Hicksville, N.Y.—During a time when most industries have been either flat or down, including a number of flooring segments, demand for hardwood continues to grow, making many manufacturers not only happy but optimistic for the rest of the year. While estimates among manufacturers and other industry sources vary, the general consensus is the segment grew 5% to 6% during the first half of this year when compared to the first six months of 2001. And, even though some have penned the category’s overall volume between $1.8 billion and $2 billion, those closest to the source—leading mill executives—say it is closer to $1.6 billion. Regardless of what figures are more accurate, there is one area in which everyone agrees: Wood flooring may not be the industry’s largest category, but since the turn of the millennium, it has risen to become the fastest growing.

There are generally two reasons for this dramatic growth, especially over the last 18 months. One is the continued desire by consumers to have natural, hard surface floors. This has to do with the many technological advances made by wood manufacturers in recent years, especially the larger mills, which have invested millions of dollars in equipment and operating systems to make their products more user friendly. These innovations, which have radically changed the way wood floors can be used, such as prefinished engineered, adding aluminum oxide and other materials to make extremely durable wearlayers, and easier installation systems to name a few, are being recognized by end users.

As a number of insiders have observed, “it’s not your grandmother’s wood floor.” Rather, today’s products, while still made from natural materials, are formed through meticulous, scientific processes that have virtually eliminated the problems associated with wood floors as recently as 15 years ago. Jim Morando, president of Harris Tarkett, noted one of the biggest reasons the category has been able to jump ahead of the other flooring segments in terms of popularity is, today’s consumer is more educated and sophisticated that ever before and wood mills have been able to respond. “Consumers want selection and a choice. For many years the segment has relied on certain stables, namely red and white oak, which are still the mainstays but, now, we can offer so much more—from exotics, distressed, wider planks, etc.

It’s a whole new world.” John Himes, Mannington Mills’ director of wood and laminate, noted sales of rustic/ distressed looking products “have been fan tastic. There has been an immediate acceptance by consumers. Exotics also keep growing month to month.” He cited hickory, as well as pecan, which is very similar, as “strong, up and coming species.” The reason exotics keep growing, he added, has to do with how end users perceive them. “They’re a little different and nicer than what has traditionally been offered.” “Oak is still the king,” said Michael Badar, vice president of Armstrong Wood Products (AWP), the industry’s largest wood flooring producer whose brands include Bruce, Hartco and Robbins, “but exotics and rustics are dong extremely well, especially on the West Coast and in the Northeast and, to some extent in the South.”

Ed Korzcak, executive director of the National Wood Flooring Association (NWFA), confirmed what many of the manufacturers said and added “One area where exotics have really taken off is in accents as they make wonderful looking borders and medallians. Overall, though, Brazillian Cherry is very strong, as is bamboo. In fact, we have seen a huge increase in the number of bamboo flooring manufacturers coming to the U.S. Ash and Birch are also growing at a steady rate.”

Another area of growth beyond species comes in the type of wood floor being purchased. Solids still account for the majority (60%) of construction types being sold, but prefinished engineered is coming on strong. “Three years ago,” said Himes, “this type of product had a 30% market share. Now it is 40%. It’s what’s helping to make this the hottest category in the industry.” There is one product type within the hardwood segment that has yet to “click,” though—glueless flooring. Most mill executives say it is still too early to tell whether glue-free floors will catch on with the same fervor in wood as they have in laminates. Armstrong’s Badar even noted many professional installers “are actually gluing them down, especially in Southern California. This may change over time, but right now these products are still too new.” Korzcak feels otherwise, noting “glueless floors are designed more for the DIY market which is very limited when it comes to wood floors. The typical hardwood customer is not a DIYer.

Plus, wood flooring is generally thought of as a higher-end, more elegant product. And, upper end goods are typically installed by professional mechanics.” Looking ahead, executives see the segment’s good times continuing. “It’s going to be far stronger as we move forward,” Harris Tarkett’s Morando said. “We feel we’ll end the year up double digits compared to last year, and 2001 was a great year for us.” Both Himes and Badar foresee steady sailing, with each expecting his respective company to continue the momentum from the first half. “There is nothing to cause us to pull back,” said Himes. “We have heard of some softening on the retail side, but it has not been seen,” Badar added, “so we expect to remain fairly strong.”

In order to maintain the growth, many feel there are two main hurdles to clear—one external, one internal. “Internally,” Badar said, “we can’t be complacent because we are the biggest. We’ve invested many millions of dollars in our facilities and people and have to make sure we continue to execute and exceed our customers’ expectations—from the quality of product to the quality of service.” Himes agreed, “We have to make sure we execute the different programs effectively and seamles sly, which includes adding new equipment on stream without disruptions.”

While mills can control the internal challenges, it is the external ones that could have the ultimate say in how the category does down the road. “The biggest concerns,” said Korzcak, “are the economy, that is will rates stay down. More importantly, with the increased demand for exotics, we need to make sure the supply channels remain strong. There is no threat now, but as time goes on, it could be harder to obtain certain species, not to mention the extra costs of duties and tariffs. The other area of concern is the environment. We have to make sure the right information is out there because we all know the government has a tendency to overreact, which can create unnecessary problems.” Despite these concerns, he still sees good times ahead for the wood industry. “We might not have the kind of growth we’ve seen recently, but maintaining a 5% to 6% growth rate over 2001 is certainly obtainable.”