Paints

INDUSTRIAL CODES

NAICS: 32-5510 Paint and Coating Manufacturing

SIC: 2851 Paints and Allied Products

NAICS-Based Product Codes: 32-55101111 through 32-55101241

PRODUCT OVERVIEW

Paint is made of a pigment to provide color or coverage, a binder to suspend the pigment evenly, and a thinner to make it easy to apply. Paint's dual purpose is to make other products both beautiful and long-lasting. The three major subdivisions of the Paint and Allied Products industry, as defined by the Bureau of the Census, are: (1) architectural coatings, (2) product finishes for original equipment manufacturers, and (3) special purpose coatings, including all marine coatings. This essay discusses architectural coatings, commonly known as house paint.

People around the world have produced paints using available resources, including earth pigments that made yellows, oranges, and browns, for more than 30,000 years. Evidence of such efforts to create beautiful and long-lasting work survives in early cave paintings. Ancient Egyptians used earth pigments and considered certain colors to have healing properties.

For centuries, paint remained relatively unchanged. House painters mixed their own paint. Often paint recipes were closely guarded secrets handed down from generation to generation. Over hundreds of years, experimentation resulted in adding substances such as olive oil, linseed oil, eggs, and animal glue or wax to increase beauty or longevity. Milk paint was simple to produce, and was developed over time, in various places, with different recipes that called for milk protein, lime, and earth pigments for color. Before the Industrial Revolution, painters carried the valuable pigments with them, to mix with a householder's milk and lime.

This situation did not change much in the United States until after the Civil War. In the 1860s patents were issued for ready-mixed paints, and for a metal paint can with a tightly fitting top. Linseed oil became mass produced and The Sherwin-Williams Company—one of the paint industry's founding companies—perfected a formula by which pigments stayed suspended and thus far exceeded the quality of paints available at the time. By the mid-1880s paint was manufactured, packaged in the new patented cans, and sold commercially.

One paradox of industrialization is the desire for homemade products. A cottage industry of handmade paints has become popular. One example is The Old Fashioned Milk Paint Company, established in 1974, who advertise their all-natural paint as having calming, healing, and soothing properties. Large paint manufacturers do this too. Consumers now have much in common with early Egyptians, who considered certain colors to have healing properties. Consumers can carefully choose house paint color to heal and comfort. The desire to come home to a comforting environment led to an increase in the sales of interior house paint. For instance, greens, blues, and violets are associated with balance and calming, while reds, golds, and yellows are associated with wisdom and clarity.

MARKET

The market for paints and coatings of all types in the United States measured slightly more than $19.9 billion in 2005. The value of all shipments is provided by the U.S. Census Bureau in its report titled "Paints and Allied Products: 2005." The architectural coatings segment accounted for $9.1 billion of the paint and allied products industry, or 45 percent, based on the 2005 dollar value of shipments. Architectural coatings are sometimes discussed in terms of volume rather than shipments. The architectural coatings segment shipped approximately 807 million gallons in 2005, an amount equal in size to more than 3,250 Olympic-sized swimming pools.

Products related to house paints are classified according to whether they are water-based or solvent-based. As a whole, sales of house paints increased 23 percent between 2001 and 2005, from a base of $7 billion in 2001 up to $9.1 billion in 2005. Most of that growth was unevenly spread around the water- and solvent-based classes. These classes are discussed separately to highlight the increases and decreases in specific product categories, using five years of paint and allied products data from 2001 to 2005.

Water-based House Paint

Water-based house paints are more frequently used than are solvent-based. They accounted for $7.2 billion of the $9.1 billion per year house paints segment of the paints and allied products industry in 2005, or approximately 80 percent. In the five-year period from 2001 to 2005, water-based house paints remained steady at 80 percent, from a 2001 base of $5.6 billion. Water-based house paints are by far the most popular class of paint, whether they are designed for interior or exterior use, which is how they are further classified. Interior water-based house paints are subdivided into familiar product classes, with the major classes arranged from largest to smallest market share described as:

• Semigloss, eggshell, satin, and other water-thinned paints and tinting bases
• Flat water-thinned paints and tinting bases
• Water-thinned undercoats and primers

Interior water-based house paints are the largest class of house paint products. Between 2001 and 2005, the value of shipments of interior water-based house paints increased from $3.7 billion in 2001 to $4.9 billion in 2005, or 24 percent. The most popular paint class—semigloss, eggshell, and satin—accounts for this increase, which amounted to 30 percent, increasing shipments from $1.7 billion in 2001 to $2.5 billion in 2005. The flat class increased 18 percent. Flat is still the second largest class of house paint, second only to the semigloss, eggshell, and satin class, with increased shipments from $1.3 billion in 2001 to $1.6 billion in 2005. The use of water-thinned undercoats and primers by house painters has apparently lost its sheen; that class decreased 6 percent.

Exterior water-based house paints are the second largest class of house paint products. They are also subdivided into product classes, with the major classes from largest to smallest market share defined as:

• Water-thinned paints and tinting bases
• Water-thinned undercoatings and primers
• Water-thinned interior-exterior deck and floor enamel

Between 2001 and 2005, the value of shipments of exterior water-based house paints increased from $1.9 billion in 2001 to $2.3 billion in 2005, or 19 percent. Most of the increase can be attributed to exterior water-thinned undercoats and primers, which increased 57 percent. This is in stark contrast to the interior water-thinned undercoats and primers, which decreased 6 percent. Apparently, the quality of the exterior product—which is more expensive than interior products—improved during this time period. The use of a small class of exterior water-based house paints also increased; interior-exterior deck and floor enamels increased by 11 percent, from a base of $38 million in 2001 to $43 million in 2005. However, the name of this small class highlights how difficult class-specific market share data are to find, since many paint products are labeled for both interior and exterior use. Exterior water-thinned paints and tinting bases, the largest class of exterior water-based products, with value of shipments at $1.4 billion, increased a disappointing 3 percent.

Solvent-based House Paint

Solvent-based house paints accounted for $1.7 billion of the $9.1 billion per year house paints segment of the paints and allied products industry in 2005, or appoximately 19 percent. In the five-year period from 2001 to 2005, solvent-based house paints decreased slightly (1%). Solvent-based house paints are not as popular among house painters as are water-based. Solvent-based house paints are further classed based on whether they are designed for interior use or exterior use. Exterior solvent-based house paints are subdivided into familiar product classes, with the two major classes from largest to smallest market share defined as:

• Solvent-thinned paints and tinting bases
• Solvent-thinned enamels and tinting bases, including exterior-interior floor enamels

Between 2001 and 2005, the value of shipments of exterior solvent-based house paints increased from $790 million in 2001 to $987 million in 2005, or 20 percent. Most of the increase can be attributed to one product in this category: solvent-thinned enamels, including exterior-interior floor enamels. This category of paint increased 23 percent over the period 2001 to 2005.

Interior solvent-based house paints are the smallest class of all house paints, and are the least popular. This least-used type of house paint is subdivided into familiar product classes, with the major classes arranged from largest to smallest market share described as:

• Solvent-thinned undercoaters and primers
• Semigloss, eggshell, and satin solvent-thinned paints and tinting bases
• Flat solvent-thinned wall paint and tinting bases, including mill white
• Gloss and quick drying enamels and other gloss solvent-thinned paints and enamels

Between 2001 and 2005, the value of U.S. shipments of interior solvent-based house paints increased from $556 million to $729 million, an increase of 24 percent. Most of the increase can be attributed to a small but popular class of interior solvent-based paint: solvent-thinned undercoats and primers, which became even more popular, growing 51 percent from a base of $116 million in 2001 to $234 million in 2005. The semigloss, eggshell, and satin solvent-thinned class increased 18 percent. The flat class increased 17 percent. The least popular class of interior solvent-based house paint, gloss and quick drying enamels, became even less popular in the five year period, decreasing 2 percent. Perhaps their use was replaced by the popular interior water-thinned semigloss, eggshell and satin class of paints, which became even more popular and grew 30 percent.

In summary, the house paints segment of the industry increased 23 percent. Most of that growth was unevenly spread across the product offerings in this sector. For instance, the biggest growth was seen for exterior water-thinned undercoats and primers, which grew 57 percent. It appears that exterior house painters are willing to spend more time and money to properly prepare a surface by first priming it. The next biggest growth was seen for interior water-based paints (semigloss, eggshell, and satin finishing paints) which grew by 30 percent.

Notable growth also occurred in solvent-thinned enamels, including exterior-interior floor enamels, which increased 23 percent. These popular dual-purpose interior-exterior solvent-thinned enamels cannot be beaten by water-thinned products for quality. Notable declines occurred in two apparently contradictory product classes. Interior water-thinned primers decreased 6 percent, perhaps because there is no good substitute for solvent-thinned primers. Interior solvent-thinned gloss and quick-drying enamels also decreased by 2 percent.

Another way to analyze house paints is to examine all interior house paints, combining both water- and solvent-thinned. The combined interior house paints amounted to $5.6 billion of the total $9.1 billion market, or 64 percent of total house paints value of shipments in 2005. It appears that the most money—and therefore probably the most time—is spent on painting the interior of structures.

When looking at all exterior paints, combining both water- and solvent-thinned, U.S. shipments amounted to $4.2 billion of the total $9.1 billion market for house paints, or 46 percent in 2005. Exterior house paints cost more, but last longer. Exterior paints often come with warranties; ten-year warranties are common. Some water-thinned exterior products now have lifetime warranties.

These market share figures represent an industry that has turned upside down in the last 150 years since paint was first manufactured, packaged in cans, and sold commercially. For the first 100 years, solvent-thinned products represented approximately 90 percent of the market (whether measured by volume or dollar value of shipments). Solvent-thinned paint defined the paint and allied products industry, including house paints. Even though the first water-based paint was developed in 1935 using milk protein and synthetic rubber and styrene, it did not gain strong acceptance in the market due primarily to quality problems. From 1930 to 1950, solvent-based products represented around 90 percent of the market. However, the end of the last century coincided with the end of an era in the paints and allied products industry.

By the late 1990s, water-thinned products represented approximately 75 percent of the market and by 2005 their share of the market had grown to 80 percent. This figure remained steady for the five-year period between 2001 and 2005. Water-based house paints have overtaken solvent-based house paints as the most popular class of paint, whether for interior or exterior use. Based on this statistic, some industry executives predict the eventual eradication of solvents. Others doubt it very much. For instance, because interior water-thinned undercoats and primers decreased by 6 percent between 2001 and 2005, while interior solvent-thinned undercoats and primers increased a whopping 51 percent, there is some proof that solvent-thinned products are growing and won't ever be entirely replaced.

Many factors played a role in the displacement of solvent-based paints with water-based paints. For instance, concurrent with the increasing cost of hydrocarbon solvents—which belong to a class of petroleum-derived products known as volatile organic compounds (VOCs)—the Environmental Protection Agency (EPA) mandated reductions in VOC use as part of the Clean Air Act Amendments of 1991. As volatiles dry, they evaporate into the atmosphere and contribute to air pollution. Because the paint industry purchased approximately 25 percent of the hydrocarbon solvents on the market at that time, the EPA mandate was anticipated to affect 65 percent of paint industry volume. The EPA-mandated VOC reductions were implemented in phases, calculated using the year 1990 as a base. Reductions of 25 percent were required by 1996, ratchetting up to reductions totaling 35 percent by 2000, finishing with cumulative reductions of 45 percent by 2003. It was during the period from 1990 to 2003 that water-based house paints overtook solvent-based. Also during this period, the quality of water-based paint markedly improved. This quality improvement may have created a third driving force, in addition to the increasing costs of petroleum-derived products and changes in regulations regarding VOCs. Consumer preferences changed when they realized the application and cleanup of water-based house paint was easier than the solvent-based, yet the quality was very similar.

KEY PRODUCERS/MANUFACTURERS

By the mid-1880s paint was manufactured, packaged in patented cans, and sold in stores. Because the weight of prepared paint made it expensive to transport, a decentralized structure of small manufacturers in discrete markets dominated the industry until the mid-1900s. Regionalization of the industry was not only because of the large cost of transporting paint but also due to weather conditions that vary from place to place. For instance, in 1967, two-thirds of paint was consumed within 500 miles of its manufacture. The decentralized structure of small manufacturers continues to some extent today. Approximately 65 percent of the total 1,400 U.S. establishments involved in the manufacture of paints and coats employ fewer than 20 people; these tenacious small- to medium-sized paint manufacturers have combined annual payrolls of $240 million and get $1.5 billion of industry sales. Production workers at these smaller manufacturers earn 20 percent less than their cohorts at larger plants, but they may live in smaller markets where the cost of living is lower.

The remaining 500 or so larger establishments employ approximately 40,000 workers. Most of these workers are clustered in the Midwest, primarily in Ohio and Illinois. Other states with large employment are California, Pennsylvania, and Texas, in that order.

The top U.S. house paint manufacturers (and their respective 2003 market shares) are Sherwin-Williams (with 16% of the market), PPG (with 13% of the market), Valspar (with 8% of the market) and ICI (with 8% of the market). Some sources claim Sherwin-Williams controls 25 percent of the U.S. house paints market.

ICI Paints in North America

Based near Cleveland, Ohio, ICI is a British conglomerate that is a relatively recent entrant into the North American market. ICI had 30,000 employees worldwide and had sales in 2005 of £5.8 billion. ICI Group's business segments include food flavors and starches, personal care fragrances, and polymers, adhesives and architectural decorative coatings. ICI entered the house paints market in North America in 1986 when it acquired Glidden, 100 years behind Sherwin-Williams. Through acquisitions, this company gained market share. Ten years later it acquired Grow Group and Fuller O'Brien. Fuller O'Brien is a regional product line formulated to meet the unique product needs of the western United States.

ICI brands include Glidden, Ralph Lauren, and Fuller O'Brien. In 2005 it introduced the This Old House brand of house paints inspired by the television series, which includes a line of water-based exterior products. Glidden has 14 separate lines including Evermore, America's Finest, Glidden Color, PrimeCoat primers, Glidden Spred, Glidden Speed-Cote, Glidden Ceiling Paint with EZ Track Technology, Porch and Floor Paints, and ProMaster.

PPG Industries (PPG)

With world headquarters in Pennsylvania, PPG Industries is a diversified manufacturer. Its business segments include house paints, original equipment manufacturer coatings, chemicals, and a variety of types of glass and fiberglass. This company's historic interest in glass is the source of its early name; it was founded in 1883 as the Pittsburgh Plate Glass Co. Since the 1990s, paints have become PPG's largest product segment, surpassing glass and fiberglass. PPG reported 2005 sales of $10.2 billion and employed 308,000 people. Six of PPG's seven principal research and development facilities are located in the United States, with its two paint R & D facilities based in Pennsylvania.

Brands include Pittsburgh Paints, PPG High Performance Coatings, Olympic Paints & Stains, Monarch Paints, Porter Paints, Lucite Paint, Keeler & Long, and Pitt-Char.

The Sherwin-Williams Company

One of the founding firms of the U.S. house paints industry, Sherwin-Williams reported 2005 sales of $7 billion. Sherwin-Williams is not past its prime; it remains committed to the U.S. market and in 2006 began operation of its newly constructed paint manufacturing plant in the western United States. It has always emphasized paint and coatings and is generally regarded as the largest producer of paints and coatings in the United States and the third largest in the world. Sherwin-Williams is not diversified; its core business segments remain house paints, original equipment manufacturer coatings, and special purpose coatings.

Sherwin-Williams brands include the Duration Home line, SuperPaints, Cashmere, Harmony, Classic 99, Bath Paint, Color Accents, Style Perfect, All Surface Enamel Latex & Alkyd, and High Performance Floor Enamel. Other brands include Dutch Boy, Pratt & Lambert, Martin-Senour, Dupli-Color, and Krylon, plus private label brands manufactured for independent dealers, mass merchandisers, and home improvement centers.

Valspar Corporation

Headquartered in Minneapolis, Minnesota, Valspar reported sales of $2.9 billion in fiscal 2006, an increase of 9.7 percent over fiscal 2005 sales of $2.7 billion. Valspar employs 7,000 people in over 80 locations worldwide and is the sixth largest paint and coatings company in the world. Since 1806, Valspar's business segments have grown from house paints to include packaging ink and coatings, original equipment manufacturer coating, specialty coatings, paint polymers, can and bottle coatings, aluminum collapsible tube coatings, and cosmetic industry packaging coatings.

Valspar brands include Color Style, Integrity, Laura Ashley, McCloskey High Performance Coatings, McCloskey Multiuse, and Perfect Sample.

MATERIALS & SUPPLY CHAIN LOGISTICS

The cost to purchase the materials needed to manufacture house paints increased 10 percent on average between 1997 and 2002. The largest categories of materials manufacturers purchase to make house paints are:

• Resins (including alkyd plastics, acrylic plastics, vinyl, epoxy and polyester)
• Titaniuim dioxide
• Solvents (hydrocarbon, alcohol, ester, ketone and glycol)
• Organic and inorganic color pigments (including chrome colors, zinc oxide, iron oxide, metallics and predispersed colorants)

Resins can be either natural or synthetic, oil-based or water-based, and are the material used as the binder to suspend pigments evenly. In addition to binding pigment particles into a uniform, continuous paint film, binders make paint adhere to the surface. The nature and amount of binder used determines performance properties such as washability, toughness, adhesion, color retention and durability. Alkyd resin is a synthetic resin used in solvent-based paints; acrylic resins are an expensive synthetic polymer used to make high-performance water-based paints; vinyl is a clear synthetic resin used in water-based paints. In 2002 the entire $19.5 billion paint industry spent $2.2 billion on resins.

Titanium dioxide is an expensive bright white pigment that is the most important pigment in both water- and solvent-based coatings. This white pigment is so often used that it deserves a materials class of its own. This white powder is an exceptionally opaque white pigment with a high refractive index. In 2002 the paint industry purchased $868 million worth of titanium dioxide, an increase of 6 percent over 1997 purchases of $820 million.

Solvents are a liquid in which paint pigments are dissolved or dispersed. Solvents include hydrocarbon, alcohol, ester, ketone, and glycol and are usually volatiles. Spending for these solvents by the paint industry increased 10 percent in the period between 1997 and 2002, from $753 million to $837 million.

Organic and inorganic pigments are a basic component of paint. These powdery substances provide whiteness or color, hiding power, and bulk. The quality and cost of pigments vary widely. The quality of the pigments used in paint will impact whether it is a high-end, high-priced paint or a lower-quality, lower-priced paint that will likely need to be reapplied more frequently. Common extender pigments are clay (kaolin and china), used mainly for interior paints; silica and silicates used in exterior paints for excellent durability; calcium carbonate (chalk) used as a low-cost, low-hiding pigment; and zinc oxide used to resist mildew and for stain blocking in primers and exterior paints. Spending on pigments increased 10 percent in the period between 1997 and 2002, from $708 million to $780 million. Spending for paint pigments and other potential extenders grew concurrent with the demand for water-based products.

DISTRIBUTION CHANNEL

House paints are sold by retailers in many classes. Retail classes include building merchants, local hardware stores, specialty paint stores, general merchandise chain stores such as Wal-Mart, and large national home improvement centers such as Home Depot and Lowe's. Retailers include the all-important class of manufacturer-owned stores.

The house paints industry had a vertically integrated distribution from its early days after the Civil War. The founding U.S. firm, Sherwin-Williams, had company stores from the beginning. Vertical integration is not only common, it is considered vital in this industry. Because of the competitive nature of the market, where paint is often thought of as an undifferentiated product where one brand works just as well as any other, makers must look for sales in all these areas: company-owned stores, independent-owned stores, and national chains. Sherwin-Williams now operates 3,081 stores in North America, Mexico, Puerto Rico, and China. These stores produce almost half of their sales revenue. In 2005 PPG had 350 retail paint centers in the United States.

KEY USERS

Paint is everywhere we live and work. House paints have a 100 percent penetration rate; paint and coatings are in or on every dwelling in America. This remarkably high penetration rate is because almost every architectural surface is painted or coated: walls, floors, and ceilings, as well as doors and window trims.

People who purchase house paints are those who do not favor wallpaper, wood paneling, vinyl siding, or glass. Women often purchase paint, according to Sherwin-Williams, who reports a shift in the primary paint purchaser from male to female. House paints are durable goods. This means they have a life expectancy of more than three years. Interior water-based paint can last from five to seven years, while interior solvent-based paint can last from five to twenty years or more. Exterior paint is generally warranted to last for ten years, twenty years, or even a lifetime.

Two broad classes of users of house paints are the do-it-yourselfer and professional painting contractors. A recent study showed that the paint brand purchase decision regarding interior paint was specified primarily in this order: painting contractors (54%), architects (17%), building owners (16%) and finally property managers (14%). Even though national home improvement centers such as Home Depot and Lowe's have grown—leading to a large do-it-yourself (DIY) market, exemplified best perhaps by the proliferation of television shows such as Extreme Home Makeover and Trading Spaces—professional contractors now purchase more than 65 percent of house paint and the DIY market represents 35 percent.

ADJACENT MARKETS

Demand for house paints can be tied to three main activities: new construction, transfer of real property, and maintenance. Because these activities are such a basic part of our daily lives—effecting the homes we live in, the places we work, the schools we attend, the hospitals in which we receive medical care, and the buildings in which our government carries out its business—some economists say that paint sales are a leading economic indicator.

The Census Bureau provides statistics on three categories generally thought to be adjacent to the house paint market: building permits, housing starts, and housing completions. In other words, new building construction is generally considered to be adjacent to the house paints market. However, other analysts dispute the importance of building permits, housing starts, and housing completions. According to a research analyst quoted in ICIS Chemical Business Americas in October 2006, "nearly 75 percent of the architectural business is the repainting market, while 25 percent is new-house-construction paint."

Transfer of real property—known as resale rates—or transfer of leases of existing residential homes, existing commercial business and existing industrial locations can be said to be adjacent, perhaps even more than new building construction activity. Transfers of property or leases often warrant a fresh coat of paint on interior and exterior surfaces. Existing institutional structures such as hospitals, schools, and government buildings are not frequently transferred but still must be maintained.

RESEARCH & DEVELOPMENT

Current research focuses on resins. They are the glue that holds everything together in a paint formulation. They determine gloss, hardness, stain resistance, wash-ability, and longevity. In high-performance coatings, the resin comprises more than 30 percent of the paint's total composition. The rest of the components are built upon the foundation of the resin itself. During the shift from solvent-based to water-based coatings, R&D departments focused most of their efforts on developing high performance resins. R&D departments are now focusing on new resins that make exterior paint harder and tougher so it can stand up to harsh climates for an increasing number of years. For instance, some resins contain special glass beads that deflect the sun's heat, saving energy. Because they comprise the largest material input into the production process, resins manufacturers are also devoted to R&D and work closely with their paint and coatings customers in developing new resin lines.

After dealing with new EPA mandates from 1990 through 2003 directed at one of the largest categories of materials needed to make paint—solvents—the industry could be focused for the next decades on research related to its number two material input: Titanium dioxide. Titanium dioxide is used in both water- and solvent-based house paints. It was not considered a potentially toxic substance until recently. In June 2006 the International Agency for Research on Cancer changed the classification under which it had categorized titanium dioxide from Group 3, a class for agents that are not classifiable as to their carcinogenicity to humans, to Group 2B, the class for agents that are possibly carcinogenic to humans. The National Paint and Coatings Association (NPCA) immediately forewarned its members that this change will require action, including, at a minimum, changing labels and material safety data sheets. Future research may well focus on finding a replacement for this most important pigment.

CURRENT TRENDS

The mature paints and coatings industry has long been one that anticipates trends and prepares to meet them in advance. The industry has had decades of practice; in the 1950s–1970s, lead paint was identified as a problem and white lead was substituted with titanium dioxide. From 1990 to 2003, VOCs were identified as a problem and the industry reformulated their entire product line, substituting water-thinned products for solvent-thinned products. In 2003 it anticipated and prepared in advance for potential lead paint class action lawsuits by affecting a preemptory strike in the form of an agreement with the EPA to re-label 100 percent of their products with lead paint warnings. The National Paints and Coatings Association (NPCA), this industry's largest association, negotiated the preemptive labeling agreement with the EPA.

A recurring trend in house paints is redecorating. Redecorating trends can compress the interior house paint repaint cycle from a project once every five years to a project once every three years. Paint makers encourage redecorating. Recently, they have begun to encourage consumers to carefully choose house paint color to heal through an increased communion with the earth. For instance, a yellow-green color from Dutch Boy called Peaceful Pines has become popular, according to Sherwin-Williams. PPG has a new color called Cathedral Glass that it describes as a blending of grass and sky. A natural-looking green color called Mother Earth is also popular. Television shows such as Extreme Home Makeover and Trading Spaces contribute to the redecorating trend and fuel the DIY market. The DIY segment is predicted to grow from $702 billion in 2004 to a projected $923 billion in 2009. According to Citigroup Equity Research, this segment will continue to capture market share with Home Depot growing from 10 percent to 16 percent and Lowe's from 5 percent to 11 percent.

Another emerging trend is related to packaging and ease of use. For instance, Sherwin Williams recently introduced new twist-and-pour 1-gallon and 1-quart paint containers and ready-to-roll project-sized paint containers that have a built-in roller tray. Ready-to-roll containers hold 2.5 gallons of paints and are disposable. In 2005 the ready-to-roll paint container was recognized as "The Most Innovative Package of the Year" by the Institute of Packaging Professionals.

TARGET MARKETS & SEGMENTATION

The market for house paints is a mature market. House paint makers can anticipate market fluctuations that follow economic cycles generally. To attempt to increase sales by trying to gain market share from competitors, paint makers focus on the higher end of the product line. The more expensive or luxury products tend to be more profitable. For instance, most house paint manufacturers have now have both professional grade product lines geared for the paint contractor and residential grade lines geared for the homeowner. Sherwin-Williams' namesake brand includes ProClassic Alkyd and ProClassic Water-borne Enamel, designed for the professional contractor.

Some paint makers target the higher end DIY market. For instance, ICI's Ralph Lauren brand is the dominant leader of high-end and specialty paint products. Ralph Lauren offers perfect whites in 60 shades, and lifestyle colors in urban loft, vintage master, island bright, natural, thoroughbred, and white wash. Each of these lifestyle colors is available in three finishes. Ralph Lauren finishes are dramatically different from familiar semigloss, eggshell, satin, and flat product classes. These dramatic product classes are referred to as candlelight suede, river rock, and metallic—which might explain why they are so expensive and provide a luxurious looking result.

Other paint makers target the higher end contractors' market. Sherwin-Williams Duration Home targets the contractor at the high end and is patented because it prevents stains from penetrating. Its ProMar 200 XP paint is designed to achieve the look of two coats of paint after a single coat has been applied, saving contractors time. Builders Solution interior paint starts with a high-build surface coat that masks drywall imperfections and establishes a smooth, even surface for topcoat.

Other paint makers expand an existing product line by introducing product innovations. An example of this type of line expansion is the introduction of The Pittsburgh Paints residential product line. This brand is more than 100 years old and recently built on its reputation by expanding to include Manor Hall interior and exterior available in flat, eggshell and semigloss, Sun-Proof exterior paint that can be applied at temperatures down to 35 degrees Fahrenheit, and full Super Premium and Premium lines each with their own Seal Grip Stain-Blocking Primers.

RELATED ASSOCIATIONS & ORGANIZATIONS

International Agency for Research on Cancer, http://www.iarc.fr

National Paint and Coatings Association, http://www.paint.org

Synthetic Organic Chemical Manufacturing Association, http://www.socma.com

BIBLIOGRAPHY

Blanchfield, Lindsey. "Sugar Coating the Housing Drop?" ICIS Chemical Business Americas. 30 October 2006, 22.

"Convenience Strikes Again at Dutch Boy." Packaging World Magazine. May 2005, 13.

Darnay, Arsen J., and Joyce P. Simkin. Manufacturing & Distribution USA, 4th ed. Thomson Gale, 2006, Volume 1, 553-558.

"The Inside Story on Interior Paint." Paint Quality Institute. Available from 〈http://.www.paintquality.com〉.

"New IARC Classification for Ti02." National Paint and Coatings Association. July 2006.

Nicholson, Wendy. "U.S. Personal Care and Household Products Digest." Citigroup Global Markets, Equity Research. 15 February 2005.

"NPCA's Lead Exposure Warnings Educating and Training Program." National Paint and Coatings Association. July 2006.

"Paint and Allied Products: 2001, 2002, 2003, 2004, and 2005." Current Industrial Reports. U.S. Department of Commerce, Bureau of the Census. July 2006 and earlier dates.

"Paints and Coatings." Chemical Week. 9 November 2005, 31.

Pianoforte, Kerry. "Exterior Architectural Coatings Market: A Boom in New Home Construction, As Well As a Robust Repaint Business, Has Resulted in Record 2004 Sales for The Exterior Coatings Market." Coatings World. October 2005.

"A Primer on the Paint & Coatings Industry." National Paint and Coatings Association. March 2005.

see also Industrial Finishes & Coatings, Inks & Toners