Made in America: Amid tariffs and coronavirus, domestically produced flooring may gain preference. - April 2020
By Meg Scarbrough
It’s no secret that China plays a dominant role in the world’s flooring manufacturing. The region currently accounts for billions in flooring imports into the U.S. each year, according to Market Insights. So with tariffs on Chinese imports in place and the potential impact that coronavirus could have on the supply chain, consumers, specifiers and end users may look to what’s being made in America with renewed interest.
In recent years, the U.S. has increased its manufacturing profile with significant investments in domestic flooring production, most notably in ceramic tile and vinyl flooring. With the U.S. already leading in carpet production and with its legacy hardwood manufacturing capacity, this growth in domestic LVT and ceramic tile production is tilting back the scales, even as so many industries are moving in the opposite direction, ceding their capacity to Asian imports.
In 2018, the Trump administration began enacting tariffs on Chinese imports, levying duties on hundreds of millions of dollars in products from that country, including almost every flooring type. The impact they have on the flooring industry varies from category to category.
Compounding the problem has been the outbreak of coronavirus around the world. The virus was first reported late last year in the Wuhan province in China, but the country was at first slow to react, and by the Chinese New Year in early February, the country was still figuring out its strategy. While factories were already closed for a week to allow workers to celebrate the new year, they were forced to stay closed longer once the epidemic hit. Ports in China also closed, backlogging cargo and bringing shipments to a halt. In the weeks since, most factories have worked to reopen, but it’s been a slow process, and they are still far from full capacity.
So far, flooring industry leaders have been optimistic, saying those supply chains have, thus far, remained intact. Among them is Dave Meberg, CEO of Consolidated Carpet, a commercial contractor based in New York. He said in March that his company, which has locations in New York and Chicago, began to prepare early on in the crisis, taking a deep look at the supply chain and assessing their orders. But he and others believe that if the crisis continues, there could be some disruption in the coming weeks and months. He said the outbreak is a good time to take another look at products made in the U.S.. “It’s a good time to be proactive, to look at manufacturers that produce their products domestically,” Meberg said. “I think maybe we could get back into the made-in-the-U.S.-mode, and it might alleviate some headaches down the road.”
Currently, there are dozens of companies, both domestic- and foreign-owned, that are creating products in every flooring category on American soil. So what’s being produced here and who are the big players?
Carpet is the largest segment of the U.S. flooring industry, and its success can largely be attributed to a North Georgia woman named Catherine Evans Whitener, the mother of modern-day carpet, who around 1900 created a handmade tufting technique that launched a roadside bedspread business, and it eventually expanded into broadloom carpets. She’s credited with burgeoning the tufting industry and saving a community during the Great Depression.
By 1963, carpet had become a billion-dollar industry with hundreds of domestic carpet mills. Over the years, the category developed and became more refined as markets grew for residential and commercial carpet, automotive carpet and carpet tile. Today, carpet comes in a range of different woven and tufted constructions and in different fiber types, including wool, nylon, polyester and polypropylene.
Currently, the U.S. is responsible for most of the world’s carpet production, which is generated by more than two dozen manufacturers. Domestic production makes up most of the country’s consumption, with specialty products like Wiltons and Axminsters from the United Kingdom and others from Asia and Egypt rounding out the category.
But the category as a whole has been losing share over the last few decades with the rise in hard surfaces, LVT in particular, and has battled perceptions that carpet is dirty and unhygienic. It currently represents about 36% of the total U.S. flooring share-residential and commercial-making it the top flooring category, but it is expected to continue to lose share this year, according to Market Insights.
While homeowners may be less likely to install wall-to-wall carpet these days, it’s still holding strong in certain areas of the home, such as the bedroom. Manufacturers are looking to new technologies and stylings in an effort to keep that foothold and stop further share loss in the home. One example is Card-Monroe Corporation’s (CMC) Tailored Loop tufting machine, which was introduced in 2019 and allows mills to create highly textured products at affordable prices. As of this spring, several large manufacturers had purchased the technology and were in the process of rolling out new products using it.
At the epicenter of the domestic industry is Georgia, which generates over 80% of the country’s carpet, according to Market Insights. Also known as the “Carpet Capital of the World,” Dalton, Georgia is home to some major carpet manufacturers: Tarkett, Dixie, Engineered, Interface, Phenix, Mannington, Mohawk, Milliken and Shaw. By comparison, the second-highest carpet-producing state is California, which accounts for just 5% of the country’s mill shipments. Other states generating broadloom include North Carolina, Pennsylvania, Alabama and South Carolina.
Top U.S. Producers
All five of the top domestic manufacturers are headquartered in or near Dalton, which is about 90 miles northwest of Atlanta. Here are the top three:
Shaw Industries: Shaw started in 1946 as a company named Star Dye Company, which was centered around dyed tufted scatter rugs, according to its website. Since then, it has grown into an international firm that has a staff of around 22,000. In 2018, the manufacturer, which is headquartered in Dalton, held 38% of the U.S. carpet share with $3.3 billion in sales, leading the carpet market. Shaw Industries’ brands include Shaw Floors, a residential line; Anderson Tuftex, a higher-end residential line; Patcraft, a commercial line; Philadelphia, a commercial line; and Shaw Contract, a commercial line. While Shaw offers other flooring products, carpet is its leading category. The company operates plants in the U.S. as well as in China and Scotland.
Mohawk Industries: Mohawk got its start in carpets in 1878 as a carpet mill in New York State. After numerous changes and transitions over the years, it is now headquartered in Calhoun, Georgia, about 20 miles from Dalton, and employs more than 42,000 people. Mohawk is second in the U.S. carpet industry, holding 23% of the marketshare in 2018 and $2 billion in carpet sales. Its brands include residential lines-Airo, a PET line; SmartStrand; and Karastan-and commercial lines Durkan (hospitality) and the Mohawk Group. Of the flooring categories it offers, carpet is by far the leading category. It currently has plants in North America, Australia and Belgium.
Engineered Floors: Engineered Floors came to be in 2009, led by Bob Shaw, formerly of Shaw Industries. In just under ten years, the Dalton-based company is now a $1 billion company that’s third in U.S. carpet sales with 11% marketshare and $980 million in carpet revenues. Its brands include Dream Weaver, which serves the specialty retail market; Dwellings, its builder operation; and J+J Flooring, which is one of its commercial lines. Between its carpet and resilient lines, carpet dominates in sales. Engineered does not have any carpet plants outside of North America.
Others producing in the U.S.: Interface, Tarkett, The Dixie Group, Bentley Mills, Milliken, Mannington/Phenix, Signature, Bloomsburg, CM Hospitality, Totally Carpet and White Oak.
Resilient flooring has taken many shapes over the years, with some of the earliest forms dating back as far as the 12th century. A more modern version was linoleum, which was developed in the 1800s in England and meant to mimic the oilcloth floorcoverings of the 1700s.
It made its debut in the U.S. shortly after and gained momentum in the decades to follow.
In the 20th century, vinyl (PVC) flooring was developed in the U.S., and it quickly became the largest resilient flooring category. Today, vinyl flooring dominates the resilient category and is made up of sheet goods, VCT (vinyl composition tile), LVT and rigid LVT. Another major resilient category is rubber, which largely targets the commercial market. Then there are linoleum and cork, which are the only entirely bio-based resilient flooring categories.
LVT represents the largest share in this category at 70%, followed by resilient sheet at 20% and resilient tile at 10%. Overall, resilient currently represents nearly $5 billion at mill sell of the total U.S. flooring market, or 20%, and is the second-largest flooring type in the country.
The Asia Pacific region-Australia, China, Japan, Taiwan, Korea, India, Indonesia and New Zealand-and Europe are about equal in their consumption and together represent about 50% of the world’s demand. But by far, Asia is the leading producer in this category at 45%.
There are currently more than a dozen major resilient flooring manufacturers in 11 states in the U.S. with Georgia once again having the largest role in the market at 36%. Pennsylvania follows in second with 22%. Other states with plants include New Jersey, Alabama, Oklahoma, Mississippi, Illinois, California, Rhode Island, Ohio and Missouri.
Resilient sheet flooring has been losing its share of the category over the decades, replaced by a growing desire for LVT. It has seen the greatest decline in residential use. Also, VCT, which goes to the commercial market, has been losing significant share, ceding territory to LVT and polished concrete.
China produces the vast majority of domestically consumed LVT and rigid LVT, and tariffs were applied to both categories. But in late 2019, tariff exclusions were enacted for LVT flooring with click systems, which covers the vast majority of rigid LVT and a small volume of flexible LVT. If the exclusions are removed when they are assessed this summer, tariffs could force the price of LVT higher and slow the category’s growth.
Top U.S. Producers
Shaw: In 2016, Shaw began manufacturing LVT at its Ringgold, Georgia, facility, and a year later bought US Floors, the producer of Coretec rigid LVT. Coretec is the original rigid LVT; it was patented in 2013. Resilient is now Shaw’s second-largest flooring category, behind carpet, with $1.5 billion in sales in 2018 and 31% of marketshare in the U.S. resilient market. On the residential side, its products include Coretec, Floorté and VersaLock. The firm, which still relies heavily on imports, offers a full range of sheet goods, LVT and rigid LVT to the commercial and residential markets.
Armstrong: Armstrong Flooring is one of the oldest resilient flooring firms in the U.S., producing linoleum in 1909 before focusing on vinyl flooring mid-century. As Armstrong World Industries, the firm also sold ceiling products, hardwood flooring and laminate. In 2016, the ceiling and flooring businesses split, and at the end of 2019, it sold off its hardwood business, moving forward as a resilient specialist. Based in Pennsylvania, the company offers LVT, vinyl sheet, rigid core LVT and VCT, serving both the residential and commercial markets. In 2018, Armstrong netted about $515 million in domestic sales to claim 11% of the category’s marketshare. Armstrong has substantial U.S. production, but it also sources rigid LVT, some flexible LVT and some commercial sheet goods from Asia.
Mohawk/IVC: Mohawk is the largest flooring firm in the world with wholesale sales of resilient flooring about $1 billion. In 2015, it acquired IVC, a Belgian manufacturer of resilient flooring. In 2018, its U.S. resilient sales were nearly $500 million, giving it a 10% share of the market. It carries several product lines in each in sheet vinyl and LVT; it is also a producer of laminate and has plants here and in Europe.
Others producing in the U.S.: Tarkett, Mannington, Roppe, Congoleum, FloorFolio, Nox, Ecore (recycled rubber), Beauflor, Flexco and Turkey’s Rok Plank, with more on the way.
Ceramic flooring has a long and colorful history that dates back to Egypt six millennia ago. Over the centuries, it spread first through the Middle East, then into Europe and East Asia.
These days, the biggest producer in terms of volume is China, which has a lock on the commodity side of the market, and in terms of value is Italy, which focuses more on the higher end. Other notable producers are Spain, Mexico, Turkey and Brazil.
Today, popularity in this category has grown globally with consumers favoring its style, timelessness and durability. In the U.S., it’s the third-highest flooring category with 12% of the total flooring market. Nevertheless, per capita usage of tile is much lower in the U.S. than in almost every other significant country.
The Asia Pacific region accounted for 63% of the market in 2017. By comparison, North America production is 2%. Much of what’s consumed in the U.S. is imported. However, recent tariffs on Chinese tile, which can double or even triple the cost, are hugely impacting global markets and influencing production capacities. While this could help drive domestic production, it’s worth noting that Chinese tile doesn’t compete much with higher-priced U.S. tile.
In the U.S., ceramic flooring represents about 14% of the flooring marketshare and is a category that has seen growth in recent years, mostly significantly on the residential side. It now accounts for more than $3.2 billion at mill sell of the total U.S. consumption.
Like other flooring categories, tile has made its home in the South, with Kentucky and Tennessee representing 66% of all U.S. tile production. Seven companies-Atlas Concorde, Crossville, Dal-Tile, Del Conca, Florim, GranitiFiandre and Wonder-currently manufacture in Tennessee, making it the country’s tile capital with 46% of the market. Others states producing ceramic include Texas, Oklahoma, Alabama and Ohio.
A major challenge for the category right now is competition from resilient flooring, given that the two compete for the same areas of the home, like kitchens and bathrooms, which benefit from ceramic’s waterproof installation. But new developments in tile design, such as the ability to apply patterns through digital printing, and changes in consumer lifestyles and styling choices could help give this category a boost. “The technology and trend will continue to grow and new aesthetics using this technology will continue and the technology will evolve, continuing to enhance tile’s growth,” according to Market Insights. Also, larger-format tiles and external applications could provide additional growth for the category.
Top U.S. Producers
Mohawk/Dal-Tile: Dal-Tile has been manufacturing tile since 1947, headquartered in Dallas, Texas. In 2002, it was acquired by Mohawk Industries for $1.7 billion. It currently holds the largest share of the U.S. tile market at 51% with estimated sales of $1.5 billion in 2018.
Crossville: This Crossville, Tennessee, company has been in operation since 1986 and is owned by Curran Group. It is second in the U.S. market with $168 million in sales in 2018 and 6% of the marketshare. While it mostly specializes in commercial tile, it does some residential production.
Stonepeak: Stonepeak, part of the Italian company
GranitiFiandre, was established in the U.S. in 2005. It currently has four brands: Stonepeak, Iris USA, Fiandre and Mediterranea. As the third-largest domestic producer of ceramic in 2018, it holds 5% of the marketshare with $140 million in sale.
Others producing in the U.S.: Atlas Concorde, Del Conca, Florida Tile, Florim, Graniti Fiandre, Interceramic, Landmark, Laufen, Metropolitan, Summitville, TechnoTiles and Wonder.
Hardwood has been a staple in homes for hundreds of years, favored for its classic appeal and also touted for raising home values. In the U.S., hardwood has traditionally been the go-to flooring. Today, it’s about the same size as the ceramic market.
The category was originally comprised entirely of solid hardwood. About 50 years ago, engineered floors were introduced to the U.S. market by Anderson Hardwood, which is now part of Shaw. And just in the last year, with the National Wood Flooring Association’s (NWFA) new and broader definition of wood flooring paved the way for composite engineered floors. While traditional engineered hardwood has a core of wood plies, all that is required of a composite engineered wood is that its topmost layer be real wood, of any thickness.
Together, these three wood flooring constructions represent about 12% of the total U.S. flooring market at $3 billion at mill sell in 2018 and are generated by more than 20 major manufacturers across the country. Wood’s stronghold in the U.S. is primarily in the residential sector with a very small portion going into commercial and other uses. It’s also used in sports flooring.
While hardwood remains popular among some consumers, North America, including the U.S. and Canada, represents a smaller slice-about 10%-of the world’s wood flooring production. Asia accounts for more than half of the world’s production and consumption, according to Market Insights. After North America, Europe is the third-largest consumer of hardwoods.
Most of the domestic wood flooring mills are positioned in the South, primarily because the soil in that region lends itself to hardwood forests. Tennessee accounts for the largest portion of the U.S. mill shipments at 25%; Kentucky and Virginia follow with 16% and 11%, respectively.
Dan Natkin, vice president of hardwood and laminate at Mannington Mills and a board member of the NWFA, has been in the industry for two decades and says hardwood is the only category “that’s proven to increase the value of the home,” adding that “there’s a reason why there’s a prestige that comes with hardwood. There’s a sense of luxury that comes with it.”
Despite the benefits, the U.S. hardwood market has been edging down in recent years, similar to carpet and for much the same reason. The rise and popularity of less-expensive wood-look products-primarily LVT and laminate-means fewer people are flocking to traditional wood floors.
It has also faced challenges related to pricing. Because it is dependent on weather and other factors, prices in this category can fluctuate, and tariffs on Chinese imports could exacerbate the problem, making importing wood a pricey option, but also benefiting domestic production. And as manufacturers create more affordable options, the hope is that the market will expand.
Top U.S. Producers
Shaw: Shaw began selling private label wood flooring in 2000 through its wholesale channel. The company has opened its own production facility in South Pittsburg, Tennessee and acquired Anderson Hardwood. Since then, it has reached $372 million in sales for 13% of the U.S. hardwood marketshare. Its product lines include Epic, a real wood veneer atop an HDF core, and Repel, its water-resistant wood line. In the last few years, Shaw has divested itself of all solid hardwood mills. And meanwhile, sales of its Coretec Wood, a wood veneer atop a magnesium oxide rigid core, are exceeding expectations.
AHF: AHF, headquartered in Mountville, Pennsylvania, came about as a result of Armstrong Floors selling its wood operation to American Industrial Partners for $90 million in late 2018. At the time, Armstrong, which was once the leader in the market, had seen its marketshare plummet from 2009 to 2017. In 2018, AHF saw $349 million in sales for 12% of the marketshare.
Mullican: This Johnson City, Tennessee-based company started more than 30 years ago and now has three manufacturing facilities. It specializes in hardwood products and produces both engineered and solid flooring. It also now sources stone polymer composite flooring. In 2018, Mullican brought in $154 million in U.S. sales for 5% of the hardwood marketshare; it currently does not sell in foreign markets. Its products are available through retailers nationwide as well as at home centers and are all produced domestically.
Others producing in the U.S.: American OEM, Mannington, ArborCraft, Beasley Flooring, McMinnville, Memphis, Mohawk, Aacer, Somerset, Maxwell, Graf, Sheoga and dozens more.
Laminate flooring was invented in Sweden around 1980 by Pergo, according to Market Insights. It’s generally fabricated in a multi-layer process using melamine and a fiberboard core to create a wood-look product that comes at a fraction of the price of hardwood. It eventually made it to the U.S. in the early 1990s and now represents about $1 billion. Today, the majority of laminate used here is within the residential sector, with a small portion going into commercial applications.
Overall, the U.S. is not a large producer of laminate, nor is demand as high as regions like Asia and parts of Europe. But it has enjoyed growth in the years since its arrival, and as of 2017, the U.S. now accounts for 11% of the world’s production and 17% of its consumption. The title of number one is held by Asia, where 45% of the world’s laminate is made and 37% of it is consumed. Worldwide, there are now more than 80 companies making laminate flooring, with about 30 brands operating in the U.S. Laminate was on an upward curve until it became a “race for the bottom” price-wise in the early years of the new millennium, and that took a significant toll on the category. The upper end, where technologies enable better design, is largely what is thriving now.
Like carpet, most domestic laminate is produced in the South, with nearly half-48%-originating in North Carolina; South Carolina is responsible for about 20% of U.S.-made laminate. Other states manufacturing laminate are Alabama, Georgia and Pennsylvania. Of what is produced domestically, about 70% to 80% is consumed here, according to Natkin, who is a board member with North American Laminate Flooring Association (NALFA).
This category represents less than 5% of the total U.S. flooring market, but as the popularity of LVT continues to rise, that marketshare is expected to drop, according to Market Insights. But Natkin remains optimistic, saying long-term performance issues with LVT could drive people back to laminate flooring, which offers greater scratch and dent resistance.
A 2015 scandal rattled the industry after allegations emerged that Lumber Liquidators was selling Chinese-made laminate containing high levels of carcinogenic formaldehyde to American consumers. A multi-million-dollar settlement was eventually reached following a federal investigation. While it led to decreased imports of Chinese-made laminate, Natkin says it actually gave domestic sales a boost. And now, he says, all of the domestic laminate manufacturers are members of NALFA, which has a 14-point certification process for all products.
Amid the challenges, the category has been re-inventing itself through new innovations that have improved designs and styling, installation systems, water-resistance and acoustics. Natkin says the rewards are starting to show, “We’ve already seen this year kind of a little bit of a resurgence in the category as we’ve continued to improve technology.”
Top U.S. Producers
Mohawk: Mohawk has expanded into laminate flooring over the years, acquiring Quick-Step and Pergo, the premier laminate brand, which has seen its name used as a generic term to describe the whole flooring category. The company now represents $385 million in domestic sales and is the fourth-highest flooring category out of five for the company. Among the manufacturers in the U.S. in the category, Mohawk currently sits at the top with 37% of the domestic marketshare. Its product offerings are manufactured in plants in North America and in Europe.
Kronospan: In 2015, Kronospan, an Austria-based company, acquired Clarion and is now the second-largest source of domestically produced laminate. In 2018, it held 26% of the rug market in the U.S. with $265 million in sales. It currently has plants in Alabama and Pennsylvania.
Swiss Krono: Swiss Krono is a division of Switzerland-based Swiss Krono Group. Based in Barnwell, South Carolina, it represents about 13% of the market and had $130 million in U.S. sales in 2018. It recently kick-started a new $350 million plant in its home state.
Others producing in the U.S.: Mannington
The earliest rugs are believed to date back as far as the fifth century in Kazakhstan, and while they have gained popularity across the world in homes and businesses in the millenia, most are still made in the Asia and the Middle East.
These days, modern rugs are divided into several categories-like area, scatter and bath-and are either handmade by tufting or weaving or machine made, and can be made of wool, cotton or synthetic material like nylon, polyester or polypropylene. Most of what’s sold in the U.S. is imported, a mix of handmade and machine made, with India accounting for the largest share of the U.S. market. In total, rugs represent about $2.72 billion in U.S. sales.
As carpet and some other flooring categories continue to take a hit from the rise in desire for hard surfaces in the home, rugs are finding their place, offering softness and style that can be paired with hard surface challenges.
However, the rug category is facing several threats, including rising freight costs, tariffs and the Internet, as more people look to online retailers, which can offer broader options than their brick-and-mortar counterparts. It is estimated that upward of 20% of rugs sales happen online.
Top U.S. producers
Mohawk: Mohawk is by far the leading producer of rugs domestically, carrying 26.3% of the marketshare and bringing in more than $714 billion in 2018. Within that, area and scatter rugs are the most dominant products, made from wool or synthetic fiber, for the company and represent 55% of this category, followed by bath rugs then door mats. It has two prominent rug labels, Mohawk Home and Karastan, which are made in factories in North Carolina and Georgia.
Maples: Maples, based in Scottsboro, Alabama, is the second-highest producer of rugs in the U.S. with more than $215 million in sales in 2018, for 8% of the marketshare. The company has been focused on tufted rugs since 1966, but its history in textiles dates back to the 1920s. It currently makes tufted accent, area, kitchen and bath rugs.
Oriental Weavers: Oriental Weavers operates factories in Egypt, China and the U.S., with its domestic facility located in Dalton. Rounding out the top three, this firm holds 4% of the market and saw $116 million in sales in 2018. The company says that half of the area rugs it sells in the U.S. are produced here. To address tariff issues, the company shifted some of its manufacturing from China to the U.S. and Egypt.
Others producing in the U.S.: The Dixie Group, Milliken, Nourison, Couristan, Orian, Natco, Capel and more.
Copyright 2020 Floor Focus
Related Topics:Coverings, Tarkett, Armstrong Flooring, Lumber Liquidators, Stonepeak Ceramics, Couristan, Florim USA, Shaw Industries Group, Inc., Anderson Tuftex, Mannington Mills, The Dixie Group, Tuftex, Interface, Shaw Floors, AHF Products, Karastan, Mohawk Industries, Roppe, Crossville, NWFA Expo, Engineered Floors, LLC, Daltile