When you're on top for so long, sometimes there is nowhere to go but down.
Though the most generous forecasts for the vinyl siding industry call for flat growth, and most call for a slight decline, industry officials still feel good about the future.
Fiber cement unquestionably has become a formidable competitor in an effort to be the choice material for the exterior cladding market. It's gaining a point or two of market share from vinyl each year, and that is projected to continue for the foreseeable future.
But even if the market continues to shift at this rate, vinyl siding will remain the dominant material for the better part of the next 15 years.
``People lose sight of that,'' said John Wayne, president of Kearney, Mo.-based Variform Inc. and chairman of the Washington-based Vinyl Siding Institute Inc. ``It's the predominant material of choice, and the forecasts all have it remaining that way.''
As a category, vinyl siding isn't going anywhere.
But that doesn't mean there won't be some casualties along the way.
The major players will remain major players, said John Pruett, a principal with Exton, Pa.-based Principia Partners, a building products industry consulting firm.
It is the third- and fourth-tier siding manufacturers that will require the most innovation, Pruett said.
``The companies who have $100 million to $250 million in annual sales - those are the companies whose future is uncertain.''
The problem, according to industry consultant Bud Bootier, is that vinyl siding manufacturers now are forced to compete with one another.
``Vinyl has always been good in head-to-head competition with other products,'' said Bootier, president of Wexford, Pa.-based Pure Strategy. ``It competed against aluminum siding even though it was 20 to 25 percent more expensive. It competed against hardboard and natural wood and pretty much obliterated those as material options.
``Now it's vinyl against vinyl, and they're not very good at it.''
Vinyl siding is the largest material segment in the $8.2 billion residential siding industry in North America, comprising more than $3 billion of that figure. Fiber cement represents about $1 billion, or about 16 percent of the siding market.
Despite the projections, Jim Ziminski, president of Columbus, Ohio-based Crane Performance Siding, is encouraged by the technological advancements in the industry, namely in foam-backed siding, which Crane pioneered, as well as expanded color offerings.
``We've continued to be more innovative in the category, not less,'' Ziminski said.
With the technological advancements in style, color and ultraviolet light protection, combined with the southern migration of retiring baby boomers and the ever-increasing market for low-maintenance living, some vinyl siding makers see growth opportunities in the South. It's an area traditionally dominated by Spanish and Mediterranean architecture, which is typically sided with stucco.
But as northerners continue to relocate south, they will bring with them their decorating tastes as well, said Walt Hoyt, communications director for Valley Forge, Pa.-based CertainTeed Corp.'s vinyl siding group.
Hoyt pointed to VSI's ``America Sides With Vinyl'' campaign - an ongoing effort to educate builders, architects and code officials on the benefits of vinyl siding.
``People aren't afraid to spend money on products that are going to give them good looks and perform well on the wall,'' he said.
CertainTeed also manufactures fiber cement.
Further industry consolidation can be expected, Wayne said. In 1996, there were 27 U.S. vinyl siding manufacturers. Now there are 13.
Louisiana-Pacific Corp. in Nasville, Tenn. just last year sold its vinyl siding operations to Montreal-based Kaycan Ltd. The entire Alcoa Home Exteriors division, which includes a massive vinyl siding operation, is currently for sale and awaiting bids. Earlier this month it was announced that Woodbridge, Ontario-based Royal Group Technologies Ltd. will be sold to Atlanta-based chemicals maker Georgia Gulf Corp. It's unclear what, if any, impact that will have on Royal Group's siding operations.
The industry needs a breakthrough technology to ensure its place long-term as the king of exterior siding, Pruett said.
``Can they do a breakthrough innovation? A game-changing technology?'' Pruett asked. ``If they can do a stone or brick, if they can achieve that look, that would be groundbreaking. That would maybe reignite sales of vinyl siding again.''
Wayne predicts that very thing will happen.
``The industry is going to try and reinvent itself,'' he said. ``There's continuing to be industry consolidation. And as the industry consolidates, you will find more discipline and companies willing to take some risk in product development.''
A breakthrough technology will come eventually - if not voluntarily, then out of necessity, industry analysts say.
``The share will gradually decline as a total category, but you can't write them off,'' Pruett said of vinyl siding manufacturers. ``They have too much at stake to let vinyl siding just slowly decline.
``It's still going to be the most popular siding material on the wall, and it's going to be decades before that changes. It's so far ahead of every other material because of all the things that are so good about vinyl siding.''