LVT: The New Generation--domestic production and new technologies - Feb 2016
By Darius Helm
LVT-type products have been around since the mid 20th century, when Kentile first came out with its vinyl tile products, but just in the last decade or so, innovations in both design and performance have lent massive momentum to the category, making it the fastest growing product in flooring. And now, thanks to both huge investments in domestic production and significant technological improvements, the category is poised for another major transformation.
Over the last few decades, the bulk of LVT has been imported. There have been several domestic producers, most of whom are still in the game, with the notable exception of Kentile, which was gone from the scene by the turn of the century—though its gigantic red Kentile sign in Brooklyn, a testament to the borough’s industrial heritage, was only dismantled a couple of years ago. And there are also a handful of well established U.S. LVT businesses that have relied on overseas manufacturing partnerships. But for some time the bulk of product has been manufactured in Asia, much of it low cost but some of it at higher price points with advanced performance and sophisticated designs as good as anything produced in the West.
The balance of imported and domestically produced LVT is in flux right now due to several major investments in the expansion and new construction of LVT facilities in the U.S. According to Santo Torcivia of Market Insights, investments in domestic production over the last few years have topped half a billion dollars, and much of that has been since 2014.
AMERICAN MADE LVT
The first seismic shift came in 2012, when Mannington acquired Amtico, one of the biggest LVT producers in the world, with facilities in the U.K. and U.S. That move put Mannington right in the heart of the category and also reinforced the narrative of American made products. Within a couple of years, Armstrong started building an LVT facility in Lancaster, Pennsylvania; Shaw closed its rug facility and converted it to LVT production; Mannington undertook a massive expansion of its Madison, Georgia facility; FloorFolio built a facility in New Jersey; Tarkett made investments in LVT capacity in Alabama; and IVC, which had just built a massive sheet vinyl facility in Dalton and an LVT facility in Belgium, started construction of an LVT plant in Dalton—and then Mohawk bought the entire company. Now Nox, the massive South Korean firm, as completed construction of an LVT facility in Fostoria, Ohio.
Most of these new facilities are already producing flooring, and industry experts are busy speculating on the impact of this new capacity on the market. Specifically, what will Asian producers do with capacity no longer being purchased by these major flooring companies?
It’s worth noting that a lot of the new capacity will be absorbed by the organic growth in the market. Also, it’s likely that Asian manufacturers may work harder on developing markets in their own neck of the woods. But it’s a good bet that there will be some battling for marketshare and for a strong position in alternate channels, and that will likely lead to LVT at lower price points, both in the U.S. and abroad.
Domestic LVT producers will also be doing whatever they can to ensure strong growth in the category. And most will probably make sure they have product in a wide range of price points—entry-level offerings to compete with the Asian manufacturers, mid-priced products to shore up their base and higher end products with added features like enhanced performance in order to move the category in the most profitable direction.
SUPPLIERS TO THE U.S. MARKET
As things stand now, there are about a dozen firms with LVT either already or on the verge of being manufactured in U.S. facilities. That includes Shaw, with its Ringgold, Georgia facility; Armstrong with its existing Kankakee, Illinois facility and its new Lancaster, Pennsylvania facility; Mohawk with its IVC LVT operations, both in Georgia and in Belgium; Tarkett with its LVT made in its two Alabama facilities, one for the Tarkett brand and the other for the Tandus Centiva brand; Congoleum with its New Jersey production of the Duraceramic family of products; Mannington with its operations in Madison and Conyers, Georgia; Flexco, which produces in Alabama; Roppe, which has facilities in Ohio; FloorFolio, with its new plant in Edison, New Jersey; Nox, which is in the final stages of starting up its Ohio facility; and Allied Tile, which is unique among all manufacturers, producing fully custom LVT from its Brooklyn facility for over 40 years.
There are several other major players, including those with manufacturing in Asia, like Metroflor, which has facilities in China and Taiwan, producing a range of well established brands for both the residential and commercial markets. On a smaller scale, FreeFit also offers LVT through Asian manufacturing. Earthwerks, out of Houston, Texas, supplies LVT to both the commercial and residential market through manufacturing partnerships. And Boston based Parterre, in business for 25 years, offers commercial LVT from longstanding partnerships. Beaulieu, which has been sourcing commercial LVT for years, now offers residential LVT, along with other hard surface programs. And also on the residential side, Home Legend, best known for its hardwood floors, offers a sourced LVT line.
One of the most prominent players is Novalis, a Hong Kong firm manufacturing in China that has been serving the global market for over 30 years. Then there’s Karndean, a sizeable British firm with manufacturing in Asia. And perhaps the most talked about firm right now is US Floors, which produces its patented Coretec product with its WPC (wood plastic composite) waterproof core through a manufacturing partnership in Asia. Its Coretec construction is the hottest product in today’s market.
Not all foreign manufacturing is in Asia. One of the biggest players in the resilient market is Gerflor, a French firm that produces a range of commercial products, including some unique LVT, from its facilities in France. And though most of the Asian capacity comes from China, there are also suppliers in Taiwan, South Korea and Indonesia. And CBC Flooring supplies the U.S. market with LVT from Japan’s Toli and Takiron, as well as from Halo Floors.
GERFLOR'S DESIGNER SURVEY
In a survey recently commissioned for Gerflor, the French vinyl flooring firm, designers from several of the top A&D firms weighed in on design trends in the built environment, flooring trends and LVT specification. In terms of overall design directions, most designers agreed that there were two strong trends in the market, one based on natural materials, including lots of rustic and reclaimed looks and industrial designs, and another more modern and clean, with white paired with stronger colors. Large formats and shapes like hexagons and triangles are also trending. Greys remain strong, though there’s a market for playful and unexpected choices, along with modern looks and colors in traditional patterns like herringbone, chevrons and wide planks. In general, there’s demand for looks that seem authentic.
WHY LVT DOMINATES
Market Insights estimates that domestic LVT consumption for 2015 hit $1.185 billion, up nearly 8% from 2014 and now accounting for 12% of total U.S. flooring sales. LVT has now surpassed laminate flooring, which has sales of less than $1.1 billion. It’s also bigger than sheet vinyl ($860 million). Other vinyl categories are much smaller, with VCT at about $310 million, and peel and stick tile, which one could argue should be classified as the lowest end of LVT, comes in at about $177 million. LVT is still less than half the size of hardwood and ceramic, but that could change a decade down the road, or less. In both the residential and commercial markets, LVT is by far the fastest growing product category.
So how has LVT managed to rise to the top of the flooring market? Why isn’t ceramic tile or hardwood leading the field? Or sheet vinyl for that matter, since consumer aversion to vinyl is apparently not much of a factor for luxury vinyl? And what about laminate? Wasn’t that the big category killer at the turn of the century?
Back then, when laminate, led by Pergo, was plundering marketshare and along with hardwood shifting the market from carpet to hard surface, LVT’s qualities and its potential were far from the spotlight. And this was despite the incredible LVT products hitting the market. Amtico was the design leader, with bold vinyl-for-vinyl’s-sake colors and designs, along with some stone and abstracted wood looks. And other prominent firms like Tarkett offered LVT brands, as did Congoleum and Armstrong. Several foreign manufacturers had strong positions in the U.S. market, like Japan’s Toli, and in Europe LVT and other forms of vinyl tile were being developed by a range of firms, including Gerflor and Marley Floors.
So LVT’s early gains were secondary to other major influences on the market, and its impact on the flooring industry was also somewhat obscured by the diversified nature of its advance—rather than decimating one particular category, in smaller increments it took share from every category. And furthermore, the furious growth in flooring that followed the dotcom recession and the housing boom also shrouded these shifts in share—since all the flooring categories were still showing strong growth.
During these years, technological advancements also started to elevate the category. Designs became crisper, with higher resolutions and more advanced textures, similar to advances in ceramic and laminate flooring. Manufacturers started to experiment with grouted systems, installation options and other technical aspects.
Then came the Great Recession, and when the dust cleared, a new landscape was revealed. Several flooring categories, like broadloom, sheet vinyl, VCT and laminate, were struggling to make gains. Hardwood and ceramic were faring better, though not by much. And two categories were surging ahead virtually unencumbered: carpet tile and luxury vinyl tile.
While carpet tile’s gains have mostly come at the expense of commercial broadloom, luxury vinyl tile has taken share in both commercial and residential from every major hard surface category, and it’s also taken its fair share from broadloom. And on top of that, it has opened up design possibilities, particularly in the commercial market, enabling wood visuals where none existed before, like in hospitals, and convincing stone looks where the cost or performance of stone or even porcelain tile traditionally fell short.
What LVT brings to the table are key advantages over every category, sufficient to make a dent in each of them. When stacked up against porcelain tile, for instance, LVT brings equivalent design capabilities in terms of color, texture, resolution and realism, but it’s lighter, more resilient, warmer and softer underfoot, and generally less expensive—and installation is more straightforward. And when compared to hardwood, it offers equivalent visuals but far better performance, easier maintenance and less dent resistance. And LVT can offer wood visuals at a lower price than the real thing, particularly for exotics and other more costly hardwoods.
Then there’s VCT, which is generally a lot less expensive at the front end. VCT’s maintenance needs are as high as LVT’s are low, and when it comes to design the two are again at opposite sides of the spectrum, so it’s not surprising that VCT is the commercial product whose marketshare has suffered most from the rise of LVT. On the residential side, LVT’s gains have mostly come at the expense of laminate and sheet vinyl. Sheet goods cannot yet match the look of LVT in terms of realism, high definition and texture. Also, while LVT in wood or stone looks can fool even industry professionals, that’s rarely the case with sheet vinyl, even as the product continues to improve.
In many ways, LVT and laminate are alike. The products both use synthetic surfaces to mimic the look of natural materials. They come in similar dimensions and are dominated by wood looks. Both offer glueless installation systems, though it’s far more common in laminate. Also, laminate is less expensive on average, and it’s more scratch resistant. However, it’s the other performance attributes that make the biggest difference, and that’s why LVT is embraced in the commercial market while laminate is still trying to find a foothold. Laminates have fiberboard cores, making them extra susceptible to moisture, and without sound deadening underlayments everyone walking on a laminate floor sounds like a tap dancer.
That’s why LVT is the fastest growing product in the flooring industry. It offers, on average, better performance, lower maintenance, easier installation, equivalent or better visuals and more design options for specifiers than are available in the other categories. It’s kind of like a 3D printer—vinyl goes in and out comes whatever you want.
WHAT’S IN A NAME?
In the ’70s, the term LVT, which back then stood for laminated vinyl tile, came into use to describe the next generation of PVC tile products, while in Europe firms like Amtico started describing their heterogeneous vinyl products as luxury vinyl tile, no doubt to distinguish them from low-end self-stick tiles.
There’s no hard and fast definition for LVT, though it is generally agreed that it is a heterogeneous tile made up of a few layers of PVC, including a base, a print layer and a wearlayer. VCT, the other major vinyl tile category, doesn’t have a print layer and it also has a low vinyl content, around 17%. There’s also solid vinyl tile, most of which is homogeneous, with higher PVC content than VCT and similar visuals. But there’s also SVT on the market that has inlaid designs or print layers. And at the same time there is flooring like Congoleum’s Duraceramic, categorized as LVT but with high calcium carbonate content, making it in many ways closer to VCT.
Beyond all that, LVT constructions are changing, PVC replacement systems are being introduced, and the dimensions of the product are evolving. Plank shapes seem to have confounded the market; even though there’s no rule that says a tile has to be square, many manufacturers are labeling their rectangular wood look luxury vinyl tiles as luxury vinyl planks (LVP). Others are calling it all LVF, for luxury vinyl flooring.
Manufacturers would probably have a hard time dropping the “luxury” designation, but it really is frivolous. And one would think that the prominent domestic producers would actually want to distinguish themselves from bottom-of-the-barrel Asian imports, but instead they’re all LVT, or LVP…or LVF.
Going forward, the V in LVT will also be increasingly inaccurate. Products like Shaw’s EcoWorx tile, made of polyethylene, are clearly in the same category as luxury vinyl. And there are more products like that entering the market every year, resilient but not vinyl.
The confusion will likely sort itself out in the coming years, and it will all probably end up referred to as resilient tile. And as is the case now, some will be more luxurious than others.
THE NEW GENERATION OF LVT
A couple of years ago, US Floors modified a waterproof core used in China for decking and inserted it into LVT to create a hybrid product, which the firm called Coretec. The core is a wood plastic composite (WPC), and last year US Floors received a U.S. patent for the product. Since then, a handful of firms have introduced WPC products, possibly violating the patent.
While LVT is the strongest growing category in flooring, the most talked about product in both the residential and commercial markets is Coretec. The rugged construction and waterproof core have captivated consumers and retailers alike. The technology takes LVT to the next level, increasing the specification domain to include a wider range of applications, including wet environments, and helping it compete even more effectively against other hard surface products. And similar technologies are likely to follow.
Now Armstrong has come up with its own development on LVT produced at its new Thomas Armstrong LVT line in Lancaster, Pennsylvania. The firm’s new Vivero LVT comes with a wearlayer with a Diamond 10 infused coating, which the firm says is four times harder than aluminum oxide wearlayers, and product demonstrations seem to back up the assertion. The initial launch features over 40 designs in four collections in gluedown or Välinge 5G click formats. The three wood lines and one stone line all come in 4-1/2” by 48” formats.
A wearlayer like that further increases the advantage over products like laminates and ceramics, which have the best scratch resistance in the flooring industry.
These new technologies by US Floors and Armstrong represent the first wave of developments. Plenty more will follow, and a lot of that will likely come from domestic producers focused on distinguishing their products from the Asian imports.
Furthermore, as LVT continues to make inroads in the commercial market, pressure will build to make it increasingly environmentally sustainable. For some this may mean finding alternatives for PVC, like Shaw’s EcoWorx Resilient Tile, and for others it may be about finding ways of making PVC greener by using new plasticizers and other materials or by setting up large scale reclamation infrastructures. But one thing is for sure: it’s not going to stay the same.
MOHAWK DOUBLES DOWN ON LVT
At press time, Mohawk announced that it is investing approximately $200 million over this year and 2017 to build two new LVT facilities, one in Europe and one in the U.S. Last summer, Mohawk purchased Belgium’s IVC Group for $1.2 billion in cash and stock. The firm has sheet vinyl and LVT facilities in both Belgium and in the U.S., in Dalton, Georgia. The Dalton sheet facility started production in 2011, while the Belgian LVT facility went online in 2014 and the Dalton LVT facility started up last year.
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