Over the last nine months, the flooring operations at Invista have undergone a number of major internal changes, from being separated into its own operating division to having a new president for the business unit that oversees it. Invista’s flooring business, now known as Surfaces, integrates its residential Stainmaster and commercial Antron operations within the company’s Performance Surfaces & Materials (PS&M) division.
The result of those changes is an operation that is not just fully dedicated to serving the flooring industry with two of the most powerful brands in Stainmaster and Antron, but streamlined to better anticipate the needs of the residential and commercial markets, while rapidly providing solutions through investments in innovation and product development.
To give readers an understanding of what the company has in store, Matthew Spieler, FCNews’ senior executive editor, recently caught up with the leadership team: David Duncan, PS&M president; Dan Haycook, Surfaces’ executive vice president; Steve Griffith, Surfaces’ chief marketing officer, and Derek Young, PS&M’s global sustainability director.
Give us a bird’s eye view of the state of Invista’s flooring operations.
Haycook: Floor covering demand has declined substantially with the collapse of the housing market, the drop in consumer confidence and the substantial increase in unemployment.
We, like everyone in the industry have had to address the size of our manufacturing footprint and our approach to depressed markets. In our estimation, about 40% of capacity in the flooring industry has been rationalized to deal with this substantial shift in demand. At Invista, we addressed most of these areas in late 2008 and early 2010, and since then have been looking forward.
We have sustained our market position in the distribution channels we serve, and have strengthened our position in such areas as home centers. We have consolidated operations to our most cost competitive plants, which are now largely running near capacity. We had about 40% of the [carpet] introductions in the residential market in 2010 and 2011, between 300 and 350 new products each year. Also this year, we introduced a “super soft” bath rug fiber, and in commercial, we’re expanding our line of Antron Lumena nylon with TruBlend fiber technology. Simply put, our Surfaces business in North America is healthy and we are focused on continuing to invest to drive innovation.
What was the thinking in creating the Surfaces division?
Duncan: The idea of collaborating across market segments wasn’t new—our team had been looking at common issues and opportunities. We believe aligning our organization into a Surfaces group will simply accelerate that work.
Over time, we have developed segments within our business to serve distinct needs of different markets—commercial, automotive flooring, rugs, residential. Although these markets have unique requirements, we have capabilities in operations, assets, R&D, marketing and planning that will benefit from an aligned organization.
Our priority will be applying the right talent and best practices across these segments, while still serving the unique needs of these markets.
Haycook: As we look at developing our innovations and distribution marketing capabilities, we will, where appropriate, leverage them across the segments where they best meet the needs of those [areas].
Is this a move to eventually spin off the flooring business?
Duncan: No. This organizational alignment is simply about increasing our pace and effectiveness in bringing innovations to our customers and markets. We continue to see opportunities for growth as the North American market recovers and as the Asia Pacific market continues to develop. We are continuing to invest in assets, marketing, planning, R&D and other resources to accelerate the pace of innovation.
How much does Invista’s flooring operations make up the PS&M business?
Duncan: The Surfaces business represents more than half of PS&M’s overall demand. This has been relatively constant over the past decade, but the mix of products and segments has evolved with the markets. Our mix is now much more oriented on branded offerings, when a decade ago we had a larger commodity offering.
Invista has one of the industry’s most powerful brands in Stainmaster. Have the awareness numbers changed in the last decade?
Griffith: Our aided awareness of the Stainmaster brand has always been above 90%, and it continues to be that way, hovering between 94% and 98%.
Over the past five years, though, we have doubled our unaided awareness to more than 40%. And that’s after taking the DuPont name off, so that’s pretty substantial considering the two had been synonymous for 20 years.
We continue to invest in and expand usage of our Stainmaster and Antron brands, and with the formation of a Surfaces marketing organization, you can expect to see even greater emphasis on our brands, marketing efforts and distribution channels.
Speaking of which, the Stainmaster name is now on a number of other products besides carpet fiber, such as cushion and resilient. Do you see it branching further out? Is there a fear of over saturation?
Griffith: We see this as important to our brand strategy, to the distribution channels who are committed to Invista products, and of course, ultimately to the consumer/enduser. So, yes, you can expect to see Stainmaster—and Antron— brand use continue to expand.
Regarding saturation, the decision whether to extend one of our brands is based on substantial market research. As long as consumers understand and continue to believe the value the products and services under, the Stainmaster brand umbrella continues to be delivered— and continues to satisfy them. We aren’t very concerned about saturation.
That being said, it’s important for us to carefully monitor and manage these very critical assets—our brands—within our business and in our marketing strategies.
What about extending the Antron brand?
Griffith: The Antron business team has and will continue to consider alternatives for brand extensions. The experience with extending the Stainmaster brand in our residential segment will be useful in evaluating opportunities for Antron.
It appears the “great consolidation” is over within the carpet industry and Invista remained as the only major independent fiber brand left (Editor’s note: Anso went to Shaw and Wear-Dated to Mohawk). How has that affected the company in terms of doing business with other mills and with Shaw and Mohawk who both still use Invista’s branded products?
Haycook: We continue to sell to every mill—including the big three. Our brands, our innovation, the performance and quality of our products, and the marketing initiatives we pursue continue to create value for manufacturers using our products. The mix of mills continues to change as the industry evolves in distribution channels, products and players. There are always new companies entering the market.
Currently, with excess capacity in the industry and demand at low levels due to the economy, every manufacturer is motivated to utilize their unused capacity. Under these conditions, business is more difficult because even though we continue to create fibers that differentiate themselves, mills use them in different ways so they each have different requests. However, through innovations and strong marketing initiatives, we have continued to create value for the selling chain, down to consumers and end users of our products.
How has the recession impacted the company—from both R&D and marketing perspectives?
Haycook: Innovation is critical to long term profitability for any company. Difficult market conditions make continued innovation even more critical because they speed up change in both the industry and with our end users. We continue to invest in R&D to drive product and manufacturing innovation. Last year, we started up a new polymer/fiber R&D facility at our Camden, S.C., plant which has already begun to produce innovations with promise for commercialization.
Griffith: The need for marketing innovation is also critical in an economic downturn. Consumer and end-user values change and the touch points for effective marketing communications evolve faster when the economy is under stress.
Through the recession, Invista has continued to invest in its brands and has gained ground versus competitive brands. Right now, the consumer commitment to and confidence in Stainmaster is at its highest in the history of the brand.
We have also invested in resources to increase our effectiveness in interactive media, launched a new Stainmaster brand website in December, and have seen increases in traffic as well at lead generation for dealers who are aligned with our products.
As the end user evolves, the use of the Internet is even more important when it comes to educating and interacting. The new Stainmaster site, for example, allows us to do these and other things better than ever, while also helping retailers gain additional business. On the commercial side, we can do similar things but in ways more conducive to contract, such as helping people specify products.
We are also looking at ways to effectively make use of the popular social media platforms, such as Facebook and Twitter.
Talk about the company’s eco initiatives. What is being done to make the company and its products as environmentally friendly as possible?
Griffith: We believe that “Sustainability Begins with Products that Last.” Tests show Stainmaster branded carpets last up to 50% longer and stay up to 30% cleaner than competitive carpets; and carpets made with Antron last up to 75% longer than the majority of competitive carpets. These are key messages that resonate with retailers, end users, specifiers and consumers.
Long lasting is not only a key performance benefit but results in conserving resources and eliminating waste through fewer replacements, which can result in less carpet in landfills, less energy consumption and fewer greenhouse gas emissions.
Last year we conducted a life cycle assessment (LCA) to measure the eco-profile of our manufacturing process and the length of time a product performs during its first life. When combining LCA and performance testing results, using carpets made with Stainmaster or Antron can have up to 40% lower energy consumption and greenhouse gas emissions—expressed as CO2 equivalents—than the majority of competitive carpets in their respective markets.
Young: In addition, PS&M has achieved substantial improvements in energy use and emissions reductions. The business has made this progress by increasing energy efficiency and by operating the most efficient manufacturing units. This effort is part of the company’s newly stated operations goal to reduce energy usage, increase energy efficiency and reduce emissions in its operations by 20% by 2020, beginning this year. That’s 20% of energy per unit (ton) of product manufactured.
Also, Stainmaster and Antron carpet fibers are certified as Environmentally Preferred Products, granted by a third-party expert in environmental certification— Scientific Certification Systems—under a new, expanded standard. This is very important to our customers because it’s third-party affirmation that carpets made with our certified fibers can have a reduced environmental impact.
And, we are constantly putting resources into finding ways of incorporating more recycled content as well as non-petroleum based materials into our fibers. There is a huge amount of work going on to find new polymers and mixtures. But before we can introduce anything, it must live up to the Stainmaster and/or Antron promise. That’s tough to do, as both have strong promises and reputations to uphold.
The bottom line, finding ways of utilizing resources more efficiently is fundamental to our business and our market based management (MBM) philosophy. Over the long run, the market will reward sustainability innovations that are based on good science and which create real value. We will continue seeking solutions that fit this approach.
What about the company’s reclamation efforts?
Griffith: Invista’s carpet recycling program was the first nationwide carpet reclamation program, in operation since the early 1990s. We decided to refocus our recycling efforts from collection, to becoming a consumer of recycled type 6,6 nylon to put into our products. Invista purchases reclaimed 6,6 nylon face fiber for use in recycled products, such as Antron Lumena solution dyed nylon, as well as the Stainmaster EcoSoft carpet cushion, which is made with over 90% recycled content by L.A. Fibers/Reliance Carpet Cushion.
Invista has made this change because there is a surplus of post-consumer carpet in the industry, and we realize there is more value in dedicating our resources to putting recycled content into our products, rather than in the role as a collector.
What are your top priorities over the next five years?
Duncan: We have a number of both near-term and long-term focus areas for our business:
1. First for us is to always work toward advancing a culture consistent with the MBM principles that drive our company— making sure we have the right people working on the right priorities—focused on our customers and creating real value. Doing all that, with integrity and compliance, is a prerequisite.
2. We also must maintain momentum of product innovations— which is especially critical in a soft market environment. In 2011, our fibers will once again be part of over 40% of all residential product introductions. We will continue to build on the “softness” category and on bringing new technologies developed in our start-up tech lab in Camden—which will help us drive more innovations to market even faster. For our commercial business, we have launched a line of fine denier white dyeable fibers under the Antron Legacy brand.
3. Marketing strategies. We will build on our interactive marketing platform and improve our effectiveness in our key market channels—specialty retail, home centers and commercial specifiers.
4. Raw material inflation and volatility. Our industry (and many others) must find ways to deal with increasing and unpredictable raw material costs.
Lastly, if there is one message you want to get out about Invista what is it?
Haycook: Invista is continuing to invest in driving differentiation and innovation through its brands and products. Over time, retailers, endusers and specifiers should see faster and better innovations from Invista.