The Vinyl Ceiling: Is Manufacturing Capacity Too Small?
Vinyl is booming, and estimates peg year-end sales at nearly three million in the United States alone. In total, year-over-year gains could easily cross one million.
But what happens after that? According to one veteran executive with expertise in the format, future growth will be challenged by limited manufacturing capacity. “All plants are producing as fast as they can, and are still behind on fulfilling orders,” the executive shared.
So why not ramp capacities upward, and meet the blossoming demand? Turns out that crossing the chasm is more complicated than it appears. The reason is that manufacturers are hesitant to pour capital into something that could end up being a fad. Retailers may also shy away from paying for new racks, or reconfiguring floorspace. “No one knows if this rally will sustain, so no one wants to invest money in new equipment to ramp up production capacity to meet increasing demand,” the source continued. “Therefore, we’re probably stuck where we are for the foreseeable future as far as market share.”