Wood Flooring

INDUSTRIAL CODES

NAICS: 32-1918 Millwork (including Flooring) Manufacturing

SIC: 2431 Millwork Manufacturing

NAICS-Based Product Codes: 32-19185161, 32-191871 through 32-19187131, and 32-191872 through 32-19187291

PRODUCT OVERVIEW

Wood has long been used as a flooring material. The character of wood sets it apart from other flooring materials such as carpet, tile, and vinyl because only nature can manufacture the patterns and colors of wood. Quality wood floors can be a work of art. No two trees are identical; therefore, no two finished floors are exactly alike. In addition to its unique patterns and colors, wood has other advantages as a flooring material. One is its design flexibility; wood floors can be formal, traditional, contemporary, or rustic. Other advantages are its strength, durability, and the easy with which wood floors may be maintained. Wood floors can last for more than a century and not go out of style. Floorboards can be sanded and recoated multiple times making it possible to refurbish old floors and make them look new again. Carpet and vinyl floors, unlike wood, typically last only 7 to 10 years.

The longevity of a wood floor comes with a price as wood floors cost more per square foot than do alternative flooring materials. On a per square foot basis, hard wood flooring costs between $8 and $30 installed, while the cost of alternate flooring materials all average somewhat less with the exception of ceramic tile which runs between $10 and $30 per square foot installed. In the long run, the expense of a wood floor may be worth it. Wood's beauty lasts for centuries, and as reported in the April 2007 issue of Floor Focus Magazine, 90 percent of real estate agents claimed that homes with wood flooring sell faster and at higher prices than homes without it. A survey of realtors by the Hardwood Manufacturers Association found that wood flooring adds between $7,000 and $10,000 to the resale value of a home.

All wood has an identifying grain pattern and a distinct range of color tones. The pronounced grain of oak with its tan undertones, for instance, is not often mistaken for the clear grain of creamy white maple. Grain is the pattern of growth rings that formed annually as the tree circumference widened. Spacing of the growth rings is determined by the species' growth rate. Old growth grain is tight because old forests were dense, allowing little sunlight in. As a result of the lack of sunlight, old growth trees grew slowly. Color is affected by how logs are milled, with older heartwood darker than sapwood. All wood starts out as sapwood and darkens as it ages and becomes heartwood at the center of the tree. Sapwood is lighter in color and more permeable—the water and mineral combination called sap flows through it.

Oak

Oak is the preferred tree species for floor boards, accounting for approximately 65 percent of the U.S. wood flooring market. It has light tan undertones and pronounced vertical grain. Oak flooring is sold as either red or white, with red oak dominating sales. Red oak is a commercial name used for several oak species including eastern, northern, and pin. The beauty of red oak is the subtle reddish patina of its tan tone. Red oak sapwood tends to be light brown and its heartwood has a pinkish brown color. Its consistent vertical grain has a slightly coarser texture than white oak. White oak is a commercial name used for several oak species including black, bur, swamp, and chinquapin. White oak heartwood is light tan to dark brown, sometimes with a slight grayish tint; sapwood is white to cream colored.

After the various oak species are sawn, it is impossible to tell them apart. Common conventions, therefore, modify the generic terms red oak and white oak. Floorboards with broadly spaced grain (or growth rings) of greater than 1/4 inch apart are referred to as southern or lowland oak—environments where more sun allows for more rapid growth. Wood with closer grain spacing is termed mountain or upland—environments where less sun creates slower growth and denser grain. Mountain is alternately called Appalachian, since oak is indigenous to the eastern part of the United States. These adjectives are used loosely to describe red and white oak.

Maple

Maple has a consistent creamy white color and a clear grain. Maple is a popular material for use as flooring for sporting venues. According to the Maple Flooring Manufacturers Association, Inc., of Northbrook, Illinois, maple flooring is a requirement for many amateur and professional organizations' basketball courts, volleyball courts, handball, and racquetball courts. The game floors certified by the National Federation of State High School Associations, National Collegiate Athletic Association, International Olympic Committee, National Basketball Association, and U.S. Racquetball Association must be made of maple. Standard badminton courts and standard shuffleboard courts are also constructed of maple floorboards.

While maple and oak tend toward pale color tones, other tree species are mid-toned and even dark. Three popular species with dark color and tone are cherry, mahogany and walnut. Cherry wood has varied grain patterns that look like pools, and deep reddish brown hues. Mahogany is dark brown with flowing ribbons of grain. Walnut is dark brown with a signature dark swirling grain pattern that gives floors a fluid dynamic. Some single species like chestnut vary a great deal in color. Chestnut can be as dark as chocolate or as light as latte.

For most of the twentieth and twenty-first centuries, wood flooring—no matter what the species—has been a building material sold as a commodity. Commodity sales are driven by price, especially when there is little to differentiate one manufacturer's 1.5 to 2 inch oak and maple planks from another's. Commodity flooring is sold for under $5 per square foot, uninstalled. In the commodity marketplace, wood is described by its grade. Grades describe the appearance of wood, not its strength or serviceability. The commodity market wood grades are: clear, select, common (No. 1 and No. 2), along with first, second, and third.

Clear wood is free of defects with only minor imperfections. Select wood is almost clear but may contain some slight imperfections in the form of small knots and some color variation. Common No. 1 has more or larger knots, more color variation, and may contain wormholes. Common No. 2 is generally referred to as rustic or cabin grade due to its deep knots and drastic color tone variation. First and second grades generally denote premium fine-grained heartwood graded clear (i.e., free of any knots) with 85 percent vertical grain or better. The term third grade was used interchangeably with the terms cabin or rustic grade, typically only 70 percent heartwood with a mixed or looser grain, and more frequent larger knots (2% or less of surface area).

The centuries old commodity market wood grading system was critical of character marks. Clear and select grades set the standard. Anything else was considered inferior and derogatorily referred to as a rustic or cabin grade. For two centuries, wood floors made from the lower grades were stained dark to hide the telltale character marks, then waxed.

This started to change in the late 1960s to 1970s when polyurethane became more widely available. Polyurethane creates a clear hard finish. It replaced the stain and wax system and allowed the natural character of wood patterns and colors to show through and shine. Knots gave wood character. Uneven grain flowing like a river through a solid plank was viewed as a visually arresting virtue that made the consistent vertical grain of oak seem almost dull in comparison. Once forbidden mineral streaks—an accumulation of matter introduced as sap flows, leaving a streak of color that can range from greenish brown to black—came to be viewed as veins of gold. Species such as pine that change color as the floor ages—once a decidedly undesirable trait—became popular in the last decades of the twentieth century, along with floorboards wider than 1.5 to 2 inches, once disparaged as a sign of poverty. Pine species used for flooring include eastern white, southern yellow, Norway, and red. Depending on how it is milled, pine can exhibit dramatic contrasts between amber red wood heartwood and light blond to golden pumpkin colored sapwood. Pine is marketed variously as antique pine, heartwood pine, southern yellow pine, and longleaf pine although, like oak, once sawn it is impossible to tell them apart.

Over time, natural characteristics such as knots, uneven grain patterns, color variation, mineral streaks, hues that deepen as the floor ages, and wider planks became desirable. Wood flooring began to gain in popularity over other flooring materials. Anderson Hardwood Floors of Clinton, South Carolina, led the charge that moved wood flooring from a commodity to a fashion. In the late 1990s it introduced a rustic look based on cabin or rustic grade hickories, maples, oaks, and pines, and marketed it as its Mountain Series. Anderson incorporated hand-crafted textures like hand-scraping and hand-staining requiring the touch of a craftsman. These hand-crafted products were marketed as collections under names like Virginia Vintage and Time Worn II and were priced at $10 to $12 a square foot uninstalled. Virginia Vintage became a bestseller.

In a move that reflected the new view of flooring material, the National Wood Flooring Association of Chesterfield, Missouri, introduced new standards in an attempt to remake the traditional commodity grades. In November 2005 it proposed five new standards: clear, consistent, natural, standard, and rustic. By July 2007 the five standards had evolved to become more consumer focused: formal, traditional, contemporary, rustic, and distressed/antiqued. Formal floors tend to be dark and highly polished mahogany and walnut. Traditional floors are often medium hued and polished ash and oak. Wood used for contemporary floors is often light toned beech and maple. Wood used in rustic floors is typically hickory or pine that features character marks and darkens as it ages.

Solid Wood

These styles can be constructed in a choice of either solid wood or engineered wood. Solid wood is an unfinished commodity product, generally 3/4 inch thick. Solid flooring is one piece of wood from top to bottom so the authentic grain and color is just as prevalent at the bottom as the top. It is finished on-site immediately after installation. On-site finishing involves sanding and coating with polyurethane, and re-sanding and re-coating, to produce a custom floor. Solid wood competes with engineered wood. Floor Covering Weekly estimated in June 2007 that engineered wood accounts for 50 percent of total wood flooring sales.

Engineered Wood

Engineered flooring was invented by L.W. "Andy" Anderson in 1931. He developed the product to help Robert Levitt meet federal residential wood flooring requirements. Levitt built bungalows on concrete slabs instead of basements to reduce building costs and to make affordable homes. Solid wood floors could not be installed directly on concrete. After Anderson developed an engineered wood floor that could, the invention was copied because it maximizes the efficiency of wood used. The design is based on a veneer of real wood bonded to five to seven plies of other less expensive woods. Early designs featured veneers thick enough for several sandings if it ever needed to be refinished to look like new again.

Engineered wood is strong because the plies are assembled so that the grain of each ply cross-cross. Known as cross-ply construction, the finished product expands and contracts less than solid wood flooring during normal seasonal fluctuations in humidity and temperature and can be used in situations where solid wood has frequently been forbidden, such as over concrete slabs. Engineered wood is efficient because core and back plies can be of a lower grade, with high quality wood reserved for the face ply. Exotic wood whose price is prohibitive in solid form is more affordable when used as the top ply of an engineered product. Engineered wood is thinner than solid hardwood, making it a suitable replacement for tile or carpet during renovation or remodeling. Engineered wood is factory finished, eliminating the mess, time, and vapors associated with applying the finish coats on site. Pre-finished floors can be installed and walked on right away. Factory finishes are cured within an ultra violet oven that produces a harder finish than can be obtained on-site. These advantages help explain how engineered wood came to command 50 percent of the market by 2007.

MARKET

The U.S. wood floor market is growing. A U.S. Census Bureau report titled "Other Millwork (Including Flooring): 2002" reported the sum of the value of wood flooring products shipped from American factories. U.S. factories shipped $1.6 billion worth of hardwood flooring products in 2002, up 25 percent from $1.2 billion in 1997.

The main Census product categories are oak, hardwoods like maple, and other hardwoods. Oak product shipments were up 7 percent in 2002 over 1997, from $811 million to $876 million. Shipments of hardwoods like maple more than doubled between 1997 and 2002, from $187 million to $485 million, an increase of 61 percent. The other hardwoods category dropped 10 percent during this same period, from $218 million to $195 million. It should be noted that the Census Bureau does not report on softwoods like pine, the woods that are growing in popularity.

Flooring makers usually offer at least one exotic hardwood, frequently imports like Brazilian cherry or African sapele. Imports from Brazil tripled from $23 million in 2004 to $61 million in 2005. Overall imports were up nearly 54 percent in 2005 to $351 million.

Industry trade publications report regularly on the state of the industry and on general trends in shipments. According to National Floor Trends, wood flooring grew 18 percent from 2003 to 2004, from $1.7 billion to $2.0 billion. The total wood flooring industry was estimated to be $2.4 billion in 2006. One factor that contributed to the steady growth of wood flooring was the growing size of the U.S. single family home. In the period from 1995 to 2005 the average newly built single family home grew almost 20 percent—from 2,000 to 2,500 square feet.

KEY PRODUCERS/MANUFACTURERS

The top four U.S. manufacturers of wood flooring are Armstrong World Industries, Tarkett, Mannington Mills, Inc., and Anderson Hardwood Floors, in that order. Sales estimates and market share figures for all four companies in 2004, the latest year for which data on all four companies was available, are based on material published in Floor Focus Magazine in May 2005. Armstrong dominated the 2004 wood floor market with sales of $807 million and a 41 percent market share. Tarkett and Mannington were tied for second in 2004, each having around $139 million in sales and 7 percent market share. Anderson was fourth with 2004 sales of $115 million and a 6 percent market share.

Armstrong World Industries, Inc.

Headquartered in Lancaster, Pennsylvania, Armstrong makes floors, ceilings, and cabinets. Its total 2006 sales were $3.4 billion and it had 13,000 employees worldwide. With its three wood floor brands—Armstrong, Bruce, and Robbins—Armstrong dominates the U.S. market, controlling an estimated 41 percent market share. The company began in a small cork-cutting shop in 1860 in Pittsburgh under its founder, Thomas Armstrong, the son of ordinary Scotch-Irish immigrants. In 1906 it built a linoleum factory at its current location. Cork tile led to linoleum and linoleum led to vinyl flooring. Wood flooring materials were also an important part of the company's product lines from its early days. By 2007 Armstrong was the world's largest manufacturer of wood flooring. It had 16 U.S. floor manufacturing facilities located in Beech Creek and Lancaster, Pennsylvania; Beverly, West Virginia; Center, Texas; Jackson and Vicksburg, Mississippi; Jackson and Oneida, Tennessee; Kankakee, Illinois; Somerset, Kentucky; South Gate, California; Statesville, North Carolina; Stillwater, Oklahoma; Warren, Arkansas; and West Plains, Missouri. Armstrong also has plants in Australia (2), Canada, England, and Sweden.

In May 2005 Armstrong announced a multi-faceted brand building effort that included a redesign of its Web site. Also that year it renamed its Hartco Quality Wood Flooring line Armstrong Hardwood Flooring by Hartco, changed the logo to give greater prominence to the Armstrong name, and added 128 stock keeping units (unique inventory item numbers) across 11 named collections. It doubled its print ad budget, placing ads in at least 60 mass circulation magazines including those that target black and Hispanic consumers and younger buyers. In April 2006 it launched new engineered wood collections for its Armstrong, Bruce, and Robbins lines. One early standout was the Robbins Artesian Classics Color-Wash line. Available in four wood types, the products are first washed with a black stain, sanded, and then stained in a different color and finished. The black stain enhances each wood types identifying grain pattern.

Mannington Mills, Inc.

In business since 1915 and privately owned for four generations, Mannington Mills is based in Salem, New Jersey. Its original vinyl floor business eventually grew to include carpet, laminate, and wood floor coverings. Besides its corporate headquarters, Mannington makes floors in Calhoun, Georgia; Highpoint, North Carolina; and Epes, Alabama. In the U.S. wood flooring market, it had approximately 7 percent market share in 2004 with sales of approximately $139 million, second only to Armstrong. Mannington makes and sells engineered wood floors only, not solid wood. Its five haute collections are referred to as Caspian, classics, exotics, hand sculptured, and rustics.

The Caspian collection is characterized by dark stains like cocoa, coffee, burnt umber, and tawny on woods like cherry, hickory, oak, Brazilian cherry, and African sapele. Caspian features LOCnGO, so it installs nearly twice as fast as conventional wood flooring without glue or nails. Pale prevails in the large Classics line of 53 stock keeping units, 36 of which are oak—demonstrating the centuries' long love of oak in America. Mannington's treatment of the oak is somewhat out-of-date, staining them to make them look like cherry and pecan, instead of offering cabin or rustic grade cherry and pecan.

In April 2007 Mannington introduced a line of exotics known as the Atlantis collection and a hand-sculptured collection called Inverness. Atlantis is a premium priced product consisting mostly of dark toned woods stained dark colors like chocolate, cinnamon, chestnut, and claret offered in four exotic species: Brazilian cherry, Brazilian teak/chestnut, an African Mozambique tigerwood Atlantic, and Santos mahogany. Inverness is a limited premium line of three products in cherry, hickory, and maple. The three maples are stained dark in colors called allspice, clove, and nutmeg—somewhat contradictory since maple is a pure creamy white. The product features hand planing, hand rubbed glazing, and unique distressing elements.

Mannington's southern New Jersey headquarters and its manufacturing facility are located within a large tidal wetland ecosystem. Wetlands ecosystems are characterized by insects, and the insects were often trapped in wood floor finishes, resulting in product defects. Mannington tried screened double-door airlocks and overhead door air curtains to keep insects out. To limit pesticide use, Mannington installed a more natural answer: houses for purple martins. Purple martins are small birds that migrate from Brazil in the spring and return to Brazil in the fall. Each martin eats a massive amount of insects. Mannington maintains seven martin condos and gourd systems adjacent to its mill. Due to human encroachment on their indigenous home, east of the Rockies, purple martins are entirely dependent on houses provided by humans.

Tarkett

With its North American headquarters in Florence, Alabama, Tarkett is another leader in U.S. wood flooring manufacturing, tying with Mannington with a 7 percent market share and approximately $139 million in sales in 2004. Tarkett has roots back to 1872 when Domco, Dominion Oil Cloth, started producing linoleum. Over a period of more than 100 years, it acquired or became alternately: Azrock, Domco, Harris Tarkett, Sintelon, Sommer, and Tarkett. In 1999 Domco acquired Tarkett and Harris Tarkett and became Domco Tarkett Inc. Since 2003 the group has operated under the Tarkett brand name.

Tarkett makes solid wood floors and engineered wood floors. Tarkett's solid wood floors consist of red oak and white oak only. It has five lines of engineered longstrip floors that are offered in ash, maple, and oak. Tarkett's engineered plank wood floors consist of ten collections. Artisan Colorwashed is white oak reminiscent of a painted Scandinavian floor worn by decades of use. Artisan Fieldstone is available in four wood types featuring hand-scraping and a colorwash that produces a stone-like surface texture. Fieldstone has names like greystone, hearthstone, cobblestone, and slate; it is wood made to look like stone.

In June 2007 Tarkett announced a North American management reorganization to focus product development, marketing, and service on the needs of local markets. Tarkett explained that the reorganization was, in part, due to its recognition that each geographic market is unique and needed to be treated accordingly.

Anderson Hardwood Floors

Anderson started in 1946. The company goes back four generations to founder L.W. "Andy" Anderson, several of whose great-grandchildren work for the company in various jobs such as plant management and marketing. While Anderson was ranked fourth in 2004 with estimated sales of $115 million and a 6 percent market share, it makes premium products in brands known as Anderson, Appalachian, Anderson Pacific, Virginia Vintage, and Biltmore Estate. Centered in South Carolina, Anderson has 600 employees at manufacturing sites in: Allendale, Clinton (2), Cross Anchor (2), Fairfax, and Walterboro, South Carolina; Port Gibson, Mississippi; and Katadin, Maine. Its Design, Marketing and Distribution Center is in Fountain Inn, South Carolina. Anderson uses a design council made up of designers from around the country to study style and fashion trends.

Anderson makes both solid floors and engineered woods. It has forty-eight solid wood styles and more than 220 engineered wood stock keeping units. It markets them in collections known as New Traditions, World Traveler, Urban Living, and Casual Comfort. New Traditions has fifty-five stock keeping units, while World Traveler has more than seventy-five. Urban Living has seventy-five and each stock keeping unit has a name like afternoon tea, reedy river, rainbarrel, morning blush, old furnace, smokehouse, lighthouse, and lantern glow.

Other Wood Flooring Manufacturers

Diversified floor coverings manufacturer Mohawk Industries is a new entrant into wood floors. With its acquisition of Columbia Forest Products, scheduled to close in the first quarter of 2008, it will immediately become one of the leading players in this market with an anticipated $180 million sales. Columbia has two solid wood plants and one engineered wood plant, plus an engineered wood plant in Malaysia.

Canadian wood flooring manufacturer Preverco opened a 45,000 square foot, $10 million engineered wood plant in June 2007. The five-fold increase in manufacturing capacity allows it to focus on PreLoc, an engineered wood product differentiated by its self-locking joints for rapid installation.

MATERIALS & SUPPLY CHAIN LOGISTICS

The primary raw material used in the production of wood floorings, both solid and engineered floorings, is wood. The industry consumes logs, both hardwood and softwood as well as processed lumber of both types and plywood, also hardwood and softwood. Other than the primary wood materials, adhesives and glues are an important raw material for manufacturers of wood flooring. The chemicals and abrasives used for finishing the flooring products are important but make up a relatively small part of the cost of total material inputs.

An estimated 3.5 billion tons of wood is consumed each year by the six billion people on Earth. More than half (60%) is used in developing countries where people depend on wood as their primary source of energy for cooking and heating. One-fourth of the total is used for building things such as housing and furniture, including wood floors. The remaining 15 percent is used to manufacture paper products. Half of that 15 percent used for paper products comes from sawmill waste from the manufacture of wood products, including wood floors. Environmentalists are concerned about the use of the world's wood and appear to prefer alternatives such as steel.

The U.S.D.A. Forest Service report titled Forest Resources of the United States, 2002 reports that the volume of hardwood in American forests increased 90 percent since 1953 to approximately 352 billion cubic feet. The report goes on to state that hardwood growth has exceeded removal every year since 1952, with harvests averaging six billion cubic feet per year and new growth averaging approximately 10.2 billion cubic feet annually.

The U.S. Wood Promotion Network, a coalition of 320 forest and allied companies that account for two-thirds of North American wood production, says North American forests have increased in size by 20 percent since 1970, and are about the same size as they were 100 years ago due to steady regeneration and sustainable forest management. The United Kingdom Wood for Good campaign explains that wood is the only building material that is renewable and that Europe's forest cover increases every year by 3,500 square miles—approximately the same area as Cyprus—due to forest management, legislation, and certification.

DISTRIBUTION CHANNEL

The distribution channel for wood floors is characterized by specialty/independent flooring stores, home centers/building materials centers, and building contractors. In April 2007 Floor Focus Magazine reported in detail on the distribution channel for over $54 billion of retail flooring—carpet, wood, tile, and vinyl—sold in the United States in 2006. Specialty/independent flooring stores led with 35 percent of retail sales. Home centers/building materials centers accounted for 24 percent. Reflecting the growing influence of the big box stores, Home Depot and Lowe's accounted for 16 percent of that 24 percent.

Floor Focus Magazine examined the total 2006 $54 billion retail flooring distribution channel in depth by breaking the industry into three distinct segments which it defined as the consumer residential replacement segment, the builder new residential segment, and the commercial mainstreet segment. A fourth segment called commercial-specified is a unique distribution channel handled by special distributors known as contract dealers.

In the consumer residential segment, specialty/independent flooring stores led the distribution channel with 45 percent. Home centers/building materials centers accounted for 36 percent of retail sales. Home Depot and Lowe's alone accounted for 26 percent of that 36 percent.

In the builder segment, specialty/independent flooring stores accounted for 38 percent of all flooring dollar sales, while building flooring contractors led the channel with 47 percent. Within this market segment, home centers/building materials centers accounted for 12 percent of retail sales. A shakeup in this segment occurred in July 2007 when Home Depot sold HD Supply, the largest builder flooring contractor in the country. In 2006 that firm alone accounted for 7 percent of all flooring sold to U.S. builders.

In the commercial segment, specialty/independent flooring stores once again led the channel with 38 percent of all flooring dollar sales, while home centers/building materials centers accounted for 20 percent. Within this commercial segment, wood flooring contractors accounted for 12 percent of retail sales. The commercial-specified segment is somewhat different. Firms called contractors or contract dealers control 87 percent of flooring dollar sales.

While the big box stores have a growing influence on the market—Home Depot and Lowe's have a combined 3,325 U.S. stores—specialty/independent flooring stores led the distribution channel overall, controlling 35 percent of the retail flooring market. Specialty/independent flooring stores also led the market for residential replacement flooring with 45 percent of this important segment of the market for wood flooring materials.

To maintain their lead, specialty/independent flooring stores develop close relationships with sales representatives of major manufacturers. In order for stores to dedicate floor space to display a manufacturer's products, it expects more than just competitive pricing, product guarantees and warranties, and on-time delivery. Manufacturers must provide retail outlets with access to knowledgeable sales representatives who can handle complaints and service issues. Manufacturers often provide training and product displays assistance to the retail outlet's staff members as well. Anderson has a reputation within the industry of providing reliable service to retailers of its product lines.

At the 2007 Surfaces Show in Las Vegas, Anderson introduced a new display for its top selling Vintage collection. The bestselling Virginia Vintage brand grew to over 25 colors with multiple width, construction, and finish choices since its 2001 introduction of just six hand-scraped colors. The new display is a high-end piece of furniture, only fitting to house the premium products it showcases. One of the unique features of the new display is that the top and bottom wings move together, eliminating the need for the customer or salesperson to bend over to review the selections. The display holds 56 large size 20 by 30 inch flooring samples but still takes up limited space on the showroom floor: it is only 21 by 84 inches.

The Internet is also part of the distribution channel, not for the purpose of sales—which tend to be local—but mainly to educate consumers. Mannington received the 2006 Internet Advertising Competition award for "Best Manufacturing Rich Media Online Ad." Sponsored by the Web Marketing Association, entrants are judged on creativity, innovation, design, copywriting, use of medium, and impact. Mannington's ad allowed users to try out its virtual decorator, and change floor and wall options within a room scene, right inside the ad itself.

KEY USERS

Key users of wood flooring are those undertaking a remodeling or redecorating project, whether they are professionals or average consumers who want to spruce-up their homes. Other key users include large national or retail homebuilders such as D.R. Horton, the largest homebuilder in the United States, and Toll Brothers, the leading builder of luxury homes.

ADJACENT MARKETS

Remodeling and home improvement spending is an adjacent market to wood flooring. The market for residential remodeling is driven by home values. As the value of a home increases, the owner's ability to obtain financing for home improvements generally increases as well. According to the U.S. Census Bureau, median home value in the United States rose 32 percent from 2000 to 2005. This boom fueled consumer spending and much of that spending was on home improvements, including remodeling projects. In 2006 and 2007 home prices dropped for the first time in years. Moody's Investors Service estimated that median existing home prices fell on average by 3.6 percent in the first half of 2007, and as much as 20 percent in some markets, notably the Detroit, Michigan market.

New construction is another adjacent market to the wood flooring market. The housing market in the United States has been at record levels during the period 2002 through 2005, buoyed by low interest rates and flexible lending practices. Housing starts as well as sales of existing housing stock have both set records during this period. Housing starts, as measured by building permits issued, grew every year from 2000 to 2005.

Sales of existing homes peaked in 2005, according to the National Association of Realtors, reaching just under 6 million homes sold. The pattern of strong growth in the housing market came to an end in 2006 when sales began to slow and the inventory of housing stock on the market grew. Early estimates of wood flooring market were expected to show a slow down in 2006 and 2007, mirroring the trend seen in new residential housing construction.

The market for carpets is another market adjacent to the wood flooring market. The value of manufacturers shipments of wood flooring in the United States annually runs slightly more than 10 percent of the value of manufacturers shipments of rugs and carpets. In 2002 according to the U.S. Census Bureau the total value of manufacturer shipments of wood flooring was $1.56 billion compared to $11.75 billion worth of rugs and carpets shipped by U.S. manufacturers.

RESEARCH & DEVELOPMENT

Research and development by two wood flooring trade associations had global and local impacts. Research and development on the global scale was conducted by the Chesterfield, Missouri-based National Wood Flooring Association, which formed in 1986 and has 3,500 members. In April 2007 it adopted a formal environmental policy regarding the preservation of air, water, land, and plants. The association is giving more than just lip service to environmental protection. It is partnered with the University of Wisconsin to conduct an environmental impact study on solid hardwood flooring. The study will provide a detailed lifecycle analysis to assess the environmental impact compared to other non-wood flooring products in the areas of energy consumption, air, water and solid waste pollution, and climate change.

Research and development on the local scale was conducted by the Memphis, Tennessee, based NOFMA: The Wood Flooring Manufacturers Association. NOFMA was established in 1909, has 23 members and 30 associate members, and sets and enforces quality standards. It mainly offers training on topics like wood products characteristics; installation techniques; and sanding and finishing. In 2007 in a stunning reversal of its historical position, it released a technical information paper with recommendations on the proper technique for gluing solid wood floors directly to a concrete slab. For almost 100 years, NOFMA did not recognize glue-down as a recommended installation procedure for solid wood on concrete due to problems with nailing and moisture. As the result of the combination of advancements in glues, the stringent manufacturing standards for NOFMA-certified wood flooring, and its technical committee, NOFMA reversed its position.

The Leadership in Energy and Environmental Design (LEED) program was introduced in 2000 by the U.S. Green Building Council. The voluntary program encourages builders to use renewable and sustainable products. LEED awards points for building materials that comply with strict environmental standards. A new development is that wood flooring is considered both renewable and sustainable, and earns points under LEED. However, for wood to get points it must be certified by the Forest Stewardship Council. Certification guarantees that wood has been harvested from sustainable sources. The third party non-profit certification program considers factors such as local economy, indigenous rights, selective harvesting, and forest ecosystem health. While Forest Stewardship Council certified wood is slightly more expensive than market priced wood, research conducted by Floor Covering Weeklyin the form of an online poll in the spring of 2007 showed that 44 percent of flooring dealer respondents have customers who ask for environmentally friendly products.

CURRENT TRENDS

Wood flooring has moved from a building commodity to a fashion marketed with collections similar to haute couture. Part of the fashion trend includes combining light and dark species to create floor designs like borders, motifs, marquetry, and inlays. Anderson has 12 ready made floor designs it markets as medallions. One is in the design of a Celtic knot, one is a traditional basket weave design, and one evokes a Tuscan piazza.

Reclaimed wood and cork are trendy wood flooring products. Reclaimed wood comes from sources such as old barns and homes, abandoned warehouses and factories, river bottoms, outdated military base housing, wineries and breweries, and bridges and railroads. Wood culled from these sources is sanded down, re-finished, and marketed as rustic, one-of-a-kind flooring. It is expensive. Some reclaimed wood exhibits the rare tight grain structure of trees that grew slowly in thick old growth forests. The market demand for reclaimed wood made the front page of the Wall Street Journal in July 2007. A contract has been drawn up to recover trees from Volta Lake in Ghana. Volta Lake is one of the world's largest man-made reservoirs, created in 1966 when the Akosombo Dam was built, leaving great swaths of trees under water. Some of the trees are 100 feet tall, six feet in diameter, and weigh 100,000 pounds. The average tree, once harvested, will be worth $1,500 to $2,500.

After waning in popularity in the 1950s and 1960s, cork flooring is emerging as a sustainable wood flooring material. Before World War II, cork was a standard workhouse floor laid in public libraries, courthouses, and other public spaces. Cork is made from the harvested bark of cork oaks, trees indigenous to the southern Iberian peninsula and the Mediterranean basin. Cork oak trees can live 150 to 250 years. Once a sapling is planted, its bark is not removed for 25 years. Thereafter, cork oak bark is harvested every nine to 11 years. Cork flooring is a composite material made by grinding cork pieces using minimal amounts of adhesive to bind the particles together under high pressure. A factory-finished ultraviolet cured polyurethane seals and protects it. Cork contains 100 million prism-shaped air-filled cells per cubic inch, which makes it both a shock absorber and natural insulator that keeps feet warm and saves energy.

TARGET MARKETS & SEGMENTATION

There are a large number of types of wood floorings available on the market and the different characteristics that each type offers the end user has a great deal to do with the consumers to whom they are marketed. For example, because of their desirability for sporting event venues, maple wood floors are marketed to institutional buyers such as gyms, schools, community centers, and libraries.

Another target market for manufacturers of wood flooring is the community of interior designers as their influence on fashion trends has an important impact on decisions regarding flooring materials. Interior designers set trends that influence flooring decisions in both residential settings as well as institutional installations.

Large home builders are also a target market for wood flooring manufacturers as potential buyers of their products. The beauty and durability of wood floors are characteristics that make them a perennial favorite for those who are able to pay the higher price of this flooring material relative to alternates such as carpeting or vinyl. Even after being covered with carpeting for years, wood floors can be brought back to use reasonably inexpensively when the fashions change by simply removal of the carpeting and refinishing of the floors themselves.

RELATED ASSOCIATIONS & ORGANIZATIONS

Maple Flooring Manufacturers Association, Inc., http://www.maplefloor.org

The National Wood Flooring Association, http://www.woodfloors.org

NOFMA: The Wood Flooring Manufacturers Association, http://www.nofma.org

Wood for Good, http://www.woodforgood.com

Wood Promotion Network, http://www.forestinformation.com

BIBLIOGRAPHY

"200% Wood Growth." Contract Flooring Journal. January 2006, 32.

"The Appeal of Wood Flooring is Growing." Contract Flooring Journal. December 2006, 66.

Berg, Rick. "Wood Cuts." Floor Focus Magazine. April 2007. Available from 〈http://floordaily.net/focus_Article.aspx?article=10802〉.

Cullen, Richard. "Natural Fashion: How Fashion is Driving the Wood Flooring Market." TTJ—The Timber Industry Magazine. 21 February 2004, 19.

Dymski, Gary. "Floored by Wood." Newsday. 15 January 2006.

"FCW1.com Poll: Dealers Buy Into Green." Floor Covering Weekly. 21-28 May 2007.

Garrison, Michelle. "Flooring Choices: Make an Ecological Difference—Tread Lightly on Our Environment with Flooring." New Life Journal. April-May 2005, 28-29.

Golden, Jeff. "Hardwood Flooring Market Keeps Growing; Prosperous Future Cited in NFT Study." National Floor Trends. December 2003, 10-12.

Helm, Darius. Focus 100 Retail. November 2006. Available from 〈http://floordaily.net/focus_article.aspx?article=9985〉.

"Homebuilder Sentiment Hammered." Focus 100 Retail. 17 July 2007. Available from 〈http://floordaily.net/newsarticle.aspx?article=10848〉.

Korczak, Ed. "High-End Houses Mean High-End Floors, and That is Good for Wood." National Floor Trends. March 2006, 64-65.

"Mohawk to Acquire Wood Flooring Assets." Home Textiles Today. 9 July 2007, 13.

"NWFA Adopts Five Standards to Help Consumers Choose Flooring." National Floor Trends. November 2005, 32.

Phillips, Michael M. "A Man has a Plan to Harvest a Forest in Ghanaian Lake." The Wall Street Journal. 21-22 July 2007.

Prewitt, Randy. "Want Authentic, Rustic and Charming? Think Character Hardwood." National Floor Trends. April 2005, 72-74.

Smith, W. Brad, et al. Forest Resources of the United States, General Technical Report NC-241. U.S. Department of Agriculture, Forest Service, North Central Research Station. 2002.

Stewart, Al. "National Floor Trends Market Trends Study: Solid as an Oak." National Floor Trends. April 2006, 12-15.

Switzer, Liz. "Preverco Opens Engineered Hardwood Plant." Floor Covering Weekly. 18-25 June 2007.

"Tarkett Announces New Management Structure." Floor Covering Weekly. 18-25 June 2007.

Torcivia, Santo. "The Home Center Challenge." Floor Focus Magazine. April 2007.

Stromberg, Meghan. "Reclaim, Reuse, Repeat: Outfront Design, Reclaimed Old-Growth Hardwood." Professional Builder. September 2003, 32.

Woolsey, John. "Hardwood Innovations Help Retailers Sell Fashion Instead of Price." National Floor Trends. October 2004, 36.

see also Resilient Floor Coverings