Carpet Tile: 21st Century Flooring - February 2013
By Jessica Chevalier & Darius Helm
Carpet tile’s unique performance attributes first captured the attention of the commercial market over 30 years ago, but its meteoric growth in the last decade or so has been driven as much by its rugged construction as by its sustainability and its design and installation flexibility.
Once viewed (and approached in design) as chopped-up broadloom, carpet tile is now its own segment—and one that is relentlessly taking share from other flooring types. Even the seams of modular carpet, previously seen as something to hide, are now embraced as a design element.
Today, the commercial market is perfectly primed for carpet tile. The flooring is hip. It’s sustainable. It’s easy to install, stock and repair. And it’s becoming more affordable. What’s more, it’s a category that continues to evolve—and not just by introducing new shades of beige. Carpet tile is a fashion-forward flooring material that affords designers creative control in a way that no flooring material has before.
How has the segment achieved all this?
CARPET TILE: FLEXIBLE FLOORING
The overall flexibility of carpet tile is a big part of what gives it an edge in the marketplace—design flexibility, installation flexibility, flexibility for replacement, even flexibility in regard to end of life (reuse and recycling).
The design story is well told. Designers can essentially create a couture look for every project by mixing colors, textures, shapes, sizes and patterns. One product can be installed in different ways to achieve a different visual result.
Says Reesie Duncan, creative director for Shaw Contract Group, “Designers are thinking of the module itself as a design element.” Indeed, the modularity of tile, which designers once sought to hide, is now a boon. This is evidenced by the fact that rectangular formats are becoming popular. Terry Mower, vice president and chief creative officer at Tandus, adds, “If, once you install, you can’t see the lines, who cares about the shape? Now, transitions are meant to be seen.”
Though the rectangular format was introduced years ago, David Oakey, who designs carpet tile for Interface, says that Interface came out with its first rectangular tiles around the year 2000. The shape is just now taking hold in the market, multiplying the number of looks that can be achieved in installation with a single product, just as the quarter-turn did with square tile. The rectangular tile opens up the option for brick, ashlar, herringbone and basketweave looks.
It’s interesting to see the excitement for rectangular formats in carpet tile, as we saw the same happen just a few years ago in the ceramic world. Both flooring types are viewed as more high-design than their peers, and there are significant parallels in how they can be used to create one-of-a-kind looks at the hands of the designer. Similarly, plank formats have become popular in ceramic, generally with a wood look, and we are seeing the same shape—sans wood visual, thankfully—in carpet tile from Interface with its 9”x36” formats. Some of the other mills are waiting to see how Interface’s gamble on planks turns out before they introduce their own plank shapes. Mower notes that 24” squares still greatly outnumber other sizes and shapes in terms of sample requests, so while rectangular tiles have wind in their sails, the old favorite is still winning out.
Carpet tile is made in large sheets, then cut. For the sake of material conservation and cost, product designers seek to use as much of those large sheets as possible, so circular tiles, for example, would be wasteful and expensive; however, straight line shapes like triangles and hexagons, though they may waste a bit more on the edges, are distinct possibilities. Designers just have to find ways to deal with the problems that those new shapes present; for example, the narrow points of an isosceles triangle would be more susceptible to crushing. Once the hurdles are overcome, new formats like these will add even more flexibility for designers. If tile continues to follow ceramics, hexagons may be the next shape around the bend.
Flexibility with installation is a significant benefit as well. Mower points to Tandus’ Tape Plus, an adhesive system designed to create a floating floor, that can be used on slabs with moisture problems, as it is able to withstand up to 12 pounds of moisture pressure.
In addition, installation systems like Tape Plus, Shaw’s LokDots and Interface’s TacTiles make it possible for users to pick up their carpet tiles and move them to a different location—a new office space for instance—or to swap out tiles from a visible high-traffic location with ones from a location where the tiles are less worn. In addition, because carpet tiles are installed one by one, rather than in a large sheet, the new flooring can be implemented in phases, rather than clearing the full space and halting the workflow. Of course, it’s simple to replace a damaged tile as well. Designers generally keep an attic stock of extra product, so that a fatally soiled or damaged piece can be popped out and a new one popped in.
If reuse isn’t an option or if the product is just, finally, worn out, many types of carpet tile can be recycled. In fact, a lot of tile, including product from Shaw and Interface, is recycled into new tile. Tandus’ Ethos backed nylon 6 products, for instance, are fully recyclable once the yarn has been sheared off the backing. The key is making certain that recycled materials have less than 10% contaminants. This is one reason that the company does not mix yarns; at this point in time, mixed yarns—like a nylon PET blend—cannot be recycled.
The key to a successful recycling program lies in logistics. Where does the source material come from? How is it collected and transported? Oakey believes that future breakthroughs in recycling will come through improvements in the supply chain.
DYEING CARPET TILE
The same processes used to dye yarn for carpet tile are used to dye yarn for broadloom: solution dyeing, piece dyeing and skein dyeing. This is an advantage, since it ensures color consistency between the two flooring types and enables them to be used together in an installation.
Solution dyeing is the most common dyeing process for carpet tile yarn. This process also produces more color consistency and is more cost efficient because it allows manufacturers to dye and extrude at the same time. By eliminating a step, manufacturers save time and water and produce less waste. However, if a manufacturer is making carpet tile to order, piece dyeing is the way to go, because, in applying dye to the finished product, it enables the manufacturer to create the amount of carpet tile needed, when it is needed. Also, with solution-dyed fiber, the more color lines you add, the greater the expense in terms of maintaining yarn inventory.
For Shaw's new Dye Lab product, it is using a piece dyeing process to create an organic look akin to naturally dyed fabric. This mimics beck dying, an old process, and produces veining that has the appearance of stone or animal hide.
In the U.S., 86% of carpet tile is solution dyed, according to Market Insights LLC. However, in Europe that number falls to 76%. And in Asia, where 25% of the carpet tile has polypropylene face fiber, only 60% of carpet tile is solution dyed.
NEW WORK SPACE, NEW LIVING SPACE
The trend in office space is toward completely open floor plans. Says Mark Oliver, senior director of product management at Mohawk, “We see the corporate market moving away from cubes and offices toward a true flexible open environment. As the walls go away, designers are more limited in the surfaces they have to work with, and therefore the floor is becoming even more important—and more fun. The flexibility of the carpet tile platform enables this freedom and creativity.”
This affects not only the fact that carpet tile is chosen but also the way it is designed. Mowers explains, “Designers are looking to get light into the center of the office, and in these new configurations, the floor plane is much more exposed. There are no walls to hide transitions, and we needed larger flowing motifs.”
Product designers view each carpet tile as a part of a larger motif. Most carpet tile is manufactured in 6’ widths. With old tufting machines, the patterns would repeat across the width of the backing, but, starting four or five years ago, technology enabled designers to begin creating non-repetitive patterns with color variation and flowing designs. The result is designs that are less structured.
Carpet tile is a great fit for offices that must be reconfigured to accommodate growth as well as those with raised access flooring—an ever more popular way of hiding the multitude of cables and wires associated with technology, as well as HVAC ducts. Carpet tile is an ideal flooring choice to cover these systems, since a single tile can be pulled up to allow access to the space below, then replaced with no damage to the flooring material.
In the residential market, carpet tile has been slow to gain traction. Milliken first got into the market in 2002 with Legato, sold through Home Depot, followed in 2003 by Tesserae for the independent dealer. That same year, Interface came out with its residential Flor carpet tile line, sold online and through catalogs.
Tesserae has since been discontinued and Legato seems to go mostly through online retailers, though more recently Milliken came out with a mainstreet line of coordinated broadloom and tile called the Studio collection. On the other hand, Interface has gone all in with its Flor line. In 2010, it added its first brick and mortar store, in Chicago, and since then it has added several locations in key U.S. metro markets. To date, the firm has 17 Flor stores in the U.S. and another in Toronto, Canada, and more are on the way.
Says Mower, “If the styling and hand is correct, carpet tile could gain marketshare in the residential market.” This trend will likely start in urban settings. Currently, carpet tile is most attractive to urban dwellers, whose desires and buying habits differ from those of their suburban neighbors.
Interestingly, according to Realtor.com, a study released in early 2012 revealed that 77% of Generation Y plans to live in an urban core; realtors report this preference among Millennials as well. According to a National Geographic article entitled Urban: “While less than one third of the world’s population lived in cities in 1950, about two thirds of humanity is expected to live in urban areas by 2030.” Ultimately, then, urban trends are likely to be quite lucrative. And, if these urban dwellers move to the suburbs once they marry and have children, as some experts predict, they will likely take their urban tastes with them, which may be carpet tile’s foray into the suburbs.
Right now, the carpet tile concept is relatively foreign in suburbia. And the current trend toward soft broadloom makes carpet tile’s residential growth even more challenging, since carpet tile does not provide the plush feel that homeowners are generally seeking when they choose a soft surface flooring product. This is not to say that carpet tile couldn’t provide that luxe texture. The concept is totally plausible. In fact, Shaw has experimented with shag versions of carpet tile. However, a heavier face weight will mean a heftier price tag—another inhibitor to growth in this market.
However, with its ease of installation, carpet tile certainly seems like a natural step in the do-it-yourself trend. Without the use of tacks or glue, the product is much more friendly to the DIY end-user than broadloom, which requires special tools to cut, stretch and seam it.
It seems as though the other big carpet tile players are watching the Flor model to see where it goes before making the leap themselves. Both Shaw and Mohawk have massive residential carpet businesses, so they certainly have the infrastructure to add carpet tile to their residential offerings. Another big residential carpet player, Beaulieu, has a contract carpet tile business under the Bolyu brand that could be tweaked for the home owner.
Then there’s Tandus, the fourth largest carpet tile producer in the U.S. The firm was recently acquired by Tarkett, which goes to the residential market with hard surface and resilient flooring. It’s unlikely that Tandus will attempt residential carpet tile anytime soon, but if and when it does, being a Tarkett company will help it get that business off the ground.
In terms of mid-sized players producing carpet tile in-house, the only commercial specialist is J&J Industries, which is likely not large enough to make an independent go of it like Interface has. Masland Contract is part of the Dixie Group, which has a comprehensive residential network for its broadloom. And Mannington Mills goes to the residential market with a range of resilient and hard surface products.
It could be argued that, among tile producers not currently in the residential carpet tile business, Dixie has the best opportunity. After all, one of the primary barriers to adoption of carpet tile in the residential market is the higher price point, and that could be a problem for the big broadloom players that sell a lot of lower priced products. However, the Dixie Group’s clientele tend to be more well to do. Its most affordable residential brand, Dixie Home, is about twice the industry average price, and its Masland and Fabrica lines stretch upward to the high end. So there would certainly be no sticker shock.
Nevertheless, there is the issue of style. Today, Dixie’s residential products use cutting edge machinery but the designs tend to lean toward the traditional, while carpet tile, with its modularity, is decidedly fashion-forward.
While carpet tile competes directly with broadloom in the commercial market, it’s a different story on the residential side. Over the last two decades, broadloom has steadily lost share in the home. It used to be everywhere but the kitchen and bathroom, but it has steadily given up square footage to hard surface, first in foyers, hallways and dining rooms, then more gradually in casual spaces like living rooms and dens. Broadloom’s strongest hold is now in the bedroom, where it’s fighting hard to keep share through lush designs and soft, luxurious face fibers.
Carpet tile, which offers a tighter, lower construction, can’t compete with broadloom for softness, and it tends to be used in living rooms and dens rather than bedrooms. Firms like Flor are increasingly marketing carpet tile as a design-forward alternative to area rugs. Using a tab or tape installation system, carpet tile can easily be assembled to create a floating area rug, which can then be moved from one location to another or taken apart and reassembled to create a new look or incorporate new pieces to make a larger size rug.
CARPET TILE'S WEIGHT CHALLENGE
Face weights declined industry-wide over the last few years and are likely to continue on this path for a short while. Oakey points out that ten years ago, 18 ounce to 28 ounce weights were common; today, products range from ten ounces to 40 ounces.
Lower weights mean a lower price tag, which was a benefit in the recession to keep carpet tile competitive with other flooring types. But lower face weights also mean a conservation of materials, and that sort of conscientious manufacturing is a trend that is unlikely to lose traction. However, design-wise, a ten-ounce weight is very limiting. To create better lower face weight products, Tandus redesigned its manufacturing process back to the extrusion heads, to create yarns that facilitate coverage at low weights. These products are modeled after flat weave sisals, and they have good performance, since less pile height means less matting and fiber degradation.
Of course, as we so often hear, even designers who are counting dollars are unwilling to sacrifice style, so manufacturers are challenged to make their lower weight products appealing design-wise.
CARPET TILE VERSUS BROADLOOM
The corporate sector, as the largest piece of the commercial market (by far), is also carpet tile’s biggest market, and in that sector it continues to gain share. The other big markets for carpet tile are healthcare, retail, education and government. Carpet tile has the smallest share in hospitality, where the public areas are still dominated by Axminster carpets with large-scale visuals and the guest rooms use inexpensive broadloom below the price points where carpet tile can effectively compete.
According to Market Insights LLC, 48% of commercial carpet tile in the U.S. goes to the corporate office sector, 35% goes to the education and institutional sectors (including theaters, museums, airports and other transportation terminals, government buildings, houses of worship and prisons), and 10% is the retail sector. That’s the bulk of the carpet tile business. Another 4% goes to lodgings (defined as hotels, motels and dormitories), and 3% is healthcare, which comprises acute care, medical office buildings and senior living.
Residential carpet tile, estimated at over $40 million, is dominated by Interface’s Flor sales.
By all accounts, the corporate sector was uneven last year, following a strong 2011. However, most carpet tile producers saw growth in sales to that sector—it’s such a dominant sector that the shift in share from broadloom to carpet tile is more than enough to counteract a lackluster market.
The education market was also uneven, with reduced K-12 activity but a strong higher education market. Retail was sluggish, with some bright spots.
Nevertheless, the U.S. carpet tile market was up by low single digits last year. And strong activity in Asia, which accounts for about a third of global sales, helped drive the international market up last year. Global consumption topped 1.97 billion square feet, up 2% from 2011 (see chart below). Carpet tile has made annual gains just about every year since its invention in the 1970s. In recent memory, the only year the category posted a loss was 2009, when global financial markets were in freefall.
THE BIG FOUR
Shaw Contract, Interface, Mohawk and Tandus are the biggest players in the carpet tile market, followed by Milliken, Mannington, J&J Industries, Bentley Prince Street, Beaulieu, Masland and Canada’s Kraus. Some of the smaller mills have lines that are sourced from the bigger players.
While Shaw outpaces Interface in domestic carpet tile sales, Interface is the clear global leader, with a 20% share, according to BMW Associates and Market Insights LLC. Shaw has a 12% global share, Milliken has 6%, followed by Mohawk at 5% and Tandus at 4%.
There are only two major global players that are not U.S. based—Desso and Toli. Desso, a Dutch firm, has a 5% share, and Japan’s Toli has a 7% share. Toli is better known in the U.S. for its commercial vinyl lines, which go to market through CBC Flooring.
Toli’s carpet tile revenues are largely from its domestic market. Japan is second only to the U.S. in carpet tile consumption, though it’s a distant second, at only 40% of the size of the U.S. market. China is close behind.
Carpet tile accounts for about 70% of Shaw’s commercial carpet revenues. Last year, Shaw’s carpet tile sales were strong both domestically and internationally. The Asia Pacific region was robust last year, while Europe is still depressed. There are also bright spots in Latin America, all the way from Argentina through Brazil and Peru up into Central America.
Later this year, the firm will open its carpet facility in China to serve the regional markets. According to the firm, it’s the first cradle to cradle carpet tile plant in Asia.
Like all the big carpet mills, corporate is Shaw’s biggest sector. Next is education, where Shaw has traditionally been stronger in higher education. However, volume has recently been building in K-12 as well. The firm’s carpet tiles also go to the institutional and healthcare sectors. The firm has been making inroads in the senior living market, developing senior living collections of both carpet tile and broadloom.
For Shaw, the retail sector has been predominantly broadloom, but now that’s starting to change. The selective replacement capability of carpet tile can be a real godsend in the retail sector. In addition, Shaw reports that its No Rules tiles, with mergeable dye lots and tiles designed to go down in random orientations, is helping the firm gain traction in the sector.
Hospitality continues to be a small part of Shaw’s carpet tile revenues, though its 18”x36” tiles have been in demand in this sector. However, the firm anticipates that over time carpet tile will make inroads in hospitality, and that’s part of the reason that the hospitality division was recently folded into Shaw Contract, to offer those products to the hospitality market.
The firm’s LokDots installation system, which replaces full-spread adhesive systems with glue beads adhered at intervals along the back of the tile, continues to make gains. The firm estimates that in barely a year LokDots are already used on nearly 10% of installations.
Interface, which is once again a complete carpet tile specialist, now that it has divested itself of Bentley Prince Street, had another growth year in 2012 in the U.S. Globally, conditions were mixed, with weakness in Europe somewhat offset by gains in Russia, China and eastern Europe. The fire that destroyed Interface’s Australia plant impacted the firm’s performance. Interface has continued to serve the Australian market with products from its plants in China and Thailand.
The domestic corporate sector was hit or miss for Interface last year, with growth from some of the big banks and the technology sector, as well as projects in the Southwest related to the energy industry. However, the education sector, Interface’s second biggest market, was up last year, both in K-12 and higher education. The firm credits some of that to its mergeable dye lots and random installation products, which are in high demand in schools.
Another big sector is retail, which has also been a mixed bag. Healthcare has been steadier. And one sector that’s growing for Interface is the multi-family market. Hospitality business is small but growing. Interface has a dedicated hospitality team, headed up by Charlie Knight, and the firm anticipates growth as the industry continues to move through a remodel phase. The firm’s Tapestry technology, which as been around for a few years, helps the firm compete in the public space side of the hospitality segment with highly patterned, decorative carpet tiles at lower face weights.
Interface’s Flor business had a great growth year, opening up several new stores. Also, the firm still does a lot of business through the Internet and catalogs. The Flor program has grown very sophisticated over the years, with a huge number of designs, patterns and colors, and plenty of installation ideas, including FloRugs, a line of over 60 designs. The bold, fashion-forward styling is helping Flor gain a strong brand identity.
Interface is still well ahead of the other carpet mills in global operations, with mills in Europe, Asia and Australia. The firm’s global platform gives multinational firms the standardized product they’re looking for with streamlined procurement. At the same time, the regional facilities offer the opportunity to design and innovate for specific markets.
Mohawk’s strength in the modular carpet market has traditionally come from its Lees high performance brand, which was particularly strong in the education and institutional sectors (as well as corporate). Over the years, carpet tile has become a bigger part of the Bigelow and Karastan brands, and it’s now part of the Durkan hospitality business as well, with Durkan carpet tiles for public space applications.
The Lees legacy is part of the reason that, following corporate, education is the firm’s next biggest market. That’s followed by retail, then healthcare and hospitality.
Mohawk’s corporate business was steady last year, mostly in refurbishment projects at lower price points. Education business was soft, led by a slow K-12 market, and the firm anticipates more of the same this year. Retail business is expected to pick up this year.
The firm serves the global market largely through toll manufacturing partnerships in both Europe and Asia. Business has continued to be robust in the BRIC nations (Brazil, Russia, India, China).
Mohawk makes carpet tiles backed with both PVC and olefin. Its PVC backings, which account for the bulk of its sales, are virgin, which allows them to be phthalate free.
In addition to nylon carpets, Mohawk also makes carpet using triexta face fiber under the SmartStrand brand, using Sorona polymer from DuPont. The program started on the residential side, where Mohawk has an exclusive deal for the fiber. Over the last couple of years, the firm has been rolling out products for the commercial market, in both broadloom and carpet tile, with more coming this year.
Mohawk doesn’t have an exclusive on SmartStrand in the commercial market, but it’s the only mill really using the fiber. Many of the other mills feel that they can find no justification for the premium cost of the fiber.
Tandus makes carpet tile, Powerbond six foot goods and broadloom. These days, broadloom accounts for less than 20% of sales, and the balance is split more or less evenly between Powerbond and carpet tiles. Over the last few years, Tandus has made a splash with its designs, particularly the organic and architectural blends coming out of its Sero design technology. Sero allows the firm to cut carpet tiles from wider widths, creating carpet tiles with irregular repeats—and making for dynamic, progressive installations. The technology has also elevated Powerbond, which used to be relegated to the education market, but is now growing fastest in corporate.
The other big news at Tandus is its acquisition by Tarkett in the fourth quarter of 2012. At the beginning of this year, Tarkett joined together Tandus and Centiva, Tarkett’s luxury vinyl producer. Tandus and Centiva both go direct, while the rest of Tarkett’s commercial products go through distribution, so the alignment makes a lot of practical sense. At the end of March, Thomas Trissl will step down as the head of Centiva, and Glen Hussmann, Tandus’ president, will start to run Centiva as well.
The acquisition is also expected to help Tandus’ global sales. Currently, international business only accounts for 10% of sales, and most of that is carpet tile to Asia. Tarkett has a robust global footprint, with about a third of its sales coming from the Americas, a third from Europe and a third from Asia. Tandus also hopes that being part of Tarkett will help increase penetration in the retail and hospitality segments.
Copyright 2013 Floor Focus