Latex International: Expect big gains in visco, latex bedding shipments
By David Perry -- Furniture Today, March 26, 2006
Shelton, Conn. — Market research indicates that latex foam sales will grow at a compound annual growth rate of 24% through 2008, catapulting shipments of the foam from $231 million in 2004 to $546 million in 2008 and boosting latex's market share from 4% to 7%.
That will make latex foam the second-fastest growing bedding technology, trailing only the 30% growth rate expected for visco-elastic foam.
The market research was done for Latex International, North America's only producer of latex mattresses.
The study predicts that visco bedding will become a significant force by 2008 at retail price points ranging from $500 to $1,000, where it was not a factor in 2004. The visco category already has experienced "significant price/margin reduction" due to Asian imports, according to the study.
Latex, meanwhile, will emerge as "a natural step-up technology" to visco by 2008.
The study looks at the "true wholesale value" of various bedding technologies used in all conventional and specialty beds in 2004 and projects the value of each technology in 2008.
In that period, the study says, innerspring bedding technology will post a compound annual growth rate decline of 0.8%, with specialty bedding of almost all types gaining ground. Airbeds will grow by 14%, while water will stay steady with a 2% market share.
Innerspring erosion under way
The study says the wholesale value of innerspring bedding technology will drop from a 77% share of bedding components in 2004 to a 57% share in 2008. In that period, visco will jump from a 13% share to a 28% share. And airbeds will grow from a 5% share in 2004 to 6% in 2008.
The study, done by a major consulting firm, is unique in presenting growth predictions by types of bedding technology. While specialty sleep producers have been saying that their category is eating away at innerspring's still-dominant market share, the study is the first to document the extent of the damage that could be inflicted by specialty sleep.
Latex International officials first presented details of the study at Furniture/Today's Leadership Conference late last year. Kevin Stein, vice president of marketing, said it was an objective study done by a top management consulting firm, although for proprietary reasons he declined to disclose which one .
The research took a detailed look at how various bedding technologies are faring in the marketplace. For example, it says that "classic innerspring" bedding — bedding that does not include specialty sleep foams — accounted for 64% of the wholesale bedding marketplace in 2004.
Hybrid bedding — innerspring cores topped with specialty foams — accounted for 19% of the market that year, according to the study. Combining those two categories, innerspring cores were featured in bedding that accounted for a total of 83% of wholesale dollars.
That left "pure specialty" bedding, or non-innerspring core mattresses, at 17% of the market in 2004, the study says.
In 2008, classic innerspring bedding is projected to account for 38% of bedding shipments. That will make it the largest single category, but just barely. Hybrid bedding and pure specialty bedding each are expected to account for 31% of shipments. Together, they would be much larger than the classic innerspring category.
However, innerspring core bedding, consisting of traditional innerspring bedding and hybrids, still will be featured in bedding which will account for 69% of the industry's volume in dollars in 2008, according to the study.
Promotional, luxury bedding expected to grow
The study also breaks down the performance of the various bedding technologies by retail price points. It paints this picture of the bedding retail marketplace in 2004: 11% of sales at under $500, 39.2% of sales in the $500 to $1,000 category, 36% of sales from $1,000 to $2,000, and 13.8% of sales at over $2,000.
By 2008, the retail bedding marketplace will look like this: 18% of sales will be under $500, 28% will be from $500 to $1,000, 37% will be between $1,000 and $2,000, and 17% will be at over $2,000.
The study says that $320 million worth of latex foam will be part of the hybrid market between $1,000 and $2,000 in 2008, with another $125 million worth of latex going into the hybrid market at over $2,000.
Stein said that latex foam is a unique bedding technology because it offers "unsurpassed comfort," a "natural" story — "it is naturally derived and environmentally friendly" — and provides the best "pressure relieving technology," which helps reduce tossing and turning.
Manufacturers and retailers like latex foam, he said, because it offers double the average unit selling prices of other types of bedding and more than double the profit dollars, in the same production time. Also, Stein said, latex foam has the lowest return rate in the industry, less than 1%.
A number of bedding producers are driving growth in the latex category, he said. Among them: Sealy with its Reflexion and Posturepedic SpringFree lines, Comfort Solutions by King Koil with its Natural Response line, Spring Air with its Nature's Rest brand, Therapedic with its PureTouch brand, and product from Englander, Classic Sleep Products, Natura, Shifman, Restonic, Original Mattress Factory and Verlo Mattress.
-
Leggett’s 2Q earnings slide 22.8% on flat sales
Jul 27, 2008 -
Order exclusive reports from Furniture Today
Apr 3, 2008 -
Specialists sell a wider mix of bedding
Feb 18, 2007 -
About the numbers
Nov 23, 2003
Featured Company
-
Brandwise Inc.
Brandwise serves a model - not just an industry - by integrating, automating, and optimizing the entire sales channel, from wholesale Suppliers to their Reps and the Retailers they service. In short, our software helps Reps and Suppliers sell more and create... more
VIEW ALL GALLERIES
