Scott Detiveaux, a senior consultant at Orr and Boss, said part of this increased growth rate reflects the relative size of the segments: exterior coatings represent approximately 35% of the architectural market. Another factor to consider is an increase in new home construction. "The increased growth rate of exterior architectural coatings is related to the booming new house construction market," he said. "Historically, new construction only accounts for 10%-15% of architectural coatings. The record level of new home construction has pushed their importance beyond historical norms."
While the demand for exterior architectural coatings in the U.S. is projected to remain strong over the near term with industry analysts predicting three to four percent growth for 2005, growth is expected to level off to a more modest two to three percent annually over the next five years.
According to Detiveaux, two significant factors will likely affect the demand for exterior architectural coatings. "As the market for new homes softens, the demand for exterior architectural coatings will also lessen," he said. "A second factor is the loss of paintable surface. Thirty years ago more than 30% of all new homes in the U.S. had wood exteriors. In 2004, less than 10% of all new homes were built with exterior wood. Vinyl, brick and stucco are now the leading exterior materials of construction. While new engineered cement fiber exterior materials also require painting, their usage remains a small part of the overall building construction market."
New technology utilizing improved bases and better pigments now allows the formulation of bold exterior colors that resist fading longer.
Non-wood materials are also gaining favor in other markets. New Zealand-based paint-maker Resene has reported a decrease in use of paintable substrates for new home construction. "Plaster finish homes which were popular a few years back are waning in popularity due to the leaky home building crisis we have had," said Karen Warman, marketing manager, Resene. "This has seen new home cladding turn to brick and weatherboard. The increasing use of brick has decreased some of the available area to paint."
This move from paintable exterior substrates to vinyl and pre-colored stucco systems has not been all bad news for the exterior painting market.
"The good news is, the repaint business is doing well," said Jeff Spillane, senior marketing manager, Benjamin Moore. "All the people who put aluminum and vinyl siding on their houses in the 1960s-80s now need to repaint. There is no such thing as a maintenance-free exterior. All the business we lost to aluminum and vinyl siding we are getting back now."
"The weather has been unpredictable for the last couple of seasons and has tended to make it difficult for DIY customers in particular to undertake exterior projects, especially when they have only a limited window of opportunity to start and finish the project," said Warman. "This has seen some customers delaying projects until future years due to a lack of ability to reschedule the work."
Although most exterior paint manufacturers try to build a product that can meet the needs of a diverse range of weather conditions, many paint companies do offer region-specific products.
"We do have some regional-produced products, but in general when we formulate we try to incorporate it all in our nationally distributed products," said Spillane. "The Pacific Northwest needs products that can be applied to a damp surface. Also, there is a need for low-temperature products for the Pacific Northwest and the Northeast for application in low temperatures, but you try to formulate all these features into the general product as long as it doesn't have a negative effect on the product. It is not efficient to make five different paints in small batches."
High heat and harsh sun are major areas of concern for paint companies in the Middle East where humidity, sun and moisture can wreak havoc on building structures and the coating which is applied on the exteriors. "Cracking, peeling, UV degradation, water ingress due to capillary action, color fading, discoloration and dampness in concrete are common problems which coating suppliers have to deal with," said Venkat Krishnan, regional brand manager, Middle East, Jotun Paints. "Jotun Paints specializes in formulations which contain inorganic pigments blended into a pure acrylic waterborne resin which can withstand color degradation caused by prolonged exposure to high temperature and UV light," Krishnan said. "Our exterior paint, Jotashield, is a single brand exterior solution and is available in a variety of finishes."
Dunn-Edwards, which sells its paint in the southwestern U.S., does not have to deal with the challenges of national brands that need to meet the needs of other regions. "However, there are differences between the hot, dry desert in Arizona and the cooler, damp climate along the seacoast of Northern California, so we offer different products to account for these variations," said Phillip Hain, product marketing manager, Dunn-Edwards.
Naturally Sico's paints are designed for conditions that are commonly found in Canada. "In addition, of course, we need freeze-thaw resistance because of our climate and wide-spread distribution network," said Gordon Simpson, manager, research and development, Sico. "Although all of our exterior paints are protected for potential mildew growth, the amounts required for northern climates are not as high as for the south. Nevertheless, we always consider the worse possible scenario, which in Canada's case, are the east and west coastal areas. In terms of UV resistance, all our exterior paints are tested in southern areas such as Florida and Arizona to determine more quickly how long our paints will last in our own climate."
Sherwin-Williams' exterior coatings are engineered to protect against peeling, blistering and fading on a variety of substrates in a variety of climates and weather characteristics. In addition to Duration exterior, it offers coatings for masonry (Loxon XP) that protect against harsh coastal environments where driving rain and freeze thaw cycles must be considered. The company also offers coatings with UV protection.
Resene offers winter-grade products for cold temperature and summer-grade products for roofing work undertaken during hot summer months. "We also have specific products such as Resene Sun Defier, whish is designed to filter out UV light and protect the topcoat beneath," said Warman. "Most of our products are suitable for use year round throughout New Zealand, with the colder regions using the winter-grade products during the colder months on exterior work."
Sherwin-Williams Duration exterior latex with Permalast technology is backed by a lifetime limited warranty, which applies to the purchasee who buys and applies the product to their home. According to Revnew, if Duration peels or blisters during the time the purchaser owns the home, Sherwin-Williams will supply replacement coatings or refund the purchase price.
The exterior of this dwelling is coated with Resene's Wintergrade products.
Not all companies offer a specific time frame, but still back their coatings' performance. "If a customer is not satisfied, we will reimburse the product," said Dominique Pépin, senior brand manager, Sico. "We do not specify how many years an exterior paint should last because it varies according to so many things including surface preparation, the way it was applied, the type of surface and climate."
Dunn-Edwards offers a standard manufacturer's material guarantee that the product is free from manufacturing defects at the time of purchase. "We fully stand behind the quality of our products," said Hain. "Many external factors-thorough surface preparation, proper application, and weather conditions-greatly influence a coating's longevity. Therefore, we furnish our customers with lots of information, both on the paint cans and through printed brochures in our stores, on how to use our paints so that they provide the best long-term beauty and coverage."
While Resene has a similar tact, it does not offer a specific warranty for its coatings. "However, we do stand behind them if things go wrong to resolve the problem," said Warman. "While we don't offer specific warranties on most of our paint, we do work hard to improve product durability as this affects our reputation as quality paint manufacturers. Our job is to make the product keep looking its best as long as possible. While this means that the time required to repaint may be extended, it also gives customers the confidence to use our products for other projects, such as interior work, where fashion often dictates the repaint rather than the paint condition."
Some paint companies see little real value in offering warranties. Instead, they emphasize the importance of customer service and educating the contractor or DIYer on proper surface preparation and application to get the most out of their exterior coating.
"Most of our competitors offer 10 year plus guarantees but when you read the fine print the warranties are of little practical value. Consumers often believe they are better protected than they are," said Warman. "Most warranties exclude everything except peeling and flaking, which is often blamed on poor surface preparation. They pro-rata the paint based on the number of years since it was painted, the warranty is not transferable to the new owner, receipts must be retained and paint is only supplied for the area affected. Therefore, potentially a customer could end up with 500 ml of paint of the original color that would not match the now faded color on the rest of their home. Resene long ago decided that we would stand behind our paint if there was a problem with the product rather than creating a warranty that was of little value," she said.
"At CIN, we adopted the policy of not giving any written warranty, but always making sure that we give all the technical support to our customers regarding product performance and any claim they might have," said Pedro Reis de Almedia, key manager, architectural/decorative, CIN based in Portugal. "We also consider that good products and professional after sales policy are the best elements to consider in order to promote sales each year."
Jotun offers a warranty on its exterior coatings, provided certain criteria are met. "We do offer product performance guarantees as part of our Single Source Solution concept up to 10 years for pure acrylic and epoxy polyurethane-based systems," said Krishnan. "These guarantees are jointly endorsed by the paint applicator and the paint supplier. We guarantee the performance of the product provided we have supervised the application and surface preparation from day one up to the completion of the project."
Jotun has put in place a team of site supervisors who are qualified to inspect and supervise the entire project. The applicator then guarantees the application against defects like insufficient opacity, leveling and final finishing.
Paint companies that offer long warranties do not see them as a deterrent to the goal of selling more paint. "We like to think that people like to refresh their house," said Pépin. "They often repaint even if the paint is not totally due for repainting, simply because colors need to be updated or because some modification to the structure of the building has been done."
According to Hain, selling more paint comes from many factors. "Changes in style and home décor influence paint and people choose new colors to give their homes a fresh look, especially if they repaint within one year."
"Resins/polymers are the glue that holds everything in a paint formulation together," said Simpson of Sico. They determine the gloss, hardness, stain resistance, block resistance, washability and longevity of a paint. In a good quality paint, the resin will comprise more than 30% of the paint's total composition. For this reason, most high quality exterior paints, like ours, are made with 100% acrylic polymer."
According to Krishnan, resins are the heart of the coatings. "The rest of the components are built up on the foundation of the resin itself. The quality of the resin in a way decides the functional quality parameters of the paint," he said.
Jotun has introduced pure acrylics in the Middle East, a market where solventborne acrylics and polyurethanes have dominated the exterior facade sector. "We had spent a considerable amount of time during the early nineties promoting the advantages of two component polyurethanes over other traditional cementitious-based coatings and styrene acrylics for exteriors. During the early part of the new millennium, we made a complete about turn to launch the 'Jotashield' range for exteriors and convinced the market to adopt a fresh approach to waterborne, environmentally friendly pure acrylic exterior paints."
According to Revnew, advancements in acrylic technology have been important to improving the performance of today's paint. "Improved technology in acrylic co-polymers is what makes Duration exterior thicker and more durable and flexible than other exterior latex paints," he said. "It is 70% thicker than ordinary house paint, which means superior one-coat coverage on previously painted surfaces and only two coats for new, never-painted surfaces."
As the shift from solvent-based to waterborne coatings continues, R&D staffers have focused much of their efforts on developing new high performance resins for these products.
"The regulations have affected what we are able to produce and sell," said Hain. "As with other manufacturers, we are reducing VOC content in some water-based products to make them compliant and look at water-based alternatives to existing oil-based products that may no longer be available."
According to Pépin of Sico, more than 80% of the firm's research time is spent on new water-based products or improvements to existing latex products. "Therefore, over many years, we have been able to offer better quality latex paints," she said. "Now most consumers realize that good quality latex paint will do an excellent job along with being easier to handle and more environmentally safe.
"While all elements of a paint have an important role to play, the role of the resin is central," said Colin Gooch, technical director, Resene. "It is also the most fruitful area for innovation. While new pigments may be discovered occasionally, novel methods of engineering polymer particles happen regularly to once more change the paradigm. One can get left behind very quickly in the race for excellence if one neglects what is going on in the R&D departments of the specialist resin manufacturers."
The repaint business represents a substantial growth opportunity for exterior coatings manufacturers.
Waterborne coatings generally don't have the adhesion of traditional alkyds when applied over grimy, chalky or peeling substrates. Despite these limitations, environmental regulations continue to shape the market, and there is much opportunity for growth in water-based products. "In light of increased VOC regulation and with continuing R&D in this area, these obstacles also are being overcome," said Revnew. "There are all types of coatings, including waterborne exterior products, that can be applied in temperatures as low as 35˚F. Low-temperature application allows jobs to be completed later in the fall, or begun earlier in the spring."
"It is not unusual in Portugal to use oil-based paints for residential exteriors, exceptions made for doors, windows and trims," said de Almeida. "But even there the trend is to move to waterborne products as forced by environmental regulations, such as the EU Directive, and environmental awareness by consumers."
With continued pressure to lower VOCs, it is fair to say that the trend towards higher performing latex paint will continue. Developing more durable, UV-resistant products is a top priority for all exterior paint manufacturers. Companies continue to tweak their products to enable homeowners to pick from a wide choice of colors that are built to last. "Bright, bold colors used outdoors faded quickly in the past, but that's no longer true," said Revnew. "New technology involving improved bases, including resins, and better pigments now allows you to work with bold exterior colors that can resist fading longer."