Strategic Exchange: Vaccine miracle is a testament to American ingenuity and collaboration - June 2021

By Kemp Harr

Fifty years ago, two Rice University freshman, Barney Graham and Bill Gruber, met as roommates. Barney was a high school athlete and valedictorian from a family farm in Kansas, and Bill was an academic star from a Houston suburb.

Like many freshman, they got into the usual mischief, throwing water balloons off the dorm roof and drilling holes in their dorm room ceiling to suspend their beds and free up floor space. During that time, they competed with each other but also supported one another.

Fast forward to last year. When Moderna announced in November that it had developed a highly effective vaccine for Covid-19, Dr. Barney Graham, a government scientist who helped design the shot, emailed his old roommate Dr. Bill Gruber, who had just completed a successful round of tests on Pfizer’s vaccine a week earlier. Over the years, the two scientists had stayed in touch and shared notes about their parallel protein research.

Granted, this story has nothing to do with flooring, but it is a testament to American ingenuity, healthy relationships and collaboration. We live in a great country that nurtures free thinking, and there is no limit to what we can achieve when we work together. If you’ve read much about the early days of the carpet industry, competitors who met for lunch at the Oakwood in Dalton would often invite competing mills over to check out the newest process they had developed.

ALAN BEAULIEU’S FORECAST FOR FLOORING INDUSTRY GROWTH
It’s no secret that the builder and residential replacement segments are currently very healthy. There are retailers out there today hoping to capitalize on this surge, and some are contemplating opening additional stores but also wondering how long the energy will last. I recently interviewed Alan Beaulieu with ITR Economics, and he provided his insight. You may recall that ITR has one of the highest track records for accurate forecasts.

According to Beaulieu, this pace of growth will be slower in 2022. He predicts we will “still see growth, but it will moderate from the super double digits we are seeing now-close to 15%-to a pace closer to 4% to 5%. Both new construction and residential remodel will decelerate but still be at record high dollars. Wages will continue to rise, interest rates will remain low, and pricing for construction materials will start to moderate as supply catches up with demand.”

When asked when inflation might become a hindrance to growth, Beaulieu answered, “It will at some point, but not yet. When the new homebuilder market starts to moderate, it will take pressure off demand, and material prices will level off.”

Beaulieu feels the commercial market will continue to improve and get back to growth numbers in 2022. Commercial always lags housing, and he predicts growth in that sector will continue well into 2023. The multifamily sector’s performance will mirror what happens in commercial. He went on to predict that 2022 could be the strongest year yet for all sectors in the flooring busines: “They’re just going to be hitting on all cylinders.”

In closing, Beaulieu mentioned that in addition to a good time ahead, at least until the middle to end 2023, we are going to see more populations shifts away from the cities as well as cultural changes as more Millennials step into power. “They have a different view of how things should be,” he notes.

TWO NEW CONSUMER FLOORING BRANDS
With the recent loss of Stainmaster as an industry-wide brand, it is encouraging to learn that two flooring companies are committing to build new consumer brands this year. The big question in both instances is whether the impact will be big enough to leave a lasting impression. The primary reason that consumers defer buying flooring in the buying cycle is confusion, and a clear brand promise helps alleviate that uncertainty.

AHF’s new Millennial-focused Tmbr brand of engineered hardwood will pursue its target demographic on the group’s home turf. Since the Millennial generation values references from influencers, the company has signed Seth and Tori Bolt of Bolt Farm Treehouses, who will install Tmbr in their new luxury nature retreats. Additionally, AHF has rolled out a robust Tmbr website that is digitally optimized and chock-full of information and tools, including a visualizer.

To support the independent retailers that carry Tmbr, AHF will provide premium membership to Independent We Stand, a nonprofit supporting independent retailers across the U.S. with marketing strategies and assets. In addition, Tmbr will donate 1% of its first-year sales to the Arbor Day Foundation.

Acquired by Tom Sullivan’s BAMR in March, Southwind will utilize its ownership’s marketing muscle to get its name out to consumers. The company, which makes carpet and sources hard surface (including SPC, WPC, flex LVT and, soon, U.S.-made SPC and waterproof laminate), is launching a consumer-focused campaign aimed at driving business to its independent retailer and contractors partners.

The company recently signed HGTV media personality Alison Victoria to act as its spokesperson. In addition, it hired The Buntin Group, a Nashville-based advertising agency, to develop its consumer-facing brand. As with Tmbr, Southwind will have an informational website, driving business to dealer partners.

If you have any comments about this month’s column, you can email me at kemp@floorfocus.com.

Copyright 2021 Floor Focus

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