Conventional wisdom would suggest that softening conditions in the new home construction market over the past eight to 10 months might put a damper on laminate flooring sales in that bellwether sector. After all, it is estimated that new residential construction accounts for anywhere between 15%–18% of category sales in the U.S. However, several major suppliers said that was not the case. While builders have certainly scaled back on the overall number of planned projects, they are continually looking for ways to lower construction costs for those builds that are, in fact, moving forward.
One key strategy that builders are employing entails sourcing lower-cost building materials to make homes more affordable amid higher mortgage rates. That fits right into the wheelhouse of the laminate category—a product segment that continues to enjoy a renaissance of sorts. “The reports of a laminate resurgence are [undeniable] in the industry,” said Barbara June, president of the North American Laminate Flooring Association (NALFA). “Wood-based floors—including and especially laminate—are selling well.”
That sentiment is largely supported by the laminate flooring manufacturing community. “Our retail, trade and builder partners tell us they see an increased demand for laminate—so we anticipate a surge in sales,” said Mike Belprez, director of product management and innovation, Cali. “With three new collections in the category, Cali now offers high-performing waterproof products in both hardwood and stone/tile looks, offering a cost-effective solution across all interior design styles.”
BHW Floors, which is also putting more focus on the laminate portion of its total hard surface product offering, also attested to the segment’s resurgence. “Laminate flooring is definitely on the upswing, and we see nothing but continued growth in the category,” said Jason Grant, vice president of BHW Floors. “We made significant investments last year by adding laminate production at our factory, and we will continue adding more decors to the category by introducing new collections.”
There’s no doubt that the laminate flooring category has reaped the rewards of greater acceptance among end-use sectors such as the builder market. At the same time, the category has also benefitted from potential homebuyers staying on the sidelines due to higher interest rates. Logic being: why trade a mortgage based on 3%-4% interest for one in the 6%-7% range? As a result, those homeowners who choose to stay in their homes for the foreseeable future are investing in more affordable flooring options for their renovation projects, thereby sustaining residential remodeling activity.
Again, categories like laminate flooring hold the advantage here. “Consumers are choosing laminate for a variety of reasons—it’s beautiful, sustainable and readily available,” said David Moore, senior director, product, Mohawk, which markets the popular RevWood brand. “The technologies are at such a place now where you’re getting really high style and design, great texturing and low gloss. Not only do they look really good, but they also perform well.”
Another positive attribute of laminate that’s swaying customer influence, according to Moore, is the product’s sustainability story. “We really do see that as a key factor in a homeowner’s thought process for picking a floor. They’re asking questions like: ‘What is it doing for the environment?’ ‘Is it sustainable?’ ‘Does it have recycled content?’ We’ve seen a lot of interest in the category and specifically our products because of the carbon-negative aspect of what we can do with RevWood.”
Taking SPC head on
Another factor driving greater consumption of laminate flooring today, experts agree, is growing consumer disenchantment with some competing hard surface products, namely low-quality, entry-level SPC. Retailers and distributors have not forgotten the troubles they ran into with getting supplies at the ports during the height of the COVID-19 pandemic. In addition to that, there were reports of sub-par rigid core products that were not holding up well to consumers’ standards.
“The most pressing issue we face currently is the price pressure from cheap, low-end SPC products in the market,” said Alex Shaoulpour, president, HF Design. “However, more customers are starting to realize the marginal price difference and performance of a modified HDF core laminate is far superior and not worth the risk of customer complaints.”
In many cases, the loss of market share previously held by low-end, poor-quality SPC has translated into laminates’ gain. “There’s no doubt there has been some softening in the desire for some SPC/WPC products—which is a big category,” said Derek Welbourn, president and CEO of Inhaus. “As a result, laminate is benefitting.”
The rigid core import category was especially hard hit by U.S. Customs restrictions on flooring products produced in the Uyghur region. As Mohawk’s Moore explained: “A lot of the imported LVT products out there, especially under UFLPA, had to re-engineer their products and take out some of the fillers and other components. There were also issues with some of the locking systems on SPC. Many retailers and consumers turned away from that and are going to a more stable, strong product like laminate.”
Isaac Lee, director of marketing for Eternity Floors, which markets an array of hard surface products, concurred. “The market is moving more and more away from SPC as expected now that there is more to offer to the consumer,” he told FCNews.
At the same time, buyers are increasingly seeking out alternative sources, he added. “That’s why we are committed and prepared with new laminate flooring lines not only from Asia but from America, Spain and France. Our Made-in-USA waterproof performance laminate lineup, AquaFi, has been well received by our customers. And our pre-order launch of our new Made-in-USA line, EcoDense hybrid resilient waterproof performance, turned out to be higher than anticipated.”
While the situation was unfortunate as far as some imported rigid core suppliers are concerned, the situation represents an opportunity for laminate manufacturers to tout the merits of their products. “The challenge for many laminate suppliers today is overcoming the outdated perception that laminate is cheap and of poor quality,” said Billy Ko, president of Johnson Hardwood, which offers a broad selection of hard surface products, including wood, high-performance laminate and rigid core. “Advances in technology have significantly improved the visuals and durability of laminate flooring, and new materials and enhanced cores have brought water-resistant and even waterproof features. While competition from SPC/WPC remains strong, more consumers are recognizing laminate’s superior scratch resistance and durability. There’s still ground to cover, but the shift in consumer perception is under way.”
Success, laminate producers say, requires re-educating retail sales associates accordingly. “For us, the most pressing issue is gaining RSA endorsement of the laminate category at independent retail,” said Brian Parker, vice president, product management, AHF Products. “SPC/WPC rigid core products have been the darling flooring products for the last decade and is the easy sale for the RSA. Waterproof laminate is also a rigid core type product with great visuals and performance. That makes it an easy transition for the RSA to make to promoting and selling laminate.”
Cali’s Belprez, agreed, adding: “The main challenge facing laminate is convincing customers this modernized product is a competitive alternative to luxury vinyl and even hardwood in terms of both performance and looks. It will take some educating to downplay the failings of the laminates of yesteryear and demonstrate this new product’s remarkable capabilities.”
Leveraging stateside production
As bottlenecks at many of the country’s ports became commonplace, that forced many specialty flooring retailers and wholesalers to explore alternatives to resilient products that they had long sourced, reliably, from Asia and other parts of the world. While the logjams have largely disappeared, the primary beneficiary of that pivot to alternative hard surface flooring sources was clearly laminate flooring. Not only did it provide a viable option to imported SPC/WPC/LVT from a visual and high-performance perspective, but it also gave buyers an opportunity to explore and/or revisit relationships with laminate producers right here at home.
“Domestic laminate manufacturing has served us well for many years,” said John Hammel, senior director, hardwood and laminate, Mannington. “It allowed us to service our customers over the fluidity of the last few years at a time when others struggled. Since the beginning of 2022 we’ve been able to consistently service all orders within three weeks.”
Another upside to domestic production for Mannington—whose laminate flooring manufacturing operations are based in High Point, N.C.—is the relative proximity to its corporate headquarters in Salem, N.J., where most of its design team members are located. This, according to Hammel, allows more seamless collaboration between different departments. “Our style and design team continues to develop in-house designs that lead the industry in their realism,” he explained, citing Mannington’s TruDetail Digital print technology, which allows for a much larger number of unique EIR planks.
Not to be outdone, Mohawk—with operations in Thomasville and Garner, N.C.—continually leverages its capabilities on both the manufacturing and design fronts. Whether it’s WetProtect, the latest click system or advancements in digital printing (i.e., Signature Technology), the goal is to continue to build upon its signature RevWood laminated wood line as interest in the laminate category remains high. “During 2020, 2021 and 2022, we were making as much product as everyone wanted,” Mohawk’s Moore said. “The investments that we’ve made in our factories—as well as just some changes that we’ve made internally—will put us in a great supply position for the foreseeable future.”
Major homegrown suppliers of the product—both branded and private-label suppliers—also cite the benefits of having production facilities that are near to their primary customer bases. “There are certainly advantages to being close to the market,” said Kyle Brown, executive vice president of Barnwell, S.C.-based Swiss Krono USA, which is estimated to produce anywhere from 25%-30% of the laminate supplied to its North American partners on a strictly private-label basis. “Obviously, with domestic manufacturing and warehousing we can offer very quick response times. In fact, for most of our retail partners, we’re just a drive down the road. That’s especially helpful when you’re working on forecasting, etc., because you’re not trying to coordinate across difference time zones. That’s a huge advantage to us being down here.”
However, perhaps it’s the supplier’s clients that stand to benefit the most from being close to their partner’s manufacturing base. “By working with a domestic supplier like us, there’s an overall reduction in the need for retailers to stock inventory,” Brown added. “If you’re a retailer ordering by the container load, you’re buying FOB and loading up working capital and tying it up in inventory and long lead times. Right now we’re working off a mix between make to order and make to stock. Most of our business is make to stock, so we hold inventory here domestically to make sure it’s in the right place at the right time for our commercial partners.”
Outlook for remainder of 2024
Laminate flooring proponents are, by and large, bullish on the category’s outlook for the remainder of the year. This despite ongoing challenges from competing product segments as well as the fact that it’s an election year.
“Laminate is a category that should see growth in volume and modest growth in dollars,” said Jason Surratt, president, Tarkett Residential. “The recent innovation in the product category in terms of realism and resistance to water make the category a great choice for the end consumer. It’s these attributes and customer sentiment that drove Tarkett Home to enter the market and launch our new laminate collection, ShoreFlor.”
HF Design’s Shaoulpour is equally optimistic. “We are very bullish and have had tremendous success in all our markets we currently sell Aquaproof.” In that same vein, Inhaus’ Welbourn is forecasting a 5% increase in category sales in the second half vs the first half of the year.
But perhaps Johnson Hardwood’s Ko put it best: “We believe the laminate market will continue to gain market share in 2024 and beyond. Manufacturers are introducing exciting new features and capabilities, significantly improving the visuals compared to the past. With these improvements in aesthetics and superior scratch resistance, laminate makes for an increasingly attractive option for consumers dissatisfied with the performance of other product categories. As long as we can avoid the race to the bottom, I believe consumer sentiment will continue to shift, leading to a moderate increase in both sales dollars and volume.”
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