Here is a snapshot of the residential decking market. Information included in the graphic below is pulled directly from Principia’s DemandBuilder®, SupplyBuilder®, and GrowthBuilder® — as well as our Voice of Customer data.
For the January issue of ProSales, the assignment was to explore what’s happening in the decking world. With that in mind, I spent two days in October at the annual Deck Expo, looking at products and speaking with manufacturers about trends.
Three lessons from that show stood out:
- Composite manufacturers have solved most of their product issues and are now focused on growing the market.
- With that in mind, they’re looking for ways to claim some of wood decking’s share.
- As the industry mindset continues its shift from decking and railing to outdoor living, sales approaches need to adapt.
Will Composites Hit the Ceiling?
Though the composite and cellular PVC market share has grown steadily over the last few years, some industry analysts expect just a few more years of growth before it peaks.
One of these is Principia consulting. Its most recent research on the decking market found that while sales of all types grew during the past three years, composites grew the fastest, with 5.5% more product shipped by volume in 2016 than in 2012, compared to 3.8% for pressure-treated (PT) decking.
In the past year alone, Principia’s researchers interviewed more than 1,000 people in all parts of the value chain: manufacturers, distributors, dealers, contractors, and homeowners. Based on that, managing partner Lou Rossi predicts that overall composite market penetration will surpass the former peak of 17% in the next five years, reaching 20% on a volume basis.
Those predictions are for the entire decking market, including DIY, but according to the February 2016 issue of Professional Deck Builder, a sister publication to ProSales, the magazine’s pro readers already use composite, PVC, and other non-wood decking products on nearly 60% of their projects. Their embrace of this technology shows that manufacturers have solved their quality problems, with the market now dominated by attractive capped composites that weather well and need little maintenance.
Situation: A leading building products company was underperforming in serving its two-step distributors. The company had lost five share points over a three-year period.
Approach: Principia helped define channel needs within the decking category, by conducting 500 interviews with the company’s distributors and trade customers. Points of need and specific areas of improvement were identified. An improved service point model was developed to better serve the channel.
Outcome: Principia recommended expanding value-added services to the portfolio and reorganizing resources to more effectively serve two-step distributors in multiple regions in the U.S. The client gained a better understanding of serving the market, including demand patterns and customer requirements. Ultimately, the client recovered three share points and improved EBIT by 10% within 18 months in this important market channel.
By CBS MONEYWATCH
Is that outdoor deck under your feet real wood, or something else? Summer is peak season for building decks, and makers of synthetic wood are pushing to expand their small market share against long-dominant natural wood.
According to new research, the synthetics — whose major selling point is superior durability — have a decent shot at making inroads on all-tree lumber. Right now, synthetics command about 16 percent of the $7 billion deck market. But a recent study by Principia Consulting found that they’re growing at a faster rate, 5 percent annually versus 3 percent.
Bolstering the rise in deck building, synthetic or not, is a comeback in the housing market since the Great Recession and a surge in enthusiasm for home renovations. That rests on a growing yen among homeowners for increased “outdoor living,” meaning more people want to spend time relaxing and playing right outside their own homes, preferably in a comfortable area with furniture and even a kitchen. You can look up at the sky, breathe in the warm breeze and then easily go into the den to watch TV.
Market Continues Growth
By Craig A Shutt, LBM Journal
Market Continues Growth
Regardless of the material or color, the deck market continues to grow, says Ken Jacobson, a partner with Principia. Composite products are benefiting from the economy’s return, growing at a faster rate today. A combination of tighter budgets and lower lumber prices had earlier pushed consumers toward choosing treated-wood options more often. Now, as the economy rebounds, composites and hardwoods are becoming more popular.
“People are interested in darker colors and more exotic looks,” he says. “The vast majority of decks are still lighter, but darker colors are being used more often to promote deck projects.”