David Savastano, Editor01.18.22
Architectural paints and coatings are most likely the segment that people consider when they think about paint. Many of us have taken on painting projects at home, whether it is a touchup, painting rooms or even the outside.
Not surprisingly, architectural paints and coating are a huge segment. Analysts across the board place the market in the range of $60 billion annually, with continued growth expected. During COVID-19, the market had mixed results: while construction shrank due to lockdowns, many people took on DIY projects.
Much of the DIY market is centered on the big box stores, such as Home Depot, Lowe’s and Ace Hardware. Lowe’s features Sherwin-Wiliams and its Valspar subsidiary among its brands; Home Depot has Behr, PPG and PPG subsidiary Glidden among its offerings. Ace Hardware offers Benjamin Moore, Clark & Kensington and Magnolia, among others. Many other brands have their own retail outlets.
Julie Elrod, paint business manager for Ace Hardware Corporation worldwide, observed that like many other home improvement retailers, Ace Hardware saw a substantial increase in paint sales in 2020 with the home improvement surge brought on by the COVID-19 pandemic.
Elrod added that the market continues to give no ground in 2021 for paint projects, as DIY and professional customers alike come to their local Ace for award-winning service and top quality paint brands like Benjamin Moore, Clark+Kensington and Magnolia Home.
“The COVID-19 pandemic sent millions of people to their homes for work and school for most of 2020, and as a result it was an incredible year for home improvement projects,” Elrod observed. “In 2021, home improvement projects shifted from home offices to bedrooms, bonus rooms, kitchen cabinets and more as people continue to spend a lot of time at home. Consumers also began to welcome professional painters back into their homes as well, resulting in a resurgence of the professional paint business following a soft year in 2020.”
“Overall, 2021 saw a rebound for the pro market,” said Terri Guenthenspberger, PPG senior marketing manager. “As the vaccine was introduced and the economy reopened, allowing for patrons to go back to restaurants, hotels, stores and the office, there has been an uptick in professional projects across the commercial segment for PPG. DIY has slowed compared to 2022, as homeowners are breaking free from their homes and choosing to spend more time vacationing and prioritizing leisure activities.”
As Elrod observed, 2021 saw people taking on home improvement projects, and paint industry leaders also saw these changes.
“Since the pandemic began, our homes have been serving double and triple duty as they continue to be gyms, play areas for children, classrooms, offices, and general living spaces,” Guenthenspberger said. “As homeowners continue to spend more time at home, they are understandably taking a closer look at their homes and examining how they function.
“As a result, home improvement projects experienced a nationwide surge in 2020, which includes purchases of both interior and exterior paint,” Guenthenspberger added. “In fact, coatings manufacturers experienced a notable boost in online paint sales at the onset of the pandemic that continued over the past year, validating that no project is too big or too small. In Q3 2021, we continued to experience improved trade demand globally and architectural DIY coatings sales returned closer to 2019 levels after notable growth last year driven by the stay-at-home impacts. We believe that there’s more upward potential in the DIY paint space as supply chain normalizes.”
Guenthenspberger noted that on the pro side, PPG also witnessed a reverse urbanization across the country being spurred by the pandemic, as countless millennials and younger generations are entering the hot home buying market earlier than expected.
“Making up nearly one third of home purchases in 2020, millennials are cashing out in hopes of more legroom,” Guenthenspberger continued. “This increase in home buying has established a strong demand for paint and an increase in residential jobs for pros. Current homeowners will want to paint their home to give it more curb appeal for potential buyers, and new homeowners often paint again to make a new home their own. In addition to demand for residential jobs increasing for pros, we’ve also seen increased opportunity in businesses that were forced to suspend or decrease operations in 2020. Now that patrons are returning to places like hotels and restaurants, these establishments are hiring pros to conduct a refresh.”
Sara McLean, Dunn-Edwards editor and color marketing manager, observed that the pandemic had some interesting impacts on the interior coatings market.
“As homeowners continued to work from home this year, remodeling and redecorating projects pushed up in scheduling,” McLean pointed out. “The pandemic spurred a wave of interest in updating homes both inside and out.
McLean noted that as people were surrounded by the same wall color all the time, they grew tired quickly of the monotony and sought new ways to express themselves through color and design.
“During this time, we found new ways to interact with others and it has usually centered around the home—as a background on Zoom with a home office, the kitchen as home central, the dining room becoming the areas for homework, or the guest room as the exercise room, etc.,” McLean added. “The pandemic impacted how we interact with our homes on a daily basis, which brought about a push for new color and design in these renewed areas of the home.”
“People are spending more time at home due to COVID-19,” Nippon Paint reported. “Stay-at-home demand is resulting in more people enjoying DIY projects. Our partner company, Dulux Group, which is mainly engaged in DIY and decorative paints in Australia, has been growing its revenue by about 5% per year on average, consistently outperforming the market (market growth rate of about 1%).
“In China, the real estate market is slowing down, but there are a lot of old houses, which create a huge demand for products and services related to home renovation,” Nippon Paint’s spokesperson pointed out. “Under the pandemic situation, homebuyers have turned to an emerging trend of home improvement instead of purchasing new homes.”
Nippon Paint had an active year in 2021. Aside from its own paint operations, Nippon Paint also has major architectural paint subsidiaries including Dunn-Edwards and Dulux, and added Cromology near the end of 2021. Nippon Paint’s spokesperson noted that the architectural market faced different challenges depending on the country.
“In Japan, through the end of 1H 2021, the market was impacted mainly by delayed paint work and sluggish new orders, due to the impact of the resurgence of the pandemic. From 3Q, the market has shown a recovery trend, due to progress of the delayed paint work projects,” the spokesperson reported.
“As of the third quarter of 2021, In China, DIY market enjoyed strong sales of substrate products and accessories, driven by robust demand growth in Tier 2 to 4 cities. The project market conditions remained firm due to healthy demand. As a result, we have successfully gained market shares and increased selling prices with strategic customers. In Oceania, the DIY market conditions were strong, with demand increasing from the COVID-19-enhanced strong demand in the previous year. In the meantime, the trade DIFM (Do It For Me) demand was slightly weaker than the previous year due to restrictions on accessing worksites based on COVID-19 restrictions. As a result, the overall market demand was flat from the previous year. In the Americas, the strength of the new construction and existing housing markets continued.”
Guenthenspberger observed that buying approaches have changed during the pandemic.
“Through COVID-19, we have also found that customers have become increasingly more comfortable with a different type of buying experience, including pickup and delivery options, as well as digital capabilities,” said Guenthenspberger. “In fact, according to Cleveland Research Clinic, in the next three years, it is estimated that painters will make more than half of their purchases online, seeking faster, more cost-effective ways to purchase products. To address the rapidly evolving needs of our customers, PPG has rolled out a new digital e-commerce model that delivers flexibility and convenience of ordering through online, email, phone or in-person methods, as well as time-saving options of receiving product through delivery, in-store of curbside pick-up options.”
Nippon Paint Holdings also noted the growth of online business, particularly in China.
“We see this as significant business opportunities as our DIY paint products and renovation services ease the burden for consumers keen to repaint and renovate their homes,” Nippon Paint reported. “Many of consumers were born in the 1990s who are digital natives and have fully embraced online consumption. Hence, Nippon Paint is actively exploring a dual-channel of online and offline approach in China, combining customer touchpoints to maximize engagement. In addition to brick-and-mortar stores, we have successfully implemented digital measures utilizing our online platform.”
Also, Dunn-Edwards, a Nippon Paint Group partner company operating a decorative paints business in the southwestern U.S., launched the mobile resource trailers service in the spring of 2021.
“This unique service of Dunn-Edwards combines Mobile Resource Trailers, which are a store on wheels at large jobsites selling paints and paint applicators and other accessories, with Mobile Color Match Trailers, which carry a color matching system to enable color mixing on the spot,” Nippon Paint’s spokesperson noted.
“Dunn-Edwards started the mobile resource trailers service to increase customers’ convenience and work efficiency. The aim is to save customers time needed to drive to paint stores to purchase paints and paint applicators and other accessories. In addition, these trailers strengthen communication with customers by providing better service than existing services at stores without having physical stores. This is a big advantage because of the high cost of real estate in the Bay Area.”
“As an essential business, the market only grew busier during this pandemic,” said Dunn-Edwards’ McLean. “Also, this time has allowed for more thought to R&D of innovative coatings and what customers are looking for in the future. Our labs are operating on normal business schedules so research hasn’t stopped. And for our customers, we’ve continued to be as productive as possible to provide the coatings they need when they need it. We’ve kept our Dunn-Edwards stores open as much as we could with essential staff by providing creative options for getting the product to them through additional delivery and pick up services.”
The supply chain has been a major concern for virtually every industry, and architectural paints and coatings are also being impacted. For example, Nippon Paint noted that procurement of raw materials has been impacted more or less, adding that there has been no substantial impact on production at its factories.
Ace Hardware’s Elrod reported that in general, the architectural coatings market has struggled in 2021, beginning with the Texas ice storm in February that severely impacted the petrochemical industry, affecting availability of raw materials for most
coatings manufacturers.
“Supply chain issues such as transportation, labor, and additional raw materials scarcity brought on by heightened consumer demand have also played into manufacturing throughput for architectural coatings,” Elrod added. “Despite global supply chain issues, at Ace Hardware we have worked diligently with our suppliers to help our independent retailers stay in stock for many of the project essentials our customers rely on to complete their painting projects throughout 2021.”
Guenthenspberger also reported that a number of global suppliers were impacted by the weather events in February and subsequent loss of energy supplies in Texas and other southern US states, as well as recent Hurricane Ida impacts.
“At the same time, there has been a significant increase in demand in some markets we supply due to increased consumer demand for our paint products for residential renovations,” added Guenthenspberger. “PPG continues to take an aggressive approach to securing materials and carriers to minimize the impact to our customers. We have begun to see some relief with slight improvement in throughput in November, and hope to continue this momentum into early 2022.”
Industry leaders see more good news ahead for 2022. Guenthenspberger noted that PPG anticipates a strong year.
“Overall we’re optimistic for 2022, as we’re seeing a rebound in the pro market given an increased need for renovation and refresh projects in commercial spaces, such as hotels, restaurants, healthcare facilities and more,” said Guenthenspberger.
“We do expect to see growth in the market as supply chain issues ease across industries and normal building and remodeling schedules resume,” said McLean.
Elrod reported that Ace Hardware expects that home improvement will continue to be a focus for DIY and pro consumer spending in 2022.
“We are excited about the opportunity to welcome new customers across all segments - particularly new homeowners and young families for project help and trusted advice as they increasingly enter the DIY home improvement market,” Elrod added. “Ace continues to be the place for the most helpful service, a color assortment with both time-tested favorites and undiscovered gems, the best quality paints and paint project essentials, all right in your neighborhood.”
Not surprisingly, architectural paints and coating are a huge segment. Analysts across the board place the market in the range of $60 billion annually, with continued growth expected. During COVID-19, the market had mixed results: while construction shrank due to lockdowns, many people took on DIY projects.
Much of the DIY market is centered on the big box stores, such as Home Depot, Lowe’s and Ace Hardware. Lowe’s features Sherwin-Wiliams and its Valspar subsidiary among its brands; Home Depot has Behr, PPG and PPG subsidiary Glidden among its offerings. Ace Hardware offers Benjamin Moore, Clark & Kensington and Magnolia, among others. Many other brands have their own retail outlets.
Julie Elrod, paint business manager for Ace Hardware Corporation worldwide, observed that like many other home improvement retailers, Ace Hardware saw a substantial increase in paint sales in 2020 with the home improvement surge brought on by the COVID-19 pandemic.
Elrod added that the market continues to give no ground in 2021 for paint projects, as DIY and professional customers alike come to their local Ace for award-winning service and top quality paint brands like Benjamin Moore, Clark+Kensington and Magnolia Home.
“The COVID-19 pandemic sent millions of people to their homes for work and school for most of 2020, and as a result it was an incredible year for home improvement projects,” Elrod observed. “In 2021, home improvement projects shifted from home offices to bedrooms, bonus rooms, kitchen cabinets and more as people continue to spend a lot of time at home. Consumers also began to welcome professional painters back into their homes as well, resulting in a resurgence of the professional paint business following a soft year in 2020.”
“Overall, 2021 saw a rebound for the pro market,” said Terri Guenthenspberger, PPG senior marketing manager. “As the vaccine was introduced and the economy reopened, allowing for patrons to go back to restaurants, hotels, stores and the office, there has been an uptick in professional projects across the commercial segment for PPG. DIY has slowed compared to 2022, as homeowners are breaking free from their homes and choosing to spend more time vacationing and prioritizing leisure activities.”
COVID-19 and DIY Projects
As Elrod observed, 2021 saw people taking on home improvement projects, and paint industry leaders also saw these changes.
“Since the pandemic began, our homes have been serving double and triple duty as they continue to be gyms, play areas for children, classrooms, offices, and general living spaces,” Guenthenspberger said. “As homeowners continue to spend more time at home, they are understandably taking a closer look at their homes and examining how they function.
“As a result, home improvement projects experienced a nationwide surge in 2020, which includes purchases of both interior and exterior paint,” Guenthenspberger added. “In fact, coatings manufacturers experienced a notable boost in online paint sales at the onset of the pandemic that continued over the past year, validating that no project is too big or too small. In Q3 2021, we continued to experience improved trade demand globally and architectural DIY coatings sales returned closer to 2019 levels after notable growth last year driven by the stay-at-home impacts. We believe that there’s more upward potential in the DIY paint space as supply chain normalizes.”
Guenthenspberger noted that on the pro side, PPG also witnessed a reverse urbanization across the country being spurred by the pandemic, as countless millennials and younger generations are entering the hot home buying market earlier than expected.
“Making up nearly one third of home purchases in 2020, millennials are cashing out in hopes of more legroom,” Guenthenspberger continued. “This increase in home buying has established a strong demand for paint and an increase in residential jobs for pros. Current homeowners will want to paint their home to give it more curb appeal for potential buyers, and new homeowners often paint again to make a new home their own. In addition to demand for residential jobs increasing for pros, we’ve also seen increased opportunity in businesses that were forced to suspend or decrease operations in 2020. Now that patrons are returning to places like hotels and restaurants, these establishments are hiring pros to conduct a refresh.”
Sara McLean, Dunn-Edwards editor and color marketing manager, observed that the pandemic had some interesting impacts on the interior coatings market.
“As homeowners continued to work from home this year, remodeling and redecorating projects pushed up in scheduling,” McLean pointed out. “The pandemic spurred a wave of interest in updating homes both inside and out.
McLean noted that as people were surrounded by the same wall color all the time, they grew tired quickly of the monotony and sought new ways to express themselves through color and design.
“During this time, we found new ways to interact with others and it has usually centered around the home—as a background on Zoom with a home office, the kitchen as home central, the dining room becoming the areas for homework, or the guest room as the exercise room, etc.,” McLean added. “The pandemic impacted how we interact with our homes on a daily basis, which brought about a push for new color and design in these renewed areas of the home.”
“People are spending more time at home due to COVID-19,” Nippon Paint reported. “Stay-at-home demand is resulting in more people enjoying DIY projects. Our partner company, Dulux Group, which is mainly engaged in DIY and decorative paints in Australia, has been growing its revenue by about 5% per year on average, consistently outperforming the market (market growth rate of about 1%).
“In China, the real estate market is slowing down, but there are a lot of old houses, which create a huge demand for products and services related to home renovation,” Nippon Paint’s spokesperson pointed out. “Under the pandemic situation, homebuyers have turned to an emerging trend of home improvement instead of purchasing new homes.”
Nippon Paint had an active year in 2021. Aside from its own paint operations, Nippon Paint also has major architectural paint subsidiaries including Dunn-Edwards and Dulux, and added Cromology near the end of 2021. Nippon Paint’s spokesperson noted that the architectural market faced different challenges depending on the country.
“In Japan, through the end of 1H 2021, the market was impacted mainly by delayed paint work and sluggish new orders, due to the impact of the resurgence of the pandemic. From 3Q, the market has shown a recovery trend, due to progress of the delayed paint work projects,” the spokesperson reported.
“As of the third quarter of 2021, In China, DIY market enjoyed strong sales of substrate products and accessories, driven by robust demand growth in Tier 2 to 4 cities. The project market conditions remained firm due to healthy demand. As a result, we have successfully gained market shares and increased selling prices with strategic customers. In Oceania, the DIY market conditions were strong, with demand increasing from the COVID-19-enhanced strong demand in the previous year. In the meantime, the trade DIFM (Do It For Me) demand was slightly weaker than the previous year due to restrictions on accessing worksites based on COVID-19 restrictions. As a result, the overall market demand was flat from the previous year. In the Americas, the strength of the new construction and existing housing markets continued.”
Guenthenspberger observed that buying approaches have changed during the pandemic.
“Through COVID-19, we have also found that customers have become increasingly more comfortable with a different type of buying experience, including pickup and delivery options, as well as digital capabilities,” said Guenthenspberger. “In fact, according to Cleveland Research Clinic, in the next three years, it is estimated that painters will make more than half of their purchases online, seeking faster, more cost-effective ways to purchase products. To address the rapidly evolving needs of our customers, PPG has rolled out a new digital e-commerce model that delivers flexibility and convenience of ordering through online, email, phone or in-person methods, as well as time-saving options of receiving product through delivery, in-store of curbside pick-up options.”
Nippon Paint Holdings also noted the growth of online business, particularly in China.
“We see this as significant business opportunities as our DIY paint products and renovation services ease the burden for consumers keen to repaint and renovate their homes,” Nippon Paint reported. “Many of consumers were born in the 1990s who are digital natives and have fully embraced online consumption. Hence, Nippon Paint is actively exploring a dual-channel of online and offline approach in China, combining customer touchpoints to maximize engagement. In addition to brick-and-mortar stores, we have successfully implemented digital measures utilizing our online platform.”
Also, Dunn-Edwards, a Nippon Paint Group partner company operating a decorative paints business in the southwestern U.S., launched the mobile resource trailers service in the spring of 2021.
“This unique service of Dunn-Edwards combines Mobile Resource Trailers, which are a store on wheels at large jobsites selling paints and paint applicators and other accessories, with Mobile Color Match Trailers, which carry a color matching system to enable color mixing on the spot,” Nippon Paint’s spokesperson noted.
“Dunn-Edwards started the mobile resource trailers service to increase customers’ convenience and work efficiency. The aim is to save customers time needed to drive to paint stores to purchase paints and paint applicators and other accessories. In addition, these trailers strengthen communication with customers by providing better service than existing services at stores without having physical stores. This is a big advantage because of the high cost of real estate in the Bay Area.”
“As an essential business, the market only grew busier during this pandemic,” said Dunn-Edwards’ McLean. “Also, this time has allowed for more thought to R&D of innovative coatings and what customers are looking for in the future. Our labs are operating on normal business schedules so research hasn’t stopped. And for our customers, we’ve continued to be as productive as possible to provide the coatings they need when they need it. We’ve kept our Dunn-Edwards stores open as much as we could with essential staff by providing creative options for getting the product to them through additional delivery and pick up services.”
Supply Chain Issues
The supply chain has been a major concern for virtually every industry, and architectural paints and coatings are also being impacted. For example, Nippon Paint noted that procurement of raw materials has been impacted more or less, adding that there has been no substantial impact on production at its factories.
Ace Hardware’s Elrod reported that in general, the architectural coatings market has struggled in 2021, beginning with the Texas ice storm in February that severely impacted the petrochemical industry, affecting availability of raw materials for most
coatings manufacturers.
“Supply chain issues such as transportation, labor, and additional raw materials scarcity brought on by heightened consumer demand have also played into manufacturing throughput for architectural coatings,” Elrod added. “Despite global supply chain issues, at Ace Hardware we have worked diligently with our suppliers to help our independent retailers stay in stock for many of the project essentials our customers rely on to complete their painting projects throughout 2021.”
Guenthenspberger also reported that a number of global suppliers were impacted by the weather events in February and subsequent loss of energy supplies in Texas and other southern US states, as well as recent Hurricane Ida impacts.
“At the same time, there has been a significant increase in demand in some markets we supply due to increased consumer demand for our paint products for residential renovations,” added Guenthenspberger. “PPG continues to take an aggressive approach to securing materials and carriers to minimize the impact to our customers. We have begun to see some relief with slight improvement in throughput in November, and hope to continue this momentum into early 2022.”
Further Growth on the Horizon
Industry leaders see more good news ahead for 2022. Guenthenspberger noted that PPG anticipates a strong year.
“Overall we’re optimistic for 2022, as we’re seeing a rebound in the pro market given an increased need for renovation and refresh projects in commercial spaces, such as hotels, restaurants, healthcare facilities and more,” said Guenthenspberger.
“We do expect to see growth in the market as supply chain issues ease across industries and normal building and remodeling schedules resume,” said McLean.
Elrod reported that Ace Hardware expects that home improvement will continue to be a focus for DIY and pro consumer spending in 2022.
“We are excited about the opportunity to welcome new customers across all segments - particularly new homeowners and young families for project help and trusted advice as they increasingly enter the DIY home improvement market,” Elrod added. “Ace continues to be the place for the most helpful service, a color assortment with both time-tested favorites and undiscovered gems, the best quality paints and paint project essentials, all right in your neighborhood.”
