Tile & stone grows in the face of inventory issues

Tile & stone grows in the face of inventory issues

Monday, December 27, 2021 from Floor Covering Weekly By Ryane DeFalco

Tile & stone grows in the face of inventory, labor issues

2021 proved to be an unpredictable, yet successful year for tile and stone. Suppliers were faced with high demand but low availability of both product and skilled installers.

“This has been a solid year for the tile category,” shared Crossville president Greg Mather. “I would expect the category to be up low double digits. A big part of this is fueled by Q2 comparisons versus the heart of lockdowns in 2020, but even into Q3 and Q4, we are seeing pretty solid levels of demand.”

There are several reasons for the robust category growth, according to Scott Maslowski, senior vice president of sales, Dal-Tile Corp. “Tile and stone have both grown in 2021, primarily driven by the residential sector. Both builder and residential redesign had a robust year, while commercial strengthened as the year progressed,” he said, adding, “We anticipate the positive momentum to continue through the end of 2021 and into 2022.”

Paulo Pereira, senior merchant for MSI, pointed to specific areas that performed particularly well for tile and stone this year. “Both categories are growing double digits in 2021 as result of the boom in remodeling projects,” he said. “The outdoor renovation trend generated an incremental demand for stone applications in 2021,” while for tile, “The home office trend during the quarantine sparked growth in demand for project remodels both indoors and outdoors in the first semester,” Pereira shared.

According to Mara Villanueva-Heras, vice president of marketing, Emser Tile, “We expect both categories to be up again this year along with most building materials including all types of flooring and surfaces. However, we do see that tile is strongly desired and sales reflect that. While many builders were looking at LVP (luxury vinyl plank) as an alternative to keep overall home prices down, it is clear that tile and stone are a preferred material and we do not see that changing.”

Tackling Challenges 
“The two major factors that confronted the industry this year were the limited space availability in vessels that started earlier this year from various sourcing countries and is still an ongoing issue, as well as cost increases related to raw material and packaging supplies that forced distributors to adjust prices,” reported Pereira. He added these issues are still present, and the recent increase in natural gas costs announced in Europe will continue to influence prices for consumers, which could sway them to other flooring categories that are more price-competitive than tile. “Import logistics challenges during the second semester compromised stock levels and delayed deliveries. Currently, distributors are still holding back orders that should be satisfied only by early 2022,” Pereira recalled.

Villanueva-Heras added that labor shortage was another obstacle for the industry in 2021. “This issue definitely needs to be addressed by the industry with a heightened focus on both adequate training and compensation to retain young talent in this profession. While the industry is working to improve the labor challenges, this is not a quick recovery with training and experience key in building a solid labor pool and this simply takes time.”

And, said Crossville’s Mather, “For several years, there has been a shortage of installers. While this remains an issue, factories are also having trouble finding workers.”

Maslowski agreed, saying, “The labor challenges continue to persist as the demand for the product continues to grow. We continue to partner with all trade associations on developing training/career programs to educate on the benefits of being an installer.” Daltile has also put muscle behind its DIY-friendly RevoTile product — an authentic porcelain tile floor that can be installed in three simple steps, easing installation woes.

“Logistics are probably the biggest challenge area for tile along with most export-driven industries,” shared Ryan Fasan, ceramic tile specialist and consultant to Tile of Spain. “With costs and timelines increasing for shipping of materials in as well as goods out, it’s been a challenging year for everyone. Everyone down the line from manufacturers to distributors are having to forecast much more accurately and float larger budgets for inventory to avoid supply disruptions for their clients.”

He said that shifting stock to distribution centers has allowed for deeper stocks to be carried. “Regional networks are developing where independent distributors are working together to support each other with stock of exclusive lines to neighboring markets helping bridge the gaps of supply-chain hiccups when possible. Manufacturers are working with insurance underwriters and financing vehicles to offer longer payment terms to better bridge the gap of increased shipping times. Challenges remain as we head into 2022 but thus far, the industry has managed to find solutions and get the product where it needs to be.”

Overseas Observations

As for the tile market overseas, a marketing representative for Ceramics of Italy told FCW, “Ceramic tile imports rose 22.2 percent in square meters in the first nine months of 2021 and 29.8 percent in dollars. And Italy is first in dollars with $487 million, with Italian ceramic imports rising 24.7 percent.”

Ryan Fasan, ceramic tile specialist and consultant to Tile of Spain, said he expects to see “single to low double-digits growth again this year for the sector, based on year-over year comparison, with Spain retaining the top spot for imports to the U.S. by dollar value.” He added that in 2020, the U.S. became the largest consumer of Spanish tile, setting a precedent for what is to come. “This is a pivotal time for product development as the U.S. hasn’t been the primary consumer of Spanish tile since pre-recession in 2007,” he said.

Driving Trends

Key drivers of the tile category this year have shown up in consumer preferences as well as tile’s composition and design. Since tile can be installed virtually anywhere, many consumers looked to the tile category when investing in outdoor solutions.

“Coordinating indoor porcelain tile and outdoor pavers have allowed customers to expand their living space beyond four walls, inviting the outdoors inside through cohesive design and durability,” said MSI senior merchant Paulo Pereira. “The thicker tiles (porcelain pavers) became a staple for outdoor installations among landscape contractors and larger sizes (porcelain slabs) introduced in 2 cm thickness are slowly gaining popularity among fabricators for kitchen countertop applications.”

Inside the home, updates to kitchen and bath spaces presented the perfect opportunity for tile to perform. “As demand continues for homeowners updating and beautify their existing homes, kitchens, baths and outdoor spaces remain top on the list for renovation projects. Thus, tile remains an important building material in all these areas of the home,” offered Mara Villanueva-Heras, vice president of marketing for Emser Tile.

Added Scott Maslowski, senior vice president of sales, Dal-Tile Corp., “The changes brought about by the pandemic created a priority focus on the gathering areas of the home. The kitchen is in the spotlight more than ever as the heart of the home. Bathrooms are an opportunity for a spa-like oasis retreat within the home, and outdoor living/entertaining areas have become a new space to spruce up. For both remodels and new builds, these spaces are in the limelight.”