The decking market is growing in value and diversifying. There are boards made of wood, plastic, plant material, aluminum, and even recycled carpet fiber. Colors and styles continue to multiply. And homeowners—armed with design websites, mobile apps, and the ability to collaborate on projects in real time—are becoming savvier about potential decks’ styles, even if they aren’t so up to speed on what the materials used to build their outdoor living rooms are actually made of.
Optimism prevails. The Freedonia Group predicts demand for decking nationwide will increase 2.4% annually through 2016 to become a $5.7 billion market encompassing 3.3 billion linear feet of material. And while wood remains far more popular than composites and plastics, the research group Principia predicts composites will gain 5 points of market share from wood in coming years.
Dealers accounted for two-thirds of the sales of composite decking and railing products in 2010, Principia says. Its recent survey of dealers nationwide found that eight in 10 figured their composite decking sales increased in 2012 by an average of 5%, and nine in 10 expect sales to increase by an average of 7% in 2013.
Such predictions by dealers fit well with more general forecasts of a revival in new-home building as well as double-digit growth in big-ticket remodeling projects. Change is afoot. Top-level consolidation isn’t scaring off new entrants, nor is it stunting deck makers’ retooling efforts. But the biggest challenge facing the market isn’t new: When will manufacturers’ new-product value propositions match contractors’ confidence in the products’ jobsite performance?
Wood’s Comeback
Synthetic boards may have dominated product development in recent years, but firms involved in wood decking still have plenty of reasons to boast.
“In the heyday of the home-building crunch, the [wood industry] was putting product out as fast as it could for as inexpensive as it could and gave pressure-treated a bit of an undeserved name,” says Michael Beaudry, president of the North American Deck and Railing Association (NADRA). “Now they’re sharpening their pencils ... coming up with higher-quality products.”
Eastman Chemical’s pencil-sharpening called for reconfiguring the cellular structure of a wood board. Its Perennial Wood, which entered the market last February, uses proprietary technology to create a physical barrier protecting Southern pine boards from the damaging effects of rain, sun, heat, and cold on wood.
“We’re a modification versus a pressure treatment,” says Jim Flickinger, Perennial Wood’s brand manager. “We’re a new kind of species. Treating it is just putting chemicals in and leaving them there. We’re changing the cell structure.”
Flickinger says the company saw an opportunity among both consumers and contractors. “People, in their minds, had sold out and bought plastic but really wanted wood,” he says. “They liked the look and feel of wood and what it brought to their home, but they didn’t really want to have to go out and stain it and seal it.”
After keeping mum for nearly a year on the development of a capped board that incorporates micro-additives in its shell, A.E.R.T. says it will release its co-extruded composite decking product as part of its MoistureShield line as early as the second quarter of 2013.
“The use of nanotechnology in research has shown promise in increased mechanical performance—basically a synergist toward improving other properties with additives—so that technology definitely has some promise in application,” composites researcher Shane O’Neill says. But he adds that the boards may be cost-prohibitive if their maker can’t offer a sizeable value proposition.
Meanwhile, additive makers are introducing treatments that resist mold and moisture while boosting color.
Lonza is developing a copper azole additive that attacks a class of copper-tolerant fungi that hasn’t been targeted before while playing to a broader industry effort to reduce the amount of preservatives neeeded, says Huck DeVenzio, Lonza’s marketing communications manager.
Osmose’s MicroPro treatment process, on the market since 2006, recently received several third-party green certifications. It turns the wood a lighter color than the standard pressure-treated green with options for colors similar to redwood or cedar.
“The face of treated wood has changed, particularly in the last half-dozen years,” says Gary Converse, Osmose’s senior vice president of marketing. In addition to new color options and environmental certifications, he says, new water-repellant stabilizer additives help wood resist the effects of weather.
Universal Forest Products recently introduced its ProWood brand of pressure-treated lumber, which includes color-infused, kiln-dried, and sill-plate boards.
Value-Added Redux
As companies in the wood-decking industry retool, so too are synthetic board manufacturers. Stung in recent years by complaints over performance failures, they’re working to change that perception with a new class of products that aims to compete with exotic hardwoods. The challenge? To look like wood but not act like it.
Royal Building Products’ new Zuri PVC decking falls within this group. Its PVC substrate is capped with a photo-realistic wood-grain print and a clear acrylic that resists stains, scratches, fading, and moisture, the company says.
Last fall, NyloBoard launched NyloDeck, made with recycled carpet fiber and VOC-free resins. It is reinforced with layers of fiberglass that resist mold, moisture, and termites, the company says, and it can span up to 24-inches on center.
But it may still be too early to tell whether this new class of product is a one-off or decking’s game-changer.
“Do contractors want the ‘next best thing?’” NADRA’s Beaudry asks. “Yes, but I don’t think they necessarily want to test it. When a guy lays down 40 decks and he has to go out and replace that material, he’s thinking twice about taking that chance again.”
An Ethical Duty
Bobby Parks, owner of Peachtree decks in Alpharetta, Ga., and past president of NADRA’s Atlanta chapter, agrees, adding that many deck builders are still reluctant to use alternative decking. “If they do fail, it falls back on us—not legally, but ethically,” he says. “We are tied to it, to our customers.”
Companies have struggled in recent years to limit the deterioration rain and sun wreak on wood-based products. The perception of faulty boards could fade, O’Neill says, as manufacturers refine and improve the wood-plastic mixture that lies at the center of nearly all composite decking.
“If you can stabilize the core, then you’re going to have a great product,” O’Neill says. One motivator: the arrival of enough warranty claims for past product defects to get executives’ attention. “Now that those are coming in, it’s a problem,” he says.
At the same time, manufacturers continue to push value and variety across price points and materials.
Trex targeted DIYers with its Select deck and rail system, while TimberTech released an earth-tone variegated color palette for its capped Earthwood Evolutions line. WOLF, a distributor that has been expanding its private-label lines, added the Prairie and Island collections to its new PVC decking house brand. Fiberon grew its composite and PVC decking inventory to include the Classic series, while TUFboard released its entry-level Eco and its variegated-grain Kinbo.
Room To Grow
Decking makers are slowly shifting their marketing platforms from touting the merits of individual products to integrating those deck boards into an outdoor living package. And it’s those product categories—railing, lighting, and other accessories—in which dealers say they have the greatest chances to boost their margins.
“If you look at any of our best guys, they’re making their profit margins on accessories and square footage,” Beaudry says. He sees growth potential in the 40 million decks that need to be replaced at a time when just 2.5 million decks are built or repaired annually. “In any one of those areas, you could double or triple the industry,” he says of companies’ expanded outdoor living portfolio. “So now you’re getting a bigger piece of the pie.”
Building-products industry design consultant George Gehringer also likes those prospects. “When she makes the decision to put composite decking, new railings, and all that into her home, she’s expecting her neighbors to come over and say, ‘I love what you did with your home,’ not your deck,” he says.
It may be too early to tell whether that rhetoric is enough to convince homeowners to buy in. When Remodeling magazine compared building cost to the resale value of adding a deck to a home, it found the resale value of mid-price-range wood or composite decks was 77.3% and 67.5% of the cost, respectively, in 2012, while the return to homeowners who put in an “upscale” composite decking addition that year was just under 60% of the project’s initial cost.
No Easy Task
Last fall, decking product specialty dealer Bob Heidenreich, president of The Deck Store in Minneapolis, explained to a crowd of manufacturers’ reps in Atlanta the challenges dealers face when selling in a saturated market in which product is available at multiple price points and through myriad outlets.
“People come in every day with smart phones, scanning barcodes, asking questions, and pulling infor-mation out of our heads,” he said. “But we’re not always getting the sale.”
Tony Steinman, general manager at Thomas Building Center in Sequim, Wash., wrapped the front of his store with a decking display in mid-2008, contributing to $169,658 in decking and railing sales that year. A year later he sold $352,957 worth of product.
Since then, he says, he’s sold a railing with any deck requiring one. His year-to-date sales of composite through November were 15% ahead of the year-earlier period.
lan Nansel, project specialist at Commerce City, Colo., specialty dealer The Deck Superstore, displays wood and synthetic products on seven indoor displays and on 60 outdoor displays, each 42 by 42 inches, that let customers see how boards respond to the elements. The displays also feature interchangeable railings.
While those yards gained from amping up their displays, many dealers remain leery about stocking more decking product. Steve Van Kouteren, principal with industry market research firm Principia Partners, surveyed 150 dealers nationwide earlier this year. He found their inventories are low and likely will remain low compared with historical standards.
Dealers did say they likely would increase their stocking levels slightly if housing picks up. Until then, he says, they’re holding onto their cash. “I would expect incremental growth in inventory stocking position in the winter buy this year. I wouldn’t expect a giant leap compared to last year. People are still conservative,” Van Kouteren says.
Time for Consolidation?
The merger last fall of AZEK and TimberTech could pose a threat to industry leader Trex’s market position, although as of press time, industry sources said it was too early to gauge the deal’s impact.
According to Builder magazine’s brand awareness survey, Trex still leads the pack, with more than three-quarters of respondents in 2012 saying they had heard of the product. AZEK followed at 61%, with TimberTech at 53%. But less than one-half of respondents said they’d used Trex decking in the last year while 27% had used AZEK, and 19% used TimberTech.
In 2004, 65% of decking demand was channeled through the top five product suppliers. In 2008, the top five had 74%, and in 2012 that group controlled 87% of decking demand.
Correction: This article has been updated to remove the terms "nanotechnology" and "NanoPly" as they relate to A.E.R.T.'s co-extruded composite deck board. The company says it expects to launch the product in the second quarter of 2013, not the first quarter as an earlier version of this article stated.
