The 2023 Wood Coatings Market

The wood coatings market is in a unique spot right now, as demand is a mixed bag. In some cases, there is a decline in demand, partly driven by inflation but also because so many people took on DIY projects during the COVID-19 pandemic. Now that these projects are done, there’s time to do other things that weren’t available during the pandemic, like travel.

Maureen Taylor, marketing manager for Olympic by PPG, sees consumer priorities shifting post-COVID.

“After explosive growth in the exterior stain category in 2020 driven by the COVID-19 pandemic, we saw demand begin to weaken late in Q2 2021 and continue through 2022,” said Taylor. “Throughout this time, we also saw home center traffic decline, indicating overall market softness in the Home Improvement category.

“As we enter this post-COVID era, we’ve found that consumers’ priorities are shifting with a desire to spend disposable income and time on travel and entertaining versus improvement projects, which will likely correlate to continued weakened demand,” Taylor added. “Because stain is part of a maintenance cycle, we don’t anticipate seeing repeat purchases of the products until at least this year, based on the historical consumer cycle in place post-COVID.”

Taylor noted that the exterior stain category tends to be driven by the DIY segment, so it enjoyed growth in the past few years.

“We’ve seen that sector surge in recent years – a growth trend we mainly attribute to the pandemic,” Taylor said. “Pros are a large driver of the interior stain category, so interior stains often perform similarly to the residential-based Pro categories. We expect both interior and exterior categories to see a stronger performance as environmental conditions also strengthen.

Alan Hall, regional commercial director, Wood Finishes and Adhesives, AkzoNobel, observed that the macro-economic environment faced significant headwinds with the war in Ukraine, record inflation across most economies and impacts of the zero COVID-19 program in China – and the wood coatings market was not immune.

“The market showed signs of a downturn early in 2022, which grew to significant softening by the end of 2022,” Hall noted. “We anticipate 2023 will continue slowing demand through the first half, with an improving demand environment in the second half. However, this will depend heavily on how the macro-economic environment evolves.”

Hall pointed out that construction levels, interest rates and inflation are key economic factors impacting the wood finishes market, with the largest being residential construction.

“Architecture, home design and lifestyle trends continue to influence home interiors,” Hall reported. “Demand for new builds and renovation projects correlates with the need for wood coatings for cabinets, furniture, flooring and especially building products. In many countries, kitchens are the main social feature with open living areas linking to outdoor spaces. Colors that complement each other in this open space will drive growth in cabinets, furniture and flooring.”

Tim Bosveld, VP of product management for Dunn-Edwards, noted that the overall architectural coatings market performed well in 2022, given the headwinds it faced with rising inflation, increasing interest rates and supply chain problems. Bosveld pointed out that North America is the largest consumer of wooden decks, which is facing its own unique set of economic circumstances.

“The wooden decking market is expected to witness growth as a result of rising urbanization and investments in infrastructure,” Bosveld added. “This growth will be negatively impacted by current economic conditions that are impacting the residential construction markets.”

Stephen “Paddy” Dyson, marketing manager for HMG Paints, said that the wood coatings market for HMG is one where they have seen a resurgence in demand.

“Following Brexit and supply issues, this is a business area that we’ve definitely seen an increase in demand from and have some exciting products in development,” Dyson said, adding that the mass availability of spray machines and equipment is an important driver in this growth.

AmCoat is a specialist in thick water-based elastomeric coatings, which traditionally were formulated for roofs and cement-masonry walls. However, Mike Moore, Rhino Shield’s director of products and applications, noted that many elastomeric properties are ideal for wood, as wood expands and contracts with the seasons and change in weather as well as when it ages.

Moore noted that AmCoat’s dealerships collectively grew their business by 40% in 2022, and sees people choosing to stay in their homes rather than move as an important aspect in this growth.

“Deferred maintenance because of COVID was a factor in many markets, but increased demand for home improvement projects also fueled the growth,” said Moore. “In mid-2022, the real estate market began to stabilize from dramatic growth and record low interest rates. With interest rates rising rapidly and at historic increases, many folks are staying in their existing homes. This means more people are using same-as-cash financing or tapping into the increased equity in their homes for home improvement projects, including coating their homes.”

Key Growth Markets For Wood Coatings

There are plenty of projects that are ideal for wood coatings, beginning with decks, fences and furniture. Bosveld said that residential wooden deck, fence and siding markets provide good growth opportunities. In addition, waterborne products are making gains in this market.

“Although the category is rather congested, our research shows there is limited distinction between current woodcare brands, and brand loyalty is somewhat low. In addition, the market continues to skew more towards pigmented, water-based products for aesthetics and performance.”

“Like all paint markets, water-based and sustainable coatings are going to experience huge growth over the next decade,” Dyson said. “There are still some doubts/reservations about water-based technology but some of the modern resin systems available now are fantastic and can match or beat finishes from traditional solvent-based products.”

Taylor said that with the increase in housing construction, PPG is seeing a correlated growth in demand for wood products in both interior and exterior applications.

“We anticipate this growth to translate into increased demand for wood coatings products, namely those used for interior application,” Taylor observed. “As the housing market expands with continued momentum in the new construction space, the demand for furniture, cabinetry, siding/trim, doors/windows, etc. will also grow. From an innovation standpoint, sustainability will be a key growth area for wood coatings, as consumers look to use solvent-reduced or even waterborne coatings as opposed to petrochemical-reliant products.”

What are Customers Looking For From Wood Coatings?

When customers research wood coatings, durability and ease of use are key requirements, as no one really likes to restain decks and repaint fences more than needed.

Matt Richman, VP of marketing at Behr Paint Company, said that homeowners and professional painters want to spend less time applying the coatings that will protect their or their client’s wood surfaces, so products that require minimal prep, are easy to apply, and are easy to clean up are becoming more popular.

“They also want products that provide long-lasting protection against sun and moisture damage so they do not need to reapply those coatings as frequently,” Richman added.
Bosveld agreed that from the end-user perspective, customers are looking for durability and longevity.

“Markets appear to be well educated about the impacts of VOC regulations on the performance properties of wood coatings,” Bosveld said. “They recognize that deck, fence and siding projects require regular maintenance. This is also a point of frustration, as they prefer coatings that will provide more years of protection.”

Rhino Shield’s Moore noted that commercial customers don’t like the painting cycle of coating their home or business every few years.

“They want long lasting coatings with solid warranties and a track record of proven performance,” Moore said. “They want a coating that lasts and looks good year after year. Labor is the overwhelming majority of the cost of coating your home or business, therefore spending a little more money for the best coatings has a marginal impact on the total applied price.”

Taylor pointed out that the main reasons customers take on stain projects is to either protect or waterproof wood surfaces, and like any other paint project, quality of product and ease of use are important to customers.

“Customers are likely to tackle staining projects every three years and therefore desire the process be fast and efficient while yielding long-lasting results,” said Taylor. “Low VOC properties and premium performance attributes such as protection and appearance over the lifetime of a coating are highly sought after when it comes to exterior stains.”

AkzoNobel’s Hall said that customers are driven to provide consumers with aesthetics and strong performance, such as scratch and stain resistance.

“At the same time, they want to reduce their total cost of ownership by purchasing products that can remove processes or costly labor steps while increasing their overall production capacity, therefore reducing costs,” Hall continued. “Some customers are opting for more sustainable coatings and are actively looking to AkzoNobel Wood Finishes to provide products with outstanding protection and unrivalled beauty alongside environmental benefits.”

Trends in Wood Coatings and Colors

In the architectural paint market, color executives are for the most part seeing a lot of interest in natural shades. Not surprisingly, these shades are also popular when it comes to wood coatings.

“We’re seeing color trends following on from the internal decorative market,” Dyson said. “We often now get requests to supply products that are color matched to leading architectural and decorative brands.”

Minwax selected Aged Barrel as its 2023 Color of the Year. Sue Kim, director of color marketing for Minwax, observed that as new routines push us to adjust in many aspects of life, simplified color choices help provide brief moments of reprieve.

“The 2023 Color of the Year, Aged Barrel, delivers just that – a reassuring and nurturing mood that embraces the organic beauty, natural aging and inherent imperfections of wood surfaces to inspire more mindful living,” Kim said. “Here, rustic style and modern sensibility harmonize. Aged Barrel highlights the grain and natural beauty of the wood itself to soothe and comfort as it bridges the gap between two very different eras.”

Sara McLean, Dunn-Edwards color expert + stylist, said that for 2023, Dunn-Edwards continues to see a trend toward warmer, earthier hues.

“We also see a continued trend toward darker hues that accent well against the natural landscape and create a seamless transition from the home to its surroundings,” McLean added. “Brown-toned stains continue to remain classic choices and are offered in a wide range of color options to suit any design style, whether cedar, redwood, honey or brown tones.”

McLean said that she sees warm and earthy tones continuing to be the focus over the next couple of years.

“Warm neutrals and browns continue to be popular among many product categories and will continue to attract those who are looking for a tranquil, cozy ambiance,” said McLean. “Soft greens offer a gardener’s delight but adding just a hint of color while still blending into the natural surroundings. Soft green hues are gardener favorites as this range of color blends in with the garden and create a serene, stylish space.”

McLean also suggested that homeowners can be bold and daring by staining their deck with a more colorful choice like blue or green to be in sync with the trend of the tropical escapism trend.

“These options are great if you live in an area that’s ok with more colorful options,” she added. “Perhaps you have an outdoor shed or ADU that needs to stand out. These more colorful choices can lend a nice tropical statement to your outdoor area.

“Solid stains are a fantastic choice for decking and fencing, especially if you have older wood that needs a refreshing update,” McLean concluded. “A new coat of solid stain can hide weathering and staining when well-prepped and cared for.”

“In the past five years, colors have shifted a little darker and richer. Homeowners are not afraid of color,” RhinoShield’s Moore noted. “Though off-whites and light neutral colors will always be popular, more homeowners a venturing towards richer colors.”

“More wood coatings products are expanding their color offerings so that homeowners and professional painters can easily match the coating to their client’s personal taste or to complement their or their client’s house color,” said Richman. “Consumers are also increasingly interested in products that are eco-friendly, and they expect those products to deliver equal or better performance than the less eco-friendly products offered in the past.”

Hall said that AkzoNobel’s dedicated Global Color and Design team for wood coatings is continuously capturing and interpreting the color and texture trends and, in collaboration with customers, creating unique complementary aesthetic wood coatings finishes for furniture, cabinetry, flooring and building products.

“Some of the modern furniture designs and higher end influences being reflected in the latest products from the AkzoNobel team include the overarching trend that we’re finding support, connection, inspiration and balance in the wonders of the natural world,” Hall added.

PPG’s Taylor pointed out that as a result of the pandemic, home design that brings the natural feel of the outdoors inside has emerged as a leading trend.

“Natural textures and colors are being used now more than ever to help homeowners create a stronger connection to nature after several years of needing to stay mostly indoors,” Taylor added. “Olympic announced Mushroom, a warm, earthy, soft gray tone, as its Stain Color of the Year for 2022. Mushroom is a versatile hue that is a natural extension of current trending palettes for interiors, which again, are grounded in nature.” 

Innovative Additives for Wood Coatings

As a leading wax distributor and manufacturer, Keim-Additec Surface offers a diverse catalog of wood coatings additives, providing innovative solutions with the help of our network of exclusive partners. In 2022, Keim-Additec further expanded this network, adding a line of resins to the portfolio as well as debuting several new waxes and wax emulsions. Additionally, our team has had success in developing alternatives for PTFE, among other environmentally-conscious initiatives, across a variety of applications. With these advancements, our sustainable and innovative technology keeps us versatile when it comes to helping clients navigate the wood coatings marketplace.  Some key
features include:
•  Enhanced sanding properties for both water-based and solvent-based systems
•  Unique hydrophobic properties for exterior applications
•  Abrasion resistance, Slip, Anti-blocking, Stain Resistance
•  High Gloss vs. Deep Matting
• Specialized support for clear coatings and pigmented wood stains,
including haptic feedback
• Available in beads, emulsions, flakes, powder, and prills

Visit us at www.keim-additec.com