Ceramic Tile Report: Innovation and education remain key as the ceramic industry seeks to rebound - June 2021
By Meg Scarbrough
After nearly a decade of growth, the ceramic industry continues to face hurdles in its quest to reinvent itself and increase its competitive edge. In 2020, the category saw a second consecutive year of decline; floor tile consumption in revenue was $2.802 billion, down 5.4% from the previous year. In the past two years, the ceramic industry worked to fill an import gap left by China’s exit from the U.S. tile market while addressing lingering issues of labor shortages and mounting pressure from luxury vinyl tile, not to mention a pandemic that wrought its own slew of challenges.
But there’s opportunity on the horizon as flooring gets another look inside and outside of the home, with health and wellness at the forefront of consumers’ minds, at the same time populations are shifting to the coastal “smile” states where tile usage is more prominent. The industry acknowledges challenges remain, but it remains hopeful that continued innovation and educating the public will lead consumers to them.
Ceramic has long been celebrated for its many benefits ranging from its durability to its cleanability. It is also natural and sustainable flooring, like hardwood. But advantages aside, it is one of the most challenging and time-consuming floors to install, and therefore costly.
LVT’s meteoric ascent comes at a time when time and money are increasingly important to consumers and one in which the ceramic industry continues to be faced with mounting labor shortages. Skilled workers are aging out and retiring, and fewer young people are getting into the trades.
Says Scott Carothers, executive director of the Ceramic Tile Education Foundation, “We know we have a problem,” but he’s quick to mention that many people think anyone can install tile. “It’s true; anyone can. But the question is: are they qualified, and will it stand the test of time?”
To address the problem, efforts have been made by everyone from trade associations to private business owners to offer education opportunities and training to anyone interested in learning. But the efforts don’t seem to be paying off fast enough, leaving the door open for products like LVT, which offer quick installation and are touted as being waterproof.
Says Jana Manzella, senior vice president of sales and marketing for Florim USA, “LVT took a huge bite out of the ceramic and porcelain wood-look plank business. LVT makes all the same claims as porcelain-scratch resistant, fade resistant, waterproof, etc.-and it is lighter weight and easier to install. Consumers are drawn to those claims. But in reality, studies have shown that there are human health and environmental health issues associated with flooring made from plastic-based materials, notably LVT in all its forms; so the short-term benefits are not outweighed by the long-term effects.”
Adding a boost for LVT is that Millennials are becoming a larger part of today’s market, but they don’t necessarily want to spend a lot of money on flooring. They are also a generation who would rather date a floor than marry it-said differently, they seek floors for today and not ten years from now because they will likely have moved on by then.
Pressure from the rise of LVT has been so great that manufacturers and importers, acknowledging that LVT is here to say, are diversifying their historically all-tile business and launching their own LVT lines this year.
In May, Daltile announced the launch of Adventuro, a luxury vinyl wood-look collection, as part of its ProSeries program. Amber Leigh Martinson, senior director of marketing for Dal-Tile Corporation, says, “We listened to the needs of our customers and developed a high-performing product platform that will fully satisfy those non-tile flooring projects.”
Emser is also launching its own LVT line this year called Emcore with 12 SKUs. Wendy Williams, national sales manager for Emser, notes the shift by Emser from its tile-only focus is a reaction to demands primarily in the builder market, and she says the company may expand into other things in the future. But many tile producers don’t have the capability or capital to venture in that direction, so finding solutions that lead to success on the installation front remains critical.
Channel shifts within the tile market are challenging traditional go-to-market patterns.
Importers Bedrosians, MSI and Emser now have a combined 150 distributor locations. Daltile has over 300 across the U.S., Canada and Puerto Rico. And Crossville has 24. These multi-location showrooms cut a layer out of the traditional channel, enabling the seller to either net a larger margin or sell to the customer at a lower price-probably a bit of both. It also provides them a direct means of both sharing their story and gathering market information, and these benefits are invaluable.
However, while these centers may be a good move for the individual companies establishing them, some traditional distributors believe they adversely impact the industry as a whole, as they create a less-than-level field of competition and reduce the power of distributors, which play an important role in the industry. Ultimately, this may irrevocably change the nature of the competitive market.
Says Donato Grosser, a tile industry consultant, “Somebody from a large manufacturer told me, ‘Importers are competing with us because they behave like manufacturers,’ which means they have large quantities, large warehouses and a lot of abilities.”
He says the difference is that importers, unlike manufacturers, aren’t stuck with a product they produce and can switch nimbly between one manufacturer or supplier to another if they see a product isn’t selling well. Tile producers may also lack the range of products of an importer.
In addition to this, the channel is being flattened by the trend toward private labeled products. Santo Torcivia of Market Insights says the flattening of the market is a serious, long-term issue, “especially if you are referring to the proliferation of private label brands-store brands at big box retailers, distribution brands, etc. Former major customers to the top suppliers are increasingly becoming major competitors to those same suppliers. No supplier seems to have a handle on the issue yet.”
Biophilia: Biophilia remains a hot topic in ceramic. According to the TCNA, “This tendency toward greens and other looks borrowed from nature (wood looks, stone looks, earth tones) play into the overarching interiors trend of biophilic design-an effort to connect with natural elements and to promote physical health, cognitive function, and psychological well-being.”
And it’s been further boosted during the pandemic, says Stonepeak’s Sabban, adding, “Of course, the big trend developing throughout 2020 was home remodeling. Millions of Americans spent more time at home, which created a spike in the residential market sales. For homeowners, the big trend is biophilia-the desire to be more closely connected with nature and natural products.”
Shapes: Happy Floors says another trend has been in playful shapes. “Hexagons and other geometric shapes are making an appearance in more and more residences and commercial spaces. People are being encouraged to express themselves through their creativity. You can see in most of our collections that we have options to take your project to the next level with hexagon tiles in our Imperial Stone collection and stylish new mosaics like our Wave 2”x12” mosaic.”
Color: Says the TCNA, “Green seems to be dominating 2021-and we’re not just referring to the fact that ceramic tile is environmentally friendly. Grey-greens, green-blacks, pastels, even green marble-looks are trending.”
Emser’s Suzanne Zurfluh adds, “Blues and greens are super hot. We’re also seeing the move toward warmer neutrals. Greys are really popular and will continue to be popular, but they’re starting to warm up. In terms of color families, we’re starting to see more of these earthy hues, whether it be a brick tone or some of these more mushroom shades of brown. We’re starting to hear the word ‘brown’ again.”
Aggregates: Terrazzo looks and other speckled surfaces are versatile in that they can incorporate any number of colors, according to the TCNA. “They can be as colorful as confetti or as muted as a realistic city sidewalk.”
Vast Veining: Marble looks are always evolving, says the TCNA, “We’ve seen a lot of large-scale veining patterns that are either linear and frenetic or wide and flowing.”
INNOVATION & DESIGN
The benefit of competition and pressure is, perhaps, that it has forced ceramic makers to accelerate innovation and elevate aesthetics more quickly. Says Patrick Warren, vice president of residential sales, dealer and showrooms for Dal-Tile Corporation, “The growth of competitive categories has pushed the tile industry to take advancements to an even higher level. We are providing amazing styling, color, shapes and advanced installation applications in ways never seen before or in any other category. It has made us stronger.”
Efforts to improve the installation process amid an ongoing labor shortage have been building for years, with various manufacturers releasing a range of solutions, some of which don’t require grout. Reviews were mixed early on because the systems offered limited selections and some were expensive, but leaders in the industry remain hopeful that progress is being made toward creating a solid solution.
Ceramics of Italy says it has seen increased demand for these products recently, possibly spurred by the skyrocketing rise in renovations this year. According to a marketing rep with the organization, “Whether an interlocking or floating floor system, these collections make it possible to create easy, fast, durable and waterproof floors without the need for adhesives and without the cost of demolishing the old floor.”
Most recently, Daltile released its RevoTile system in January 2020. The company, through a large marketing campaign, has been touting the ease of install and the fact that it doesn’t require mortar. Says Warren, “RevoTile addresses the current shortage of professional tile installers by providing tile that can easily be installed by any member of a builder, contractor or flooring installers team, and is also a perfect tile solution for DIYers.”
As tile producers work toward finding the perfect installation solution, they have also been transforming the fashion and appeal of tile. Advancements in digital printing have revolutionized the tile industry and enabled it to create stylish and more-realistic looks that broaden appeal among consumers.. Crossville Tile, for example, recently launched a porcelain tile panel collection called In-Side that mimics the look of the deep blue-grey sandstone mined only in the Apuan Alps. With Daltile, RevoTile features 26 looks, including marble, wood, stone and concrete visuals.
Suzanne Zurfluh, director of design and trend for Emser, says the benefit of this design innovation is that it can really give consumers products that work for them. She adds, “Natural marble is hard to maintain,” but with marble-look porcelain tile, “we can have beautiful products without the maintenance, and they are super durable.”
But the industry’s transformation goes beyond working to improve installation and visuals. Larger formats and different shapes are also taking center stage in both commercial and residential settings.
Ceramics of Italy, calling it an exciting development, says, “Large porcelain slabs, which were developed by the Italian industry and have been popular in Europe for quite some time, are being increasingly used in the U.S. market as new installation standards have been developed and fabricators and installers become more comfortable working with the material. We’re even seeing these extra-large tiles being used in single-family and multifamily residences to create beautifully seamless surfaces that are also extremely durable and hard-wearing.”
Micah Hand, director of marketing and product management for Florida Tile, adds, “We love playing with large formats in unique shapes and sizes,” noting the company offers large hexagon shapes in its East Village collection and large polygon shapes in its NY2LA collection. He adds, “The visual effect of these unique large-format shapes creates a stunning design, especially when multiple colors are used together.”
Del Conca is also taking note of the trend. Says Katherine Whitehead, marketing and social media specialist with the company, “The most relevant trend for us has been the installation of the advanced rectification line that allows us to produce rectified formats from 6”x12” up to 24”x48” and 2cm pavers. With this capability we have started a product portfolio renovation that will be finished at the end of 2022, incorporating a wider selection of larger sizes like 24”x48” and rectified products.”
The Tile Council of North America, the trade association for the tile market, says that with the noticeable rapid growth in popularity of ceramic tiles of thickness 2cm and greater, it has been collaborating with members on research toward the potential development of thick tile standards. Says Eric Astrachan, executive director of the TCNA, “These products are being used as raised flooring with pedestal systems on decks and rooftop patios, as well as for on-grade paver applications. Especially with the increased desire for outdoor spaces and outdoor dining in light of the pandemic, the availability of these kinds of products and the development of standards should prove timely for 2021 and beyond.”
Coverings, the largest tile and stone exhibition in North America, is returning to its normal in-person format this summer, a year after the pandemic forced organizers to move the event to an online-only format.
The show, which normally takes place in April, will run from July 7 to 9 at the Orange County Convention Center in Orlando, Florida and will feature exhibits, live installation demos, education and CEU opportunities, networking events and much more.
Also new this year are extended hours. The exhibit hall will be open from 9:30 a.m. to 6:00 p.m. July 7 and 8 and from 9:30 a.m. to 2:30 p.m. July 9.
In a unique move, this year’s event will coincide with the National Wood Flooring Association’s annual Wood Flooring Expo, which will open at the same time in a different portion of the facility. The NWFA also normally takes place in April but was rescheduled due to Covid-19. Granted, the show is expecting a smaller crowd this year, but organizers are ramping up to hold their position as the largest tile show in North America.
In a news release, NWFA president and CEO Michael Martin says, “Opportunities often present themselves in a time of crisis. Coverings and the NWFA Expo are consistently held within weeks of each other every spring. Given both organizations had to postpone their shows in April, it makes sense to be co-locating with Coverings to bring additional value to attendees of NWFA’s Wood Flooring Expo.”
Participants who register for either show will have access to both exhibit floors. For more information on the schedule of events and exhibitors or to register, visit www.coverings.com.
As innovation continues in the industry, there are population shifts and consumer trends at play that could elevate the importance of ceramic in the home.
Ceramic tile, despite being the oldest and longest lasting flooring, has historically struggled to gain ground over its competition when it comes to flooring in American homes. As a matter of fact, compared to Europe and Asia, the U.S. represents only a tiny fraction of the world’s tile consumption at around 4% versus Europe and Asia’s combined 70%, according to Market Insights data. Some attribute this to Americans’ disposable mentality, but others point to stick-and-frame constuction over crawl spaces versus the stone foundations that are used in Europe.
Part of the challenge for American consumers is that tile, without an underfloor heating system, is cold underfoot, making it less than ideal for cold weather climates like in the Northeast. Data shows that sales in the region trail behind locales like the South and West.
But that same coolness that may be shunned in one region makes it the perfect flooring for high-heat locations like Las Vegas, where temperatures regularly top 100 degrees in the summer. Its waterproof and cleanability story also makes it ideal for high-humidity states like Florida or Hawaii, which can see upwards of 30 inches of rain a year. Combined with the humidity, it’s a perfect atmosphere for mold and mildew.
Says Emser’s Williams, “If you look at somewhere like Phoenix or Las Vegas or anywhere in Florida, tile is in the home from the minute you walk into the home to the end.”
Recent data from the U.S. Census shows that population migrations have been happening over the last decade, most notably and dramatically in the West and South. Even more movement has been spurred as a result of Covid-19, which has seen real estate spike in rural areas as families settle into a new work-from-home norm or take advantage of low interest rates. Moving from city settings means homeowners can potentially buy more home for their dollars.
Other pandemic-related trends have been emerging, as well.
More and more, homeowners are expanding their homes from the inside out, creating spaces that flow from inside to outside or designing outdoor living spaces that offer comforts often relegated to the indoors. As Torcivia points out, “They are doing this inside-outside thing where you can open up sliders from your family room and the room carries to the outside.” Tile manufacturers and distributors are taking note and have been introducing collections that offer products for indoor and outdoor use. Stonepeak’s new Wave collection, for instance, comes in a honed and textured finish with the idea that the same design inside the house can easily be carried to the outdoor spaces.
Additionally, cleanliness has become more important than ever. Says Jennifer Sabban, marketing director for Stonepeak, “It is important that the floors and counters in people’s homes are easy to keep clean and can withstand harsh chemicals.”
In response, Daltile is in the early stages of launching Microban Defend, a new program of floor, wall and mosaic tile products armed with antibacterial, antifungal, antimicrobial protection.
The TCNA says manufacturers rushed to its product performance testing laboratory to determine antiviral properties of their surfaces amid the pandemic, so the organization added services and equipment to allow testing with two strains of the SARS-CoV-2 virus. Says Astrachan, “With increased testing over the past numerous months, TCNA has learned much about virus behavior on various surfaces, including ceramic tile, sanitaryware, textiles, plastics and several others. This new knowledge is leading the development of internationally recognized test methods, led by our research personnel, to standardize this type of testing as emphasis grows on the importance of antimicrobial properties.”
WHY TILE: EDUCATION IS KEY
In an effort to gain a larger piece of the flooring pie, the ceramic industry has made strides to educate the public and better market its own message, including the fact it’s the only truly waterproof floor there is. It has been an all-hands-on-deck approach.
In 2017, the Why Tile campaign was kicked off, aimed at promoting tile and reaching consumers. The initial launch of the website-www.whytile.com-was geared toward the residential sector but has now expanded to include commercial, as well, and offers content, tools and resources for its users. Content centers around the style, durability and cleanability attributes of tile and includes tips and guides.
The initiative, coordinated by the TCNA, relies on input from various industry organizations, including the Ceramic Tile Distributors Association, the National Tile Contractors Association, the Ceramic Tile Education Foundation, the Tile Contractors Association of America and the Tile Heritage Foundation, in addition to manufacturers worldwide.
It’s a unique approach at seeking industry-wide solutions.
Manzella says, “The key is to market directly to the consumer making the final purchase. Historically, we have only spoken to the distributor partners that we work directly with. Now, with the growth of social media and online marketing platforms, end users are searching online and collecting information prior to making purchasing decisions and we can reach them. We are changing the way that we market our products, creating more educational content that can better prepare consumers so that they make the right decisions for their own health and the health of the environment.”
Warren agrees, adding, “It’s all in our messaging and how we tell our story. As the original waterproof product, we just need to keep telling our story-that is how we win!”
President Joe Biden is promoting a massive infrastructure plan aimed at creating jobs and improving the country’s highways and bridges. For U.S. makers of tile, the plan could be a boon as cities across the county seek to update aging transit tunnels.
Tiles have long been used in the country’s tunnel systems for its myriad qualities, like durability, cleanability and waterproofness. But tile can also withstand years of abuse from exhaust, debris and natural elements and can provide a reflective surface that improves lighting, as well.
With billions of dollars on the line, manufacturers on U.S. soil that can produce tiles in high volumes stand to benefit.
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