Volume 28/Number 3; July 21/28, 2014
Kronotex USA rolls out the ‘best of the best’
By Steven Feldman
Barnwell, S.C.—Kronotex USA, a division of one of the world’s largest producers of laminate flooring, is rolling out the American Concepts brand for the North American marketplace. The program consolidates the company’s entire lineup of branded products, which was formerly marketed under the Kronotex and Formica brands.
American Concepts, a 57-SKU collection featuring the company’s “best of the best” wood visuals, was developed through extensive consumer research. That research included everything from the name to the logo to the products themselves. The goal was to give independent flooring retailers a brand and collection that would resonate with the target audience of female consumers, ages 35 to 55. In other words, provide retailers with an easily sellable line where they could make a respectable margin. Moreover, American Concepts is not being made available to the big boxes or other mega-retailers, preventing the line from being shopped.
The process began about a year ago by asking more than 1,000 consumers what they value in a laminate floor. Research revealed that American-made product is a purchase driver for emotional reasons, but that was just the beginning. “We found ‘made in America’ equates to quality and safety,” said Mike Fox, founder of the Mullingar Group, which conducted the research. “Many products made overseas don’t have the same safeguards as American Concepts as it relates to VOCs and the construction of the product itself. Where it is made determines how well it is made.”
Consumers also said sustainability is important. “At the top of the list was landfill issues and sustainable forest management,” Fox said.
So, at the end of the day, Kronotex USA opted to create a line that would give specialty flooring retailers’ customers everything they would want in a laminate. “Retailers should generate more sales if they give women everything they want— American quality, made in America, healthier for the home and planet—all in one brand,” said Barbara June, marketing director.
Travis Bass, executive vice president of sales and marketing, summed it up: “A U.S. producer that has quality product, stands behind it, services from here, and offers design that reflects women’s definition of American style. That’s the story behind American Concepts.”
And, with that, the move from the Formica brand was enacted in order to expand the value proposition. “In 2005, we were trying to pick a name that would help retailers,” said Fred Giuggio, vice president of brands for Kronotex USA. “We found Formica stood for durability, and that was an important story nine years ago. But, today, durability is no longer a question for laminate; it is a category benefit. The Formica name was chosen because of something [that resonated with consumers] in the past. It is now time to be looking at future trends. American Concepts is built around our next generation of buyers.”
Jeff Hamar, president of Galleher Corp., a Santa Fe Springs, Calif., distributor of Kronotex laminate, said the coupling of a brand switch and new products featuring aggressive price points and new looks could prove compelling to dealers and their customers.
“Branding it ‘American Concepts’ is probably smart because there seems to be consumer interest—at least in some segments—in buying American products,” Hamar said. “And while there is no real brand recognition for laminate these days—not since Pergo—when consumers walk into a store and see a nice, fresh display with the name American Concepts, you can have some success if you’re a retailer. You just have to make sure they walk the customer over to the display.”
Product features and benefits
American Concepts will be positioned as a value-priced product that boasts quality, the latest design and all the components of the value equation. The American Concepts display, which is a retrofitted Formica rack with new graphics and the updated SKU designs, will attract consumers’ attention from anywhere in the showroom given its red, white and blue Americana logo. “There are lots of positive feelings about supporting American-made products,” Bass said. “Seventy-eight percent of women would rather buy an American product. Sixty percent said they would buy American at a higher price.”
He added that the American Concepts line is a better grouping than what was offered under the Formica moniker. “When we serviced Formica, we also were servicing Kronotex USA and a non-branded line. What we did through American Concepts was eliminate 160 SKUs and come up with what we believe are 57 winners. We took the best performers from the former three lines and enhanced them with some new designs. This is our all-star lineup.”
Coming up with the products that would eventually make the cut was an arduous task. The company needed to ensure the specialty retailer had something to sell at every price point, from the basic, 7mm, square edge, meat and potato products all the way through the 12mm, embossed-in-register, handscraped products with a four-sided bevel and attached pad. The collection can retail for anywhere from $0.79 to $2.99 a square foot. And, the line is flexible. “We will be tracking the performance of designs,” Bass said. “We will constantly be refreshing our product assortment.”
The initial lineup:
•Liberty: 7mm, square edge; six SKUs
•Stone Harbor: 8mm, square edge; nine SKUs
•Dalton Ridge: 8mm, beveled edge; 16 SKUs
•Middlebrooke: 10mm square edge with attached pad; seven SKUs
•Sanderlin Mountain: 10mm, beveled edge with attached pad; five SKUs
•Berkeley Lane: 12mm, beveled edge; eight SKUs
•Valley Forge: 12mm, beveled edge with attached pad; six SKUs
“Kronotex has used this opportunity to refresh the line in a powerful way,” Hamar said. “It is very contemporary with the looks that are hot today.”
The launch of American Concepts illustrates Kronotex USA’s commitment to the North American market, particularly the independent retail channel, which has been under fire after witnessing its share of the laminate market drop to between 30% and 35%. According to Bass, there is still opportunity here. “There is no capacity left on the street with high-end laminate items. We have to source product ourselves from time to time, and that is after a $45 million investment in added capacity. We could double our capacity in high-end items and not miss a beat. The category is dying? We have all we can say grace over.”
Being a division of Kronotex USA offers a number of advantages few competitors can boast. For starters, it makes laminate—and only laminate. “We are like the Navy Seals,” Bass said. “When you do one thing you do it the best.”
Kronotex USA also offers the financial backing that many Chinese importers lack and, as such, the confidence instilled in retailers. “When you are the world leader in size, you are going to be the world leader in quality manufacturing,” Bass said. “The financial backing of Kronotex allows us to have the most state-of-the-art equipment, reliable distribution from a central location, world class R&D, and it allows us to continually invest in the business.”