April, 2006

In Depth: Decks

Boasting new colors, textures and accessories, composite decking continues to grow its share of the decking market.

By Craig A. Shutt

Homeowners today are looking to expand their living space by expanding their indoor areas to the outdoors. That’s becoming easier as deck products offer wider varieties of materials, designs and accessories. Composite materials in particular have gained the consumer’s eye, expanding the options while providing new benefits.

"Outdoor living spaces have never been more popular,” says Roger Gilley, national product manager for composite decking and insulation at Weyerhaeuser Co. in Federal Way, Wash. A recent study indicated that nearly half of all new homeowners either buy a home with an attached deck or add one within five years, he reports. Several factors are driving this trend. "Working adults are spending more time at the office, making it increasingly difficult to make quality time for the family. The same pressures are driving down the time available to enjoy the outdoors. Families are finding that outdoor living spaces are a great way to fill both voids.” Homeowners who like to entertain also are finding outdoor spaces provide more freedom to grill and carouse without fearing spilled drinks.

"Patios are becoming more purposeful,” says Linda Kerechek, brand manager at Louisiana-Pacific Corp. in Nashville, Tenn. "Homeowners are extending more of their indoor space outdoors and adding more living space with covered areas and other architectural elements. Decks are being used for more than a grill and a table.” Chris Grover, president of the California Redwood Association in Novato, Calif., agrees. "Decks are becoming true outdoor rooms,” he says, citing cabinetry that stores dining accessories and tableware, the creating of fire pits and various shaded areas.

As a result, many of those decks are getting larger, including layouts that create wings for different functions. "Decks used to be designed to accommodate four people,” notes John Burns, director of channel marketing at Trex in Winchester, Va. "Now homeowners want seating for eight or more, entire outdoor kitchens or screened-in lounging areas.” Media reports indicating that adding a deck produces one of the best returns on investment of all remodeling projects also spurs interest, he adds.

But not all decks are gigantic, points out Grover. "We’ve seen some little gems that work well for how the owner wants to live,” he says. Small side-yard decks also have grown in popularity to supplement a backyard deck.

Better Informed Customers

Homeowners are more confident talking about and designing decks thanks to Web-based information and home centers offering computerized deck-design programs. "People are spending more time designing their decks today,” says Mick Whelan, corporate director of marketing for Tamko in Joplin, Mo., which makes EverGrain composite decking. "They’ll use different angles and shapes as well as multiple colors to make it look more attractive.” That makes the deck more than simply a functional add-on to the home’s backyard.

Building material distributor BlueLinx in Atlanta, for instance, introduced its own online design program at the International Builders Show in January and will have it available to customers in April. It provides a layout and material list so dealers can create designs for customers, says Dave Crane, vice president of specialty products.

Composites Grow

Another factor driving higher sales and consumer interest has been the proliferation and higher profile of composite decking materials. These products, typically made from a combination of wood or other cellulose fibers encased in synthetic material, have gained significant visibility since they were first introduced more than a decade ago. Today, as technologies improve, the benefits they offer are appealing to a growing number of homeowners, remodelers and builders.

There are several types of composite materials, specifically based on poly-propylene, a rigid plastic, and polyethylene, typically made from recycled plastics such as milk jugs, etc. Both have their adherents and tout structural integrity, environmental friendliness and other benefits. Despite the differences, the materials together have one thing in common: they are beginning to put a dent in sales of more traditional pressure-treated lumber products.

"The highest growth rates in the market will come from composite wood decking, even to the point of generating negative growth for pressure-treated lumber in some areas,” predicts L-P’s Kerechek. Adds Mike Loughery, communications manager for CertainTeed, "We believe that composite-decking growth percentages are slowing. But there is certainly more opportunity to shift from wood to composites.”

A recent market report from The Freedonia Group Inc. in Cleveland, Ohio, bears out both the growing popularity for decking and the rapid growth of the composite materials. The report forecasts growth of 2.8% in the total deck market through 2009, representing 5.7 billion board feet and $5.8 billion. The relative stability of the market stems from it deriving 85% of its demand through the repair and remodeling market, which is inherently less cyclical than the new-construction market. That should bode well in coming years if new-home starts do indeed taper off, as most forecasts predict.

The major role played by the remodeling market has given composite materials a boost, manufacturers say. Homeowners with wood decks looking for replacements more often are looking to move up to higher-end materials. And the recent proliferation of new products can be seen in how homeowners respond to those desires.

In 1994, the Freedonia report says, wood decking materials accounted for 97% of volume. "By 2004, alternative decking materials accounted for 11% of the market, posting double-digit gains in most markets,” it said. "Composite decking will provide the strongest growth opportunities, posting 15% annual growth through 2009 to almost 900 million board feet. Other alternative decking materials, such as plastic and aluminum, will also show growth, rising nearly 11% per year through 2009.” Of course, posting large-percentage growth rates is easier on a small base of sales, which composite materials have had to date.

Wood Still Dominates

"The Freedonia report makes it clear that composites are growing, and there has been a huge influx of composites into the market,” says Ron Hobbs, executive vice president of business development and a managing partner with Timber Treatment Technologies in Memphis, which makes an alternative wood-treatment process for lumber. "They account for a minor part of the market, but they are having an impact on it. But consumers still like wood, and carpenters like wood.”

California Redwood’s Grover agrees. "We’ve seen a lot of people coming back to natural woods,” he says. "They’ve had experience with other products, and now they’re returning to what they like best.” Redwood is especially popular west of the Rocky Mountains, he notes, because it’s a traditional material in that region. In other areas, various hardwood species are popular based on availability and regional preferences, he adds.

The benefits plastic and composite deck materials offer compared to wood are the key reason for the growth, notes the Freedonia report. High durability and low maintenance are the big drivers. "Most people want a no- or low-maintenance deck, and that’s what these products provide,” says Dave Fancher, marketing projects manager for Elk Corp. in Lenexa, Kan. Adds John Long, sales and marketing manager at GeoDeck in Green Bay, Wis., "The lack of maintenance is the number-one selling point, far and away. The ability to avoid having to reseal it or treat it is key.”

The products also tout their fade-resistance, although most products do fade some in the first three months or so. The products’ image of having a plastic, non-wood appearance also is disappearing, manufacturers say.

"The initial generation of products has changed, and now the looks are much more aesthetically pleasing,” says GeoDeck’s Long. Adds Trex’s Burns, "Manufacturers are doing a better job of creating a woodgrain appearance in their products. That lets homeowners choose patterns that are more natural looking.”

Composite Colors Expand

New colors also are being added, expanding on the existing one- or two-color inventory to provide better matches with what consumers expect from wood products. "Everyone wants the products to look more like wood,” says Elk’s Fancher. Elk has five colors in its line, eliminating two after purchasing the product’s manufacturer three years ago. "We wanted to simplify the line.”

Indeed, while technology is making new colors more palatable, it’s not a slam-dunk decision, says CertainTeed’s Loughery. "Our range of colors is expanding due to customer requests, and technology is allowing us to introduce new products. But first we need to create the color in the lab and ensure it will work. These are new products, so there’s not a lot of historic experience with how they will look and which will be popular.”

The added options often accent the base color, notes Mike Descoteaux, marketing manager for Correct Building Products in Biddeford, Maine. "We’re seeing mixes of two colors with a third used as an accent board, to create a picture-frame look.” Adds Trex’s Burns, "Our Gray and Saddle colors are by far our most popular, but customers are buying other colors to use as borders and edges or to visually separate one area from the others.” The company recently added a new color to replicate the appearance of a tropical hardwood, he notes. "The growth of natural hardwoods in the market has raised the aesthetic bar, so to speak, for deck products.” New textures also are being created, adding embossing and more random grain patterns to better simulate the look of wood.

These techniques come at a price—composite products can sell for three times the cost of pressure-treated lumber. Prices aren’t declining even as the product lines mature, due to their reliance on oil prices, which have been hurt by last year’s hurricanes and increased worldwide demand. But most manufacturers say consumers understand the cost differential, and they aren’t deterred.

"Composite decks can be sold on quality, aesthetics and their low-maintenance capability,” says BlueLinx’s Crane. "Folks are spending more money outside the home, and they’re looking to upgrade.” Tamko’s Whelan agrees, "Homeowners are past their concerns about composite pricing, they’re attracted to the low maintenance. Many of them have had a wood deck, and they are looking for something that won’t require so much maintenance.” The undercarriage, which typically is pressure-treated wood in any case, along with labor costs, remain the same on either type of deck, he points out. Those similarities reduce the percentage of the overall project that is impacted by the higher cost of composite decking boards.

But that significant cost difference—which no manufacturers indicated would be closing—keeps the door open for wood products, says L-P’s Kerechek. "The lower price point for wood is the key to sales.” With prices varying across the country, options are available for any budget in wood. And manufacturers and dealers can sell the good looks and natural materials, which still attract buyers.

Composites have raised other concerns among contractors and homeowners, notes Timber Treatment Technologies’ Hobbs. The materials can be heavy, and early promotion of "no-maintenance” claims were overstated. "They still require cleaning and protection against mold,” he says, although some brands have begun introducing mold-resistant options. Installers also must pay close attention to span tables when designing the structural undercarriage, he says, as some composites can sag in hot weather.

Heat retention has been a drawback for composites, particularly in the western states, notes California Redwood’s Grover. Redwood also offers more versatility in being able to be shaped. With redwood sales dictated more by availability than popularity, he anticipates a steady market for redwood for the next three to five years.

Brand Loyalty?

Availability as well as dealers’ past experiences also can impact which products get stocked. "Some dealers have had bad experiences with no-maintenance products that didn’t work,” says Elk’s Fancher. "So they’re looking for a better fit.” Dealers tend to decide whether to stick with the product they’ve been selling each year and buy in job-lot quantities, he points out. "Some have brand loyalty, but that only works when the customer is familiar with the product’s brand and it’s a selling point.” To that end, Elk has begun promoting more to homeowners. "We want to be sure we’re better known.”

GeoDeck, meanwhile, is focusing its marketing efforts on professionals. "Overall, around 80% of decks are installed by a professional, and that’s our customer,” says Long. "We don’t focus so much on educating the consumer. Time spent on the builder and the remodeler pays off more.” If nothing else, consumers only buy one deck. "There’s no repeat business with consumers.”

Timber Treatment Technologies focuses on the entire channel, says Hobbs. "We are stressing complete pull-through marketing,” he says. "We sell the dealer’s customer, and then we sell that customer’s customer.” The company is promoting its products "as if they were composite materials, emphasizing aesthetics, but we view them as premium wood products, with the integrity and workability of lumber.”

Even the builder market is giving composites a closer look, says L-P’s Kerechek. "Builders need to differentiate their homes and create a high-quality image, especially for their premium products,” she points out. "Composite decking can help to attract customers who are more interested in outdoor living. It’s a good option for builders who are offering more than one type of home and have luxury alternatives.”

BlueLinx’s Crane agrees that the professional market is the focus for composite sales. "It’s usually a secondary product, used as a step up or for a remodeling project. That affects how it gets to market and where it’s sold. Some of it is going through retail, but most is two-step to the dealer’s customer. It’s an ideal product for the LBM dealer to stock.”

Stocking Options Overflow

But stocking products has become more challenging as the brands have proliferated. Some manufacturers estimate that the total number of suppliers in the market today is upwards of 70. "There are more companies in deck products than in any other market,” says Elk’s Fancher. A shakeout may be in the offing, some suppliers note.

"With any kind of young, emerging market, there will be some adjustment,” says L-P’s Kerechek. "It would not be surprising to see a shakeout in the market as it matures.”

That doesn’t mean decking’s potential is reaching a plateau, she stresses. "These materials have so many great attributes that I expect to see them move out of the residential market and into the commercial market.” Potential applications include boardwalks, marine installations, parks, zoos and botanical gardens.

With the great disparity in price points between wood and composite materials, there are niches for additional new products, notes Huck DeVenzio, manager of marketing communications for Arch Wood Protection in Smyrna, Ga. "I expect to see more water-repellant wood products in the market and better treated and higher grades of lumber being used,” he says. "It will raise the price of the products, but it will still be considerably lower than composites, which creates a niche that offers an alternative to lumber or composites.”

Composite makers may work to grow their share by eating into wood’s dominance rather than take away from their direct competitors, notes BlueLinx’s Crane. "As the industry better manages the raw materials, facility throughput and new products, they will be able to penetrate further into the remaining volume out there.”

With that growth and improvement in mind, BlueLinx is in the process of creating a division organized around the outdoor environment, focused on fencing, decks and other areas. "I expect we’ll continue to see companies develop a better mousetrap, with a focus on improvements in performance, aesthetics and installation.”

But wood products will remain dominant for the future, says Timber Treatment Technologies Hobbs—it’s just a matter of which products dominate. "I’ve seen cedar products growing particularly well, and we expect our products to do well. But I think the market held by the ACQ pressure-treated products is ripe for the picking.”

There’s No Containing Railings

As the number of composite-deck companies expands, that growth is matched—and surpassed—by the companies offering railing products to complement decks. Although deck manufacturers offer their own railing options, there is a mix-and-match attitude among contractors and homeowners that has left the door open for other companies.

"More and more manufacturers are creating their own designs and combinations of pieces,” says John Long of GeoDeck. "Companies are rounding out their product line, and demand has risen.” The focus makes sense, notes Linda Kerechek of Louisiana-Pacific. "The railing is the first thing people see of a deck, even from inside the home. So manufacturers are paying more attention to aesthetics and providing more looks.”

"There has been a shift in focus from decking to railing as the next big opportunity for composites,” says Mike Loughery of CertainTeed. Part of that results from product expansions, such as the one introduced by his company, which features PVC-coated components rather than solid PVC units. "PVC-cap composite railings can provide more detail and give a freshly painted, wood look,” he says. Solid PVC designs add weight that also detracts from their popularity.

"There is a nationwide trend to expand railing products and offer a variety of accessories, with different ones in different parts of the country,” says Mick Whelan, of Tamko. This includes mixing and matching colors, he notes. "The handrail will be one color, the posts will be another and the balustrades will be a third.”

Customers aren’t loyal to their deck brand, considering all options, says John Burns of Trex. "Many options can be achieved with other companies’ products. People are paying more attention to the railings and thinking about how to use style to set off their deck and make it unique.”

Suppliers’ railing components in general are becoming more stylish, offering contemporary designs and different materials, expanding the lines substantially. "White vinyl systems are available, but they’re pretty limiting aesthetically, and people are searching for more options,” says Whelan. "The market is growing right along with the deck market.”

"Everyone is adding a railing product,” agrees Dave Fancher of Elk Corp. "Those products have a high focus right now.

In some cases, it’s important enough that contractors are leading with these products in their sales pitch and getting the decking to go with the railing. Selling accessories first is an interesting way to go—it’s like selling the icing before the cake.”