Resilient: Update: Resilient is in the midst of evolutionary change – October 2024

By Jennifer Bardoner

The resilient category is entering the next stage of its development-and it seems to be moving away from commoditization. Driven by low-end SPC failures, constructions are shifting as retailers move consumers to thicker, more durable products. Alternative materials are being explored as more producers work to find PVC-free solutions. Visuals are being enhanced as new technology enters the market, opening the door to a more design-driven market approach. The long-term impacts of all of this remain to be seen, but without a doubt, it will be interesting to watch play out.

MARKET ACTIVITY AND OUTLOOK
With interest rates up, retail activity is down across the board, but resilient remains a go-to for retailers and consumers alike, thanks to its realistic visuals, value proposition and water resistance.

“Retail floorcovering is clearly off in 2024-some estimates are as much as 10% to 14% compared to the same period in 2023,” reports Drew Hash, president and CEO of Southwind Building Products. “However, if you look specifically at resilient, we believe it is down 5% to 7%. Even as the market has slowed some, resilient continues to take marketshare from the other flooring categories.”

The Fed cut interest rates by a half point in mid-September, but the economy isn’t the only thing dragging flooring sales down from the historic highs experienced during the pandemic. Yon Hinkle, vice president of resilient product management for AHF, notes that those kinds of year-over-year gains are not sustainable, and that “buy-ahead” is still having an impact.

“If you apply commonsense logic to that Covid bump we all saw, if so much material was used in remodels, repairs and add-ons, not to mention new housing, there’s not as much pent-up demand for flooring anymore; people aren’t doing another remodel 36 months later,” points out Jamann Stepp, senior vice president of hard surface for Stanton.

Hinkle and Noah?Fulton, Karndean’s vice president of business strategy, anticipate the tide beginning to turn in the second quarter of next year as lowered interest rates stimulate the housing market, though Hinkle cautions against Covid-era expectations.?“We’re not projecting some spike; we’re projecting a turnaround and that normal 2%- to 3%-type growth,” he says.?

David Sheehan, senior vice president of residential marketing and product at Mannington Mills, reports, “The good news is that units are up versus last year. The bad news is that this was the point in 2023 where we started running short on our imported product due to changes we were making to mitigate the UFLPA port confusion. The only inventory we could get was U.S.-made flex and U.S.-made WPC. This disrupted 60% of my product line.”

He continues, “Right now, we are seeing a really good response to the products that we have introduced, and I feel like we’re starting to get our swagger back, but the election has consumers in a major postponement mode. We’ll have a decent day for orders and then an abysmal one. It’s up and down. We think it will be ‘survive in 2025’ and 2026 will be when things start clicking.”

Denis Darragh, vice president of Forbo North America, believes 2026 is when things will finally settle into a “new normal,” likening the impact of the pandemic to hurling a huge boulder into the middle of a calm lake. “The waves go out in ripples; they don’t just go out and then it’s done,” he explains. “Those ripples diminish over time, but they keep going. It’s still, I think, a bumpy path for the overall market.”

Karndean product director Jenne Ross believes one of those ripple effects has created a unique opportunity. “Covid brought mass awareness to the category because of the amount of renovation being done,” she says. “We benefited from the marketing and advertising by big box stores to bring awareness to the category while being able to provide a more specialty service to get people to shop from a local retailer. That’s a challenge we still have today in the category: to continue to educate the homeowner that shopping local through a specialty provider allows them to offer the value that resilient products bring and provide a better shopping experience.”

And the upper end of the market, serviced by independent dealers, is creating enhanced opportunities for both producers and retailers.

“People with more disposable income who are still remodeling want nicer, thicker product,” says Adam Ward, vice president of resilient for Mohawk. “Thicker, nicer products are just more expensive; there’s no way around it. People are now comfortable paying $5.99 or $6.99 per square foot at retail for these products, whereas before the price cap may have been $3.99, so it’s just expanding the market over.”

PRODUCT MIX AND SHIFTS
The move to thicker LVT comes as claims against low-end SPC are turning some dealers away from those entry-level products, which Stepp qualifies as less than 5mm total thickness.

“We’ve got customers and RSAs that are like, ‘I’m not ever touching SPC again,’ and we have some that are like, ‘I have to be in the SPC game’; it’s a cost thing for them and where they fit in their market, their towns,” says Amy Tucker, director of hard surfaces for The Dixie Group, noting that their thinnest product is 5.5mm. “We believe if you stay with better products you won’t have all those issues, and that’s where we live. For us, SPC has not been a problem.”?

Ward points out that the resilient category is varied. And, accounting for approximately $7.5 billion in sales last year, per Market Insights, it has to be. But SPC makes up the majority of the domestic residential resilient market, both in sales and production.

“SPC has literally hundreds of millions of square feet out there performing successfully,” says Hinkle. “Customers throughout the chain need to be looking for good stewards of the industry and partner with them to bring products they can trust. When a customer brings up this subject, we ask, ‘Where are you buying your SPC from? What’s the specification?’ Too often, we’re finding a no-name, some importer that doesn’t have much to lose and isn’t able to back it up.

“Our belief is that during the Covid times and since, there was an overbuild of capacity in the SPC range and a lot of fighting to get business-if you build plants, you’ve got to fill them up,” he adds, pointing to the rash of new plants built outside of China in light of the tariffs on China-made goods. “I think what we’ve seen in some ways is a rush to the bottom. How do you get to the lowest price? You make the product thinner, put more of cheaper materials in it and less of what allows it to function, like binders and polymers. But this concept that SPC is a problem is silly, because it wasn’t a problem for the first five years we were putting it in. It only became a problem when people started pushing the envelope.”

SPC will always have a place in the market, our sources agree, and its performance compared to WPC makes it the best choice for some environments. But WPC is growing in light of the current concern and SPC fatigue, going from $1.2 billion in sales in 2019 to $1.5 billion last year. It currently accounts for an estimated 24% of the total domestic LVT market.

“By far, one of the greatest shifts that’s happening is rightsizing resilient into the right category mix and really finding its right place in it-where does SPC fit into it, where does traditional gluedown and dryback/looselay fit into it, where does WPC fit into it, and what consumer segments really respond to that?” says Cali’s Brodkin.

That will require honest conversations about products’ characteristics, the consumer’s and retailer’s expectations, and the intended use. “I think the consumer is ultimately getting a better shake at seeing all the options, rather than just getting pushed into a certain product category, and having conversations about what is the best product for that consumer’s home,” Brodkin says, adding that this “rightsizing” applies to retailers as well, based on their goals and place in the market.?

That is creating opportunities for conversations about better-end products, and producers are responding with new introductions. Stanton is debuting its first WPC collections this fall and is already set to double the size of the new program in January. Southwind, which has consistently maintained a larger ratio of WPC than SPC, has launched “significantly more products” in the better-end resilient space during the first half of 2024, Hash reports. Cali will introduce a new WPC at Surfaces, following the success of its Laguna launch this year, though Brodkin notes that the brand’s upper-end SPC is still performing well. Building on the response to its suite of beefed-up introductions this year, Mohawk will be launching 12mm and 10mm products in its Pergo and Karastan brands this winter. Forbo, which focuses on the top 10% of the market, is launching a distribution channel for its LVT in the U.S.

Karndean, which added WPC to its Art Select collection this year, has adopted a ladder strategy within its lines, providing many of the same styles and colors in both a gluedown and a rigid core format, either SPC or WPC, depending on the price point.

“Overall, we are seeing growth in the retail category in gluedown, and we’ve seen huge appetite when we reintroduced new colors with looselay this year,” Ross reports, referencing the reintroduction of Karndean’s looselay flex floating format. “Homeowners like the comfort that the LVT is going to stay glued to their floor.”

She notes that with today’s large, open floorplans, clickable rigid core necessitates a transition every 50 linear feet, as well as in doorways, whereas gluedown and looselay products “solve a lot of those problems.” Ward says the looselay Mohawk launched this year “has been a bright spot for us,” which he attributes in part to its thicker construction.

“Retailers and distributors are diversifying their offering,” says Lacy Price, director of U.S. marketing for CFL. “They’re not putting all their eggs in one basket. They’re wanting a good mix of products.”

Stepp says he’s seen a pretty steady pace for what he calls the category’s “flagship”: 2.5mm gluedown, which he’s seeing go into more mainstreet and multifamily projects, as well as some single-family new construction in certain parts of the country. One format that is fading out, however, is sheet, he and Ward agree.

“Sheet has continued to trend more away from retail into other categories,” says Ward.

TECHNOLOGICAL ADVANCEMENTS
Though resilient’s performance is what draws consumers to the category, style is ultimately the top purchase driver for any floor. “The top reason consumers choose a floor is its beauty, which often translates to how real it looks,” says Mohawk design director Joyce?Van Waeleghem.

Embossed-in-register (EIR) has become standard for the category, imparting texture that emulates that of the inspiration material, typically wood. However, in most cases, the result couldn’t fool truly discerning eyes, especially when studied up close.

Having initially launched its enhanced-detail Signature embossing on laminate, the company has spent the last few years adapting the technology for resilient. The result is Signature HDX, which debuted on SolidTech Premier at this year’s Surfaces.

“At Surfaces this year, we installed SolidTech Premier with Signature HDX on the main pathway of our booth, and many people questioned whether they were walking on a wood or resilient product,” she reports. “Unlike standard methods that simplify wood or stone textures into just two or three depths for ease of production, Mohawk’s R&D team preserves texture completely by combining micro and deeper textures. In resilient products, we have achieved up to 75 depths to enhance authenticity, while laminate products feature up to 64 layers.”

Characterizing traditional EIR as having “simplified rounded textures and blurry, yellowish visuals,” Van Waeleghem notes that “achieving the same level of texture transfer in plastic-based products proved much more challenging” than with laminate. To illustrate the clarity, guests at Surfaces were invited to use a magnification tool and compare a sample to a competing product as well as the inspiration wood, and that approach is now helping Mohawk’s retail partners in their showrooms, she says.

Also at Surfaces, Engineered Floors debuted the first domestically made LVT featuring direct digital print, meaning the visuals are printed directly onto the substrate. This provides a more realistic look and feel due to the lack of a wearlayer, which tends to convey a slight plastic sheen and slickness. With CFL in the final stages of installing the Hymmen technology at its Georgia plant and HMTX importing direct-digital-print products from its outfitted factory in China, the innovation is poised to become a meaningful differentiator for the category.

“It allows you to get the fine tuning of the wood grain, like getting high res on your TV,” Price explains, adding that it also allows for fewer pattern repeats, which don’t occur in nature. “You’re not going to see a repeating board at all-we’re going from 24 to 60 unique boards within the same SKU. That’s a big deal for the consumer at the end of the day. You don’t notice it until you get it in the room, but I think it’s going to be a big deal in selling that new category.”

The ability to print directly onto the core without the need for separate print films and wearlayers will improve material costs and product lead times, opening the door for changes in the way the industry functions, says Hinkle. In addition to the customization the technology will allow for, it could transition the industry to a fashion-oriented approach that leads consumers to more routinely swap out their floors for aesthetic reasons.

One of the hindrances to resilient’s visual realism has been its plastic composition and wearlayer. To address this, CFL recently launched a matte finish that mimics the appearance of oiled wood on SPC, and based on customer response, it will be extending it to WPC and laminate.

“It’s a really easy product to sell in the showrooms with just having two pieces to compare,” Price says, noting that CFL’s new digital printing line is being built to accommodate such enhancements in the future.

In light of such developments and the proliferation of pressed bevels, which provide an edge more in line with the look of real hardwood flooring, Darragh points to acoustic enhancements as the next frontier for differentiation, “because that’s one of the downsides of resilient today,” he says. “It will have to become more of a focus of every product that’s out there.”

SUSTAINABILITY
Direct digital print technology could also propel the emerging hybrid subcategory, which adopts various components of resilient and laminate for the best of both worlds. Hinkle believes some of these constructions, like AHF’s recent PVC-free Ingenious Plank introduction, could benefit from the ongoing shift in formats within the category as retailers move consumers to more premium products and, in some cases, away from SPC.

“Right now, I would say PVC-free is still not a significant driver for consumers,” he notes, stressing the enhanced performance characteristics of such hybrid products. “That being said, every year that passes, consumers get more informed. And the industry is innovating more around alternatives than it was in the past because the science has caught up to allow for that. There are now alternatives in chemistry that deliver two important things: similarity in the cost profiles, in a range where it’s acceptable, and performance. The alternatives that existed ten years ago were very hit-or-miss.”

Estimating the current premium for PVC-free resilient products at 20% to 40%, Hill says Novalis is “actively researching alternatives that meet our performance expectations without a significant cost increase. As demand increases, we expect the costs of alternative polymers and raw materials to decrease, which will make them more tenable for residential offerings.”

Citing research by the Resilient Floor Covering Institute (RFCI), Price reports that Gen Z-which is approaching the average first-time homebuying age-is “a lot more sensitive to their environmental footprint than Gen X and even Millennials.” But, she adds, “Are they willing to pay more for it? They’re not quite there yet.”

Darragh points to sustained double-digit growth year over year for Forbo’s Cinch Loc Seal floating linoleum tiles as proof that “for a growing percent of the population, PVC-free is a meaningful purchase driver,” noting that most of those domestic sales occur online. “We’re a bit nichey, but that consumer finds us,” he explains.

Regardless of whether it’s the performance attributes or the lack of PVC that they highlight, a growing number of producers are offering alternative solutions. Dixie’s TruCor Refined hit the market last year; earlier this year, Mohawk and CFL introduced PureTech and Eco-Composite, respectively; and Stanton and Karndean are working to identify viable solutions.

Darragh points out that “very few people are looking at biobased organic solutions, which is part of the appeal we have. Synthetics have health issues, plasticizers, all the things people are concerned about.”

As the world grapples with pollution from single-use plastics, it is being eyed as an eco-friendly input for alternative resilient products, with Ward reporting that 86% of consumers are concerned with plastic waste and 56% of LVT purchasers say they consider the impact of their flooring choices. Mohawk is set to debut a new PVC-free offering, SolidTech R, made using 100% recycled plastic and natural stone. In addition to being recyclable, it will feature premium visual enhancements, including HDX for color clarity and Real Plank for up to 30 unique planks, but it will have a mid price point, he says.

Legislation could soon mandate that the category enhance its sustainable profile. While resilient flooring was removed from the latest version of the AB 863 California recycling bill, it is expected to be expanded in the future.

“The thing about end-of-life right now-which is the challenge-is having the infrastructure and facilities to be able to do the recycling, and that’s an industry-wide problem, which is most likely why LVT has been removed from the bill,” Ross says. “But we are thinking that will only be maybe a year down the road. Separate from that, we have our own set of operational strategies that we’re looking to achieve over the next ten years, and end-of-life recycling is part of that.”

Ward says that while no other states have yet followed California’s lead in mandating the recycling of carpet, it is “expected that others would follow suit, and it’s too difficult to have inventory and service just for California,” which is the most populous state and an important market.

Price reports that RFCI is working to identify partner industries that could recycle end-of-life resilient flooring into their products.

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