Flooring distributors have seen hot product categories before. In 1994,
Pergo laminate flooring was introduced to the U.S. market and soon the
category was ablaze. Alas, while laminate zoomed in the retail channel
it never cracked builder or commercial in a meaningful way due to
inherent limitations and perhaps a little overselling of its purported
performance attributes.
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[It went from zero to $1 billion quick, but laminate was a one-trick
pony," recalled Jeff Striegel, president of Elias Wilf, a top 20
flooring distributor.
Enter LVT and its offspring WPC/rigid core. This category has taken off
like a rocket and shows no signs of slowing down. In this case, this
waterproof product segment is different than laminate-and it has
multiple applications. [The growth curve of this category is like
nothing the industry has ever seen," Striegel said. [Most new products
have a primary usage in a given channel. Not LVT/WPC. WPC is terrific
off the hook for multifamily, contract and residential. It hits on all
cylinders in every category, and it is waterproof. It`s not just a good
product-it is a great product."
In a fairly slow-growth market following the great recession,
distributors have latched onto this waterproof segment as a flooring
savior of sorts. Many top 20 distributors have created a separate
category for LVT/WPC apart from resilient. Jaeckle Distributors, for
instance, places WPC, rigid core and traditional luxury vinyl products
under the LVT umbrella. [I do think LVT, WPC and rigid will all have a
place in the market long term," said Jeff Jaeckle, vice president. [It`s
hard to be precise about the share each will have, but directionally I
think it will go like this: WPC has already cut into the share of LVT
and I believe rigid will take share from both WPC and LVT. While rigid
will take share from WPC and LVT, I don`t think it necessarily
translates into a decline of WPC`s overall business because WPC should
more than make up for it in what it continues to take from LVT and other
product categories."
Herregan Distributors has been bullish on LVT/WPC with more than
one-third of its business now devoted to the category. Other top-tier
distributors are all in double digits, percentage-wise, in terms of
product mix; those numbers are expected to rise.
As with laminate, there is a fear among some distributors that price
erosion will impact this category and could theoretically turn this into
a commodity much like other segments Pat Theis, vice president of sales
and marketing for Herregan, is concerned. [Because of the number of
suppliers in the WPC market, prices are getting downward pressure. There
is a lot of misinformation and misrepresentation in this category, so
being able to speak intelligently about your product vs. the competition
is key to helping customers understand the value of the product."
What`s fundamentally different about WPC/rigid core from laminate,
some say, is the latter has uses in virtually every residential and
commercial application. [I think the massive marketing behind WPC/rigid
core will continue to provide lift for these products," said Scott
Rozmus, president of FlorStar Sales. [The people I talk to view
WPC/rigid core as a subset of LVT, so in a sense the success of such
products lends credibility to the overall LVT category, which will
continue to grow."