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22 Resilient July 23/30, 2012 Perspective What led to vinyl’s record year? Industry executives Russell Rogg, CEO, Metrofl or; Keith Lacagnata, vice president of sales and marketing, FreeFit; Pat Buckley, vice president of product management, Congoleum; Jonathan Train, vice president of product development, EarthWerks; and Allen Cubell, vice president, residential product management, Armstrong put it into perspective. What fueled vinyl flooring’s rapid increase in sales and market share in 2011? Rogg: There is no doubt that the advent of click LVT (luxury vinyl tile) has only increased the amount of share the category is taking from laminate fl ooring residentially and commercially. Laminate has some drawbacks. Using click LVT has become a natural next step for folks who were familiar with installing laminate. Lacagnata: When you combine the tremendous gains of LVT and fi berglass sheet, you begin to understand how these products are encroaching upon the entire industry. Without Chart 29 Other resilient flooring* market value and volume (in millions) 400 350 300 250 200 150 100 50 0 Chart 30 Resilient floor covering sales by volume (Total square feet: 3.20 billion) 1.8% 0.4% 24.6% $282.5 2007 2008 2009 2010 2011 6.1% 352.9 5.4% $279.8 28.4%% 330.8 Market sales $263.5 33.3% question they are taking share from every category, but particularly laminate. Gains that would have gone to laminate got siphoned off to LVT last year. Buckley: Category price increases were a big factor. When you combine that with double-digit growth in LVT and sheet you get impressive increases in category value. LVT is by no means inexpensive, selling on average for $3 or $4 per square foot. That translates into $36 to $40 per square yard. Catalina’s number might be a little high but not too far off. Train: Sheet vinyl increased slightly in total volume due to an improved economy and increase in value as more people continued to move toward fi ber products. I also think that price increases added to total value. For LVT, my guess is that the value increased at least 10 percent last year. And LVT continues to gain market share from other categories Cubell: The growth of LVT in general tends to be at higher average unit values. Raw materials have been going up. Freight has been going up. There are a number of factors going on, all driving the average square foot value up. 280.1 $270.1 250.2 Square feet Source: Catalina Research *Other resilient flooring includes cork, other plastics, rubber and linoleum VCT/Linoleum 1,064.0 million Vinyl sheet 907.0 million LVT 785.0 million Fiberglass backed 195.0 million Rubber 57.0 million Cork 12.0 million $281.5 244.0 Other plastic and flooring materials 175.0 million Source: Catalina Research Chart 31 Other resilient flooring* imports value and volume (in millions) Chart 32 Other resilient flooring* exports value and volume (in millions) Chart 33 Other resilient flooring* average value per square foot $1.20 $1.05 $0.90 $0.75 $0.60 $0.45 $0.30 $0.15 $0.0 240 210 180 150 120 90 60 30 0 100.0 87.5 75.0 62.5 50.0 37.5 25.0 12.5 0 $0.80 $106.1 $27.6 2007 2008 2009 2010 2011 $0.85 196.7 51.4 $0.94 $43.3 Market sales 1.08 91.2 1.15 2007 2008 2009 2010 2011 *Other resilient flooring includes cork, other plastics, rubber and linoleum Record high Continued from page 20 $107.6 230.3 2007 2008 2009 2010 2011 Market sales Square feet Other resilient Includes imports of flooring made of other plastics, cork, linoleum, rubber and other materials. Mannington shifts more of its LVT production to its new Amtico facility in Georgia.” Amtico, Armstrong, Centiva, Congoleum, Mannington and Tarkett all supply the LVT market with domestic made product. “Most of our products are made in the U.S.A. and have always been so,” said Pat Buckley, vice president of product management, Congoleum. “Our most popular products — DuraCeramic, DuraPlank II and AirStep — are all made here and increasing in popularity.” Other resilient flooring Sales of cork, rubber, linoleum and floors $95.4 $34.3 227.7 70.9 Square feet $109.6 $40.9 213.5 76.7 $117.2 $40.4 74.7 161.9 *Other resilient flooring exports include flooring made of other plastics, linoleum, rubber and other materials Chart 34 Vinyl sheet and floor tile average value per square foot $0.8 $0.7 $0.6 $0.5 $0.4 $0.3 $0.2 $0.1 $0.0 $0.59(R) $0.65(R) $0.65(R) $0.70(R) $0.72 2007 2008 2009 2010 2011 Source: Catalina Research made of “other plastics” increased 4.2 percent in value last year, mostly due to price increases tied to higher raw materials costs, while sales volumes declined 2.5 percent, according to Catalina Research. “When the economy gets back to normal this segment will get back to where it was before,” said Ivan Stoler, president, Allstate Rubber. Valued at $281.5 million dollars in 2011, this “other” category is near its 2007 record sales level of $282.5 million dollars, but down some 30.9 percent in volume during the same period. Currently, the category accounts for less than 2 percent of industry sales. But, the segment has experienced the industry’s highest price increases with 2011 average square foot pricing up 6.5 percent over 2010. FCW
July 23/30, 2012 23 Mohawk releases third sustainability report [Calhoun, Ga.] Mohawk Industries, Inc., based here, has released its third annual sustainability report this year. While adhering to the Global Reporting Initiative (GRI) standard, in place since their first report, the company entrusted FIRA, an independent firm headquartered in The Netherlands, as the report assurance provider. “We are dedicated to integrity and open communication with all of our stakeholders, which is why we have always used an independent auditor to verify the accuracy of information before we release the report,” said Jenny Cross, director of global sustainability at Mohawk. “Using GRI standards to report the progress we’ve made in our sustainable practices ensures that our organization is measuring and documenting its practices in a manner consistent with global best practices.” Mohawk stressed the importance of understanding that sustainability is more than just environmental initiatives — people, the planet and profit are the pillars. “If we don’t keep our people healthy and smart, our business will not be sustainable,” said Cross. During 2011, for example, Mohawk expanded Healthy Mohawk, one of its most successful wellness programs to date. (The basis of the program was to combine telephonic specialty nurse management and on-site Healthy Life Centers [HLC] to the most densely populated employment centers.) Two new HLCs have been set up in the Dallas area for Dal-Tile employees. From 2010 to 2011, Mohawk saw a 7 percent increase in preventative care, a 9 percent decrease in radiology and scans, and a 50 percent decrease in diabetes-related hospital stays. In four Georgia HLC locations, exercise and nutrition classes are now offered. New initiatives to sustain the planet include adding an on-site fueling station for its vehicles reducing the amount of miles its trucks must drive to and from an off-site location by 39,000 miles a year. “Typically at our distribution station we would go fill up, but your vehicle can only be so heavy. We would have to go back again and put the rest of the product on. No w, we can do it on-site and take the mileage out,” said Cross. Mohawk is continuously working towards their goal of becoming 25 percent more water and energy efficient by 2020. It has changed its dying process for carpet, and now uses the continuous dye method which uses less water. Though the company experienced a 4.8 percent increase in water usage in from 2010-2011 due to the state of the market and their product mix changing slightly, “[Mohawk] expects the spike to work its way out in the coming years,” predicted Cross. “We appear to be on track to meet our goals.” Over the last six years, Mohawk has reduced water usage by 1.13 billion gallons. — Taryn Baum FloorForce partners with Fabulous Floors [Boca Raton, Fla.] FloorForce has announced a marketing partnership with Fabulous Floors Magazine. Fabulous Floors, the first consumer magazine devoted solely to flooring styles, will provide a widget for Floor- Force retailers to put on their websites, which opens a digital version of Fabulous Floors Magazine, exclusive to FloorForce customers. The digital magazine will provide consumers with ideas and inspiration on flooring products while ensuring that manufacturers have a direct line to consumers. For retailers, the added sticky content provides not only added value for their customers but ensures that they remain on their site longer — encouraging them to purchase products or visit the store. “The Fabulous Floors widget is just another great example of the value that FloorForce brings to the flooring retailer, the manufacturer and to the consumer,” said John Weller, marketing director for FloorForce. “We have also launched a bi-monthly newsletter for our retailers called CloudBurst, and a blog site named Floorboard that is plum full of content that our retailers can use to populate content onto their own social media networks. Both of these were developed to further our one and only goal of helping the flooring retailer accelerate sales through technology.” Added Fabulous Floors publisher Margo Locust, “Floor Force websites currently reach more than 36,000 consumers searching for flooring per week and this number is growing all the time — having this exposure for our informative content is wonderful.” FCW Trade associations partner with UPenn [Philadelphia] Commencing in January 2013, the University of Pennsylvania will begin a partnership program with the Association of Rug Care Specialists (ARCS), National Wood Flooring Association (NWFA), North American Association of Floor Covering Distributors (NAFCD) and the World Floor Covering Association (WFCA) to provide participants with an opportunity to study the essentials of business management and to develop new skills and strategies needed to grow their businesses. “The partnership is an incredible opportunity for trade association members to develop their management skills and learn strategies for growing their business at one of the country’s most respected academic institutions,” said Jim Walters, immediate past chairman of WFCA. “We have been interested in small businesses for a while — we have the Pennsylvania Small Business Development Center housed on our campus and we got them involved in the idea of creating a program to support trade association members in growing their businesses,” said Rita McGlone, executive director of training and consulting services at the University. “The common theme throughout the program will be to utilize each other by working as peers in small groups towards a particular goal.” The program will run anywhere from 9-12 weeks, a length that will be determined once the curriculum has been finalized. It will combine traditional face-to-face classes with online courses to minimize time spent away from businesses. While not a credit-granting program, partakers will obtain a certificate from the University upon completion. “They will be able to receive actual skills to take back to their businesses and implement them in real time to be able to see the return of their dollars quickly,” said Ken Adams, president and CEO of ABC Oriental Rug and Carpet Cleaning and a member of the ARCS board of directors. The University is looking for 25 to 40 participants, qualified by being a member of at least one of the associations and by being either a business owner or in a position of management in the industry. “Our members were surveyed to see who would be interested, and we provided those results to UPenn. After speaking with the other associations, it was decided that there was enough interest to move forward,” said Anita Howard, senior director of communications and events, NWFA. “Most of the businesses in our industry are run by generations of families, and now we have a younger core of people coming in. The economy and business environment has totally changed — we knew a course that taught management skills wo uld be something that would be great for us,” said Adams. The partnership will maximize the resources available at the University, including the Center for Organizational Dynamics, Department of Economics, and the Wharton Small Business Development Center. Potential courses include Marketing for Success, Financial Management, Family Business Planning and Succession Issues, and Negotiating Skills. FCW Shaw’s Epic Continued from page 3 Shaw’s Kathy Young, director of marketing, said the company is thrilled that De Giulio chose Epic for this year’s kitchen. “It’s always a pleasure to work with the kitchen designer to choose a Shaw floor that brings his or her dream kitchen to life, and Epic has provided such a strong foundation for this year’s stunning Kitchen of the Year,” said Young. “Top kitchen designer Mick De Giulio has merged the beauty and hand detailing of our Epic hardwood with such a fun and dynamic chevron design to create a truly fashion-forward style statement in this fabulous kitchen. The result is a truly inspiring project for home enthusiasts.” Shaw is employing a number of marketing initiatives in order to tout its featured Epic hardwood flooring on the consumer level. Through social media outlets such as Facebook, Pinterest and its ShawFloors.com website, the company is showcasing photos, insightful descriptions and special insider previews of the kitchen. According to Christina Honkonen, marketing, communications specialist at Shaw, “This creative content empowers Shaw consumers with rich interior design and flooring inspiration. With new style ideas around every corner, from the chevron design created with our Epic hardwood in the butler’s pantry to creative tabletop displays that provided finishing touches.” Shaw also created a marketing kiosk with two tailored promotionals that encouraged visitors to ask the company specific questions relating to flooring installation, design ideas and flooring maintenance. Each Kitchen of the Year visitor could register to win a $1,000 floor giveaway, and a 10-percent off discount was made available to everyone. “Our outreach this year was designed to spark real and insightful dialog with our customers that will ultimately lead to a visit with their nearest Shaw retailer,” added Honkonen. Other featured brands in the kitchen included KraftMaid cabinetry, Whirlpool appliances and Kohler faucets. — Mallory Cruise
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 18 and 19: 18 Tile & Stone July 23/30, 2012 Pe
Page 20 and 21: 20 Resilient July 23/30, 2012 Vinyl
Page 24 and 25: Marketplace Next up in FCW August 2
Page 26: Randy Me ritt By Kimberly Gavin ple

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