Hicksville, N.Y.—If sales of laminate floors over the second half of 2004 mirror what was done during the first six months of the year, a number of manufacturing officials believe the category has a chance to reach the $1 billion plateau before the calendar changes. And, even if it falls short, all agree that 2005 will be the year when sales surpass the magical number. “If it doesn’t hit $1 billion this year, then it definitely will in 2005,” said David Wilkerson, vice president of marketing for Shaw Industries’ hard surface division. “It’s going to be close,” noted Rob Tarver, Wilsonart’s national sales manager, “but if it misses, then we’ll certainly reach that plateau next year.” “I think it will fall just shy in 2004,” remarked Ed Duncan, senior vice president of residential marketing for Mannington Mills.

“It will do it next year but, even so, we are still extremely pleased with the investments we’ve made and continue to make in the category. So much so, that we are expanding the capabilities of our plant in High Point, N.C.” Ken Peden, executive vice president of Quick-Step, the U.S. division of Unilin Flooring, is the most optimistic based on what he saw happen in the first half of ’04. “I feel sales will go over the billion dollar mark by a little bit. If not, then it will happen in 2005 no matter what.” Industry officials are saying the category continued to grow in the low to mid double-digits over the first half and expect it to stay that way through the remainder of the year. In 2003, the North American Laminate Flooring Association (NALFA) reported category sales were $810 million at the conservative end—some pegged it at $890 million—and grew 12% compared to 2002.

Official numbers for the first half of 2004 were not available as Floor Covering News went to press, but in-house research suggests the category may just hit a billion dollars before the year is out. Granted, this is an optimistic point of view based on what the segment reportedly did last year, what transpired over the past six months and what is being projected for the remainder of the year, but the possibility does exist for those who tend to view the glass as half full. On a more realistic note, sales will most likely fall short of $1 billion, anywhere from $25 million to $90 million depending on how conservative you want to be. Regardless of whether it gets there this year or next, it is not a bad achievement, most admit, for a flooring segment that has only existed in North America for approximately 10 years.

“Either way,” said Tarver, “that’s not bad for a 10-year-old building product.” “It’s been a very fast growing category,” Wilkerson added. One of the main catalysts for the segment’s quick growth rate is “almost every specialty dealer carries laminate products, and that has been a very significant factor in helping it to grow. If you look at it, many dealers are just getting into wood and/or ceramic, which are both well established products, yet just about everyone has at least one laminate display.” Despite this, many note it is still a challenge getting retailers to not only fully understand the category but recognize it can be extremely profitable. “We’ve only been in the industry for 10 years,” Peden pointed out, “so it is still a maturing process because the average dealer is not focusing enough energy on it. We need to get them to better understand there is a great deal of profit in selling laminate flooring and by not focusing on it, they are leaving money on the table.”

In fact, in 2002, FCNews did a comprehensive research project on the various floor covering categories and their volume productivity per square foot with regard to three typical-sized stores. The first study presented focused on laminates (FCNews, May 27/June 3) and, when compared to the other categories, had one of the highest productivity rates. Beyond the fact that technological innovations have allowed manufacturers to create products that are more durable and realistic looking, one of the keys to the category’s success this year is credited to the building sector. “There is more evidence of builders offering laminate floors, especially in multi-family construction,” noted Wilkerson. “And if strong inroads continue to be made, we will be seeing a lot of extra growth in the category.”

Peden agreed, noting, “We finally have a foot-hold. It’s been a battle, because when the glue-together products were introduced, builders tried them and got frustrated. Then they were hesitant to use the glue-free products. But, they are starting to come back due to their own research, companies like Quick-Step constantly giving them demonstrations on the value and quality of the goods and, most of all, consumers are asking for it.” “That is the important driver,” Wilkerson added. “Builders like to stick with what they know and are slow to change—just like the commercial sector—but they do when their customers start asking for something. And, now we are at the stage where many consumers have had good experiences with laminate floors and want to have them installed in their new homes and the builders are starting to respond.”

“Laminate flooring is not just a trade-up anymore,” Tarver explained. “We’re starting to get it specified from the start. Wilsonart has been working hard to break through and, in some areas of the country, it is starting to work. “It’s the same for the commercial area,” he continued. “For the past three years, we’ve put a great deal of energy into the contract segment and we are starting to see all that hard work develop into more sales each day. One of the things we did was to do a bunch of tests, such as install a laminate in a section of a hospital. As officials see the results and benefits they are willing to have it installed in other sections.” Mannington’s Duncan noted the mill’s Icore product, which was developed specifically for the commercial market, “has seen a great deal of success. It has many features that make it a perfect floor for commercial environments and we’ve been very happy with the results.”

Back to the builder category, Peden said in 2002, 5% of laminate sales were estimated to go through this segment. Last year, it grew to 11% and “we feel it could go up to 22% before this year is over.” Officials say consumer interest in laminates remains strong not just because of past experiences, but due to the constant improvements manufacturers are making with regard to performance and surface visuals and treatments. “The latest laminate floors are convincing through the use of a unique and innovative appearance that makes them incredibly similar to the original, natural patterns,” noted Karin Dullweber, public relations manager of the European Producers of Laminate Flooring (EPLF). “As the real-wood look takes over in the home and furnishing sectors, laminate flooring proves that it adapts perfectly to this trend. Rustic surfaces with textured appearance—with or without V-grooves—are certainly in vogue at present. And, it is not only the wood look that is thriving, tiled finishes are also to be found in the trend setting laminate flooring selections.”

Duncan said styles will continue to evolve “beyond the day-in and day-out oaks and begin to replicate more of the exotic species that are gaining in popularity. The biggest thing, though, will be the improvements in aesthetics, meaning the surface visuals will improve with regard to looks, colorations, textures, etc.” Along the line of exotics, Wilkerson said more emphasis is being put on creating upscale products, from bevels to attaching an underlayment directly to the plank. We need to have a good mix of products, but because this is a very competitive segment, we still have to differentiate ourselves from other manufacturers.” “Surface visuals are still at phase one,” Peden said. “The products that will be coming out will be remarkable because we have been so focused on surface visuals.”

Tarver agreed, noting “registered embossed is just one form of creating realistic textures and different types will start emerging. And, because the paper and printing industries are getting better and better with the use of new technology it translates to improved surface visuals.” Another way to help improve the overall appearance of the floor is in the design. With that, Peden said “we’re going to see more mixing and matching in terms of different lengths and widths of planks.” Tarver said narrower planks will be seen in the near future, something Claes Wennerth, president of Alloc, noted earlier this year: “Alloc is stepping out of the traditional sizes with such products as our herringbone pattern. The smaller size gives the look of older wood planks plus adds a great deal of flexibility in the installation design.”

As Dullweber notes, even though the wood vis-uals get the most attention, manufacturers are also using technology to improve the ceramic-looking laminates. Wennerth agreed, “There has been some improvement in stone looks, from the depth of the design to the grooves.” Steve Newman, vice president of the Floor & Décor retail chain and former president and CEO of Witex USA, recently said, “We are seeing better technology everyday. From greater surface visuals to strong and durable locking systems we’re beginning to see laminates whose looks are more equal to wood and ceramic. “This is what will help the category get out of the commodity part of the business. The consumer wants a better product and she is willing to pay for it, but we must present her with tangible benefits, things with which she can understand and relate. When that happens, everyone wins.” Bill Dearing, NALFA’s president, noted at the group’s annual press conference,

“In the past two years, we’ve seen an abundance of technological innovations take hold, especially in the mid to upper end of laminates—from pre-glued to attached backs and beveling to embossing. This is a good sign, because as we keep increasing the appearance and benefits of laminate flooring we are keeping it away from being a commodity.” “There is a multitude of innovative design ideas with the new generation of laminate flooring ranges and finishes,” Dullweber concluded. “The true character of the natural material—whether wood or stone—is perfectly captured in these products and now provides opportunities for unusual, ex- citing and elegant flooring solutions for almost any environment.”