Latex foam boom still racing ahead
By David Perry -- Furniture Today, March 21, 2004
Shelton, Conn. — Shelton, Conn.— The U.S. latex bedding market is in the midst of a growth boom that shows no signs of slowing, according to a leading producer of latex foam.
Kevin Stein, director of marketing for Latex Foam International here, North America's only latex bedding producer, sees substantial growth ahead for the burgeoning category.
He estimated the specialty sleep category, which includes latex foam, represented about 12%, or $588 million, of the $4.9 billion wholesale U.S. bedding industry in 2003. Latex foam's share of the specialty sleep market in 2003 was 20%, or $118 million.
That's reflects a 71% growth in latex sales since 2001, Stein said.
In overall bedding market share, latex currently is 2.4% of the market. It will grow to 3.1% by the end of this year, and will exceed 4% by the end of 2005, Stein estimated. That will keep latex growing at a 71% rate every two years.
What's driving that growth?
Stein cited several factors, including:
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Luxury bedding is expanding rapidly. Higher-margin bedding, retailing at $1,500 and up, has shown 20% growth in consumer spending in the past two years.
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Consumers are becoming better educated about the category, through media reports, the Internet and the advertising of specialty sleep retailers and producers.
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There is more data available to quantify the impact of a good night's sleep, and latex foam offers a better way to sleep.
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One-sided mattresses are becoming the industry standard, and the performance of cushioning layers, such as those featuring latex foam, is more critical than ever.
Foam is now accepted as a premier bedding component technology by consumers, retailers and manufacturers, Stein said. The direct marketing efforts of Tempur-Pedic, which produces visco-elastic or "memory" foam, have helped boost awareness of foam in general, he said.
Borrowing car racing terminology, Stein said latex is "drafting" on the success of visco-elastic foam. The Big Five bedding producers have latex bedding programs that registered growth of 223% from 2002 to 2004, he said. And the "feel, performance and uniqueness" of latex foam is separating it from other foams in the market, he added.
Major latex offerings include Sealy's Reflexion line, the Simmons BackCare Advanced line, the Serta Perfect Night and
Masterpiece lines, Spring Air's Nature's Rest line and King Koil's Natural Response line, among others.
Retailers see latex as a higher-value complement to Tempur-Pedic-type bedding with a unique natural story, according to Stein.
On the consumer side, there is confusion on the differences between latex and visco-elastic foam. The Internet is helping to educate consumers, but the retail sales associate has the greatest influence on the consumer, Stein said.
He noted that latex foam is a naturally derived and environmentally friendly product. Latex is harvested much as a maple tree is tapped for syrup, he said. Virtually all natural rubber comes from the latex of the hevea-brasiliensis (rubber) tree. Each tree yields about a teacup's worth of latex per day.
Retailers and manufacturers are promoting latex because it produces more retail profit, Stein said. A latex bedding set retailing at $1,599 yields almost $800 in gross profit at a 50% margin, triple the profits of a $499 sleep set that represents a significant portion of bedding sales. The production time of the two sleep sets is the same, he said.
And latex's 1% return rate is "the lowest in the industry," Stein said.
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Specialty sleep products likely to stay hot
Dec 22, 2004 -
Can specialty sleep maintain buzz?
Mar 21, 2004
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