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Suppliers look for market opportunities with innovative styles, designs

December 8/15, 2014; Volume 28/Number 12

Laminate

By Ken Ryan

Flooring manufacturers and association members are forecasting growth of between 1% and 5% for laminate in 2015. While not headline-grabbing numbers, it does represent an increase for a segment that has been hurt by competing products and big boxes. Laminate continues to grow by offering high performing, visually appealing characteristics at affordable prices.

Derek Welbourn CEO, Inhaus

Screen Shot 2014-12-10 at 2.45.03 PMOverall we see the market as a bright spot. We have seen continuous success for ourselves and for our competitors. There is definitely a little wind at our back with market demand, and we believe this will continue. It doesn’t seem to us that the market is growing at a pace that will create a bubble, but rather slow, steady growth that is benefiting the industry as a whole both now and in the longer run. This is our outlook for North America.

However, being part of the Classen Group based in Germany, the European market is important to us and we see some weakness there. One note of caution is that if Europe slides into a recession it could be bad for North America. We are all tied to the global economy; I believe that the saying is, “If Europe catches the flu, best case scenario, North America gets a cold.”

We see the laminate market in North America continuing to grow—5% in dollars and even higher numbers in volume because of lower and mid-priced laminate taking a larger share of the market. We see the mid and upper end of the laminate market growing but getting increased competition from other categories, mainly LVT. There is also tremendous growth in hybrid products that combine strengths of multiple categories such as wooden-based composite products. We have made a major investment in this growing category that will be making its debut at Surfaces.

Laminate is continuing to grow as it offers value with high performing and visually appealing attributes at a very affordable price point relative to other categories. For this reason the low- and mid-end laminate segments continue to claim share.

We continue to be successful and enjoy the laminate category. It is our focus. 2014 will be the third year running that Inhaus has posted a strong double-digit growth. This is due to our customers having success with our unique laminate line, leading to an increased focus on our offerings. We also continue to expand geographically, and have an ongoing focus on new designs and innovations. Our laminate line is not for everyone as we center on design-oriented products. We find that consumers who are looking for something unique that fits more with their personal style often choose Inhaus. We will not be changing this strategy and we will be launching six new, totally unique laminate designs in 2015. We see more steady growth in 2015 for both Inhaus and the industry.

Roger Farabee Senior vice president, marketing, Unilin NA/Mohawk Hard Surfaces

Screen Shot 2014-12-10 at 2.45.09 PMWe are forecasting laminate to be up about 1% in dollars for 2015. This growth will continue to be driven by sales outside of specialty retail. All category growth will come from home centers, warehouse clubs and national retailers such as Lumber Liquidators. We anticipate floor covering retail [for laminate] to be down again in 2015 as in 2014.

Weakness in Europe impacts the U.S. market for laminate in that it allows for more low-cost goods to come in, adding to the imports from China. This is putting pressure on all domestic producers, particularly at some of the opening price points.

We have a lot of exciting new products coming in 2015 for both Quick-Step and Mohawk. We will introduce the new Mohawk products at the Solutions convention [in early December] and the new Quick-Step products at Surfaces.

Barbara June Marketing manager, Kronotex USA

Screen Shot 2014-12-10 at 2.45.16 PMLaminate has been steady in 2014 and we expect modest category growth in 2015. Homeowners and businesses alike have numerous flooring options today, more so than ever before with the new tile and vinyl wood looks. Laminate is still a superior choice for the discerning owner who wants durable wood flooring without the expense and mess of traditional hardwood installation. Trendy decors are invigorating the category as well, from end planks to wood grains in vibrant art colors. Laminate can give the consumer the exact look she wants—quickly and economically.

As for us, the initial response to our new American Concepts collection has been outstanding, and we anticipate continued growth in 2015. We have a few changes in store for next season, but for now let’s just say that we are listening to customer demand and industry-wide feedback.

Bill Dearing President, North American Laminate Flooring Association

Screen Shot 2014-12-10 at 2.45.24 PMLaminate overall will improve but not double digits or anything [major]. I see a small increase, no more than 5%; if that happens, I will be happy.

I expect the industry will dovetail to the recovery of the real estate market. Laminate remains predominately a remodel product and the economy is now progressing enough that all flooring materials are benefiting. Laminate flooring is no exception and consumers appear to appreciate the value option with the styling that laminate flooring provides.

I am bullish on 2015. If you look at the West Coast market, where I am located, it was up, it was down, and now it is up again. That is a good sign, hopefully too for the rest of the country. I think [consumers’] pocketbooks will open up for more exotic and decorative laminate floors. That market will progress in line with the improving housing market.

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Will digital printing be the next big thing?

November 10/17, 2014; Volume 28/Number 11

Industry slow to embrace advanced technology

By Jenna Lippin

Screen Shot 2014-11-18 at 3.11.44 PMDespite some companies’ success with the technology, laminate flooring manufacturers have yet to fully embrace digital printing. Some further education, testing and investments may lead to increased usage of digital printing in years to come, but for now many producers are admiring the process from afar.

“Currently digital printing doesn’t offer pure cost advantages, but what it does appear to offer is significantly higher quality printing and design flexibility,” noted Derek Welbourn, CEO of Inhaus, the North American marketing arm of global laminate manufacturer Classen. As of now, about 10% of Inhaus’ 1,000-plus SKUs is digitally printed.

“The challenge with the higher quality printing is that once the product is manufactured into a laminate with a wear layer overlay, the higher definition of the digital printing can become lost,” Welbourn explained. “However, there is a major advantage in design flexibility both in terms of investment and development speed. No longer is there an investment required in paper inventory and cylinders; once a digital print is developed it can be manufactured into finished flooring immediately.”

Germany-based Classen has invested heavily in multiple high-speed digital printers that have significant production capacity, Welbourn said. “We are just beginning to see the design and flexibility advantages. We are also exploring alternative finishes, which can take advantage of the higher resolution of the digital printing. We believe in digital print technology both in terms of design, flexibility and future cost reductions.”

Mannington has not yet commercialized digital printing on its laminate products, but the process does allow for creation of prototypes in a faster and more realistic format. “We can now simulate almost exactly how the product will look in the final form,” said Dan Natkin, senior director, residential products. Mannington currently uses digital printing in other flooring categories.

Like many other laminate manufacturers, Armstrong still uses the “old fashioned” method in laminate production, the rotogravure process. The company does, however, employ digital printing on its trim and molding. “It has been very successful because you can get an apples-to-apples look with the floor and trim, while before it was more of a coordination,” explained Sara Babinski, principal designer, laminate flooring. “That’s where we are dipping our toes into digital printing.”

Inhaus' Urban Loft
Inhaus’ Urban Loft

When it comes to digital printing benefits that laminate producers will acknowledge, advanced design and customer demand are high on the list. Travis Bass, executive vice president of sales and marketing for Kronotex USA, noted that digital printing “allows quick turnaround of high quality prints for customer approvals as well as shorter print runs to prepare actual finished product samples. Our benefit comes from the advantages [digital printing] gives the printers for trial products and better quality decors from our designers.”

Similarly, Babinski said being able to print on demand would be good in terms of supplying the customer, but also beneficial for the manufacturer as there would be less sitting inventory. She also cited print fidelity and custom design, which Welbourn also said has created a “significant advantage” for Inhaus.

“Another advantage is random designs with no repeating patterns,” he added. “You create a cylinder whenever you design a printed floor. With digital printing, because it’s data management, there is simply a picture used instead of a cylinder. The image is scanned and the printer can randomly select a chunk of data. You should have an infinite number of variations because the image will select, flip and mirror random parts. However, the challenge with digital printing is it is just too much data for a machine to crunch while still maintaining high print speed.”

Natkin had a similar assessment, noting that digital printing “allows for fewer plank repeats, creating a much more unique floor. [But] digital print is still far too slow and costly versus rotogravure printing in laminate.”

While digital printing for laminate for now is utilized by a select few, there is a belief that as the technology progresses it will become more mainstream, which in turn should positively affect costs related to the process, such as the price of ink.

“I think [digital printing] could potentially replace how laminate is manufactured today,” Babinksi said. “I don’t know how far out that would be. It would be a change of investment for different businesses that manufacture anything digitally printed.”

Expressing a similar sentiment, Natkin said, “As the cost continues to come down on digital print technology and equipment, it may eventually replace the printed décor paper.”

Welbourn noted that a big part of cost of producing laminate flooring is the price of the ink. “If a lot of people get involved and there is a bigger volume of ink flowing, the cost will come down and it can be a more competitive process.” That being said, Inhaus is refining the digital printing process and “moving to the next step.

“It never separates you from the pack for too long,” he continued. “The biggest advantage for the whole category is we are going to be able to create exciting designs and achieve design flexibility you haven’t seen. Laminate is quite good, and it is going to get even better.”

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American Concepts Laminate debuts for specialty dealers

Volume 28/Number 3; July 21/28, 2014

Kronotex USA rolls out the ‘best of the best’

By Steven Feldman

Screen Shot 2014-07-29 at 9.22.19 AM

Barnwell, S.C.—Kronotex USA, a division of one of the world’s largest producers of laminate flooring, is rolling out the American Concepts brand for the North American marketplace. The program consolidates the company’s entire lineup of branded products, which was formerly marketed under the Kronotex and Formica brands.

American Concepts, a 57-SKU collection featuring the company’s “best of the best” wood visuals, was developed through extensive consumer research. That research included everything from the name to the logo to the products themselves. The goal was to give independent flooring retailers a brand and collection that would resonate with the target audience of female consumers, ages 35 to 55. In other words, provide retailers with an easily sellable line where they could make a respectable margin. Moreover, American Concepts is not being made available to the big boxes or other mega-retailers, preventing the line from being shopped.

The process began about a year ago by asking more than 1,000 consumers what they value in a laminate floor. Research revealed that American-made product is a purchase driver for emotional reasons, but that was just the beginning. “We found ‘made in America’ equates to quality and safety,” said Mike Fox, founder of the Mullingar Group, which conducted the research. “Many products made overseas don’t have the same safeguards as American Concepts as it relates to VOCs and the construction of the product itself. Where it is made determines how well it is made.”

Consumers also said sustainability is important. “At the top of the list was landfill issues and sustainable forest management,” Fox said.

So, at the end of the day, Kronotex USA opted to create a line that would give specialty flooring retailers’ customers everything they would want in a laminate. “Retailers should generate more sales if they give women everything they want— American quality, made in America, healthier for the home and planet—all in one brand,” said Barbara June, marketing director.

Travis Bass, executive vice president of sales and marketing, summed it up: “A U.S. producer that has quality product, stands behind it, services from here, and offers design that reflects women’s definition of American style. That’s the story behind American Concepts.”

And, with that, the move from the Formica brand was enacted in order to expand the value proposition. “In 2005, we were trying to pick a name that would help retailers,” said Fred Giuggio, vice president of brands for Kronotex USA. “We found Formica stood for durability, and that was an important story nine years ago. But, today, durability is no longer a question for laminate; it is a category benefit. The Formica name was chosen because of something [that resonated with consumers] in the past. It is now time to be looking at future trends. American Concepts is built around our next generation of buyers.”

Jeff Hamar, president of Galleher Corp., a Santa Fe Springs, Calif., distributor of Kronotex laminate, said the coupling of a brand switch and new products featuring aggressive price points and new looks could prove compelling to dealers and their customers.

“Branding it ‘American Concepts’ is probably smart because there seems to be consumer interest—at least in some segments—in buying American products,” Hamar said. “And while there is no real brand recognition for laminate these days—not since Pergo—when consumers walk into a store and see a nice, fresh display with the name American Concepts, you can have some success if you’re a retailer. You just have to make sure they walk the customer over to the display.”

Product features and benefits

American Concepts will be positioned as a value-priced product that boasts quality, the latest design and all the components of the value equation. The American Concepts display, which is a retrofitted Screen Shot 2014-07-29 at 9.39.54 AMFormica rack with new graphics and the updated SKU designs, will attract consumers’ attention from anywhere in the showroom given its red, white and blue Americana logo. “There are lots of positive feelings about supporting American-made products,” Bass said. “Seventy-eight percent of women would rather buy an American product. Sixty percent said they would buy American at a higher price.”

He added that the American Concepts line is a better grouping than what was offered under the Formica moniker. “When we serviced Formica, we also were servicing Kronotex USA and a non-branded line. What we did through American Concepts was eliminate 160 SKUs and come up with what we believe are 57 winners. We took the best performers from the former three lines and enhanced them with some new designs. This is our all-star lineup.”

Coming up with the products that would eventually make the cut was an arduous task. The company needed to ensure the specialty retailer had something to sell at every price point, from the basic, 7mm, square edge, meat and potato products all the way through the 12mm, embossed-in-register, handscraped products with a four-sided bevel and attached pad. The collection can retail for anywhere from $0.79 to $2.99 a square foot. And, the line is flexible. “We will be tracking the performance of designs,” Bass said. “We will constantly be refreshing our product assortment.”

The initial lineup:

•Liberty: 7mm, square edge; six SKUs

•Stone Harbor: 8mm, square edge; nine SKUs

•Dalton Ridge: 8mm, beveled edge; 16 SKUs

•Middlebrooke: 10mm square edge with attached pad; seven SKUs

•Sanderlin Mountain: 10mm, beveled edge with attached pad; five SKUs

•Berkeley Lane: 12mm, beveled edge; eight SKUs

•Valley Forge: 12mm, beveled edge with attached pad; six SKUs

“Kronotex has used this opportunity to refresh the line in a powerful way,” Hamar said. “It is very contemporary with the looks that are hot today.”

The launch of American Concepts illustrates Kronotex USA’s commitment to the North American market, particularly the independent retail channel, which has been under fire after witnessing its share of the laminate market drop to between 30% and 35%. According to Bass, there is still opportunity here. “There is no capacity left on the street with high-end laminate items. We have to source product ourselves from time to time, and that is after a $45 million investment in added capacity. We could double our capacity in high-end items and not miss a beat. The category is dying? We have all we can say grace over.”

Being a division of Kronotex USA offers a number of advantages few competitors can boast. For starters, it makes laminate—and only laminate. “We are like the Navy Seals,” Bass said. “When you do one thing you do it the best.”

Kronotex USA also offers the financial backing that many Chinese importers lack and, as such, the confidence instilled in retailers. “When you are the world leader in size, you are going to be the world leader in quality manufacturing,” Bass said. “The financial backing of Kronotex allows us to have the most state-of-the-art equipment, reliable distribution from a central location, world class R&D, and it allows us to continually invest in the business.”

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Made in the USA: Domestic doesn’t have to mean more expensive

Volume 26/Number 25; April 29/May 6, 2013

By Matthew Spieler

For companies like Armstrong, which has 14 U.S.-based factories, local production provides numerous cost benefits, such as greater speed to market.

One of the main reasons companies have cited for exiting the U.S. in favor of making or sourcing their products internationally is price, namely the cost of labor and regulations, which they say hamper their ability to effectively compete with products coming from countries that do not put a value on either.

While this is something with which it is hard to argue, many flooring companies point out the cost differential is not as steep as most think, allowing them to offer products and services equal to or better than those that are imported. Continue reading Made in the USA: Domestic doesn’t have to mean more expensive

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Kronotex USA begins major recycling initiative

Barnwell, S.C. – Kronotex USA has launched a company-wide recycling and waste reduction program that will have a tremendous impact on materials that would normally be sent to a landfill. Kronotex is working with Pratt Recycling, a subsidiary of Pratt Industries, on the project.

Kronotex USA’s recycling program will involve complete separation of all waste streams, including paper, clear plastic, green strapping, corrugate, bottles, cans, metal and general waste. The paper and corrugated products collected will be used as raw materials for one of Pratt’s paper mills and returned in the form of sustainable, 100% recycled content packaging. Non-paper recyclables are transported to end users, while non-recyclables are used as fuel for Pratt’s clean energy plant, which powers the paper-making process. Continue reading Kronotex USA begins major recycling initiative

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Executive forecast: Things are looking up for laminate category

By Louis Iannaco 

Volume 27/number 15; December 3/10, 2012

After a rough few years, it looks as if the laminate segment may be on its way back to better, more profitable times. At least that’s the way industry executives believe, with one chief reason being the positive signs coming from builder business. Increases in the demand for higher end goods are also contributing to a more optimistic outlook for next year. Continue reading Executive forecast: Things are looking up for laminate category

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Advantage America: For mills, it’s all about being in ‘quality control’

One of the great advantages for companies that make product both abroad and in the U.S. is the ability to control their fate. In the case of quality control, firms that manufacture here are able to shape their own destiny as they reassure customers that product will get to them in a timely—and profitable—fashion. Continue reading Advantage America: For mills, it’s all about being in ‘quality control’

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Kronotex USA obtains GREENGUARD certification

Barnwell, S.C. — Laminate flooring manufacturer Kronotex USA has announced its product line has earned GREENGUARD Indoor Air Quality Certification issued by the GREENGUARD Environmental Institute (GEI). Continue reading Kronotex USA obtains GREENGUARD certification

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Executive forecast: Laminate officials remain optimistic

By Matthew Spieler

 

With the massive slide laminate had been on continuing to level off in 2011, officials remain upbeat the category will soon see better days—albeit not to the degree they once were, but compared to where they have been recently, any improvement is a welcome sight.

Executives admit there are still tremendous challenges even beyond the economy but feel laminate’s realism, performance and overall value will win back the post-recession consumer. Continue reading Executive forecast: Laminate officials remain optimistic

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Laminate: Dollars down in category, but volume up

There are pretty much two ways to look at the laminate flooring category in 2010. The optimists will focus on the fact that for the second consecutive year, and in a very tough economic climate, laminate manufacturers moved more square feet of the product than the year prior. Unfortunately, it is happening at the expense of the product’s average selling price. Thus, the category suffered its fourth straight year of declining sales in terms of dollars, although similar to 2009, the dip was only in the 2% range. Continue reading Laminate: Dollars down in category, but volume up