February, 2006

In Depth: Molding

Wood, composites and polymers have expanded the molding market, giving dealers wider options for meeting customer needs and budgets.

By Craig A. Shutt

As housing starts and remodeling have boomed in recent years, the molding and millwork markets have risen as well. Prices have dropped from record highs in 2004 that resulted from high demand and shortages. In the meantime, new types of products, including polymer- and composite-wood-based products, are gaining ground as builders, remodelers and homeowners recognize the benefits. The result is a more diversified market, with products to meet almost any specific need or budget.

Market Keeps Growing

Demand for molding and trim is expected to rise 3.7% annually through 2008, creating a $9.1-billion market, according to The Freedonia Group Inc., a Cleveland-based research organization. In the near future, nonresidential use is expected to grow as the market rebounds, while the residential market will taper off in accordance with forecasts for slightly lower home starts. That will be offset somewhat by expected continued strength for remodeling, the group says. "Residential demand for molding and trim will also be supported by the growing popularity of higher-end products such as custom wood moldings and plastic exterior trim.”

Indeed, the growing popularity of polymer-based moldings in particular is changing the market. "Traditionally, wood has accounted for the vast majority of molding and trim demand,” the Freedonia report says. Although wood still accounts for approximately two-thirds of the market, it has lost "significant share” to alternative products. "Plastic materials post a particularly strong competitive threat to wood and will continue to erode the market share held by wood through 2008, rising 7% per year to $1.2 billion or 13% of total demand,” it says. That indicates strong growth, but it still represents a fairly small slice of the total pie.

Polymer-based millwork manufacturers agree that the market is realizing there are more options than wood. "The growth has been explosive,” says Tina Mealer, president of AZEK Trimboards in Moosic, Pa.. He reports his own company’s sales have doubled every 12 to 18 months for the past six years. "But there’s still a big education process needed.”

The polymer products offer key advantages over wood, such as rot resistance, their light weight, no failures or irregularities such as knots and the ability to cut and fasten the products with the same tools used with wood products. The key benefit to builders and remodelers is the faster installation and minimized callbacks, which create labor savings not apparent in pricing, says Trip Lantz, CEO of Kleer Lumber. The company’s sales in 2005 were estimated at $20 million, and Lantz expects to double that in 2006.

"The industry is still in its infancy,” he says. He cites studies that indicate that awareness of polymer building materials is only about 10% of the market. "One of our challenges is getting the word out about PVC products to professionals.”

Spreading the word is becoming easier, as more companies enter the market and add to the products’ visibility. New manufacturers, especially from Asia, are entering the market, providing more options. "Many new materials are becoming available, and that range is creating a larger market,” says Joey Shimm, marketing director for Orac Decor N.A. LLC in Ridgefield Park, N.J. "Each has its own cost effectiveness based on certain uses.”

Builders now have more choice for determining the right product for each application, agrees Tina Mealer, director of marketing for Fypon. Urethane products, which are poured into individual molds, work well for larger, detailed pieces and for short runs

PVC moldings, which are extruded, offer more utilitarian styles with thinner profiles that are especially cost-effective for long runs. "You want to use the right product for the right application.”

Also biting into wood’s dominance are composite materials, particularly those made of medium-density fiberboard (MDF) or particleboard.

These composites, which also include metal and other engineered-wood options, will show "above-average” growth through 2008, rising 6.1% annually to $2.4 billion, Freedonia’s report says. Interior moldings made from MDF will be especially strong in this market.

A recent report by R.E. Taylor & Associates Ltd. agrees that MDF will remain a strong market. "The fastest rate of U.S. [wood-molding] market growth has been (and will continue to be) MDF moldings—a lower-priced alternative to pine moldings,” according to the third edition of Global Clearwood (Pine) Lumber, Molding & Millwork Sector: Outlook to 2008.

"The technical aspects and consistency of primed MDF moldings have created the biggest change in the molding industry in the last five years,” the report says. "From nowhere, MDF now has a one-third share of the U.S. [wood] molding market and should continue to grow each year to 2008.”

"Millwork guys are detail-oriented, and they are looking for high-quality boards in either wood or plastic that provide them with a tight cell structure that can be milled and routed easily,” says Kleer’s Lantz. Providing the middle ground of wood construction in a manufactured product at an economical price provides the familiarity that some builders prefer.

But even as other products gain strength, wood still dominates. The Taylor report expects demand for clearwood products to continue to grow, at about half the rate of the growth rate in the previous decade. As it retains its strong position, however, the market will evolve, with import products comprising a larger bite. Capacity in such countries as Chile, Brazil, Argentina, New Zealand and South Africa are expanding quickly, the Taylor report indicates.

"Imported finished pine products are forecast to expand across the board into the U.S. market, putting domestic U.S. producers at risk in a number of sectors,” says Peter Butzelaar, co-author of the study and a consultant to Taylor. Currently, China and Brazil are the dominant players, representing more than 75% of imported molding sales in 2005, he notes, with Siberian red-pine lumber becoming stronger.

Wood represents the traditional, well-known material, which can be an unbeatable position with many builders and remodelers. "Plastic” can offer a connotation that leaves homeowners uncomfortable with whether the installed look will meet their needs. "There is a reticence on the part of some professionals to use new materials and products,” says Shimm. "They don’t want to be the pioneers.” Using a new product that saves money can be offset by callbacks that make the item more expensive than it’s worth.

Adds Lantz, "Builders are proud of what they build, and they want it to hold up. Some will always stick with wood, because they have an old-school approach, and that’s fine. But the variety of products, such as siding, that are already on the market are making them more comfortable with plastic products.”

Wood products also can point to their environmental aspect, as renewable resources are used to create their moldings. WindsorONE in Windsor, Calif., for instance, promotes its S4SSE trim boards as being harvested "from even-aged timber stands in order to provide the most consistent, high-quality and environmentally friendly trim boards anyone can buy.”

Although popular styles vary by region and the home’s styling, manufacturers agree that bigger is becoming better. "Many of the products are being scaled to higher ceilings, which means they can be larger,” says Fypon’s Wolf. Crown moldings tend to measure about 5 inches deep, but 6- to 10-inch styles also are becoming popular, especially for polymer producers. "The larger, longer styles can be expensive to produce in wood.”

Adds AZEK’s Bruno, "Across the country, there is growth in Victorian styles, and our lines fit perfectly with that.” That more ornate look dropped in popularity for awhile, he notes. "The amount of detail and trimwork created a headache for homeowners. Now, they can put up our gingerbread trim without worrying about maintenance.” A move back to more elaborate façades and porches also encourages decorating these spaces with added trim pieces.

"People are getting more decadent in their approach to their home’s style, and they want to be different in lighting, molding, etc.,” says Debbie Crouch, purchasing manager for Orac Decor. "There have always been homeowners who want a clean look or very decorative style, but now it’s even more all over the place. We see it in restaurants, stores, homes, all over. People want something different in their moldings.”

The growing popularity is leading companies to create larger and wider-ranging packages of designs. Fypon, for instance, has introduced a grouping of products based on the designs at the Biltmore Estate in Asheville, N.C. It includes baseboard, door and window trim, casing, chair rail and crown moldings. The designs are downscaled to fit the less grand size of homes, but retain a similar styling so homeowners can use the same design throughout their home in different locations.

Likewise, WindsorONE recently introduced a line of intricate mantel designs in four styles (Colonial Revival, Classical Colonial, Greek Revival and Classical Craftsman). "Prior to releasing these new designs, contractors and architects would use our moldings to design their own mantels,” explains Craig Flynn, vice president of sales and market- ing. "However, when we took into account our whole-room mindset, we decided to design a series of mantels that were consistent with the design and period of each molding style, so homeowners could choose a mantel that would blend seamlessly with their moldings and trim.” This approach makes designing mantels easier for the designer while keeping the style consistent.

Alerting builders and remodelers to the variety of options in materials and designs requires active work, manufacturers say, on the part of both suppliers and dealers. "There’s still a big education process needed,” says AZEK’s Bruno. "It will happen through word of mouth, consumer awareness and professional communication.” Kleer’s Lantz agrees. He estimates that current builder awareness of polymer options and benefits could be as low as 6%, and he expects that to grow to 25% or more in the next five years. But that still leaves a large share of market to be reached. "It will take a collective effort by all involved to spread the word.”

Both push and pull types of marketing are being done, suppliers say. Push styles focus on designers and builders. "We’ve put emphasis on architects, because that’s where the specifications start,” explains Fypon’s Wolf. "We want to explain about standard pieces as well as the ability to customize.”

Pull types of marketing are provided through a variety of dealer programs. These include point-of-purchase displays that provide samples and explain benefits. "Dealers have become a great resource for builders,” says Bruno. P-O-P materials can ensure builders learn about the products without needing sales help or having to ask about them. "Our goal is to make our moldings more visible and require less interaction to explain,” says Orac Decor’s Crouch. "We want customers to be able to ‘happen upon’ them in the store rather than having to ask.”

The companies also focus on demonstrating products, attending dealer contractor days and holding programs at dealers’ locations whenever possible. "There’s nothing like putting the product into the customer’s hands and letting them use it, to see that it cuts, routes and nails just like wood,” says Bruno. "It becomes a very tangible thing for them.”

Dealers also can promote the products, ensuring that builders and remodelers are aware of the full range available and helping them find the appropriate one for each application. "The best thing dealers can do is take a hard look at their key customers to determine which ones are more progressive in trying new building materials, and see if they’re interested in polymer products”, suggests Kleer’s Lantz. "Ask them to use the products and be advocates if they like them. That will help spread the word and gain a foothold for more products.” It’s apparent that the molding market will continue to provide a wider range of options that can change professionals’ product selections as they become aware of them and see which ones fit their applications. "These products aren’t just a trend in the market,” says Lantz. "They’re the future.”

Craig A. Shutt is a freelance writer based in Chicago, Ill.