By CountertopResource.com
Editor’s Note: Last year, Rupesh Shah, co-CEO of MSI Surfaces, spoke with CountertopResource.com offering insights on the quartz surfacing market, trends and the establishment of a new U.S. manufacturing facility. Shah was kind enough to update us on what he’s seeing today in relation to these topics, as well as looking ahead.
When examining the surfacing industry, it is difficult to ignore the economic conditions. In late October, MSI Surfaces Co-CEO Rupesh Shah shared his insight from the bird’s eye view that running a top-level manufacturing and distribution company affords. While uncertain as to exact market expectations, he offered his thoughts on current and emerging design trends, as well as his informed opinion on what the industry may be looking at moving forward.
While acknowledging 2023 has been an interesting year in terms of the economic situation, Shah was quick to point out that while it could be better, it could certainly be worse. “We’re dealing with it and thankfully we don’t see a collapse like 2008 approaching,” he commented before sharing his view of quartz trends.
Trends in Quartz Surfacing
Shah said white marble looks continue to be the most popular choice. His team estimates more than 85 percent of quartz countertops sold in the U.S. market today have a white background. However, he pointed out not all white backgrounds are equal, and that the top end of the market is looking for more translucent whites that have a reflective element. “Producing whites with more depth and no visible grain is more difficult,” explained Shah. “Our U.S. factory focuses on meeting this type of demand, producing higher-end, more translucent whites that we market under the Q Studio Collection. People want these richer or more transparent looks, but obviously it all comes down to a combination of look and value.”
Beyond that, Shah said the line of thinking is that white is more of a canvas than a color choice, and trends are more focused on what is put on that canvas.
“In the last couple years, the trend has been moving toward warmer looks in the form of accents and veining,” said Shah. “White gray is still popular, but warmer shades of brown, gold and chocolate are increasing in popularity, which has likely been driven by a trend toward wood looks.”
In particular, MSI reports blonde and taupe wood looks as increasingly popular for flooring, which leads to that warmer color palette. “When thinking about color, you can’t think about it in isolation,” warned Shah. “You have to look at everything from the backsplash and the cabinet to the floor and the countertop together.”
Ultimately, he said, it’s not the material that drives demand, but rather what the consumer wants.
“One emerging trend, which is good to see, is that consumers want more accent colors in their countertops to complement the overall design of their kitchen,” said Shah. “It’s not only about adding pops of color, but also getting the right shades. Many designers are talking about how green is trending in the kitchen, but that’s probably an oversimplification as it’s related to countertops. Consumers want just the right shade of green that feels natural and isn’t overwhelming.”
Shah said that MSI’s Calacatta Viraldi is the company’s example of providing that “pop” of green in an appealing shade. However, he said these carefully curated accent colors are growing to include shades of blue, burgundy and warmer shades of blonde. “We spend a ton of time trying to create just the right shades,” explained Shah. “In our South Carolina factory we recently introduced a color we’re calling Calacatta Miraggio Seaglass. We probably went through 100 iterations to get the right shade that would go over well in the market.”
The Current Situation
MSI now produces eight colors at its U.S. factory, and expects to add one or two more colors every quarter. “Our domestic facility isn’t about volume as much as producing innovative colors,” offered Shah. “We invest a ton of time
in R&D and technology that’s led to breakthroughs in the last year that allow us to mix more colors together. Using multiple colors of veins in a slab creates a very natural, marbleized look.”
Of the four lines at the U.S. facility, three are already running, producing 300 to 400 slabs per day, with plans to bring the fourth online soon. The untapped capacity leaves plenty of room for expansion of premium designs that require the features afforded by such a new, state-of-the-art plant.
“There’s good news in that innovation has returned globally,” said Shah. “People are traveling again, going to trade shows, visiting consumers and visiting customers, which results in positive outcomes. We’re seeing suppliers globally invest in technologies and bringing newer looks to the market at all price points. So, we believe even with the slowdown, tremendous innovation in countertops will continue to develop.”
In 2022, MSI was facing labor challenges at the newly-built facility, but that seems to be a thing of the past. “We’ve made huge improvements in the last year,” said Shah. “We now have a stable workforce with all of the critical positions filled. We have a great team there.”
He explained that fabricators, however, continue to tell him that attracting the right labor is probably their biggest challenge today. “We are seeing shorter lead times from order to installation,” shared Shah, “but it’s largely because of the economic slowdown in comparison to when demand was booming during the pandemic.”
“For three years, through the pandemic, our industry had an unsustainable growth rate,” he continued. “So certainly, a correction was coming and we’re living through it now. While we could try to predict how long that correction will last, I think the reality is no one knows.”
According to Shah, the strong growth during the pandemic was caused by very low interest rates combined with the fact that so many people were stuck in their homes with fewer spending options. He believes this fundamentally changed how people think of their homes and turned home remodeling into a popular hobby.
“It’s great for all of us in the industry that people think of investing in their homes as a hobby. We don’t see that changing, and the pandemic has led people to it more than ever,” opined Shah. “And with 30-year mortgage rates above 8 percent, people are thinking twice before they invest in a new house that’s going to reset their mortgage rate.”
Looking Forward
Even in the face of the economic slowdown, increases in interest rates and record inflation, Shah estimates demand to have only dropped off by 7 to 10 percent. “I believe the economy is in a volatile situation, and I don’t make a career predicting the future, but in August we were much more optimistic than we are now in terms of the next 12 to 15 months,” he offered. “We now believe growth will be pushed back to the latter half of 2024. Obviously, geopolitics could throw a wrench in any sort of prediction.”
One bright spot Shah sees is the hospitality industry. “People are traveling again, even in the down market,” he explained. “There’s a huge stock of hotels that are in need of renovation and I think we’ll start to see that happen, and it should continue for a long time.”
He also said underinvestment in residential building that fails to meet even the replacement demand, coupled with increased migration into lower cost areas will be additional driving factors for long-term growth.
“I think the longer the economic downturn, the more pent-up demand there will be when we return to growth,” Shah offered. “Over the medium to long-term, we’re in a great industry.”
That’s not to say he expects everything to instantly fall into place. “There are going to be rough patches all along the way,” concluded Shah. “Trends and product categories will change, but I think the desire of people for the right design products, and to live in beautiful homes isn’t going to change, which will continue to work in the industry’s favor.”
For more information, visit www.QfromMSI.com.
