TILE Industry Viewpoint: For evolving segment nothing is set in stone
If there is one solid view of the tile and stone industry, it is that the industry remains uncertain. Across the industry, companies are closely scrutinizing the fluctuating housing market to gauge future demand for their products. Depending on their perspective, industry veterans offer a variety of opinions. While there may be no clear consensus, one thing is apparent: industry professionals say they are excited by the constant innovation that drives the segment. And they say they are taking steps to ensure the industry continues to evolve.
In a series of interviews TILE asked representatives of the industry to share insights and ideas on how to keep the tile and stone segment lively. They generously praise their industry, but also clearly point out what needs attention. From their answers, it is clear they are ready for nearly any situation.
Bart Bettiga,The tile industry continues to grow, but I expect the rate of growth to diminish somewhat over the next several years. Housing starts are definitely slowing down and this will affect our growth. I am also deeply concerned that we continue to lag behind other industries in the recruitment of a new labor force. I think we are very close to a serious labor shortage, especially in the terms of qualified and trained labor. Opportunities exist in our industry, and consumer demand for our product is very high. Companies who are now investing in ceramic tile need to take a proactive approach to invest in all aspects of training of their employees. This applies to all aspects of our industry.
Executive Director, National Tile Contractors Association
The thing I would change and am trying to change is our level of collaboration. We need to realize we are one industry, and we need to act accordingly. Manufacturers, distributors, retailers, contractors and installers all have to collaborate to form a united position promoting our industry. We need to find a way to tell this story: the tile industry is a profession to be proud of and can make a fulfilling career.
Let's make one thing clear. I love this industry! First and foremost, the people are salt of the earth. They're hard-working, dedicated and have played a significant role in our tremendous growth. Also, the products and technology are dynamic. What can be more fun and sexy than being in an industry that creates a beautiful look to our living spaces? Helping people realize their dreams in their homes is a great way to make a living.
Javier Soriano,Our industry has had a very positive evolution during the second half of the year, mainly thanks to the solid export growth. Data for January to July 2006 shows that export sales have grown by 7.5 percent. Together with bigger sales, the product mix solidly incorporates a higher added value. However, our main challenges are consolidation in Europe and meeting the strong demand coming from Eastern Europe. The U.S. continues to be our major export destination and still has a great growth potential. But we are concerned by the high energy prices. This increase has been difficult to absorb.
Director, Foreign Trade and Export Promotion Dept., ASCER
Porcelain is growing strongly, especially in large formats. Many companies are also offering architectural applications such as systems for ventilated facades. In general, Spain's tile industry is evolving through new innovations to meet the needs of architects and designers.
In a global market, where competition is ever fiercer, we have to use every available tool to better reach clients and consumers to inform them about the excellence and advantages of ceramic tiles made in Spain. Through our collective marketing campaign "Be creative" we are communicating the limitless possibilities of our products for designers in every space and application.
One area for further exploration is the ability to communicate and improve our proximity to the end consumer. We would also like to know customer needs and tastes firsthand so as to adapt to them faster. A big effort is being made by the industry in this area and I think that we can expect to see more of a bridge between manufacturers and consumers in the near future.
Donato GrosserThe tile segment is already showing signs of slowing. We're just not going to see the same rates of expansion that we have in the past five years. With the construction business losing steam, I believe there's going to be fewer sales of ceramic tiles for new projects. Of course, we may see an increase in commercial construction, but I don't think it's going to be enough to turn sales around.
President, D. Grosser and Associates, and Assopiastrelle consultant
It is quite possible that cheaper products are going to be hit hardest by the economy. Because these products are used mostly in new construction, they will certainly be affected by the drop in new construction. However, upscale remodeling projects will continue. So there will still be a need for upscale products such as Italian tile.
Ceramic tile does not garner very much brand recognition. It has been that way for years. With ceramic tile, consumers are thinking about the product. If you ask them about the brand they will be unsure. Consumers have very little awareness. To them, ceramic tile is Italian ceramic tile. The Italian Trade Commission is supporting that view with heavy advertising.
Nick Di Tempora,The tile industry is growing at the same level of the last two to three years. It is growing slightly higher than the construction rate. People are renovating. And the renovations focus on the kitchen and the bathroom - areas that use a lot of ceramic tile. On the whole everything is going well. But we still have to become more efficient. For our part, we plan to aggressively enter into capital investment projects over the next two to three years. We have to take into account the cost of production and doing business.
President, MAPEI Americas
The pressure is certainly on for tile manufacturers to come up with new designs, new styles, and to keep making them cost effective. I'm always amazed by the designs that tile manufacturers come up with. This is a very old industry - tile has been around for at least 2,000 years - and yet, every year the products are fresh and new. We have tile that imitates marble, wood and granite. They're making tiles thinner and making them more durable. The innovation amazes me.
Marketing for us is very important. The challenge is to show people why they should pay for the added value of our products. We think of it like this: one place you should not skimp on is the setting materials. Nobody wants a failed job. Doing it right the first time is very important. That's what we convey in our marketing.
I've been in this industry 25 years and if anyone ever asked me what I would rather do, I would not be able to come up with anything. We talk to our customers every day. Relationships in this industry are very important, and I'm grateful for the friends I've made in this industry over the years.
John W. McMullen,Our industry is strong, despite the anticipated slowdown in residential housing markets. Tile and stone continues to play an important role in adding value and prestige to residential and commercial developments. We will continue to see growth in the segment as tile and stone outpace other surfacing materials. Overall, our industry can reap benefits by implementing two fundamental strategies. The first is greater investment in consumer-focused marketing. Second, we need to focus on the continued development of qualified professional installers.
Executive VP, Custom Building Products
In setting materials, the emphasis is on more sophisticated adhesive and mortar formulations that can solve a variety of installation challenges. The use of more advanced polymers and lightweight fillers are adding strength and reducing weight in premium products. Unmodified, low performance thin-set formulations are becoming a much smaller and less important segment of the market. Increasing importance is also being placed on surface preparation products such as membranes, waterproofing products and new backerboard technologies. These products play a key role in increasing the longevity of an installation. And consumers, wanting to protect their investment, are learning how to better care for tile and stone, driving education which results in growth and sales in that segment.
Some changes I'd like to see relate to issues including developing new trade show formats and reducing specification code body politics, but these are relatively minor compared to the future impact that could be realized by increased marketing investments for developing consumer awareness to the benefits of tile and stone products. By clearly communicating the true differences between products, manufacturers will help contractors understand the distinct differences that can mean enhanced performance and reduced time and effort. In general, the installation products segment of the tile industry has done a reasonable job of meeting those obligations, but improvement is needed and should be continuous, especially as product technology evolves.
Above all, I'm proud that our industry produces beautiful tile and stone products that add functionality, design aesthetic and value to construction projects. And the industry is global in nature. Most importantly, there are a huge number of really great people who are passionate about their products and their businesses.
Sean BoyleThe slowdown in new housing construction will certainly affect everybody. But hopefully there will be an upsurge in remodeling expenditures. I don't expect the housing slowdown to last very long. The industry on the whole is very healthy. Ceramic tile and stone are the hottest floor coverings available right now. Let's face it - these types of flooring are the most durable, feature the best lifecycle cost, and are the easiest to maintain.
Director, Business Development
Marketing is critical and it's not at the level it should be at. It's not just installation materials manufacturers. Ceramic tile and stone manufacturers need to advertise more in everything from TV to radio to print campaigns. We need to let consumers know what the benefits are of tile and stone. When consumers are remodeling they should think of tile and stone first. I also want to see the industry toot its own horn to homeowners and contractors. We do not want tile installers to sell themselves short. People want high-performance materials and they will pay for it. I want to see more distributors and dealers make their customers aware of high-performance systems.
We love being at the forefront of setting materials manufacturers. There's a tremendous opportunity to innovate in the category. We love the installers. These guys take tremendous pride in their work. We manufacture products that allow installers to do their projects faster and easier, and do it right. We take pride in that. This is a friendly industry, full of great people. We're happy to be part of it for 50 years.
Joe Renzetti,The tile industry is growing, with a renewed focus on the fashion of tile. We're seeing changes in consumers' tastes. There's more glass tile, large-format tiles, mosaics and metallic looks. Tile is becoming more designer-friendly. This has presented TEC with new opportunities. We are developing the technologies to ensure that larger-sized tiles will set correctly, for example. As we move ahead, we see our business making more technologically advanced products for all types of tile, to provide ease of use and ease of maintenance for virtually any setting.
President, Specialty Construction Brands
I think the real challenge for the industry is adopting to change. There are some very exciting opportunities out there, and the way to capitalize on those is to try new things and adapt as necessary. One of the challenges for us is convincing installers that the old way is not necessary the only way. For example, we tell installers that with our AccuColor XT, you no longer need to seal the grout. But I can understand why they would still want to seal it - it's something they've done for years.
If the industry could both create and adopt new technologies faster, that would open more doors for us all. We usually launch about two new products a year. When our products are launched they do quite well, but I believe the industry has the capacity to handle more change faster. In construction the tried and true is very important, and there's a good reason for that. But if consumers for instance want the new larger-sized tiles, then our industry has to be ready to try new setting materials designed for the new challenges.
The people I've met in this industry all love the industry. They have a real passion for tile. They feel the industry is expanding and there's a wonderful energy about that. It feels very personal, very friendly and I'm excited to be involved in it.
Kevin McFadden,The industry continues to grow at a moderate rate. Yes, the housing market is starting to cool off but we have not seen the effect of that. Normally when residential construction slows down, commercial business picks up the slack. What's going to propel industry growth is the commitment from tile producers for domestic production. Our company is in the middle of a geographical expansion. We're primarily known as an East Coast company but by year's end we will be positioned to manufacture nationally.
Marketing Director, Bonsal
The product trend right now: larger tiles. From an installation perspective, we've had to formulate products for vertical installation of those tiles. It's a whole new challenge. A lot of education needs to take place so consumers know about these changes. Our marketing efforts are helping to accomplish that. I would love to be able to drive our marketing message directly to the consumer but unfortunately it's too expensive. So we market toward the home builders and the contractors. If something goes wrong, they are usually the first people in the line of fire for the consumer.
If I could change one thing about the industry, I would like a process where companies have to verify the technical claims that they make. Not only from the installation side but the tile side as well. Porcelain is so new to the industry that things are still a little uncertain. Some companies are making lesser-quality products that do not meet porcelain standards. I think this lack of quality control will get worse if there's not some sort of policing program in place.
Michael Blades,The industry is continuing to grow. The recent drop in housing starts is certainly going to affect the new home builder category, but because tile is such a high-demand product in the remodeling segment, I think we're going to continue to see gains overall. After all, the majority of the tile footage is coming from remodeling, not new home construction. We've become a remodel nation.
Product Manager, Cement Board, National Gypsum Co.
With regards to backerboards and accessories, customers are being drawn to mold-resistant products. Any product that states that it helps prevent mold growth is a big player right now. Truthfully, there's a bit of spin there. Historically Portland cement-based products have a natural alkalinity that helps prevent the growth of mold and mildew. In fact, many of the old-school products have performed so well because of those inherent attributes. Many of the newer products, that are not cement-based, compensate with the addition of chemicals and treatments.
In our segment, I see a need for some kind of product classification system so the builder community knows what products to use in what situations. A lot of the newer products have limitations and restrictions on where and how they can be used. Staying up to speed on all their ins and outs has become more difficult due to the sheer volume of new offerings that are available. Perhaps there could be a system where, for example, backerboards that can be used basically anywhere are labeled as Class 1. Then backerboards that can be used anywhere but outside are Class 2. And backerboards that cannot be used outside, in saunas or in steam rooms are Class 3. This simplifies the selection process and ensures that the proper product is used in a specific situation.
I love that the industry is pushing harder for contractors and installers to either join trade organizations or get involved with the educational components offered by the NTCA, CTEF and others. As tile becomes more popular, more installers are going to work with it, and they need this type of training and industry support. We don't have a union or tradesman/apprentice program for this industry, and I love that these groups are working to bridge that gap. There lies the potential to enhance the reputation of our industry and to ensure our industry's continued growth.
Kathy Stoffer,The tile industry is growing. Even with the slowing of new home sales, people will continue to remodel their homes. So the biggest opportunities for future growth are to continue developing new and exciting products that resonate with consumers. The challenge, for every business right now, is simply the economy.
Director, Sales and Marketing, Gainey Ceramics
In product trends, I'm seeing that subway bricks, elongated and rectangular shapes are hot. We plan on introducing new sizes in brick as well as updating some colors in our collections. This year we have offered what I call "safety colors," but this coming year we plan to take more chances with bolder colors and sizes. The more appealing you can make your product, the more you get people interested in it. It's great to see the bigger players putting more design and fashion into their ads. Without great marketing, you don't exist.
I love the people in this industry. They are hardworking, loyal and dedicated people. We are all very fortunate to be in an industry that continues to grow and is used in 95 to 99 percent of structures in the world. However, I would like to see the tile industry become more involved in charity and giving back to the community. We are a billion dollar industry and should be doing our part in giving back to the communities that have helped us all become successful.