Hardwood: Exotics still have their place in the market

Home Inside FCNews Hardwood: Exotics still have their place in the market

February 29/March 7, 2016; Volume 30, Number 18

By Reginald Tucker

The vibrant colors, unique grain characteristics and unusual markings found in many “tropical” exotic hardwood floors are not only visually striking, but from a performance perspective these rare floors rank amongst the hardest, most dense species known to man. And although they are typically priced above comparably constructed products made in America, they are still within the reach of many consumers. So why is it that tropical exotic woods—which seemed poised to seize a bigger share of the U.S. hardwood flooring market just 10 to 15 years ago—appear to now be ceding more ground to homegrown species, particularly “domestic” exotics?

“[Tropical] exotics have definitely lost a little bit of steam lately,” s
aid Jeff Krekelberg, president of Gold River Flooring, a three-store chain based in Rancho Cordova, Calif. “When they first came out they were oversold to the consumer and this left somewhat of a black eye on the market.”

By “oversold” Krekelberg means many marketers hyped the purported superior scratch resistance qualities of some species. On top of that, he said consumers and retailers alike actually understood very little about how exotics behave. “People said, ‘OK, I want Tigerwood, Brazilian cherry, etc.’ But a lot of people didn’t realize when they bought an exotic floor that the color changes when exposed to sunlight. So when the homeowner moved the furniture or an area rug, they would notice the color of the floor was lighter than the areas that were previously exposed. That [pulled] a lot of the referral business away from exotics.”

Changes in the overall economy also impacted sales of exotic hardwood floors, according to industry executives. During the heyday for exotics in America (roughly 10 to 12 years ago), there was a solid supply chain in place and importers were very aggressive with their pricing. But the economic crash in 2008 had a chilling effect on the exotic market. “Customers started buying less product in the wood business,” said Dick Quinlan, senior director of hardwood products for Mohawk/Unilin. “The crash changed the market significantly.”
At the same time, Quinlan noted, the Lacey Act was coming into play. This put additional pressure on exotic hardwood importers and marketers who were now charged with the responsibility of ensuring that their suppliers and agents across the chain complied with new regulations pertaining to sourcing.

Bill Schollmeyer, CEO of Johnson Hardwood Floors, believes two factors conspired to put a damper on exotic sales: a steep increase in prices about two and a half years ago along with a seismic change in consumer tastes. “The color trends shifted from reds to browns, and wider widths became much more popular,” he explained. “Exotics became too expensive versus domestic species and, for the most part, their colors and widths weren’t in sync with the trends. But I’m sure at some point they’ll come back into style.”

Other industry observers also attribute the move away from tropical exotics to changes in consumer preferences. “Exotics were the hottest thing in the market 10 years ago, but it has shifted toward styles like European oaks,” said Doug Leigh, vice president of Triangulo Hardwoods’ U.S. division. “Market conditions and trends can change very quickly in our industry.”

In particular, the trend toward more rustic looks—an aesthetic not usually associated with exotics—is playing a critical role in the shift. “Exotics tend to have a smoother texture and they typically feature higher gloss levels,” said John Himes, president and CEO of Wood Flooring International. “This has made the market for those floors much smaller than it had been, say, 10 or 15 years ago. And with so much migration to texture, scrapes, wire-brushes and larger bevels across the country, more and more people are going to the rustic products.”

Josh McGrane, president and COO of Max Woods, concurs. “The consumer is now shopping for that matte finish that looks like a reclaimed floor or the appearance of an oil finish,” he said, citing species such as white oak and American hickory—both hot sellers in the Max Woods lineup. “She wants a wider and longer board for her home.”

Still, executives like Leigh and Himes believe exotics have their place in the market, the thought process being the more variety for the consumer, the better. “A great showroom is not complete without a sustainably harvested exotic program,” Leigh said. “The exotics category has established itself as a must-have.”

Himes added that while the tropical exotic category does not represent as significant a component of his company’s business compared to six or seven years ago, Wood Flooring International cites strong interest in species such as Brazilian cherry and acacia, especially solids. “Exotics perform well and they look great, but in general the U.S. trend has been toward more texture and a little more rustic whereas the exotics were always a little more formal,” he explained. “Nowadays it’s a much more specialized/ regionalized approach when it comes to exotics.”

One region that still seems to be particularly hot for exotics right now is the Southeast, namely Florida. In the Tampa area especially, dealers are seeing quite a bit of exotic activity in high-rise residential settings as well as luxury new home construction projects. “Some of the popular species we’re putting in homes these days are chocolate pecan, amendoim, tigerwood and Brazilian cherry,” said Pat Adipietro, president of the insurance and builder & commercial sales division of NAFFCO, which also operates three retail stores in the region. “On average these are homes that range anywhere from $750,000 all the way up to $5 million.”

Adipietro, who specifies the Triangulo brand exclusively when working with exotics, admits the trend toward 7- and 8-inch “European” hardwood is slowly encroaching on exotics’ turf. But he’s hopeful that some new products that are currently in development from the Brazilian supplier will help the category take back share. (Triangulo confirmed plans to launch several products ranging from 7 to 9¼ inches wide and 7 feet long as well as a few “specialty” items featuring interesting stains and colors.)

Some executives believe—ironically—that the key to helping tropical exotics take back share is to downplay the fact they are exotics in the first place. “As a distributor, we are actually not trying to pigeonhole the exotics into a separate category,” said Steve Rosenthal, senior vice president of sales and marketing for No. 4-ranked distributor All-Tile, which counts the IndusParquet brand among its four hardwood lines. “Right now exotic isn’t a sexy word to the consumer; it might turn some people off who are misinformed about how the forests are managed. That is, unless it’s a product the consumer really wants. We believe wood is wood, and you open yourself up to a larger customer base if you market it that way.”

Domestic exotics emerge

Meanwhile, demand for homegrown exotic species such as hickory, birch, walnut and maple has been skyrocketing in recent years. Retailers credit the overall trend toward traditional, timeworn looks in home decor, which dovetails nicely with the wide-width, hand-scraped format that’s so popular today.

“We’re not seeing a lot of movement in exotics in our area, but we are definitely seeing strong demand for hickory,” said Gary Cissell, president of Mill Creek Carpet & Tile, Flooring & Granite in Tulsa, Okla. “The barnyard looks in particular seem to be very popular.”

In response to the shift, many hardwood flooring manufacturers have adjusted their product mixes accordingly. It’s not that they are eschewing tropical exotics altogether; they are putting more of the emphasis on domestic species (FCNews, Feb. 1/8). “We do have some exotics in our line, such as Brazilian cherry, but we really don’t promote them heavily because consumers are moving away from the red tones,” said Brian Greenwell, vice president of sales and marketing for Mullican. “But we are seeing a growing interest in hickory and walnut, and our latest introductions reflect that.”

Other suppliers are responding accordingly. At Mohawk, for example, the focus is on introductions that highlight maple and hickory (i.e., the Rockford Collection) as well as walnut looks in an engineered format (satin walnut from the American Designer series). The company is also developing innovative products featuring a fiber core. “The new core actually makes the surface harder so we are able to bring in some new visuals and some dynamite looking colors and styles,” Quinlan said. “This has allowed us to introduce some new species that have more of a tropical look but are domestically grown and produced.”

For its part, Max Woods has focused its new product development on 7½-inch-wide, 8-foot-long planks. “We wanted to give our retailers a look that the consumer wants and sees in the magazines and on TV,” McCrane explained.

Not to be outdone, Shaw is also eyeing the exotics business in response to consumer demand (FCNews, Jan. 18/25). “Shaw has been working on developing a new exotic hardwood program,” said Natalie Cady, hardwood category manager. “We are looking forward to unveiling the full collection soon.”

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