Trendspotting is a key tool for wood product manufacturers.
Trendspotting helps manufacturers remain competitive by being proactive rather than reactive in their businesses. Every year, a multidisciplinary team at FPInnovations – FPInnovations consisting of marketing, product development, design, and industry specialists identifies trends for specific sectors and compiles them into trend reports. This year, the trend spotters focused on trends in the window, door, kitchen cabinet, and outdoor project segments. They researched trends such as demographics, new materials, sustainability, or alternative species etc., for current and future opportunities and threats. While some of the current trends appear to be ongoing, others are utterly new and present new possibilities for Canadian manufacturers.
In this article, we highlight three over-riding trends that could affect many Canadian businesses. The full trend report broken down for each sector will be available shortly at www.solutionsforwood.ca, www.fpinnovations.ca, and www.valuetowood.ca.
Trend 1: The 2015 Home – Smaller But Better
After decades of increasing average home size in the US and Canada, demographics, economic conditions, and sustainability concerns are projected to halt and even reverse growth in floor area.
Between 1973 and 2006, the average home size in the USA increased by 67% from 1500 to 2500 square feet. According to a survey of over 500 architects, designers, manufacturers, and marketing experts conducted for the National Association of Homebuilders in the US, home size will stagnate or even decrease over the next decade and remain between 2300 and 2500 square feet, ending three decades of growth.
In Canada, home size is generally 300-400 square feet smaller than US home size but follows the same growth trends.
This projected outcome is based on several trends.
- Land price is continually increasing driving lot sizes to be smaller.
- Zoning and community planning decisions are capping floor area more often.
- Baby boomers are retiring and downsizing.
- The sustainability and environmental footprint is becoming more important.
- The cost of materials and trades continues to rise.
This trend however, is not all bad news. Buyers in move-up and luxury homes are trading size for quality and features, which results in new opportunities for Canadian manufacturers. As buyers move up, they generally look for:
- Higher quality materials
- Taller walls (9 and 10 foot)
- More and bigger baths
- Dedicated laundry rooms
- More built-in cabinets
- The conversion of the living room into a “great room”
Trend 2: Canadians are abandoning the American dream
Canadians seem to be gravitating away from the American Dream of a single detached home with a lawn and a garage towards multi-family housing such as condominiums and townhouses, especially in larger urban centres. Over the past decade, multi-family housing starts in Canada grew from 37% to 47% as compared to 18.5% to 21.5 % for the US.
The reasons for this trend are:
- Affordability: Young families and first time buyers can’t afford houses in many urban centres.
- Convenience: Dual income households have no time for home and garden maintenance or choose leisure in their time off.
- Demographics: Baby boomers are downsizing and downloading responsibilities.
- Urban density: Some major centres have few if any new building lots close to the city core.
- Sustainability: Energy consumption and commuting are key reasons to downsize and move closer in to urban centres.
Characteristics of multi-family construction differ with respect to material selection from detached housing in the following ways:
- The units are smaller than detached homes
- The developer makes material choices and a small package of choices is put together for the end-consumer. Developers generally are driven by material and installed costs in developing these package options.
- However, as a more diverse range of consumers is opting for multi-family living, developers are being forced to offer various styles and price-points.
- Owners have limited ability to renovate those items that fall into the common areas like entrance doors, windows and balcony areas.
- Since many kinds of renovations are restricted or controlled by a council, owners can focus their resources on the areas they do have control over such as cabinetry, flooring, and furnishings.
The multifamily trend also changes the decision making process for product specifying. As two new decision makers are added to the fold for new construction and renovation activities, manufacturers must come up with strategies to serve them.
- Builders and professional renovators (existing)
- Owners (existing)
- Developers (new)
- Strata Councils (new)
Trend 3: Sustainability
Fuelled by massive media interest last year, environmental issues and sustainability reached a tipping point in the mind of consumers and the mainstream market. Consumers are more willing to pay the price premiums required for environmentally-friendly consumer products. Sustainability, health, and the environment are now becoming key purchasing decision factors.
It will be challenging for companies to monitor sustainability trends in their particular industry and market. Information on green product practices, production processes and shipping is complex and evolves constantly. Companies that don’t address sustainable design, manufacturing processes and business practices will risk legislative as well as brand and sales erosion. Builders, designers, and architects are well aware of the growing demand for healthful products and are a driving force for this movement.
To date, there are several key governmental, non-governmental and industry-led environmental programs. Two of the more prominent programs that affect the window industry as an example, are highlighted below:
The Leadership in Energy and Environmental Design (LEED) Program
LEED is a voluntary green building rating system based on a system of points allocated for various requirements such as using:
- Local materials
- Wood from certified sources (FSC)
- Rapidly renewable material sources
- Products containing recycled material content
- Low volatile organic compounds (VOCs)
- Urea Formaldehyde free panels
A guide to LEED, geared specifically for wood product manufacturers and designed to simplify the process of understanding LEED requirements has been prepared. The report translates the hundreds of pages of LEED material down to just what manufacturers need to know about issues such as recycled content, certified wood, and VOC emissions of coatings.
To obtain a copy of this report, go to publications@van.FPInnovations.ca.
Energy Star Program
The Energy Star Program rewards products that are deemed energy efficient, from electric appliances to doors and windows. As an incentive for purchasing Energy Star products, consumers do not have to pay provincial sales tax on these purchases. For more information on the Canadian Energy Star program please visit: http://oee.nrcan.gc.ca/english/index.cfm
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