Facing Losses, Carpet & Rug Manufacturers Scramble to Diversify

Facing Losses, Carpet & Rug Manufacturers Scramble to Diversify

Carpets and rugs are a familiar staple of homes throughout the developed world.  Over the years, however, these soft, plush products have seen their market share eroded by rapid gains in hard surface flooring.  According to Elliott Woo, an analyst with The Freedonia Group, this shift is mainly the result of evolving consumer preferences and global market trends.

In fact, since 2006, annual growth in demand for hard-surface flooring has consistently outperformed that of carpets and rugs – in part due to the rapid expansion of developing markets such as China and India, where hard-surface flooring has always been more popular. However, the primary culprit behind this shift resides in North America, where a rising preference for Luxury Vinyl Tile (LVT) has carpet and rug manufacturers scrambling to broaden their product portfolios and cash in on the trend.

The Rise of LVT 

Although hard-surface flooring has always dominated in the global flooring market, the rapid gains of LVT in recent years have spooked a number of carpet and rug manufacturers into making serious changes.

LVT has several advantages that appeal to consumers, particularly its ability to convincingly mimic the look of high-end products such as hardwood and stone at a relatively low price, which makes it particularly desirable in commercial and institutional applications that require hard-surface flooring. Its sleek look and low cost also appeal to homeowners, who are increasingly adopting hard-surface flooring throughout their residences, not just in kitchens and bathrooms.

Compared to carpets and rugs and even other hard-surface flooring types, LVT features more versatile installation options, higher durability, and easier maintenance, which yields a greater return on investment over time. As a result, LVT is the fastest growing product in the overall flooring market globally, bolstering gains for hard-surface flooring overall in the major (and heavily carpeted) North American market.

If You Can’t Beat ‘Em, Join ‘Em

Consequently, several US-based manufacturers, which had previously only produced carpets and rugs, are diversifying their product mix to also include LVT.

In late 2016, the Dixie Group's Masland subsidiary debuted its Calibré LVT line for commercial and hospitality interiors.  Calibré's ability to resist water (and thus warping) and endure heavy foot traffic, as well as its cost effectiveness, trump other hard-surface product alternatives. Masland and Dixie Home, another Dixie Group subsidiary that produces carpets and rugs, also launched the Stainmaster PetProtect LVT product line for pet owners fed up with carpet stains and locked-in odors.

For Interface, a manufacturer of modular carpet tiles, producing LVT was a natural progression. In March 2017, the company introduced its Level Set collection of LVT flooring, which features glue-free backings and resists scratches and scuffs in high traffic areas. Of the new product line, Matt Miller, President for Interface Americas, said that Level Set ensures “customers can select a mix of hard and soft flooring from a single partner to create a unified look and feel."

That sentiment was echoed in a May 2017 press release from J&J Flooring Group (Engineered Floors) upon the release of its ClassicsCollection (featuring designs that resemble natural wood) and FrameworkCollection, which is strategically designed to allow for seamless installation adjacent to J+J’s modular carpet and textile composite flooring products.

Although carpets and rugs will remain a powerful force in the global flooring market (with modular carpet tiles expected to post particularly strong gains going forward), manufacturers who wish to expand their flooring presence are likely to keep looking to low-cost hard-surface solutions such as LVT.

Want to Learn More?

To learn more the global flooring market, check out two new reports from The Freedonia Group:  Global Carpets and Rugs Market and Global Hard Surface Flooring Market.   These reports offer analysis covering:

  • key trends
  • leading markets (residential, commercial, nonresidential, and transportation)
  • major product types
  • demand information for each global region
  • industry composition and market share

About the Author

Ian Tryon is a Corporate Analyst at the Freedonia Group, where he works on studies related to the construction, packaging, and industrial components markets, for the US, Chinese, and global markets.