Hardwood Report 2024: Hardwood flooring continues to be challenged by lookalikes - March 2024
By Jessica Chevalier
The hardwood flooring category has not had an easy go of it as of late. Preliminary estimates from Market Insights for 2023 indicate that market consumption for hardwood was down as much as 15% in revenues. Imports declined 32% year over year, and exports sank 29.5%-with both being the worst of all flooring categories. However, there has been a rush of new blood into the category as of late, with companies including Tarkett Home, Cali, MSI and Southwind establishing hardwood offerings, many in a quest to offer a full portfolio of hard surface flooring.
Indeed, it is a strange position for the category both most desired by homeowners and the only one guaranteed to raise home value. But as Drew Hash, president of Southwind, notes, “It’s not the first time hardwood has lost share. In the early ’60s, broadloom carpet impacted hardwood much like LVT has today. Hardwood had 60% of share until the Federal Housing Administration accepted carpet. Wood nearly died in the ’70s and early ’80s.”
In spite of its current struggles, sentiment among hardwood manufacturers remains optimistic, buoyed by the fact that market fervor for LVT has tempered a bit, and hardwood retains measurable benefits over its competition. The fact is, according to many hardwood suppliers, there is a percentage of buyers who will not settle for a hardwood lookalike, so while LVT may eat away at the lower end of the market, it struggles to compete with “better” and “best” hardwood products, which are now leaning even more heavily into their “natural” qualities as differentiators.
Hurdles endure for the category, some within its control and some external. One that straddles that line relates to consumer demand for oak flooring, which accounts for 85% of hardwood flooring sales, according to sources. Demand for oak is also high from other industries, such as furniture and bourbon-both of which are often able to pay more for the raw material-and, eventually, demand will outpace supply.
Another challenge is the category’s strategy to counter the focus LVT marketing has placed on waterproof flooring, a largely unwarranted concern but one that is highly compelling to consumers when RSAs bring it up. Hardwood is not, and will never be, fully waterproof, but the fact is that most homes don’t need a fully waterproof floor-a realization consumers likely won’t come to on their own.
In addition, lookalikes in LVT, laminate and ceramic are improving, and the consumer is having more trouble than ever before differentiating the real thing from the copies, as well as justifying the cost of true hardwood against simulations that are passable as wood to the bulk of the population-until they walk on it with bare feet, that is.
Hardwood imports to the U.S. declined 32% in 2023, and the nations of origin with the largest declines are all Asian, reports Market Insights: Vietnam is down 32%, Cambodia is down 30% and China is down 52%.
According to Santo Torcivia, chief economist for Market Insights, the punitive tariffs on Chinese imports are hurting hardwood products coming from what used to be the largest exporter to the U.S. market, and, likely, the logistical issues and the U.S. economic slowdown are hurting China and other Asian nations that sell in the U.S.
Among the top ten nations importing hardwood to the U.S., only Canada, number three, is up year over year with an increase of 0.6% (in dollar value).
THE RICH RARELY GET POOR
While the lower and middle classes have been impacted by the post-Covid near-cession, America’s wealthier class hasn’t felt the same pinch and, therefore, has continued spending. This is good news for hardwood, which is the ultimate luxury flooring material.
For the most part, manufacturers report the category is strongest at the higher end. This bodes well for companies like Mercier, a higher-end manufacturer, with Wade Bondrowski, director of U.S. sales for the company, noting, “We are also seeing activity in our entry-level collections, which are still really good quality products; in recessionary times, people gravitate toward commodity.”
“We see the mid- to upper-end price points generally selling best,” says Dan Natkin, chief commercial officer for Boen and Somerset. “At the upper end, this is wide and long. We have also seen a resurgence in alternative species, like hickory, which I believe stands out particularly because there is so much white oak in the market.”
He adds that, at the lower end, the company has seen a nice resurgence in prefinished solid, which ties back to homeowners remodeling rooms versus whole houses.
While the higher end may be most active for many, recent years have brought some challenge in relation to pricing. “Due to the influx of hardwood importers out of Asia, the industry is seeing a race to the bottom, even on better-end products, to capture marketshare,” reports Kyle McAllister, director of the hardwood and laminate categories for Shaw.
Several interviewees, including from AHF and Mannington, have noted increased hardwood demand from builders as that sector gains steam.
“We are seeing builder come back to hardwood after five to six years of nothing but LVT,” says Brian Parker, vice president of product management for AHF. “People are asking for it. They want an alternative to vinyl, and hardwood is the only “forever-floor” except ceramic.”
Adds John Hammel, senior director for Mannington’s hardwood and laminate businesses, “The builder is looking for every opportunity to diversify and stay current with trends.”
OLD DOG, NEW TRICKS
AHF’s and Bjelin’s densified wood products, for instance, not only offer increased durability and scratch- and dent-resistance, directly taking on the durability claims of vinyl and laminate products, but also expand the opportunity for softer woods to be used as flooring. This offers a great deal of promise, as it could potentially ease the pressure on oak and elevate different aesthetics in the hardwood flooring category.
Additionally, hardwood continues to go wider and longer, with Tarkett Home’s Travis Cramer, senior director product management, noting that over the last six to 12 months demand for widths has moved from the 7” to 8” range to the 9” to 10” range.
President of Mullican, Pat Oakley, reports that demand for longer and wider is active on the solid side of the market, as well, though solid can’t go as wide as engineered. As longer and wider products are typically premium, this can benefit the average selling price.
Hardwood is also benefiting from advancements in printing, says Michael Martin, president of the National Wood Flooring Association, noting, “From a visual standpoint, customization is key. With new photographic and digital enhancements, today’s hardwoods can be customized to each customer’s specific color and add grain texture.”
“When they log white oak trees, there are different channels to sell the tree through at its high value.” Says Parker, “Flooring is not at the peak; furniture and wine barrels drive the premium. And because there is less white oak harvested, those industries are taking more than their share and paying more for it than we could sell it for as a wood floor, which is very concerning.”
Decreasing demand for furniture produced by China is likely to lead to less white oak being harvested in Europe, notes Hammel.
This has led many manufacturers to develop red oak products that emulate white oak.
“The consumer doesn’t care how you get there, they just want a beautiful floor,” says Parker.
CORE STORY
The upheaval created by the shortage of Baltic birch due to Russia’s war on Ukraine is largely behind hardwood flooring manufacturers now. Some, like Shaw, were unaffected, as the company began sourcing different core wood when prices on the material rose before the invasion was even underway. The company settled on a domestically sourced ply core.
Boen’s business was unaffected, but Somerset used primarily Baltic birch and, therefore, was forced to seek another source. At this point, reports Natkin, Somerset has found an alternative that it is pleased with, and it does still utilize Baltic birch in some instances.
Bondrowski reports of Mercier, “We were almost forced to look at other plies. We chose to stay with plywood. We believe plywood is better quality and offers greater stability, especially with everything in our line being sawn face. We still use Baltic in many cases, but we are okay with eucalyptus core.”
Bondrowski explains that one of the interesting results of the shortage was a proliferation of plywood suppliers. “Prior to this, there were only a few manufacturers that made floor-grade plywood,” he says. “But with the turmoil in Ukraine, others have seen opportunity there, so there are 40 to 50 now, rather than a handful.”
None of the manufacturers with whom we spoke were enthusiastic about hybrid hardwood products, which makes sense given the current strategy of leaning into wood’s natural virtues.
“We don’t believe in plastic-y cores,” says Bondrowski. “Hardwood is an investment that could be there for the consumer’s life. We make real hardwood that they can stain and finish.”
Adds Natkin, “SPC core products have been around for years but have had a number of performance issues.”
RAW MATERIALS
Lumber pricing is stable at present due to overall global weakness in demand for hardwood lumber and record low hardwood lumber production in 2023. However, prices stabilized at a relatively high rate, up 30% from fall 2022 on North American lumber, reports Natkin.
“For more than half or three-quarters of 2023, oak lumber prices went up, then plateaued there in Q4,” says Parker, noting that pricing trends do vary between species. “We saw some lumber price erosion on the lesser-demand species, like hickory and maple. Consumer demand is 85% oak, and there is a shortage of white oak in the market. The forest will yield 70% red oak but only 30% white oak.”
Oakley points to the big-picture factors at work. “There is global weakness in pricing due to weakness in both industrial demand, which represents about 60% of production, and the board and appearance demand, about 40%,” he explains. “If one is strong and one is weak, suppliers still tend to produce. If demand is on the appearance side, it will push our prices up. If demand is on the industrial side, then prices for our grade would trend down.” Board and appearance products are used for cabinetry, furniture and flooring, among other things.
Martin adds, “Supply is gradually increasing as we head toward the heavy summer construction months. There is far less volatility in the market today than we experienced coming out of the pandemic years.”
Mercier is seeing more price increases from overseas as well as turmoil due to tariffs. Bondrowski says, “Whether or not producers move their facilities out of China, the USTR (Office of the United States Trade Representative) is looking at the DNA of where the tree originated. This will change things a bit, as they will be more stringent on what comes over. I’ve heard DNA testing can detect down to a five-mile radius.”
Natkins adds, “Regarding supply from sawmills, given that demand has been tepid for 12 to 14 months, if there was a hockey-stick resurgence, supply would become tight. There are 40% fewer sawmills than there were 15 years ago. It will certainly be a constraint to watch in the future because some industries are gobbling up supply, like the bourbon business, which uses North American white oak.” While supply is tough on North American white oak, red oak supply is sufficient.
INCREASES VALUE OF A HOME
Bondrowski: During a recession, commodity wins. But consumers need to look at upgrades. Could they add value by incorporating the cost of an upgrade to hardwood into the mortgage?
SANDABLE WHEN DAMAGED
Natkin: All of our products are refinishable. We can give the consumer that assurance, and that is a comfort to them, even if they don’t do it.
AUTHENTIC
Alex Brodkin, vice president of product development, Cali: You can live an active life on hardwood. It’s not saying hardwood is bulletproof, but it ages beautifully.
Goulet: Nobody wakes up and says, ‘I want to buy a copy today.’ As one friend told me, ‘I’m too poor to buy cheap’; meaning, if I go cheap now, I’ll have to buy it again.
SUSTAINABLE
Martin: In late 2023, the National Wood Flooring Association and the Decorative Hardwoods Association released a comprehensive environmental product declaration (EPD) for wood flooring. This definitively shows through science that wood flooring is the most environmentally solid choice for flooring. Both solid and engineered wood flooring possess a considerably smaller carbon footprint than all other flooring categories.
Oakley: Most consumers are confused about hardwood flooring being a sustainable product. They think that if we cut a tree, it is bad for the environment, which is not the case. What’s bad for the environment is a toxic spill or ripping up plastic flooring ten years from now and landfilling it.
Natkin: Consumers want wood. And playing up the benefits of natural and refinishable and longer lasting with the lowest carbon footprint becomes a larger sounding board. The global warming impact of carpet is phenomenal in comparison to hardwood.
THE LOOKALIKES
Natkin: The threat is twofold. Lookalikes continue to look better, so the line is blurred. Mohawk was slapped on the wrist for calling its laminate “hardwood,” and the consumer is confused.
Cramer: I think the biggest challenge for engineered hardwood is the waterproof story of other products.
INSTALLER SHORTAGE
Natkin: On the installation side, trained installers are hard to come by. Click products are easier to install.
RSA COMPLACENCY
Parker: The RSA has become so complacent around selling the wood-look product that they are not really trying to focus on the trade-up to real hardwood. Nothing compares to the look and feel of a real hardwood floor. Consumers want it. But the RSA drives them to a fake wood product because they are comfortable selling that. It is a detriment to the retail store owner because they miss that premium sale for a lower margin, and they have to sell three times more.
Brodkin: Does flooring live up to the consumer expectation? It’s really important that we work with RSAs about how they sell-not to oversell or undersell. We need to set them up for success. We spend time in the field with RSAs and produce collateral for their use detailing how to talk about product and design. Not every RSA is a decorator.
McAllister: Sustainability is huge, and we have to do a better job of getting consumers to see how hardwood benefits the environment. We have to get RSAs and dealers engaged and educate them on how to inform the consumer.
MACROECONOMICS
Hammel: The macroeconomic conditions are the biggest threat: interest rates, the Middle East conflict and weather conditions in the Panama Canal.
A TREE WITHOUT BRANCHES
Through their many trials and tribulations, hardwood manufacturers have come to realize that their best strategy may be leaning into the sheer woodiness of wood. What other material, after all, can compete on those terms?
“Clean grade is what consumers are looking for,” says Jerome Goulet, marketing director for Mirage. “That’s putting a lot of pressure on that species, and that’s why red oak innovations around hiding red tone are a good solution. Generally, people want wide and long to align with nature. They want a tree without branches.”
Greys, the darling of the last decade, are fading in favor of earthy tones and raw, natural looks. “It’s one visual advantage that wood has,” says Natkin. “Every plank is different, and raw finishes accentuate that.” Texture-wise, subtle wirebrushing is preferred.
Parker has noted a counter-trend toward character grade. “We see the clean grade in more premium structures with thicker faces-a premium product structure with premium look,” he says. “The character grade hits a premium price point, because you can create really rich looks but can hit the value price point, as well.”
He continues, “On the solid side, trends more move slowly. But we are seeing growing demand for on-trend visuals in solid wood products. At Surfaces, we introduced about 80 new visuals in solid wood.”
While the multi-generational office and the importance of building workplaces that appeal to Millennial and Gen Z workers is a prominent topic today, Oakley notes the importance of manufacturers doing the same with their blue-collar teams. “In our plants today, there is a different mindset due to the new generations of workers. As an employer, we have to focus hard on what makes them tick and do what we have to do to stabilize our workforce. We must make them feel engaged and turn them into leaders, so we can trust them to do what we need them to do.” Oakley notes that building culture is something he plans to spend time on as president of Mullican.
COMPANY HIGHLIGHTS
AHF Products has applied its Dogwood densified wood technology across all of its major brands. At Surfaces, the company introduced new products as “beyond oak.” Oak represents 85% of hardwood sales, according to the company, in part because of the durability it offers. Many other species are beautiful but too soft naturally to serve as flooring. However, the company’s densification technology hardens softer woods. AHF believes this is a benefit to the retailer, offering a differentiated portfolio of hardwood products, which tends to stand out among the sea of oaks.
AHF has also extended its hydro series technology to all engineered hardwood products at no added cost. Hydro series technology provides the product eight to 36 hours of protection against liquids.
It is also using what it calls PureTone technology. “Most people prefer a sawn face look,” explains Parker. “For that, the veneer has to be sliced, and wood has to be soaked before it’s sliced. When you do that with white oak, you get a green tone. PureTone allows a sliced face that looks exactly like sawn, which enables an entry-level product that looks more like an expensive sawn-face product.” AHF doesn’t tout this process to consumers but does speak about it to its professional partners. Says Parker, “Our goal is to make the entry-level as beautiful as the higher-end. That would be a dangerous proposition if the difference was narrow, but it is so great: $10/foot versus $3/foot.”
On the engineered side, in Hartco, the company rolled out Necessity, an American-made, 6” wide product with a 3mm face. In Robbins, it introduced sawn-face Coastside with a 4mm face. Seaboard is a cleaner version of Coastside.
In solid, oak in 4” to 5” widths is generating activity. “Consumers are willing to pay for a premium visual,” says Milton Goodwin, vice president with AHF Products.
Both builder and multifamily are significant to AHF’s hardwood business. The company manufactures in the U.S., Europe and Cambodia.
Cali has been in the hardwood space for four years in a limited fashion but, in the last six months, has dramatically expanded its offering, with 2024 being its biggest push thus far. The company, which also added laminate to its offering, has the goal of being a full-fledged hard surface provider, offering premium products at a value.
Introduced in 2023, Barrel is the entry point product, a 1/2” platform with a 2mm veneer. A step up are Whiskey & Wine and Cellar, also this year, with Whiskey & Wine serving as the more rustic of the two, which can be paired. Cellar is 8” wide and 82” long with a 3mm face.
The company notes that Barrel hits similar price points to high-end WPC.
Around 75% of the company’s wood line is made in Asia, while Whiskey & Wine is U.S.-made. The company plans to source a new line from Europe in 2025.
Cali is an omnichannel brand, going to market direct to consumers, through groups such as the National Flooring Alliance and CCA, and to builders, whom it has seen starting to re-embrace hardwood.
In early 2024, Shaw rolled out its first ever exotic collection: Shaw Floors’ Short Leaf Acacia and Regatta Teak. Positioned in the “better” and “best” categories, these offer a differentiator from the white oak saturation in the market.
Also, it added four new colors in Ensemble, a 1/2”-core product with a 2mm sliced white oak face. The company refreshed the line based on demend for white oak and lighter colors.
Shaw manufactures some of its hardwood in South Pittsburg, Tennessee and sources the rest. Its business is split between the retail replacement and builder channels, and it sells a fair amount of product for commercial use.
In late January, Somerset announced that its Crossville, Tennessee engineered hardwood production would be consolidated to the Somerset, Kentucky plant. Both lumber processing and finishing were already taking place at the Kentucky plant, so this was simply about moving the middle of the process onto the same site as the beginning and end. Boen’s hardwoods are produced in Lithuania and Croatia. Both brands go to market through distribution and focus on independent retail-with no mass merchant business.
Boen also offers a dedicated sport flooring line, which is continuing to grow, as well as commercial hardwood, used in hospitality and corporate locations. Somerset’s products are used commercially in retail and corporate specifications.
Boen and Somerset are rolling out a bevy of new products in 2024. Boen’s new high-character Viking collection is offered at a value price point. In addition, the company has launched its click herringbone hardwood in the top colors from its plank offering, the response to which has been “phenomenal,” says Natkin.
On the Somerset side, the company brought to market a European wide plank product with American finishes and color. And Natkin notes that there are two or three additional new offerings in the hopper for later in the year.
For Mannington’s hardwood business, old is new. “Our hand-crafted, hand-stained wood products are unique and somewhat innovative in a category that is mostly highly automated,” says Hammel. “Not only is it that they are created by artisans, but it gives them unique looks with clarity and depth.”
The company reports that it has experienced activity across the board: in the lower price points ($4.99 to $5.99 per squre foot) to its 1/2” product at the mid-tier to the premium end. The company sources its products from Central America and Asia. Its products go to market both direct and through distribution. It also does business with builders and multifamily operators.
Mannington has two new hardwood products. River Walk is a European white oak product positioned at a lower price point with a 3/8” format and a 1.2mm face, while Monogram, a 9/16” European white oak with a contemporary feel and light wirebrushing, is a premium product; it features a fuming technique that brings out natural variation of grain.
In 2024, Mercier will introduce one of its largest rollouts in a few years. Answering market demand for engineered products, its new Pro Engineered series features 5” wide boards with a 1/2” sawn face in oak and maple. Pro is available in seven colors and a natural.
In addition, Stellar is a new line of white oak available in eight colors and two grades-Authentic and Distinction, with Distinction a bit cleaner-in thicknesses of 1/2” and 3/4”.
Mercier produces its hardwood in Canada. When components are manufactured abroad, the company finishes them in its own facilities to make certain that they meet its expectations. The company’s products are sold direct in Canada but through distribution in the U.S.
Last year, Mercier relaunched its commercial hardwood program with its Intact 2500 commercial finish that features a ten-year commercial warranty and a three-year no-walk-off-mat warranty. The company reports that the new finish is much cleaner looking than the prior.
Long before the outbreak of Russia’s war on Ukraine, Mirage transitioned its cores to its TruBalance platform. The all-wood platform is comprised of a hardwood top, an SPF quarter sawn pine core and a wood backer. The product is available in widths up to 7-3/4” with a 3/4” thickness. While the technology has been around for ten years, last summer Mirage soft launched it on a 9/16” platform. The company produces its products and sources materials primarily from North America.
In December 2023, Mullican’s long-time president, Neil Poland, retired, and Oakley, who has been with the company for more than two decades, was named as his replacement. Poland is now executive chairman of Mullican. Oakley served most recently as vice president of marketing.
In line with consumer demand, this year Mullican will introduce products in longer lengths in both solid and engineered with a cleaner grade.
Mullican has four plants in the United States and goes to market through both the home center and distribution channels.
Tarkett Home is dipping its toe in the hardwood segment, shooting for the middle of the market in terms of its product offering of engineered hardwood, which was introduced under the name AmeriGrove at Surfaces, to launch in late spring or early summer.
The initial ten SKUs are a mix of oak and hickory, all made in North America. The company is also introducing laminate. “Our approach is to get away from the exclusively SPC option for distribution,” says Cramer. “Each has its own performance characteristics, and we are giving the customer options.” The company’s entire hard surface line is sold through distribution. The company hopes to expand into exotics.
The NWFA has launched its Engineered Wood Flooring Refinishable Program, a voluntary certification designed to identify engineered wood flooring products with veneers thick enough to be refinished.
The ability to refinish not only makes hardwood a multi-generational product but also offers the opportunity for a floor to achieve a new aesthetic.
Products must meet the following minimum wearlayer thickness requirements:
• Unfinished Smooth Wood Flooring: 3.2mm
• Factory Finished Smooth Wood Flooring: 2.5mm
• Sculpted/Distressed Wood Flooring: 2.5mm at the lowest point
For more on the NWFA Refinishable Program, turn to Wood Cuts on page 91.
Copyright 2024 Floor Focus
Related Topics:Shaw Industries Group, Inc., Mohawk Industries, Tarkett, Mirage Floors, Shaw Floors, Mannington Mills, Lumber Liquidators, Crossville, AHF Products, NWFA Expo