Laminate Update: Innovative design and premium product mix sustain the category
By Calista Sprague
At first glance, the laminate category may appear to be in trouble. Growth numbers have been flat for several years. Commodity products from overseas continue to threaten pricing stability, and LVT, the fastest growing hard surface category, is taking marketshare. As if that weren’t enough, recent negative press has stirred up health concerns as well. However, a closer look at laminate reveals a mature category that is investing in design innovation and premium products in order to maintain its value in the market. And as the dust is settling, all that negative publicity is actually boosting business for domestic laminate producers. According to the industry leaders we spoke to, laminate is still a viable category with U.S. sales in excess of a billion dollars.
The biggest news to hit the laminate industry in recent months was the 60 Minutes exposé on March 1 that found high levels of formaldehyde in some Chinese laminate sold by Lumber Liquidators. In the early days following the story, manufacturers fielded calls from worried consumers as well as frantic distributers and retailers, and although many in the industry initially expressed concern about possible negative impacts on the laminate category, the impacts for domestic producers have been mostly positive.
Michael Babula, Clarion Industries’ chief marketing and sales officer, says many of the big boxes and home centers are pushing the Made in the USA message, and some Clarion customers have stopped sourcing products from China altogether. One very positive result of the news story is that domestic manufacturers have enjoyed a bump in sales. Worried consumers gravitated toward trusted brands, especially those made in the U.S., shying away from no-name imports. And when distributors and home centers stopped sourcing Chinese products for their private labels, domestic producers with private label business were all too happy to fill the void.
Some industry leaders say that domestic suppliers and big boxes will ride the wave of hype surrounding the superior safety of American products as long as possible, pointing out that some have even begun shifting the conversation to include the materials in resilient products.
A few major manufacturers still do business with reputable Chinese companies, sourcing safe, quality laminate to round out their offerings. For companies like Armstrong, a trusted household brand name has helped distributers and consumers feel comfortable with its Chinese made products. “What we’re seeing is that it’s not a laminate issue; it’s not even a Chinese made laminate issue,” says Armstrong strategic project manager Brian Parker. “It’s a business decision issue that created that situation, so we’ve seen some accounts getting away from imported no-name laminate, moving toward Armstrong-branded laminate.”
One of laminate’s best selling attributes is its durability. Although it looks like real wood, it stands up to scratches and scuffs better than any hardwood or vinyl product, making it an ideal product for families with young children and pets. “The wear and scratch resistance of laminate is superior to any other hard surface category product,” says Parker. “It holds up extremely well in those challenging environments that have high traffic.”
Only ceramic outperforms laminate in terms of wear surface durability, but its prohibitive cost, challenging installation and hardness under foot make it less desirable for many consumers.
Compared to hardwood, laminate also provides better dent and fade resistance. According to Eric Erickson, director of hard surface R&D at Shaw Industries, laminate is so durable that the product will “ugly out” from shifts in color and design preferences long before it wears out.
In abusive environments, laminate also outperforms LVT, currently the hottest hard surface category. “In premium laminate, like the products we make, the performance is unparalleled in terms of the way it stands up in the home versus any other product,” claims Roger Farabee, vice president of marketing for Unilin/Mohawk hard surface. “Because LVT is such a soft surface, it scratches, scuffs and mars very, very easily. We can show that hands down our products will look better decades longer versus the average LVT product.”
Laminate installs with simple click systems that the average DIYer can easily manage. And because the flooring floats over the subfloor, very little preparation is required. Imperfections in the subfloor will be hidden and will not telegraph to the surface, unlike with LVT. For these reasons among others, builders in the new home and multifamily markets have also begun choosing laminate more often than in the past. Installers can easily handle laminate installation, with no time needed to, for instance, acclimate hardwood to the house, no concerns about humidity levels and less risk of damage from careless subcontractors.
Once installed, the product requires little in the way of maintenance. Routine dust mopping and occasional damp mopping keep it looking like new, and it never needs to be stripped, refinished or waxed. The fact that laminate cannot be refinished is also a negative, however. One of the features that hardwood has over laminate is the ability to renew the surface through refinishing. As long as the veneer is thick enough, even engineered hardwood can be refinished to bring back the original look. For laminate, however, once the floor is worn or damaged, it must be replaced.
The primary enemy to laminate is water. Consumers must be educated not to wet mop or use steam cleaners, and laminate is not suitable for use in wet areas. Wet applications is a major area where LVT has the upper hand since it is much more water resistant. Whereas LVT can be used in kitchens and baths—the rooms most likely to be hard surface—without risk of water damage, laminate cannot.
TAKING ON THE COMPETITION
The laminate category goes up against some stiff competition in hard surface, especially from LVT and engineered hardwood. All three categories provide a wood or stone look with a variety of pros and cons, but in addition to its superior wear resistance, laminate’s design and price points help keep the category competitive.
Consumers tend to prefer laminate’s heft in hand over the thinner LVT, says Erickson. “When you can put a 10mm, 12mm product into that consumer’s hand compared to a 4mm or thinner vinyl, there’s a huge value proposition there. We’ve seen that thicker product bring a lot more value to the consumer because it’s just so much more substantial.”
With formaldehyde fears by and large quelled, manufacturers of laminate are actually marketing laminate’s composition as a benefit. Laminate is mainly a wood-based product with extremely low chemical emissions, when produced responsibly, and some companies are emphasizing how LVT is a PVC-based flooring product, which may contain toxins in the form of ortho-phthalates. This argument may not remain viable in the long term, however, with many LVT makers already moving away from ortho-phthalates.
In years past, laminate could not compete with the look of hardwood. Although the digital images were realistic, the surface of the laminate was flat and easy to distinguish from wood. However, today’s enhanced digital wood visuals, along with the embossed-in-register textures, have resulted in laminate planks that actually rival real hardwood. “With our laminate products, especially Architectural Remnants and Rustics Premium, customers and consumers mistake it for real hardwood,” Parker claims. He says that even when it’s laid in the same showroom with hardwood, industry professionals can have difficulty discerning the difference.
Farabee adds that the combination of these sophisticated visuals and competitive price points give laminate an edge over engineered hardwood. “The aesthetics are so good, in many cases we can provide a premium laminate look at the same price of a very plain commodity engineered hardwood look.”
Because high-end laminate offers the most authentic wood visuals along with more advanced performance features, most manufacturers are investing in premium laminate to better compete, especially with LVT. “We are seeing a shift in the product category from the low end to the high end, and I think that’s our response to the threats from the competitive products, whether it’s LVT or Coretec or even engineered wood,” explains Travis Bass, executive vice president of marketing at Kronotex USA. “We’ve had to be more proactive in product development from a defensive standpoint, but the result has been a fairly stable market.”
Soon the market will be flooded with new domestically produced LVT from several manufacturers currently building or expanding facilities, and the laminate category could potentially lose significant marketshare in the process, although that remains to be seen.
While companies like Shaw Industries are reporting an uptick in laminate sales with stone, tile, concrete or abstract looks, the overwhelming majority of laminate is sold in wood looks, and the trends tend to mirror those in hardwood.
North American Laminate Floor Association president Bill Dearing is often asked why so much of laminate is dedicated to the wood look. “It is all market driven,” he responds. “That’s what the consumer wants, so that’s what laminate flooring gives. If the consumer decides in six months to shift, it’s a photograph; it could be anything that sells. Wood looks sell; wood looks are made.”
Hardwood planks have been growing longer and wider in recent years, a look that is easier to achieve in laminate since the product is more stable and warping is not an issue. And thicker laminate boards of 10mm and 12mm are also gaining momentum, appealing to customers who favor a substantial weight more akin to solid hardwood.
Laminate designs, like in hardwoods, have also been trending toward rustic looks with character marks for the last few years. Texture has become increasingly important, especially for laminate, as it helps convince the eye that it is actually seeing wood planks. Embossed-in-register texturing coupled with handscraped and wirebrushed looks have become incredibly nuanced, fooling even the most educated eye.
The rustic, heavily distressed looks continue to sell, but more elegant looks are beginning to grow as well. “The trend seems to be starting to lean a little more toward European than it has in the past,” explains Steve Roan, sales and marketing director of hard flooring at BerryAlloc. “Some of the grey tones and the heavier highlights of the graining that have been prominent throughout Europe for the past few years are starting to take hold in the U.S.” The affinity for these European looks is a boon for international manufacturers like BerryAlloc, a division of Beaulieu International Group, and Kronotex, which can now adopt some of its European looks for the U.S. market, rather than creating so much product exclusively for the U.S.
Sara Babinski, principal designer at Armstrong World Industries, says that soft colors, especially greys, whites and aqueous colors, have gained in popularity in recent months. Coordinating with these soft hues, beach inspired reclaimed and distressed paint looks have also become important interiors trends seen at trade shows around the world, such as Maison & Objet in Paris and Highpoint Market here in the U.S.
“Laminate has become so beautiful and specialized,” Babinski says. “A lot of what I’ve been doing in laminate is becoming my inspiration for hardwood. For example, a couple of years ago Woodland Reclaim pattern had so many unique mixes of color and species and texture, I thought, ‘I want to do that in wood.’” Although Armstrong sources its laminate boards, it creates its own designs and has recently invested in larger cylinders for 24 images per design, tripling the standard eight for greatly reduced pattern repeat. It also purchased new embossing rolls for additional textures.
“I think the visuals are huge,” Erickson says. Shaw’s strategy has been to carry much of its high-end visuals and textures throughout its laminate lines, even into the entry level 7mm and 8mm lines, in order to set its products apart from the pack.
For Kronotex, its Golden Oak embossed-in-register products have been top sellers as well as some of the more exotic species, such as acacias and pecans—looks that are both more difficult to find and more expensive in solid hardwood. Kronotex opened a showroom in Atlanta last year where it can display its products from Germany, Switzerland and Poland, streamlining the process for U.S. test marketing.
Armstrong has received requests and seen a boost in sales for traditional looks, so Babinski has derived handscraped hickory and traditional walnut looks from lumber at the Armstrong hardwood plants in West Virginia and Pennsylvania. The traditional looks also move well in the builder market, which is a growing sector for laminate.
Even if laminate wood looks persist, manufacturers still have design frontiers to conquer, points out Kronotex’s Bass. “There’s still room for advanced embossed-in-register designs with different gloss levels within the depth of the embossing. Same thing with the combination of embossed-in-register and handscraped. That’s where technology seems to be the key. If a consumer picks up a piece of laminate and thinks that they’re holding a piece of hardwood, then we have succeeded.”
INGREDIENTS FOR LAYERS
The isolated formaldehyde issue aside, laminate is potentially an extremely green product, and many domestic products on the market are FloorScore certified. The core, which represents the bulk of the weight of the planks, is increasingly made of recycled wood fibers, often from post-industrial waste. And manufacturers that use virgin fibers usually obtain them from fast-growth trees, often pine, on sustainable tree farms.
The wood fibers are held together with various resins that also help give the planks some water resistance. Materials for the boards are typically sourced close to the manufacturing plants for greater efficiency, as are the décor layers. In some cases, papers may be sourced from Europe, but the vast majority of ingredients for domestically produced laminates come from the U.S. The laminating layer is generally a melamine similar to the material used for light switch covers.
Clarion’s laminate products are unique in that they have zero added formaldehyde, and therefore do not have to undergo CARB 2 testing. Unfortunately, as an OEM and an unbranded company, it cannot utilize its own sustainability story.
Laminate sees much more activity in the residential market than in commercial sectors, and most of what is sold into commercial settings would be considered light commercial. Retail and multi-family segments see the most activity, although the hospitality market is beginning to put more hard surfaces into hotel rooms, including some laminate.
BerryAlloc is one of the last manufacturers to make high pressure laminate, which is rated for heavy commercial traffic and offers enhanced water resistance, wear resistance and an aluminum locking system for greater strength than the more common direct pressure laminate. Steve Roan says, “It’s an expensive process, but it creates a product that is almost indestructible. We have the worldwide contract with Volkswagon for laminate in their showrooms. People drive cars on it. It’s incredibly well constructed, but obviously there’s a price for that.”
Mohawk Industries is one of the few companies with a dedicated brand for commercial laminate, selling its Pergo Pro products through the Mohawk Commercial Group. “Commercial is still a relatively small portion of the market,” Roger Farabee says. “We’re starting to see interest, particularly in the hospitality and retail segments.” He points out that the challenge with laminate in commercial segments is maintenance. Because it’s a wood product that will swell when wet, laminate needs to be installed in a controlled environment where a maintenance crew won’t ruin the floor with wet mopping.
Kronotex is working on an AC6, highly moisture resistant laminate for the commercial market that will launch in the spring of 2016. Bass says that the company is making headway with specifiers who still have in mind the early laminate with its slick surface and hollow sound. “Once a specifier or an architect takes the time to look at today’s laminate, they realize that this isn’t their grandma’s laminate. I think these types of products will continue to make their way into commercial applications as the commercial community becomes more aware of the features and benefits of the product, and you’ll see some growth there.”
Laminate products with high amounts of recycled content and low VOCs could be easily marketed to specifiers who are always looking for ways to increase LEED and other green certification scores, but the strong green story behind laminate largely goes untold. In light of the formaldehyde issue, manufacturers are more apt to tout laminate’s sustainability attributes, so perhaps this will lead to increased attention from specifiers.
Armstrong sells both residential and commercially rated laminate, and according to Parker, the commercial products actually sell more in residential applications, which he attributes to the visuals. “These designs are beautiful designer looks that actually come with a commercial wearlayer without sacrificing clarity of the visuals.”
CHANNELS AND PRICE POINTS
Most of the major laminate suppliers sell at all price points, although the bulk do not participate at the lowest commodity ranges well under $1. Most are seeing the greatest activity at the premium end of the market, where distributers and retailers can sell sophisticated hardwood looks at a fraction of the cost of wood.
“For the last couple of years, the opening price point seemed to be the winner,” says Babula of Clarion. “But over the last 12 to 18 months, we’ve seen good growth in the mid and upper price points through better designs and thicker product.”
According to NALFA president Bill Dearing, square-foot pricing of laminate has been up for the past two years. “We interpret that to mean people are looking for better quality and are willing to pay for that at retail. That to us is very, very heartening, considering the entire market is down, especially the realty market.”
Because of the recent activity at the category’s upper end, companies like Kronotex have shifted their product mix to focus more on premium products. “We’ve worked hard to get away from some of the low end products,” Bass says. “We’ve upgraded, so we have a richer product mix over smaller volume of total product.”
Specialty retailers have supported the move toward higher end laminate products, where they have a better value proposition and have less competition from the home centers and other big boxes. And builders are beginning to see the value of premium laminate as well.
There has been significantly increased interest in the category from builders who are frustrated by fluctuating hardwood prices and difficulties in finding qualified installers. “New homes used to be focused on 7mm product as the opening price point and then trading up to wood,” Armstrong’s Parker explains. “Now you’re seeing a shift where new home construction is more heavily weighted toward 12mm laminate because you can create a beautiful new home that has a hardwood look but without the cost of a hardwood.”
The laminate market has been battling commoditization for many years, due to a steady stream of low cost product flowing in first from Europe and more recently from Asia. But suppliers today don’t seem overly concerned about additional commoditization. “I think that’s already happened,” says Shaw’s Erickson. “Five to six years ago, you just didn’t know where the bottom was, but price points have seemed to hold well over the past couple years. Overall it seems to have stabilized.”
Dan Natkin, senior director of residential products at Mannington Mills says that focusing on higher end laminate products helps protect the category from further erosion. “There is a diversity of manufacturers in the U.S. just like in Europe with continuous lines designed to run more of the commodity laminate. Then you have others who have engineered their facilities to produce toward the upper end.”
Many companies are investing in technology for enhanced designs to help keep pushing the category forward. The sophisticated textures that have become so popular cannot be produced on high speed manufacturing lines that produce commodity product, so the innovations in design and technology help keep commoditization at bay.
The stream of new domestically produced LVT that is expected to hit the market in the coming months may create some cause for concern, however. If LVT prices drop significantly, it may put pressure on the laminate market to drop prices as well. Manufacturers like Kronotex are upbeat, however. “There’s always a place for a real wood floor,” Bass says, “and the closer laminate can approach the look and feel of solid wood with a low maintenance offering and a good environmental story, the more certain is its place in the market.”
LAMINATE UNDERLAYMENTS When laminate flooring first came to market, underlayments, often made of polyethylene foam, were used to smooth out small subfloor imperfections and to create a level surface for the installation. Copyright 2015 Floor Focus
When consumers began to complain about laminate’s hollow, clicky sound underfoot and sound transference from floor to ceiling, the industry searched for a better acoustic solution. Moisture mitigation and R-value were also important concerns.
Today there are many underlayments on the market, including rubber and cork, that help eliminate the hollow laminate sound and transference of sound between floors. Most offer a moisture barrier for below grade applications on cement subfloors and some offer an insulating R-value as well.
MP Global developed one of the leading laminate underlayments, called QuietWalk, made of synthetic fibers from 94% recycled materials. It outperforms rubber and cork underlayments acoustically and offers a unique moisture management system and improved R-value.
Healthier Choice makes OmniChoice, an acoustic underlayment with moisture barrier made of high density memory foam. It is Greenguard certified and 100% recyclable.
Some laminate comes with attached pads, but most manufacturers feel that attached pads minimize the profit margin for retailers. Selling underlayments separately gives retailers add-on business with the opportunity to upsell, just like with carpet.
In 2008, NALFA drafted minimum performance standards for laminate underlayment that address impact sound transmission, airborne sound transmission, compression resistance, thickness and water vapor transmission.
When laminate flooring first came to market, underlayments, often made of polyethylene foam, were used to smooth out small subfloor imperfections and to create a level surface for the installation.
Copyright 2015 Floor Focus