Market Trends and Opportunities for Plastic Profiles in … · 2018-06-21 · Apartment/Condo SFD...
Transcript of Market Trends and Opportunities for Plastic Profiles in … · 2018-06-21 · Apartment/Condo SFD...
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MARKET TRENDSAND OPPORTUNITIES
FOR PLASTIC PROFILESIN CONSTRUCTION
PROFILES 2018
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Home Innovation Research Labs
▪ Founded in 1964 as wholly-owned subsidiary of NAHB
▪ Independent, for-profit researchers assisting development and commercialization of new building technologies ▪ Engineering research & development
▪ Market & field research
▪ Laboratory testing
▪ #1 in green home building certification (NGBS)
▪ Building codes and standards developers
▪ Partners with ICC-ES to fast-track issuance of ESRs
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Purpose and Outline of Presentation
1. Review of building materials trends in new homes and remodeling
1. Windows & Patio Doors
2. Roofing
3. Siding & Exterior Finishes
4. Exterior Trim & Fascia
5. Decks & Railing Systems
6. Fences & Privacy Walls
2. Current market opportunities; Pitfalls in launching & promoting new building products & services
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Basis for Trend Data: Annual
Building Product Tracking Studies
▪ Home Innovation has been tracking annual materials purchases since 1995
▪ Builder Practices Survey of 1,500 U.S. Builders
▪ Consumer Practices Survey of 100,000+ U.S. households
▪ Decades of custom market research, sponsored by hundreds of building materials manufacturers
▪ Support of development and launch of hundreds of new building products
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Windows Installed in New U.S.
Homes and Home Remodeling, 2017 (millions of window units)
1.6
0.9
4.2
12.2
3.9
6.1
8.4
17.3
0 5 10 15 20 25 30 35
Aluminum
Composite & Other
Wood
Vinyl
New HomesHome Remodeling
About 55 million windows/year
installed in homes
Source: Annual Builder & Consumer Practices Reports
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Windows in New U.S. Homes
0%
10%
20%
30%
40%
50%
60%
70%
Vinyl
Wood
Composite
Aluminum
Source: Annual Builder Practices Reports
2017 Findings
Vinyl 68% (up)
Wood 24% (up)
Aluminum 5% (down)
Composite 4% (down)
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Change in New Home Construction
Mix
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
Apartment/Condo
SFD Moveup
SFD Starter
SFD Luxury
Townhouse/Duplex
Source: Home Innovation Research Labs, NAHB
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Windows in New U.S. Homes,
by Census Divisions, 2016
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
Wood Vinyl Aluminum Other
Source: Annual Builder Practices Reports
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Window Frame Materials in New U.S.
Homes by Price-Point of Home, 2016
20%
13%
39%
13%
4%7%
65%
79%
46%
2% 3%
8%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
Starter Moveup Luxury
Wood
Aluminum
Vinyl
Composite & Other
Source: Annual Builder Practices Reports
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Window Frame Materials in New
U.S. Homes by Size of Builder, 2016
37%
23%
13%9%
7%4%
47%
65%
81%
7% 5%1%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
Builds 1 - 10Homes/Year
Builds 11 - 50Homes/Year
Builds 51+Homes/Year
Wood
Aluminum
Vinyl
Composite & Other
Source: Annual Builder Practices Reports
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Windows in U.S. Home Repair,
Replacement, and Remodeling
0%
10%
20%
30%
40%
50%
60%
70%
Wood
Aluminum
Vinyl
Composite &Other
Source: Annual Consumer Practices Reports
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Patio Doors Purchased for
New Homes and Remodeling, 2017 (thousands of units)
123
124
193
52
178
193
488
90
126
134
126
314
266
254
411
0 100 200 300 400 500 600 700 800 900 1,000
Other
Steel
Vinyl Clad Wood
Aluminum Clad Wood
Unclad Wood
Composite/Fiberglass
Aluminum
Vinyl
New Homes Home Remodeling
More than 3 million
residential patio
doors were purchased
in 2017
Source: Annual Builder & Consumer Practices Reports
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Residential Roofing: New Homes and
Home Replacements/Additions, 2017 (millions of sf)
328
338
1,832
150
252
333
1,048
577
1,615
5,963
4,819
0 1,000 2,000 3,000 4,000 5,000 6,000 7,000
Composite
Slate
Single Ply
Cedar shingles & shakes
Clay or Concrete Tile
Metal
Asphalt--3-tab
Asphalt--architectural
New Homes
Remodeling
Residential Roofing is about an 18 billion sq.ft. per-year market
Source: Annual Builder & Consumer Practices Reports
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Roofing Materials Installed
in New U.S. Homes
0%
10%
20%
30%
40%
50%
60%
70%
Asphalt--Three Tab
Asphalt--Architectural
Wood Shakes/Shingles
Concrete and Clay Tile
Metal
Plastic Composite
Other
Source: Annual Builder Practices Reports
2017 Findings
Asphalt 82% (up)
Tiles 8% (down)
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Roofing Material Installed
in U.S. Home Replacements
Source: Annual Consumer Practices Reports
0%
10%
20%
30%
40%
50%
60%
Asphalt--Three Tab
Asphalt--Architectural
Wood Shakes/Shingles
Concrete and Clay Tile
Metal
Plastic Composite
Other
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Siding in New Homes and
Remodeling, 2017 (millions of sq.ft.)
26
432
87
486
571
393
568
96
375
254
423
317
341
585
1,740
- 500 1,000 1,500 2,000 2,500
Other
Metal
Stucco
Natural Wood
Fiber Cement
Stone & Brick
Engineered Wood
Vinyl & Other Plastic
New Homes
Remodeling
Residential siding representsabout 7 billion sq.ft. annually
Source: Annual Builder & Consumer Practices Reports
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Siding on
New U.S. Homes
Source: Annual Builder Practices Reports
0%
5%
10%
15%
20%
25%
30%
Engineered Wood
Natural Wood
Brick & Block
Stone
Stucco
Vinyl & Polymer
Fiber Cement
Other
2017 Findings
Vinyl 19% (up)
Fiber Cement 22.5% (up)
Eng. Wood 15.5% (up)
Stone 9.5% (down)
Brick 12.5% (down)
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Siding Shares on New U.S. Homes,
by Major Price-Points, 2016
24%
18% 18%
9%
20% 19%
6%
8%
17%
19%
8%
15%15%
25%
19%
26%
18%
8%
0%
5%
10%
15%
20%
25%
30%
Starter Move-up Luxury
Wood
Brick
Stone
Stucco
Fiber Cement
Vinyl
Source: Annual Builder Practices Reports
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Exterior Cladding in
Home Remodeling
0%
10%
20%
30%
40%
50%
60%
70%
Engineered Wood
Natural Wood
Brick & Block
Stone
Stucco
Vinyl & Polymer
Fiber Cement
Metal and Other
Source: Annual Consumer Practices Reports
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Exterior Cladding in
Home Remodeling (Lowest Tier)
Source: Annual Consumer Practices Reports
0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
20%
Engineered Wood
Natural Wood
Brick & Block
Stone
Stucco
Vinyl & Polymer
Fiber Cement
Metal and Other
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Exterior Trim & Fascia Board
for New U.S. Homes, 2017 (millions of LF)
58
58
133
63
126
167
155
43
48
15
95
73
81
185
0 50 100 150 200 250 300 350 400
Other
PVC Board
Fiber Cement
Vinyl Wrap/Profile
Aluminum Wrap
Engineered Wood
Natural Wood
New Homes Home Remodeling
The residential trim market was about 1.3 billion LF in 2017
Source: Annual Builder & Consumer Practices Reports
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Exterior Trim & Fascia Board
for New U.S. Homes
0%
5%
10%
15%
20%
25%
Aluminum Wrap
Engineered Wood
Natural Wood
Vinyl Wrap
Fiber Cement
PVC Board
Other
Source: Annual Builder Practices Reports
2017 Findings
Vinyl Wrap 9% (up)
Natural Wood 19% (down)
Eng. Wood 21% (down)
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Exterior Trim & Fascia
for U.S. Home Remodeling
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
Aluminum Wrap
Engineered Wood
Natural Wood
Vinyl Wrap
Fiber Cement
PVC & PlasticComposite
Other
Source: Annual Consumer Practices Reports
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Porch & Deck Surfacing in
New Homes and Remodeling, 2016 (millions of sf installed)
28
33
82
149
181
595
0 100 200 300 400 500 600 700
PVC & other plastic
Other untreated wood
Redwood
Cedar
Composite
Treated wood
New Homes
Remodeling
Residential Decking market is about 700 million sq.ft. installedper year (composite = 220 MM)
Source: Annual Builder & Consumer Practices Reports
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Porch and Deck Surfacing Materials
in New U.S. Homes
0%
10%
20%
30%
40%
50%
60%
70%
Treated Lumber
Untreated Lumber
Composite & Plastic
Source: Annual Builder Practices Reports
2017 Findings
Composite 44.5% (up)
Treated Wood 38% (down)
Untreated Lumber 16% (down)
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Porch and Deck Surfacing Material
in U.S. Residential Remodeling
0%
10%
20%
30%
40%
50%
60%
70%
2011 2012 2013 2014 2015 2016 2017
Treated Lumber
Untreated Lumber
Composite & Plastic
Source: Annual Consumer Practices Reports
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Porch and Deck Railing Systems
on New Homes and Remodeling, 2017 (millions of linear feet)
The U.S. home porch and deck
railing market is about 120 million
linear feet per year (~1 billion feet
of lineals)
3.0
3.5
5.4
4.7
7.2
11.7
12.4
18.1
45.5
0.0 20.0 40.0 60.0
Other
Aluminum
PVC & other plastic
Iron or steel
Composite
Untreated wood
Treated wood
New Homes Remodeling
Source: Annual Builder & Consumer Practices Reports
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Deck and Porch Railing
in New U.S. Homes
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
Treated wood
Untreated wood
Composite
PVC & other plastic
Aluminum
Iron or steel
Other
Source: Annual Builder Practices Reports
2017 Findings
Aluminum 13% (up)
PVC 13% (n.c.)
Treated Wood 33% (n.c.)
Untreated Wood 15% (down)
Composite 12% (down)
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Deck and Porch Railing
in U.S. Home Remodeling
0%
10%
20%
30%
40%
50%
60%
Treated wood
Untreated wood
Composite
PVC & other plastic
Aluminum
Iron or steel
Other
Source: Annual Consumer Practices Reports
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Fences & Privacy Walls Installed in
New Homes and Remodeling, 2017 (millions of LF)
138
55
58
170
212
272
771
- 100 200 300 400 500 600 700 800 900 1,000
Stone
Aluminum
Brick or Block
Concrete & Other
Iron or Steel
Chain Link
Plastic or Composite
Wood Rails or Timbers
Wood Vertical Boards
New Homes Residential Remodeling
About 1.8 million LF of fence Installed per year = 8 billion SF
Plastic/Composite = about 230 million LF = 1.2 billion SF
Source: Annual Builder & Consumer Practices Reports
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Fence & Privacy Wall Trends
in New U.S. Homes
0%
10%
20%
30%
40%
50%
60%
70%
80%Wood Vertical Boards
Wood Rails or Timbers
Chain Link
Iron or Steel
Aluminum
Plastic or Composite
Stone
Brick or Block
Concrete
Source: Annual Builder Practices Reports
2017 Findings
Treated Wood 61% (up)
Iron or Steel 6.5% (up)
Plastic 9.5% (n.c.)
Brick or Block 13% (down)
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Fence & Privacy Walls Installed
in U.S. Home Remodeling
0%
10%
20%
30%
40%
50%
60%
2010 2011 2012 2013 2014 2015 2016 2017
Wood Vertical Boards
Wood Rails or Timbers
Chain Link
Iron or Steel
Aluminum
Plastic or Composite
Stone
Brick or Block
Concrete & Other
Source: Annual Consumer Practices Reports
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Some Pitfalls to New
Building Product Introductions
▪ Product benefits someone other than specifier, purchaser or end-user (such as some labor saving innovations)
▪ Product requires systemic change in design/construction▪ Drop-in replacements have higher likelihood of success
▪ Wrongly assuming little emotional content in purchase decision…confidence, smart, or conveys personal values
▪ Benefits are difficult or disadvantageous to convey▪ When more than multiple logical points need to be made, or if
benefits rest on hard-to-understand engineering principles
▪ Involves mentioning of disasters, sickness, raises questions
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Common Mistakes with New
Building Product Introductions
▪ Entering the most regulated or complex applications first▪ Wall systems in very cold or high-wind areas, for example
▪ Sellers create value proposition that relies on purist view, requires all-or-nothing decision▪ Exterior trim & molding is a prime example: a single house may
have four or more different exterior trim materials
▪ Failure to realize that home building & remodeling companies are businesses▪ Sales, design, marketing, regulations, code approvals, coordinating
construction, financing, hiring & training & retaining employees
▪ Your product can improve their home - how about their business?
▪ Some offer program assistance - bidding, scheduling, financing, etc.
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Common Mistakes with New
Building Product Introductions
▪ New products address complaints or nuisances, but fail to really solve problems or create opportunities▪ Contractors will not always pay more for a product that is less
heavy, less dusty, or less itchy
▪ Some new product benefits create unintended consequences—examples of issues with early Green homes▪ Ultra-low-flow fixtures and long wait times for hot water
▪ Very high efficiency AC and high indoor humidity
▪ Very tight homes and poor indoor air quality
▪ True advantages are often not learned until after the product has been on the market a while
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How Switching to a New Product
Can Impact Builders and Contractors
▪ Switching Costs—new products often require new place of purchase, training installers & supervisors, new tools▪ “Tool Programs” are one popular way to reduce switching cost
▪ Field techs, design assistance, code consultation are common with successful launches
▪ There is an implied “risk premium” required by contractors for switching—so your product/service need to have substantially greater benefits or lower cost
▪ Remember that most installers do not read instructions, and they want the contractor to make decisions on how to install
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New Product Strategies to Help
Solve Construction Labor Shortage
▪ Reduce skills required (system that can allow unskilled worker to do job of journeyman, for example)
▪ Reduce crew size (run more crews with same workforce)
▪ Allowing one construction trade to do the work of two
▪ Fewer trips to the jobsite
▪ Reduce fatigue & jobsite injuries to keep workers longer
▪ Allow for easier payment of workers by piece rates
▪ Cautions: saving time for one worker does not always translate into overall time savings
▪ Focus innovation on time-consuming activities
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Your New Product Installs So Easily,
Anyone Can Do It…
▪ Anticipate resistance from some skilled trades
▪ Demonstration is very important to selling
▪ Consider non-traditional users, like ▪ remodeling generalists
▪ handymen who welcome alternatives that don’t require special tools or training
▪ Consider do-it-yourselfers (prosumers, weekend warriors, etc.)
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Management Labor Deficit
▪ Recent Home Innovation study of ASHRAE members revealed that there is a deficit management levels of construction companies – not just skilled tradespeople▪ The primary lack was project coordination and management
▪ The skills were particularly lacking a deep knowledge of construction (not engineering) need jobsite experience and maturity to anticipate issues
▪ Technologies/apps/software solutions are available, but only tech saavy younger generation inclined to use them▪ Webinars to facilitate face-to-face contact
▪ Tracking software to communicate real-time with building team
▪ Communications apps
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Industry Concentration Among
New Home Builders
Calculations Based on Builder Magazine’s Builder 100 and NAHB-reported housing starts
Share of 2016
Total Starts
Total 2016 Starts
of Smallest in the
Group
Nation's Largest Builder 3% 41,652
Top 5 Builders 10% 14,229
Top 10 Builders 13% 6,098
Top 20 Builders 16% 2,790
Top 100 Builders 22% 403
Top 200 Builders 24% 149
All Builders Under 149 Starts 76% 1
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New U.S. Home Starts
by Category, 2016
Source: U.S. Census and Annual Builder Practices Reports
Single Family Starter, 20%
Single Family Moveup, 27%
Single Family Luxury, 13%
Townhouses, 12%
Multifamily Apartments, 28%
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Value of New U.S. Homes Built
2016
Source: Annual Builder Practices Reports
Average SF of
Finished Floor
Area
Average Selling
Price (USD)
Total Value
(Billions USD)
Townhouses 1,745 327,091$ 48$
Multifamily Apartments 1,118 191,640$ 66$
Single Family Starter 1,700 183,428$ 46$
Single Family Moveup 2,535 364,136$ 121$
Single Family Luxury 3,931 767,320$ 119$
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