January 5/12, 2015; Volume 28/Number 14
By Ken Ryan
Clearly the entire market for exotics has changed. It is not forgotten, but it is just not the hot category it was a decade ago. Distributors no longer go wide and deep with their inventory, preferring to carry one or two lines that have been successful. “What the market has come down to is minimizing merchandising and turning those boards
as fast as you
can,” said Bruce Hammer, sales manager at Elof Hansson, which boasts an inventory of roughly 80% exotics.
In 2008, Congress passed the Lacey Act, prohibiting the import of illegally harvested wood and wood products into the United States. This legislation set a precedent for the global trade in wood flooring and other wood-related products, ensuring that only legally logged timber for flooring is sold into the United States.
The emergence of Lacey prompted some players to leave the Brazilian market. For companies like IndusParquet, which sources its products from Brazil, this market shift was welcome news. For starters, IndusParquet does not face illegal logging issues in Brazil because of the way it harvests from managed forests; second, the thinning of the herd has allowed it to take market share.
But the company did more than just sit back, according to Jason Strong, vice president of marketing and sales. “We don’t look at ourselves as just an exotics company,” he said. “We bring today’s fashion trends from Brazil into the U.S. market.”
Those trends include soft rustics and wide planks up to 8 feet long. Several of these products were on display at the NAFCD show in November, including Dolce pecan. This best seller features a ½-inch wear layer with a 6¼-inch-wide by 8-foot-long plank. The company sells the offering to distributors for just under $4 per square foot.
In addition, Indus-Parquet is adding a gray stain—gray being one of the trendiest colors—to its Brazilian pecan collection. “We’re taking our species and putting our spin on it,” Strong said.
IndusParquet products are now distributed in every U.S. state. The last region to be filled was the Northwest; Cascade Pacific, a Denver Hardwood company, agreed to carry the exotics line in 2014. The companies forged the deal at Surfaces.
“I have to give credit to Enos Farnsworth,” Strong said of the Denver Hardwood president. “Enos was the one who drove this process, who helped us get coverage in the Northwest.”
Farnsworth said he looked at all the exotics and believed IndusParquet was the clear leader. “We’re going to have a good partnership.”
Distributors were also interested in Elof Hansson exotics during the NAFCD show. Of particular interest is acacia, its leading exotic out of Asia. It sells for $1 to $2 less a square foot than most South American exotics and has been a winner for distributors, Hammer said.
Elof Hansson sources about 85% of its exotics from Brazil, with Bolivia and Peru making up the rest.
Industry wide, Brazilian cherry remains the leading South American exotic. Santos mahogany, another popular species, is said to be in short supply, at least in Peru where Chinese companies have been buying up vast quantities, flooring executives explained.
Out of Africa
Ark Floors’ most recent exotics introductions include unique African species such as doussie, padauk, tali, amberwood and African mahogany, which all make up Ark’s Wild Coast collection. “There are a lot of unique species from that region that are durable, stunning and work well over radiant heat, yet for some reason we don’t see a lot of them in the marketplace,” said Laurie Sanfilippo, marketing manager.
Sanfilippo is one who believes enforcement of the Lacey Act and other green standards is postitive, as it has forced exotics marketers to raise their quality standards or face the consequences. “As consumers everywhere become more concerned with the back story of the products they purchase, manufacturers need to respond in order to remain viable. This can only benefit the industry as a whole. For Ark, these regulations have not changed our mindset, as responsible forestry is something that our factory has always been concerned with.”
Despite sourcing 85% of its products from South America, Elof Hansson can lay claim to a U.S. story as well—virtually all of its exotics are finished at a facility in North Carolina. The U.S. connection can be a big deal, Hammer learned, when a customer who was purchasing 4,600 square feet of tigerwood insisted on personally visiting the North Carolina facility to ensure the finishing was done on U.S. soil. “Ninety-eight percent of what we finish is done here in the states,” Hammer said. “It’s more to manage but I like the control it gives us along with the flexibility and recourse to have the raw materials here.”
For Mirage, exotics make up a very small percentage of its hardwood flooring portfolio, but it serves a niche market. The company sources Santos mahogany from Brazil and sapele from Africa. “We like the business we have in exotics, but it’s not the fastest growing part of our business by any imagination,” said Chris Thompson, vice president of sales and marketing at Boa-Franc, makers of the Mirage brand. “I think the consumer demand has lessened; the demand isn’t like what it was a few years ago. A lot of that is due to styling and color. Red—which can be found in Brazilian cherry and other exotics species—has fallen out of favor.”
Still, for those who rely on tropical exotics as their main hardwood flooring line, there are plenty of opportunities waiting to be grabbed.