By Ken Ryan
Vinyl is in vogue. So said Allen Cubell, vice president, residential product manager, Armstrong World Industries, who echoed many of the sentiments shared by industry leaders as the resilient category continued to grow in 2012 amid still sluggish conditions in housing and weakness in the general economy.
Marketing executives say the total resilient market will be about $2 billion in 2012, with LVT accounting for nearly 35% of the market, or roughly $700 million. According to a consensus of manufacturing executives, LVT’s growth will be in the 15% to 20% range in 2012, and even higher among top-tier manufacturers such as Mannington and Armstrong.
Sheet vinyl, meanwhile, though not quite as robust, will have also grown but in the mid single digits. “The market growth in LVT is due to taking market share from wood, ceramic and VCT because of easier maintenance, installation and competitive price points without sacrificing design and style,” executives consistently said.
Market dynamics drive growth
David Sheehan, vice president of resilient business for Mannington, said the continued growth and strength of the resilient category is driven by a confluence of factors. “Vinyl has never looked or performed better. Installation options for both sheet and LVT are numerous—loose lay, click systems, grouted visuals. The versatility of today’s fiberglass floors and the beauty of LVT are driving growth both residentially and commercially, all at a time when the value proposition that resilient provides is extremely important.”
Michael Raskin, CEO, Raskin Industries, said innovation in the category has created more options in floating LVT, be it non-skid backings, click or self-stick strips. “Traditional glue down is still a large part of the market because of the lower price points, and the commercial market still has hesitations on using a floating product. The installed price points for traditional glue down are especially low where labor is less, such as markets like Texas.
“Another key factor is durability and design,” he said. “In a down economy, end users are looking for products that perform, are easy to maintain and have strong aesthetics, whereas before—in a good economy—these would have not even been considered. End users are impressed with the product, so residential customers will recommend it while designers and architects will also continue to specify the product.”
While LVT is not the only growth area within resilient—with strength occurring in other non-PVC related sectors—LVT continues to soar above the others, in large part because of continued advancement in aesthetics and installation technology, executives said.
Paul Murfin, president of IVC U.S., said retailers, contractors and consumers are increasingly recognizing the historical performance characteristics of vinyl, with durability and cleanability now enhanced by more realistic looks and easier installation options. LVT, he said, “is moisture resistant, easy to install, good looking, realistic and affordable, and generally quiet and comfortable underfoot. The category overcomes some of the drawbacks other categories experience, so it is hardly surprising resilient is growing at a faster pace than the industry.”
Cubell added that the nice trend about LVT is that the mid- to higher-end goods are selling. “We see a lot of growth there, especially Alterna, which continues to win.”
All the available formats—click, glue-down and loose lay—have their advantages and price points, and that in turn has allowed for a larger market share. While both click and glue down are growing—click at more than twice the rate of glue down—no one product is a complete solution, yet all give users a good choice as long as the product is made correctly, according to executives.
“The installation system is the sizzle but the quality and design is the sauce,” Raskin said. “You need both to sustain the growth and create value, otherwise it eventually becomes a commodity and market share will decline. Companies that understand this will be part of the market and its long-term continued growth.”
In terms of pricing, glue down and click are both trending down, while loose lay price points are being maintained. Raskin said there is a bottom for quality products since LVT is petroleum-based and its cost is strongly related to that of oil. “Vinyl is inorganic material and it’s important to realize that the raw materials used and how it is manufactured are critical for quality floors that perform over time,” he said. “One needs to take a longer-term approach to the category to create a strong brand built to last.”
Fiberglass vs. sheet
Resilient executives agree that fiberglass is taking share from sheet goods, a factor driven by ease of installation, cushioned comfort underfoot, ease of repair and affordable price points.
Fiberglass will continue to grow at the expense of felt, which will migrate to lower price points. “Felt is showing a gradual decline, but it’s not precipitous,” Cubell said.
Raskin observed that the market is well educated on fiberglass and understands that the key feature of fiberglass is it is an extremely stable component. “I am aware of three types—chopped, mesh and solid sheet of fiberglass. Solid sheet being at the high end for raw material costs and the need for special equipment to keep laminated. Ultimately it is up to the retailer and architects to decide if they think they’re worth the added cost.”
To Murfin, glass fiber flooring products are easier to install and repair than felt, and also offer additional comfort and “hand,” as he called it. “As a result there is significant shift from one category to the other. All of the newer plants in the vinyl category are glass fiber plants. I wonder when the last felt plant was built? The product has a higher vinyl content and less filler so it is generally more expensive to produce, but more efficient factories such as ours can now supply glass fiber flooring at similar prices to traditionally less expensive felt products. Affordable glass products are now becoming the product of choice in builder and property management channels in addition to retail where the product first emerged.”
Realism and natural looks continue to dominate trends in style and color, while select non-traditional visuals are also taking hold. Other trends seen are in oiled white oaks in grays and light natural colors; and grays and beige with gray tones in tile.
“The same trends you see in laminate are present in resilient, that is larger, wider planks, wider widths. The 12 x 12 format has been successful for us,” Cubell said.
The growth of resilient, and LVT in particular, is not without its potential pitfalls. “There are a couple of challenges,” said Clark Hodgkins, resilient category manager, Shaw Industries. “The market itself is fragmented and has overcapacity. Add to that, as with many fast-growing segments, standardized testing is spotty, and product quality can be inconsistent. Opportunity lies in creating well-styled products, having deep inventory and assuring quality.”
Raskin said the challenges are making sure the market doesn’t get “muddied up” with suppliers who do not understand LVT, which will stain the category by providing poor quality, marketing and design. “This will cheapen the category and impact the image of resilient flooring,” he said. “On the flip side, the more companies that provide high quality design and tasteful marketing will excel and enhance the image of the category.”
Cubell’s worry is that LVT could face a “trust” issue with consumers. “Just because everyone can make the product doesn’t mean everyone should buy it. From our data most don’t know what they are doing, and it generally doesn’t help a category to have a lot of low quality hit the market. It turns off consumers.”
According to Sheehan, it wasn’t long ago that many thought laminate would ultimately kill the vinyl category. “But look at where we stand today. The laminate industry is experiencing a number of challenges as a mature category and vinyl has reinvented itself to become one of the strong growth segments in the industry. Innovation and relevance to the consumer must always be the focus for the vinyl industry and that is the challenge.”
Murfin added that the challenge he sees “is shaking off the historical perception that vinyl is simply a cheap imitation of the real thing. I’d like to think that we start to promote the category based on the solutions it offers vs. it being a less expensive alternative to a more expensive flooring product.”