As we enter a new century, the demand for architectural coatings has not shown any signs of slowing down. Between the many new products introduced over the past year, and promises of more introductions during the year ahead, architectural coatings will continue to dominate the overall coatings industry.
According to Market Tracking International (MTI), London, 12,023,000 tons of architectural paint were produced globally in 1998 (see map, pg. 38 in the print edition). In the U.S., manufacturers sales of architectural paint totaled $6.1 billion in 1997, accounting for 37% of the total U.S. coatings market, according to Business Trend Analysts (BTA), Commack, NY. BTA estimates that the U.S. architectural coatings market will grow at a rate of 2.5% per year to reach $7.8 billion in 2007.
Keeping Things Fresh With growth levels remaining in the single digits in the U.S. architectural market, it is more important than ever for manufacturers to hold onto current customers–and attracting new ones–by keeping shelves well-stocked with products that keep buyers coming back for more.
New from TruServ is the Prestige line of 100% acrylic interior and exterior decorative paints, available in 2,112 colors and backed by a lifetime warranty. The interior paints are available in semi-gloss, satin and eggshell, while the exterior line comes in semi-gloss, satin and flat. "What prompted the Prestige line was the trend that as consumers become more aware of paint quality differences, they select more high-quality products," said Dave Patrizi, assistant vice president, sales and marketing, at TruServ.
New from PPG is the Olympic Paint line of interior and exterior paints aimed at attracting the female home decorator. There are three price points ranging from premium-priced Olympic Ultimate to Olympic Premium, a mid-priced product, to Olympic Color Decorator, the least expensive. PPG has also formed an alliance with a major retailer. "PPG has reached an agreement with Lowe's as the only regional distributor for the new Olympic Paint products," said Mike Provenzano, marketing director, PPG Architectural Finishes. "We selected Lowe's because it is committed to home decorating and this line is doing well." When purchased at Lowe's Home Improvement warehouse, Olympic Ultimate offers an unlimited lifetime warranty.
The Sherwin-Williams Company, Cleveland, OH, has developed three new lines of paint. The EverClean line offers a "just wipe-clean finish which virtually prohibits ordinary stains and scuffs from taking a hold," according to the company, and is available in flat, satin and semi-gloss. LowTemp 35 exterior paints have been engineered to resist frosting, peeling, blistering, fading, chalking and mildewing, according to the company.
Also from Sherwin-Williams is new Duration exterior coatings, developed with "innovative PermaLast technology," which ensures a thicker, more flexible layer than traditional exterior paint, virtually eliminating peeling and blistering problems, according to the company.
Duron Paint and Wallcoverings, Beltsville, MD, manufactures architectural coatings sold in 14 U.S. states. "As we grow into new markets, Duron is developing new products to meet our customers' needs," said Mark Arnett, Duron's marketing manager.
Duron's Everlast is a premium interior alkyd produced with reduced levels of solvents found in traditional alkyd paints. The reduced use of solvents lowers VOC levels, thus reducing the potential environmental damage, according to the company. "Most notable is its resistance to yellowing, a common problem with low-VOC products," said Bill Rosenthal, Duron's vice president of technology.
Regional Focus While Duron is targeting specific niches like low-VOC paints, it is also concentrating on specific regions of the U.S. The company recently expanded its presence in Florida with the introduction of the Florida-Max Flex line of elastomeric coatings. "Products for Florida are different because of the extreme mildew conditions; they must be extremely mildew resistant," Mr. Arnett said. "A lot of property managers of hotels, resorts, apartment buildings and condos wanted an elastomeric coating."
Duron entered Florida about five years ago in the Orlando and Tampa Bay markets, and has expanded into Ft. Lauderdale and Ft. Myers, and opened a new distribution center in Jacksonville. "In total we have nine new stores in Florida," Mr. Arnett said. "We had sold a lot of products through dealers and saw it fit to open our own stores." In addition to a number of retail sites, another benefit of the "Sunshine State" is its year-round sales potential, according to Duron. "One of the benefits of the Florida climate is the ability to paint all year long," Mr. Arnett added.
Duron has also introduced new products to the Chicago market, which the company entered in 1997. "Elastomeric coatings are quite popular here as well," Mr. Arnett added. "We also have a concrete stain program for this market, which is very popular. It was a piece of the architectural coatings market we were missing out on since a lot of concrete stain is used in Chicago." Duron has 14 stores to serve the Chicago area.
Davis-Frost, Inc., a Lynchburg, VA-based manufacturer, serves the architectural markets in Virginia, North Carolina, South Carolina, West Virginia, Maryland and Washington D.C. Davis-Frost, ISO 9001-certified since October, introduced two new direct-to-metal (DTM) products. The 1900 series high gloss acrylic all-purpose exterior enamel has many uses including as a topcoat for surfaces originally painted with oil. Characteristics of the 1900 series include super adhesion over existing oil, extreme durability and excellent color and gloss retention, according to the company. The 1200 series acrylic DTM interior satin finish line of paints is easy to apply, quick drying and is low odor, according to the company.
Norton & Son, Bayonne, NJ, also had some new launches in 1999, including Power Hide, a high performance line of contractor paints for interior applications. "Our unique technology is bringing a better high volume, lower price line of paints to the commercial market," said Lee Flemming, vice president of marketing.
Beyond the Basics Even though the majority of architectural coatings available are traditional interior and exterior products, there are niches within the market that companies look to serve as well.
The Flood Company, Hudson, OH, introduced Flood semi-transparent deck and siding stain and Flood solid color deck and siding stain during the fall of 1998. According to the company, Flood's exclusive technology blends the penetrating and adhesion benefits of an oil finish with the color retention and flexibility qualities of a latex finish. Flood backs the products with a five-year guarantee against peeling on decks and a 15-year guarantee on siding.
Kids Play Colors is a new line of interior paints for children's rooms from TruServ. "The color card focuses on brighter, bolder colors," Mr. Patrizi said, which will attract kids' attention. But it is the formulation that will make parents happy. "This product offers high durability and scrubability in an acrylic satin finish," he added.
Norton & Son has developed a two-part epoxy for garage and basement floors, Ultra EP-epoxy. "It is a unique product because the coatings will not stick to hot tires and be pulled off," said Mr. Flemming.
Low-odor paints are not new to the architectural coatings market, having been first introduced a few years back. But this hasn't stopped manufacturers from working to develop better technologies and introducing new low-odor paints. Sherwin-Williams' HealthSpec low-odor coatings systems allow priming and painting to take place during normal business hours because they emit very low amounts of VOCs and produce very little odor, according to the company. Genesis Odor-Free is an interior latex paint from Duron that does not emit a detectable odor. "Genesis dries quickly, demonstrates excellent hide, is resistant to spattering during application and leaves no detectable lingering paint odor," said Gene Merril, director of product development.
"Genesis offers the application and durability of an oil-based alkyd paint–what most people are used to–but is odor-free," added Mr. Arnett.
Another aspect of architectural paint is color choice. And since color selection is one of the first things customers look for when buying paint, manufacturers are continually updating and expanding their palettes. TruServ has introduced a new color system with a 2,112-color palette which Mr. Patrizi claims is "the largest color palette in the industry."
PPG's Voice of Color palette for the Pittsburgh Paints Design Collection has 1,890 new colors. "This palette has had positive broad base appeal since its launch in 1998," said Mr. Provenzano.
Davis-Frost also has expanded its color offerings over the past few years. "The importance of color, not just off-whites, has emerged in our market as a factor in paint selection," said Mr. Davis. "In particular with homeowners, they seem to be using less wallpaper and are using more paint colors. As a result, we have introduced more color cards in the last few years, including a new historical card."
While Davis-Frost is offering colors that keep in touch with the past, Duron has identified five color palettes for the new millennium–Lifeforce, Neo Retro, South Seas Exotic, Urban Retreat and Approach with Caution. "World dynamics and their effects on color can create new directions for designers and consumers," said Mark Woodman, Duron's color marketing and design manager. "Concepts and influences are instrumental in establishing individual color palettes and design directions."
Around the World There has been a lot of activity in the U.S. market, but there has also been a number of new introductions by coatings manufacturers around the world.
Imagica Utd., a London-based wholly owned subsidiary of Tikkurila Paints, has continued to expand the United Colors of Benetton paint line. First introduced to England in 1998, this line was expanded to Sweden, Finland and Japan during 1999, and is also available in Belgium, France and The Netherlands. Aimed at the DIY'er, this line features 18 ready-mixed paint colors and four effect finishes.
"The launch establishes paint as an essential part of the home fashion market," said Lynne Stainthorpe, Imagica's marketing director. "Benetton is a global fashion brand with mass appeal. The United Colors of Benetton paint range captures the sprit of the catwalk and brings a fresh new approach to color and texture in the home. It is positioned to appeal to the young at mind."
Yasar Paint, a Turkish-based manufacturer, has expanded its Dyo line with three new introductions. Dyomin, an exterior coating containing natural colored marble particles, debuted in March. A month later, Yasar unveiled Dyotex, an exterior paint based on pure acrylic binders. According to the company, Dyotex has better performance and durability compared to conventional acrylic copolymer-based paints. The company's final introduction of the year, Dyo aerosol paints, feature several products from special effect paints to heat resistant paints.
Jotun Paints Dubai, United Arab Emirate, introduced Fenomastic Gold, an acrylic-based emulsion paint, to the Middle East in May. An interior paint, Fenomastic Gold features an active anti-fungus agent offering effective resistance against fungus growth, according to Jotun.
"In addition to this unique product's excellent flow and leveling properties, it is also very washable," said Venkat Krishnan, Jotun Paints product manager. "Aside from its technical superiority, Fenomastic Gold also adds aesthetic value to the interior surfaces of a building, due to its concealing power and high-class finish." Also new from Jotun Paints Dubai is Fenomastic primer, a high performance waterborne primer.
Asian Paints (India) Limited, Mumbai, India, has launched ACE exterior emulsion, an emulsion for exterior masonry surfaces. "It is an acrylic copolymer emulsion and is promoted as a better alternative to cement paint, which is the dominant exterior coating in India," said P.M. Murty, president, decorative division. "ACE is better than cement paint in terms of aesthetic appeal, non-fading characteristics of the shades, greater film durability and better anti-algae properties."
A recent introduction from Egyptian firm Paint and Chemicals Industry (PACHIN) is Syntal, a synthetic interior and exterior enamel which gives the consumer a high gloss, durable and quick air-drying product with strong hiding power.
Daihan Paint and Ink, South Korea, introduced a number of new products in 1999, including a water-based, fire-resistant paint, a water-based elastomeric latex paint for waterproofing, and a "low-dirt-pick-up," weather resistant solvent-based paint.
New from Canadian-based Sico is Sico Cashmere. "This new product has a gloss-free finish and is stain resistant, resulting in deeper and richer colors and flexibility of usage everywhere," said Yvon Savaria, Sico's marketing director.
Samwha Paints, Seoul, Korea, also enjoyed a busy 1999 with a number of new launches. Among the new introductions are KD fireproof urethane lacquer and Bangsutan, a one-coat urethane. Muni-Chip is a new water-based interior paint that offers a long shelf-life, easy repair and improved workability, according to the company.
CIN, based in Portugal, has introduced Vinylsoft, a water-based paint offering soft sheen.
Changing Demographics A change in demographics in the paint market is one reason why companies are revamping and expanding their palettes and product offerings. More and more women can be find perusing the shelves at home improvement and paint stores in search of just the right type of paint for their homes. Paint manufacturers are taking notice, and are redesigning color palettes and introducing new products in hopes of attracting female customers.
"We are making a major investment to target female customers," said Mr. Provenzano of PPG. "Merchandisers are taking advantage of the trend for using multiple colors. Color is the number one attribute female customers look for when purchasing paint. Color preference sometimes ranks before brand selection."
PPG's line of Olympic interior and exterior paints is targeted at the female home decorator as a DIY paint. "The in-store display contains a wide variety of ideas and decorating brochures, all of which are female-oriented," added Mr. Provenzano. "We are trying to take away the fear of selecting colors that go together."
TruServ is targeting the female consumer with faux finishing techniques. "We are keeping in mind that in almost all cases, the female consumer is either making the purchase or she has an important say in what product is purchased," said Mr. Patrizi.
Manufacturers serving other markets throughout the world have noticed this trend, and are focusing marketing efforts on women too. Samwha Paints is trying to increase sales of household paint by advertising in magazines for women and expanding its distribution network of discount stores. In 1998, CIN launched the Ambientes Collection, through a mail-order campaign directed at the female shopper.
"Over the years, an increasingly large portion of our efforts and budgets have been targeting women who initiate most of the paint and decorating projects and largely decide on the color used," said Ms. Savaria of Sico. "The positioning of our new Cashmere product reflects this approach. The development and the success of our annual Evolution magazine, which presents color trends, is definitely proof that this is the way to go."
Companies in Egypt and India are also looking at ways to better target female shoppers. PACHIN is preparing to launch a new tinting system that will target female households and the facility owner. Asian Paints is taking a similar approach. "Our primary target audience for all of our marketing and communication activities have been the adult male who is the primary decision maker on the brand of paint used," said Mr. Murty of Asian Paints. "However, the female members of the house play a very significant role in the selection of shades. We have leveraged this through a series of ads over the last decade aimed at the female shopper."
In addition to changes among the demographics of DIY customers, coatings manufacturers are seeing an increase in the number of professional painters purchasing paint, as today's busy homeowners opt to hire contractors. According to the Freedonia Group, Cleveland, OH, professional contractors accounted for more than two-thirds of the total architectural paint demand in the U.S. by volume, with DIY customers accounting for the remainder.
"We are finding that more and more professionals are applying the paint rather than the homeowner," said Mr. Patrizi of TruServ. "We are making sure that our products can be used in spray applications for the professional."
Yasar Paint has experienced similar changes in Turkey. "In 1999 Dyo began to focus on the distribution channel and the paint professionals," said Bulent Atabay, vice president of Yasar Paint. "The VIP club–merchandising teams for the hardware stores–was established and widened through the country. Wholesalers were appointed as regional distributors with their own regions in order to prevent competition between them. Dyo Friends Club and Colourful Chats–two projects aiming to establish closer relations with professional painters and decorators–were speeded up."
Regulatory Compliance New products are usually developed with the customer in mind. But in the coatings industry, a lot of attention must be given to environmental concerns and governmental regulations. Companies who comply with regulations ahead of time and stay on top of the changing developments are going to be those out in front when new regulations take effect.
In the U.S., a national VOC mandate, the National Architectural and Industrial Maintenance Paints and Coatings (AIM) Rule took effect on Sept. 13, 1999. Paint manufacturers had been anticipating this rule for quite some time, so many were already in compliance before the deadline.
"Duron's R&D lab has been working on VOC issues for several years," said Mr. Arnett. "All of our new products do conform to new regulations. Among the 14 states we manufacture coatings for, New Jersey has the strictest VOC regulations, so all of our products are geared to meet New Jersey's standards."
Mr. Patrizi said TruServ is constantly trying to stay ahead of regulations. "We try to prepare for VOC regulations by being compliant one year before the regulations go into effect. We are concentrating a large part of our R&D on VOC levels, more than we have in the past."
North of the U.S. border in Canada, VOC controls are also a factor. "The progressive lowering of the norm for our Ecologo approval continues and most companies comply," said Ms. Savaria of Sico. "The control of post-consumption, however, has created more discussions and the Quebec and Ontario provinces are working on new legislation."
In India, there haven't been any new regulations introduced, but companies are still working on environmental issues. "We are aiming at zero discharge from our manufacturing units," said Mr. Murty of Asian Paints.
"Towards this, work is being carried out to minimize or eliminate process effluents, modify formulations and develop appropriate treatments for reuse or recycle," Mr. Murty continued. "All factory locations are gearing up to accredit themselves to ISO 14000 environmental standards."
The Global Outlook Market researchers indicate that the U.S. is the top producer of architectural paint, and demand will continue to rise, albeit, at modest levels. But many of the manufacturers that Coatings World spoke with outside U.S borders expect to see growth in their markets as well.
Turkey, which was devastated by a major earthquake, will see its 1999 architectural paint sales fall one percent, according to Yasar Paint. But as the country begins to rebuild, things will turn around. "With its new construction and renewals, the tourism sector is one of the biggest consumers of architectural paints in Turkey," said Mr. Atabay. Mr. Atabay expects Turkey's architectural paint market to grow five percent this year.
But Turkish companies like Yasar are finding increased competition from outside players. "In the last few years foreign companies have acquired many Turkish companies in the architectural paint sector," Mr. Atabay continued. "This interest is caused by the low paint consumption per capita in Turkey, which shows a great potential for the future."
ABRAFATI, Brazil's trade industry association, estimates that the Brazilian market is down about three to four percent from 175.1 million gallons in 1997 to 169.8 million in 1998. However, ABRAFATI contends the Brazilian coatings market is beginning to emerge from the depression. Coatings manufacturers serving the Middle East must compete not only with each other, but also with other types of applications. "In high profile markets like Dubai, Abudhabi and Saudi Arabia, we generally have a higher investment on the exterior facades where they use a lot of glass, marble and aluminum panels, which are substitutes for traditional paint," said Mr. Krishnan of Jotun Paints Dubai. "This is a general trend which has caught on during the last few years which will eat into our market shares. Unless we innovate and motivate our labs to come up with fresh ideas, we will face huge pressure on profit margins in the years to come.
The architectural coatings market in India has been growing as much as two times the rate of growth of the country's GDP. "The trend so far in 1999 indicates that market growth will be around 12%," said Mr. Murty of Asian Paints. "There seems to be, at this time, a possibility that the growth rate will be repeated in 2000.
"The state of the construction business clearly impacts paint market growth," Mr. Murty added. "The architectural coatings market in India is not a mature market and is in a state of constant development. The key trend that we see is continuous upgrading by customers from the products they are currently using. Consumers are upgrading to products that are functionally and aesthetically superior."
PACHIN estimates the architectural coatings market in Egypt to be approximately 125,000 tons per year. "The market did not show any growth in 1998-1999," said Shawkat Tawfik of PACHIN's business development division. "During the coming year, the situation is expected to flourish due to two factors–the prevailing optimism about the improvement of the liquidity position in the market and the possibility that the People's Assembly would pass the law governing real estate mortgage."
Canada reported a three percent increase in the market in 1998, following a three percent decline in 1997, according to Sico. "Canada's paint industry is a very mature industry showing little growth over the past few years," said Ms. Savaria. "After the economic recession of the early 1990s and slower recovery, we have finally seen new housing construction and home resales recuperating more recently, a reflection of better employment and interest rates as well as reduced insecurity from the consumers."
More good news came from Portugal. CIN reported that Portugal's overall coatings sales rose 6.8% in 1999. "Decorative sales grew four percent due to growth in new construction, albeit where lower quality paints were used," said Rui Bevilacqua, public relations director.
Looking Ahead With all the work being done by paint manufacturers to develop higher quality, more attractive products, 2000 promises to a be another busy year. Companies in the U.S. and abroad are investing in new product developments and new facilities to increase their sales and efficiency.
For example, PACHIN is in the midst of relocating its plant to a site in El Obour City "which will allow us to double its existing capacity," said Mr. Tawfik.
Next month Duron has plans to introduce a new product for repainting siding called Siding-in-a-Can. "Many people do not realize that siding can be repainted," said Mr. Arnett. According to the company, this product is formulated to resist cracking, fading, chalking and blistering, and contains a mildew-resistant component.
What many companies are focusing on is performance. In the future, many companies expect quality and value to matter as much as color when customers go in search of paint. According to Mr. Flemming of Norton & Son, "A trend across all channels is the willingness to pay more if a customer is satisfied with a product's performance and value."