Deck makers tout material advances in quest for more market share

Capped composite decks are hot, gaining about 70 percent of the synthetic market segment while chipping away at sales of wooden decks, which dominate the overall market with an 84 percent share.

Usually made of polyethylene and wood filler with a protective shell, composite decks never need sanding, staining or painting, don't rot or splinter, are termite-proof, and come with warranties for fade resistance and performance.

However, composite decks can be literally hot, too, in the summer months, absorbing heat from their surroundings. That's spurring a new innovation by one of the industry veterans. Founded in 1989 in Springdale, Ark., Advanced Environmental Recycling Technologies Inc. is getting ready to launch a new product with what it calls “cool deck technology.”

“That's the ability for it to absorb up to 35 percent less heat than traditional capstocks,” AERT President Randy Gottlieb said in a telephone interview about MoistureShield Infuse, which will be released in the fourth quarter.

“That gives our customers the ability to use their deck more often and walk on it in bare feet. It's mostly a comfort thing. As we did our market research, we learned that the surface temperature of composite decking is a drawback in the industry and we wanted to solve that problem.”

AERT developed a proprietary way to optimize heat reflection while mimicking the beauty of wood with a co-extrusion manufacturing process, Gottlieb said.

“With the help of a few third parties and lots of good partnerships we were able to come up with something that takes the heat away,” he added.

Infuse will debut on the heels of another AERT capped composite decking line called Refine, which hit the market in July. Refine has a deeper embossed pattern for more texture and a capstock to protect against fading and staining.

Capping it off

With $76 million in sales in 2015, AERT is the No. 48 pipe, profile and tubing extruder in North America, according to Plastics News' rankings. The expansion of its capped composite offerings follows the No. 1 trend in residential decking and railing, according to Principia.

“With the rapid adoption of capped composites that has occurred over the last several years, the industry has transitioned from lower priced uncapped composites to higher-end capped composites,” a Principia trends study shows.

How rapid is this transition? Capped composite decking sales, which made up 18 percent of the synthetic market in 2010, grew to 45 percent in 2012 and 68 percent in 2014, Principia says.

AERT officials expect their “cool deck technology” to stand out among buyers.

“We're the first to address this, and our research says it is more than a great tiebreaker with all things being equal with pricing, aesthetics and performance,” Gottlieb said.

In the overall decking market, alternative-wood products have 16 percent of the 2.4 billion lineal-feet share, according to Principia. Before the recession, composites had about a 20 percent market share but are poised to make up more ground as technology improves both performance and color options, and as busy or aging homeowners seek low-maintenance products. Principia projects the market for composite decks will grow at 5 percent annual rate through 2017 compared to 3 percent for decking in general.

The overall decking market is valued at $4.1 billion, which is up from $3.6 billion in 2012, according to the LBM Journal for lumber building material distributors.

Every 1 percent of market share that the alternative products gain from wood represents $50 million of revenue, according to a May 2016 investor presentation for Trex Co., which is the top-selling composite deck manufacturer.

With sales of $440.8 million in 2015, the Winchester, Va.-based business is the No. 8 pipe, profile and tubing producer, according to Plastics News' latest rankings.

Trex has seen its share of the composite market grow from 36 percent in 2012 to 41 percent in 2014, according to 2013 and 2015 Principia market reports. The company has about 7 percent of the total decking market.

 Challenging wood

Trex launched what will be a multi-year advertising campaign in April to promote the benefits of its products vs. wood with videos showing the aging process on pressure treated lumber, cedar, redwood and ipe, an upscale wood also called the Brazilian walnut. The company's second-quarter revenue growth of 7 percent reflects the strength of the remodeling market and effective marketing strategies, Trex CEO and President Jim Cline told investment bankers on Aug. 2.

“Initial metrics show that our marketing campaigns are resonating with both trade and consumers,” Cline said.

Synthetic competitors are sharing similar messages prominently on their websites. However, Gottlieb pointed out that this isn't a concerted effort.

“There's nothing official that we're doing as an industry,” he said. “There's no pork-is-the-other-white-meat kind of thing. The message for composite decking is that it works better than wood.”

Fiberon, which is made by New London. N.C.-based Fiber Composites LLC, released a new reversible product in January called Symmetry that is covered on all four sides with a cap layer called PermaTech. Fiberon suggests to its website visitors: “Thinking about wood? Think again. Because no one likes splinters, mold or re-staining decks.” Amongst pipe, profile and tubing producers, Fiberon ranks No. 24 with estimated sales of $175 million in 2015.

“Why mess around with high-maintenance decks…” CertainTeed Corp. asks on its website. The building products manufacturer, which is based in Malvern, Pa, makes vinyl decks but has capped composite railing made of PVC and recycled maple wood flour with a PVC capstock. With estimated sales of $630 million, CertainTeed ranks No. 6.

Also hammering away at wood, TimberTech's website says “Think wood made tougher” while Azek recommends online shoppers “Choose a deck engineered to last.”

TimberTech composite decks and Azek vinyl decks, which now have a capstock, are produced by CPG International. The privately held Skokie, Ill.-based company ranks 13th among pipe, profile and tubing manufacturers with an estimated $310 million in 2015 sales, according to Plastics News' data.

In the decking industry, CPG is considered the biggest competitor to Trex. Principia puts the company's synthetic decking share at just over 30 percent of that market.

“Wood is still the majority of the decking that's installed. Our collective goal absolutely should be to transition the market away from wood,” CPG spokesperson Rachelle Shendow said in a telephone interview. “Any way we can educate homeowners and contractors to that is beneficial.”

Differentiating factors

Still, that doesn't mean the competition has cooled between synthetic deck makers. CPG is out with new colors for TimberTech. And, since January, all Azek vinyl decks have come with a capstock called “alloy armour technology” that Shendow said gives the boards outstanding protection against weather, staining and sunlight, which means they hold their color over time.

“With this technology, we've also introduced the 30-year fade and stain warranty,” she said.

Trex and many other polymer deck makers offer a 25-year limited residential warranty and an additional 25-year fade and stain warranty. However, AERT says some of its guarantees are the best, such as the lifetime residential warranty — even if the boards are installed on the ground, in the ground, or under water — and a 25-year fade and stain warranty for its first capped composite line called MoisturePro.

Shendow said Azek's Vintage collection colors with the capstock technology are among the company's top sellers. The Vintage boards also appeal to those needing to meet a Class A flame spread index rating.

“This has given us another opportunity to sell decking for rooftop applications,” Shendow said. “In places with stringent fire codes, this could be a great option.” 

Looking ahead

Since homebuilders often go with wood decks because they are cheaper, the remodeling market for existing homes is where the biggest growth opportunity remains for synthetic deck manufacturers.

The North American Deck and Railing Association says nearly 40 million decks in North America are more than 20 years old.

Tamko Building Products has realigned management and added positions to capture some of the decking business for its EverGrain brand. The Joplin, Mo.-based company, which entered the decking market in 2001, compression molds boards of plastic and wood fiber “with an added layer of protection” bonded in the manufacturing process of its capped Envision line for aesthetics and durability.

“We recognized that our intense focus on the growth of Tamko's core roofing business over the past several years diverted attention and resources from the decking operation,” Executive Vice President Tim Whelan said in a news release. “These organizational changes were made to return the entrepreneurial spirit, passion and innovation that drove the early explosive growth of EverGrain decking.”

Trex's Cline said the drive to alternative wood products “will begin to really take place” in 2017 and 2018.

“We're seeing good growth across the breadth of the market — big box and two-step distribution model,” he said. “So it's a very balanced growth that we're seeing and I believe that is probably representative of the entire market since we are such a large portion of that share.”