Focus on Leadership: Russ Rogg discusses the future of the rapidly changing LVT business - Aug/Sept 2020
Interview by Kemp Harr
Pittsburgh-born and bred Russ Rogg started his career with laminate producer Wilsonart after earning a degree in business from Thiel College. Rogg was introduced to the flooring business through Wilsonart, joining its floorcovering division as district sales manager and rising through the ranks to become director of sales. When Wilsonart closed its flooring business in 2011, Rogg joined the Stone family of businesses, where today he serves as president of Metroflor and chief product officer across all HMTX brands. Rogg lives in Connecticut with his wife, Kim; the pair have two children.
Q: When you were growing up, what did you think you’d end up doing as a career?
A: As a young kid, I’m not sure that I had a particular dream or vision about my career, but as I got a little older, I did think that I would end up in the construction or building materials industry in some capacity.
My father was in sales, primarily in the plumbing fixtures business, representing brands such as Crane (which has since been purchased by American Standard) and Sloan Valve Company. Additionally, my oldest brother was a remodeler-turned-general contractor, and he ultimately opened a cabinet company, which now manufactures casework and millwork for commercial projects such as schools, hospitals, restaurants, etc. So over time, I began to envision coupling a business degree with these family experiences. And in the end, that’s exactly what transpired.
Q: How did you end up with a career in the flooring business?
A: It was a series of favorable coincidences and opportunities that led me to the flooring industry. As noted, my oldest brother, Ken Rogg, operates a commercial casework company in Pittsburgh, Pennsylvania, where I grew up. As a teenager and throughout college, I worked for him building cabinets and countertops, and through his business, I came to know the local Wilsonart laminate distributor, Bennett Supply.
After graduating from college, I learned through this distributor that the Wilsonart regional branch in Columbus, Ohio was hiring, and through that connection, I was afforded an interview and subsequently began my career with Wilsonart International in 1991. At the time of my hiring, Wilsonart did not have a flooring division, but in the mid-’90s, they broke ground on a plant in Temple, Texas, and through connections within the company, I transferred to the Wilsonart flooring division and began my flooring career as a district sales manager. I could have never predicted that path, but I am grateful that it worked out as it did.
Q: You spent 13 years at Wilsonart. Why did the firm exit the flooring business, and what can you learn from that decision?
A: Wilsonart’s parent company, Illinois Tool Works (ITW), made the decision to close the flooring division in late 2010. At that time, we had lost marketshare to a number of emerging competitors that were manufacturing direct pressure laminate flooring (DPL), while Wilsonart was manufacturing high pressure laminate flooring (HPL). HPL had a number of performance advantages, but it was significantly more expensive. In fact, I recall that at the time of our closure, Wilsonart’s average selling price was $2/square foot, while the category as a whole was closer to $1/square foot. So, while HPL was arguably better in many regards, it was hard to justify that degree of cost variation.
Those of us that were there at the time felt that we could have continued operations, but it would have required a shift in our strategy to embrace DPL products to remain competitive. This, ironically, became the tipping point. Wilsonart’s flooring division represented less than 10% of Wilsonart International’s overall volume, and the only value the flooring division had in the eyes of ITW was that it was the biggest user of laminate as manufactured by Wilsonart. Therefore, if the flooring division could only survive by nature of converting to DPL, then the flooring division was no longer of value. This was a tough decision to accept, and even tougher to execute the closing of the division, but I definitely grew and learned from the experience.
First, I learned that it’s critically important to offer a broad product portfolio covering a wide range of prices. It’s not easy to survive only at the upper end of a given category.
Second, I learned that using partners for manufacturing needs versus manufacturing entirely yourself can be advantageous. As opposed to convincing your customers to buy what you’re capable of manufacturing, you can focus on what your customer is seeking and then find various sources of supply to meet those needs.
I also learned to face tough circumstances head on and to make the right, honest and fair decision even when those decisions are tough to communicate.
Q: What attracted you to join Metroflor and the Stone family of brands?
A: Many of Wilsonart’s distributors were also Metroflor distributors, so I was able to see first hand how Metroflor revolutionized the LVT category with Konecto, the industry’s first floating LVT. Furthermore, the Stone family had a stellar reputation amongst these shared distributors. They were considered pioneers in their category and had a great reputation. So, the combination of innovation, legacy and integrity was a pretty compelling formula.
Q: Some say that the Amazon era could have a flattening effect on the layers between makers and end-users. What role do you think distribution will play in the flooring business long term?
A: This is a really interesting question, and the evolution that distributors may need to make in order to remain strong and relevant will likely be accelerated based on consumer buying habits that are being influenced by COVID-19.
What we think of as the traditional functions of a distributor will still continue, i.e. inventorying product and servicing independent retailers and contractors. However, in addition to this traditional model, distributors and manufacturers who rely on distribution will need to adapt and partner with one another to facilitate a transactional experience for those consumers that will not shop in the traditional way. This may allow the distributor to leverage their local inventory, their logistics, etc., but the path to the consumer could be very different. In short, I definitely believe that there is a future for distribution, but an evolution will occur that affects their “layer,” if you will. The layer will remain, but their function in the layer may be different for at least a portion of their business.
Q: Today, rigid LVT is the fastest-growing flooring category, and we’re watching as more and more investment is made in manufacturing capacity, both in the U.S. and abroad. Are you concerned that if capacity outpaces demand, the battle will shift to price?
A: There is always the fear of increased capacity having an adverse effect on price, especially if capacity, as you noted, outpaces demand. Fortunately, for the time being, demand in the LVT category is outpacing capacity, and the promised new capacity is not materializing all that quickly or reliably. With that said, the category is highly competitive right now. Consumers, retailers and distributors have many choices, and “price” inevitably calculates into the decision-making process for any buyer. Therefore, the goal for a manufacturer, regardless of capacity/demand dynamics is to deliver value through better design, better performance, more realism, etc., to garner a fair price.
The only other caveat that I might add is that certain product types or platforms within the larger LVT category may end up being commoditized, but that doesn’t mean the entire category as a whole will become commoditized. Innovation is at an all-time high in the world of LVT, and more exciting times are ahead.
Q: Some firms believe that you can make rigid LVT without PVC. Tell us why just adding more limestone won’t work.
A: Excluding magnesium cores or other polymers … and only discussing WPC and SPC as we know them today, PVC is an important ingredient in both formulas. Both WPC and SPC utilize PVC and limestone, and WPC, of course, also integrates a foaming agent, which results in a core that’s expanded. The role of PVC is to act as a binder of the various ingredients in each formula, and PVC also inherently adds a degree of flexibility to the core, even though these cores do not contain plasticizers. If you reduce the ratio of PVC and increase the ratio of limestone, it can result in a product that is too rigid and too brittle. A proper ratio results in a core that is rigid, but also retains just enough flexibility to not become brittle. The reason that this envelope continues to be pushed is because limestone, of course, is less expensive than PVC.
Q: What is HMTX doing to ensure that it leads the way in developing safe and sustainable resilient products?
A: We are actively and constantly pursuing materials/ingredients that can be used for resilient flooring that might be viewed as safer or more sustainable than PVC. Most of our efforts under the HMTX umbrella have been relegated to the Teknoflor division whereby they are offering both commercial sheet and commercial plank and tile products manufactured with Ecuran, which is a bio-polyurethane composed of plant-based oils such as canola or castor oil. The applications for these products are commercial in nature; however, we believe that these types of products will become more mainstream and will also migrate to residential audiences, as well. Our goal is to continue refining the products that we are offering today while simultaneously pursuing new materials that will allow us to bring high-performing products to a wider audience at an affordable price. This is one of the next frontiers for sure, and we plan to be a big part of this evolution.
Q: I’ve recently learned that you are also the head of all product innovation for HMTX. Tell us what role branding and innovation will play as this category evolves?
A: The role that your referring to is chief product officer, and I will be the first to admit that it is a developing role for me within HMTX. As you know, HMTX is comprised of various divisions, or towers, as we like to call them: Halstead, Metroflor, Teknoflor, Aspecta and Vertex. Each of these divisions has a different set of customers and also a different channel to the marketplace, but we do share many of the same factories, and of course, we all specialize in resilient.
The goal for this role is to pursue cross-collaboration across all of these divisions as it relates to design, product development, testing, validation and so forth. Innovation within our company comes from all directions, including feedback and suggestions from our customers. So, this role is not about innovation but rather facilitating a better process of taking the concept of a product to fruition in a methodical manner.
Q: What is your mix of business today, commercial versus residential, and where do you plan to take it?
A: From an HMTX standpoint, Aspecta and Teknoflor are 100% commercial. Halstead, which sells to The Home Depot, is primarily residential, but we do see growth emerging on the pro side of that business. Metroflor’s business is still heavily weighted towards residential with about a 70/30 split. To answer honestly about where we plan to take it, our objective is to grow all divisions and in both segments. Aspecta and Teknoflor are both poised with great product portfolios such that they can achieve growth in commercial and institutional settings. Metroflor will likely continue with a 70/30 split between residential and commercial.
Q: What does the flooring industry need to do to solve the shortage of installers?
A: One thing that we can do, and are doing as manufacturers, is to make products easier and faster to install. This doesn’t add to the labor pool, of course, but it does make the labor pool more productive. I also think that supporting the Floor Covering Education Foundation is a good start, although it remains to be seen which tactics will yield the best results. I can’t help but think that this needs to be solved not by a foundation alone, or simply throwing money at the problem, but rather by promoting a shift in thinking at the grassroots level. I think back to my time working in my brother’s casework business. We had trouble finding cabinet makers and countertop fabricators, so we hired unskilled labor and one by one taught them these skills.
Q: Tell us who has influenced your life the most and what they taught you.
A: This is tough because a long list of people have influenced me over the years. First, credit to my wife, Kim; she’s the best person I know, and she causes me to strive to be a better person in all aspects of my life. My father, Richard Rogg, taught me the importance of hard work, carrying myself with honesty and integrity and also the importance of family. My older brother, Ken, taught me to be resilient and to never give up.
During my time at Wilsonart, I was very lucky to have a number of mentors to watch and learn from: John Duff, my first boss at Wilsonart; Curt Haffner; Jim Schnietz; Curt Thompson (all sales directors at Wilsonart flooring) and Bill DiGaetano, president of Wilsonart International when I was with the organization. While each if these men had individual talents and skills, they all embodied a culture that was inherent at Wilsonart, which shaped me then and remains with me today. And last but not least, I’ve certainly learned a lot from Harlan Stone. His business acumen, strategy, vision and a willingness to take risk are admirable and are balanced by his compassionate demeanor and generosity.
Q: What advice do you give your children as you prepare them to lead successful lives?
A: I have two children-a 20-year-old daughter named Sommer and a 17-year-old son named Cooper. I tell them both the same thing: I want them to be happy, healthy and safe! I hope that what I do every day by way of example is what will prepare them to lead successful lives themselves.
Q: Why are sustainability and social equity for workers two important topics for HMTX?
A: From a social equity standpoint, it’s the right human approach to take, and I think that because our products are predominantly manufactured in China and because there are so many misperceptions about what that really looks like, it was important for us to be transparent and vocal about the environments in which our factory employees work.
There is a human side to our sustainability efforts, as well. It’s undeniably the correct approach to take from the perspective of responsibly managing our natural resources and also the impact that our manufacturing process has on the environment. I mentioned earlier that one of the next frontiers was related to future development of more sustainable products, and social equity and transparency are interrelated. Where a product is made, by whom, with what ingredients and with what impact are the questions we want to be in a position to answer with pride and confidence.
Q: What do you like to do when you’re not focused on work?
A: I don’t have a singular hobby, but rather, I enjoy a variety of different activities. I like to play golf and tennis. I like to hunt and shoot sporting clays/skeet, and over the past few years, I’ve become much more committed to exercising on a regular basis, which has helped me both physically and mentally. It’s funny how the results of a slowing metabolism can be an inspiration to change your lifestyle!
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