import tariffs sounds like a great idea since theoretically it would help local production in the West but would hurt categories like LVT, which are mostly sourced in China. “In our industry, the product categories that are imported at this stage cannot be made on the domestic machines,” Baert said. “Although several manufacturers are now transforming some production lines to be able to, it is questionable whether this will truly replace China production.”

Don Finkell, CEO of American OEM, a domestic wood manufacturer, had a different take as he pointed to the U.S. trade deficit. “We’re running at an $800 billion trade deficit with the rest of the world, of which $500 billion of that is with China. Most economists say that it is unsustainable, but they don’t really agree on what the consequences are. It’s been this way for more than a decade and growing. Since more jobs are involved in making a product than in importing a product, loss of jobs seems to be the long-term consequence of a trade deficit.”

Finkell said wood flooring going to China from the U.S. has a combination of tariffs, fees and taxes in the range of 27%. If there is a tariff on wood flooring under these trade actions, he said he would expect it to be in the range of 25%. He termed it “significant but not catastrophic to the industry.”

Flooring observers say the tariffs—should they be implemented—would impact the full line distributor to a greater extent than other sectors since wholesalers have been importing LVT/WPC/SPC products in large part to promote their own private-label brands. Jeff Hamar, president of Galleher, a top 20 distributor from Santa Fe Springs, Calif., which sources from China, said he would be very surprised if flooring is ever involved in the tariffs. “There are already duties on wood flooring produced in China so, in theory, the government is already adjusting those prices to reflect market realities,” he said. “If they were to go after rigid LVT flooring the argument would be that there is so little U.S. domestic capacity, who are they harming? Clearly, any duty would be passed onto the consumer and would result in higher prices. Duties on LVT would cut the gap between wood and LVT possibly helping wood flooring sales.”

Jonathan Train, CEO of Houston-based Swiff-Train Co., which also sources extensively from Asia, is clearly not an advocate for excessive tariffs. “Small tariffs that are clearly understood and fairly implemented are fine and do not block trade,” he said. “Plus, they add a reasonable means of revenue for the government. But larger, volatile and retroactive tariffs disrupt markets unnecessarily and do not fix anything.”

Many economists see a trade war as little more than punishing the other country rather than protecting domestic producers. Some flooring executives have similar views. “Unfortunately, it’s going to be a ‘tit for tat’ kind of game that we can’t afford to play,” said Olga Robertson, president of the FCA Network. “Imagine just for one second if Walmart couldn’t fill their stores with goods—it would be Armageddon.”

manufacturing to make more stuff here in the U.S.,” said Olga Robertson, president of the FCA Network, Shorewood, Ill. “But unfortunately, it’s going to be a ‘tit for tat’ kind of game that we can’t afford to play. Imagine just for one second if Walmart couldn’t fill their stores with goods—it would be Armageddon.”

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Wood: State of the industry—Builder business, remodel sector propel category

April 2/9, 2018: Volume 33, Issue 21

By Reginald Tucker

 

Preliminary anecdotal information shows the hardwood flooring category grew between 3% and 4% in 2017, placing the estimated value of the category just north of $2.31 billion at the first point of distribution. That growth, manufacturer executives say, puts the category on par with the estimated growth of the industry as a whole but slightly above the total gross domestic product for the year.

In terms of volume, that growth estimate equates to roughly 930 million square feet, lifting the hardwood flooring category ever closer to the 1 billion-square-foot threshold.

Ask a roomful of hardwood flooring manufacturer executives to identify the root cause of this growth, and many will point 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.

Natalie Cady, hardwood category manager, Shaw Floors, agrees, citing consumption trends and demographic shifts. “Residential is driving the market, and for Shaw that means both single family and residential re-do. And as our single-family business grows, it has that wonderful trickle-down effect.”

By that, Cady means more people are able to get into a new home while sellers have been able to get better market value on their existing properties. As for the former, she is finding that many people strongly aspire to real hardwood and wood lookalikes. She also sees a direct correlation to influential purchasing segments. “Millennials want wood, and they are the No. 1 consumer right now. At the same time, the empty nesters are downsizing and finding they can afford hardwood flooring.”

But that doesn’t imply that it’s going to be smooth sailing. “For us, the driving factor is still the housing market,” said Wade Bondrowski, director of sales, U.S., Mercier Wood Flooring. “Although this segment is trending up, we are still below normal levels.”

Other executives are seeing hardwood growth across virtually all end-use sectors, including commercial specified and Main Street applications. “We think it is all of the above,” said Michael Bell, vice president, hardwood, Armstrong Flooring. “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. We also see hardwood opportunities in the commercial marketplace.”

But that doesn’t mean all segments within the hardwood flooring category are growing at the same pace. When it comes to solid vs. engineered, for example—or even between subcategories within the engineered flooring offering—activity can be quite mixed. “While the wood category grew by low single digits in 2017, the growth rates were different between solid and engineered, with solids declining in overall volume and engineered growing by mid-single digits,” Mannington’s Natkin said.

It’s not that the solid segment of the hardwood flooring business is no longer an in-demand category. Truth be told, it still is preferred by many customers, home builders and designers in markets like the Northeast and Pacific Northwest. Rather, experts say, 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 before our eyes right now,” Tom Lape, president, Mohawk Residential, told FCNews. “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. “That’s not to say that people living out in the Hamptons are buying engineered. 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.”

And all this plays to Mohawk’s strengths, according to Lape. “We try to focus on our game, which is leveraging our position as a true, integrated and vertical HDF engineered wood producer. Making all our own HDF internally gives us an advantage in terms of consistency and uniformity of the product. Second, we produce all those products here in North America, which gives us an advantage in terms of supply chain and reliability.”

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 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.”

Innovation, Bell added, continues to happen across both structures. “While there is significant activity in engineered floors, we also see that solid wood flooring remains the go-to product in certain parts of the country and for key consumer segments.”

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,” Shaw Floors’ Cady said, citing the tendency of solid floors to expand and contract more easily than engineered. “Having the ability to go longer/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.”

With consumers continuing to ride the longer/wider wave, suppliers remain committed to giving them more of what they’re looking for. “The good story is the industry is not sitting still; we’re giving consumers more of what they want—wider and longer,” Mohawk’s Lape explained. “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.”

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 hardwood 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 ½- and a ¾-inch format. We initially envisioned that the ½-inch product would be most suited for the U.S. market and the ¾-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 ¾-inch platform engineered products in our U.S. footprint.”

Tracking design trends

The shift in product preference within the hardwood flooring segment is not limited to the product’s core construction. Industry observers are also keeping a close eye on changing consumer tastes relative to color, species, surface texture and even board length and width. For many suppliers, staying ahead of consumer trends and anticipating what’s going to be the next big thing is akin to shooting after a moving target.

“The key is making sure we stay out in front in terms of styling and design,” Shaw Floors’ Cady said. “We’re still seeing the move toward longer, wider planks, but we are also seeing a move toward more traditional visuals. Instead of going into the European wide-oak visuals, we’re going back to basics by focusing on the natural characteristics of hardwood—meaning showcasing less texture and lighter colors so consumers can see the actual wood, not covering it up with dark stains.”

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—including companies like Ribadao Wood Boutique—say there’s still a viable market for imported product.

“We’re still very bullish on exotics, although it’s just one line that we offer,” Bruce Hammer, vice president of sales, said. “It’s true the U.S. market is nowhere near what it was for exotics about 10 years ago, but that doesn’t mean there’s no opportunity for us. We consider our products to be more ‘boutique’ offerings. It’s still a viable product line for us to be offering.”

Ongoing challenges

Hardwood flooring has long been linked to its ability to contribute 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. And, 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 the long run, hardwood will always maintain a significant market share in the flooring industry.”

Those companies that supply the full range of competing hard surface materials believe all products can successfully coexist. But that doesn’t mean equal market share for all product segments.

“It’s an ongoing conversation with all flooring suppliers and it comes down to having products to fulfill consumer needs and wants, Shaw Floors’ Cady said.

But wood’s classification as a natural product also subjects the category to price fluctuations due to rising raw material costs. “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, also 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.”

Despite these challenges, suppliers are optimistic about the category’s prospects in 2018. “We predict the overall hardwood category will have a moderate growth rate of 3%-5% this year,” said Brad Williams, vice president of sales and marketing for Boa-Franc, maker of the Mirage brand. “We feel our greatest opportunity continues to be within our existing network. We will continue try to understand our customers’ needs and focus on creating opportunities for them.”

Don Finkell, president and CEO, American OEM, is confident the category 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.”

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Bogner joins American OEM as COO

Burns, Tenn.—American OEM has added Harry Bogner as chief operations officer. Beginning April 2, Bogner is responsible for the manufacturing plant and design center, reporting directly to Don Finkell, the company’s CEO.

“Bringing Harry on will have a tremendously positive impact on our business in very short order,” said Finkell. “His knowledge of engineered hardwood manufacturing and operations, as well as his entrepreneurial spirit, make him a perfect fit for our team and culture.”

Bogner is equally excited for the new venture, stating, “The opportunity to work for American OEM, a company committed to the sustainability of American hardwood and manufacturing in America, is exciting. It is an honor to be a part of the team and I anticipate fresh opportunities, growth and a bright future ahead for American OEM.”

Bringing 14 years of industry experience to his new role, Bogner has served in senior manufacturing and operations positions at both Mohawk and Armstrong. His background includes extensive plant management in engineered and solid hardwood flooring, overseeing both domestic and international facilities. He also brings logistical and financial experience from outside of the wood industry, working as general manager for Sunbeam and holding an accounting position at General Electric Plastics.