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18 Tile & Stone July 23/30, 2012 Perspective Sean Cilona, marketing director for Florida Tile; Gianni Mattioli, president of Marazzi USA; Lindsey Waldrep, VP of Marketing for Crossville; Granitifi andre & Iris Group President and CEO Graziano Verdi; and Lori Kirk-Rolley, senior marketing director for Dal- Tile discuss today’s market conditions. What trends are driving growth today? Cilona: Stone is an expensive, higher-end product, but we’re defi nitely seeing demand for natural stone, like our PietraArt, Stone is a product that has a long lifespan and the versatility is endless. Mattioli: We continue to focus on new products, new technology and new sizes. We have invested highly in the inkjet and high-defi nition technology. The wood look also seems to be very popular. Verde: We’re convinced that the green economy is important not only due to the ethical value of environmental awareness and construction of an eco-sustainable world in today’s society but also because of the economic opportunities and new business potential it has to offer. Granitifi andre uses natural elements to recreate some of the world’s best-known marbles without the consequences for the environment that come with extracting quarried marble. Kirk-Rolley: While we’re seeing our growth being driven on the residential remodeling side, we are seeing a pickup in business in new home construction and commercial projects. Waldrep: We’ve always been strong in the architectural market and our new launch Laminam by Crossville is a full line of lean profile, large format porcelain products through an exclusive distribution agreement with Italian manufacturer Laminam, a division of Systems Group. . Chart 18 Ceramic tile average value per square foot $1.15 $1.10 $1.05 $1.06 $1.14 $1.05 $1.06 $0.0 $1.03 2007 2008 2009 2010 2011 Source: Catalina Research Chart 19 Ceramic tile by end-use market ($2.21 billion) 0.2% 19% 14.6% 25.1% 40.7% Chart 20 $4.12 0.4% Residential builders: $323 million Residential replacement: $899 million Manufactured housing: $9 million Commercial new construction: $555 million Commercial replacement: $420 million Transportation: $4 million Source: Catalina Research Stone average value per square foot $4.00 $4.00 $4.08 $3.98 $4.07 $3.85 $3.87 $0.0 2007 2008 2009 2010 2011 Source: Catalina Research
July 23/30, 2012 Laminate 19 Flatline: 2011 highs, lows By Raymond Pina The U.S. laminate floor wholesale market essentially remained flat in 2011, growing just 0.13 percent in value due to rising prices while declining 0.82 percent in volume, according to Catalina Research. The category’s wholesale value and average square foot pricing stopped declining, and domestic products overtook imports for the first time since 2008. But sales volume was dominated by the home center channel and continues to decline due to pressure from vinyl and engineered wood flooring. What’s more, this trend is continuing through 2012, according to Stuart Hirschhorn, director of research, Catalina Research. Chart 21 Laminate purchases by end-use market (Total: $894.2 million) Chart 22 Laminate flooring market value and volume (in millions) 1,400 1,200 1,000 800 600 400 200 7.5% $1,275.6(R) 12.2% Residential replacement $718.0 million Residential builders $67.1 million Commercial replacement $109.1 million 1,160.2(R) $1,047(R) 80.3% Source: Catalina Research 1,038.9(R) $901(R) Market sales “Overall demand for laminate flooring has leveled off,” Hirschhorn said. “The gains of domestic shipments were offset by declines in imports last year. We do see an estimated 1.5 percent increase in the first half of 2012 but that will keep the category well within the 950 million to 960 million square foot range.” Catalina estimated the 2011 U.S. laminate floor wholesale market at 949.8 million square feet and $894.2 million with an average square foot price increase of 1.1 percent to 94 cents. Domestic rising While Catalina reports an aggressive 13.8 percent increase in sales volume for domestically-made laminate product in 2011, overall category growth was stalled by a 13 percent decline in imported product, according to Hirschhorn. “It’s been like a rollercoaster where imports will out-pace domestics one year and then it flip flops the next — though there’s definitely a shift towards sourcing domestic 2011 key points Laminate sales remain virtually flat in 2011, growing 0.13 percent in value and declining 0.82 percent in volume. Average square foot pricing rose 1.1 percent in 2011, though pricing was off 14.5 percent from 2007 and 53 percent from 1997. Domestic suppliers account for 51.2 percent of U.S. square footage sales, a leading position not enjoyed since 2008. Laminate has lost 9.1 percent of market share since 2007. 912 $893(R) 2007 2008 2009 2010 2011 Square feet 957.7(R) $894.2 949.8 Source: Catalina Research R=Revised Chart 23 Laminate flooring imports value and volume (in millions) 600 500 400 300 200 100 0 $589.7(R) 550.0 $453.2(R) 461.9 Market sales products to offset rising import prices and increasing transportation costs,” he said. As a result, Hirschhorn said U.S. laminate floor manufactured shipments now account for 51.2 percent of U.S. sales volume. “There’s a paradigm shift from outsourcing to insourcing happening in flooring, especially in laminate flooring,” said Tony Sturrus, president and CEO of Shippenville, Pa.-based Clarion Industries. “This rapid shift is primarily being driven by the shrinking cost advantage China has versus the U.S. Labor is a relatively small component of the highly automated laminate manufacturing process so that Chinese advantage has little impact. China’s manufacturing costs are going up and they’ve devalued their currency but it’s not sustainable.” The home centers, pricing pressure Though domestic suppliers are taking share, it hasn’t had an impact on average square foot pricing because an estimated 60 percent of product is sold at low-cost mass merchants such as Home Depot, Lowe’s and Lumber Liquidators, according to Catalina Research. While average square foot pricing increased by 1.1 percent last year due to increased raw material and transportation costs, it remained down 14.5 percent from 2007 and a whopping 53 percent from 1997. Catalina Research estimates laminate floor sales represent 5.0 percent of the industry’s total 2011 value, a 2 percent decline from 2010 and a 9.1 percent decrease from 2007. However, laminate suppliers focused on the specialty retail market said that average pricing is increasing as dealers turn to better quality goods. “The better dealers have learned it’s not worth the effort to try and compete against home centers on pricing,” said Dan Natkin, director of wood and laminate business, Mannington. “They may have one or two products at an attractive opening price $461.9(R) 486.0(R) $476.2(R) Square feet 522.7(R) $419.2 2007 2008 2009 2010 2011 Chart 24 454.8 Source: Catalina Research R=Revised Laminate flooring average value per square foot $1.20 $1.00 $0.80 $0.60 $0.40 $0.20 $0.0 $1.10 $1.01 $0.99 $0.93(R) $0.94 2007 2008 2009 2010 2011 Source: Catalina Research R=Revised point, but their emphasis, and what their customers are increasingly buying, are thicker products with better quality and overall design.” Fred Giuggio, vice president of sales and marketing at Kronotex USA, said average price points are increasing in both the specialty retail Formica brand business as well as in private label business at Home Depot and Lowe’s. “The shift to domestic product has increased quality and we’re seeing a subsequent uptick in sales price,” he said. Armstrong raised its laminate floor pricing 5 percent last month, but currently other leading suppliers haven’t followed suit. An increase in price wo n’t stick, said David Carballo, vice president of sales, Faus. “We just had a product line review at Home Depot and these guys are putting a lot of pressure on price,” he said. “Lumber Liquidators is advertising price like crazy.” FCW
Page 1: Vol. 61 No. 14 A Hearst Business Pu
Page 4 and 5: 4 Table 1 U.S. floor covering marke
Page 6 and 7: 6 marketWise July 23/30, 2012 Who s
Page 8 and 9: 8 Carpet & Area Rugs July 23/30, 20
Page 10 and 11: 10 Carpet & Area Rugs July 23/30, 2
Page 12 and 13: 12 Wood July 23/30, 2012 Hardwood g
Page 14 and 15: Chart 10 Hardwood purchases by end-
Page 16 and 17: 16 Tile & Stone Tile & stone inch a
Page 20 and 21: 20 Resilient July 23/30, 2012 Vinyl
Page 22 and 23: 22 Resilient July 23/30, 2012 Persp
Page 24 and 25: Marketplace Next up in FCW August 2
Page 26: Randy Me ritt By Kimberly Gavin ple

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