Should Solid Surface Fabricators Expand Their Offerings To Include Natural Stone and Quartz Surfacing? Washington DC

Park Industries • As a consultant to the natural stone and quartz surface countertop industry, this is a question often asked of Park Industries by fabricators of solid surface products. After all, for many years the market competition between the two industry segments has been fierce, and it is often difficult to embrace that which has been the competition for so long. However, many fabricators of solid surface have put aside their animosity toward the "hard and shiny" materials and made stone and quartz a new addition to their product offering. The question is why are fabricators adding these new materials, and does it make sense for your company to carry these offerings?

The Market Factor

As with any business decision, we must first consider our market. A recent study by the Freedonia Group has predicted a 10-year increase of countertop demand of 20 percent. That's an increase from 469 million sq. ft. in 2004, to an expected 563 million sq. ft. in 2014. Of the products included in the study, solid surface demand is expected to increase by 22 percent and laminates by 7 percent. However, natural stone and quartz surfaces are expected to reach an 87 percent increase in demand, surpassing the demand for solid surfaces by 2009 as measured in square footage. This study has shown natural stone and quartz surfaces to achieve the largest growth segment by far.

Increase In Demand

Why such a large increase in demand? For starters, cost is one factor. Imports of granite have risen over 600 percent since 1995, pushing the price of raw material down over that same period. The correlation lowers the cost of the finished product to the consumer. This reduction has, therefore, made the product much more accessible to homeowners, resulting in increased interest in the product.

Until the recent fall in pricing to the homeowner, most sales of natural stone were installed in homes with an average market value of more than $550,000. According to the last census taken, those homes accounted for 4.6 percent of the existing homes at that time. This small segment of homeowners did not allow room for the tremendous growth expected. However, the lower cost of the product to the consumer has made it common practice for builders to include granite or quartz surfaces in more moderately priced homes, with homes starting in the $175,000 range joining the more expensive models. This has increased the number of potential customers to over 35 percent of existing homes.*

Secondly, television has seen a dramatic increase in the number of kitchen and bath remodeling shows in recent years, on channels like DIY and HGTV, and hard surfaces are becoming increasingly common in the designs showcased on these programs. Coupled with major retail outlets advertising the product, it is easy to see where the increase in consumer awareness is coming from.

Business Goals

So the demand is there. The next question should be, "What business am I in?" It may seem absurd, but are you in the solid surface business, or are you in the countertop business? There really is no wrong answer — your business is what you want it to be. However, business goals are fairly easily defined. No. 1: Meet the customer's needs. No. 2: Be profitable. Simply put, if you don't fabricate it, somebody else will.

There are definite advantages to being a one-stop countertop shop. The first benefit is obvious: You don't have to send the customer somewhere else to get the product they want, or try to steer them from what they are looking for to what you offer. The next is based on a sound business principle: diversification. By adding product offering, you are better prepared to not only gain market share, but to offset the cyclic nature of the business. If the solid surfaces gain ground in the market, great! If the hard surfaces have an upswing, well, that's great, too!

Only you can know what is right for your business. No one can, or should, tell you where your company should go. I encourage you to do your homework. Research your market, and get the best answers you can to help you with the tough decisions. There are exciting opportunities in the market today, and none should be overlooked.