|State of the Industry Archives.
Office Furniture Industry Sees 'Sustained' Recovery
Double-digit sales growth and the continued push for LEED credits highlight the office furniture industry's year.
For today's office furniture manufacturers, to "sustain" is to succeed. And succeeding they are.
For the first time in eight years, the U.S. office furniture market is projecting double-digit growth in both production and consumption for 2005. According to the Business and Institutional Furniture Manufacturers Assn., 2005 office furniture production will rise an estimated 12 percent over 2004 figures, to almost $9.995 billion. Likewise, consumption will show approximately 12 percent growth over last year's rates, to $11.910 billion.
While the industry still has a long way to go to get back to the record $13.285 billion it shipped in 2000, it is on the right track. The outlook for next year is positive, with experts projecting 2006 production and consumption to rise an estimated 7 percent and 9 percent, respectively. New office construction spending is expected to increase 3 percent for the first quarter of 2006, to $33.5 billion, according to the economic consulting organization Global Insight.
"All three of the primary drivers of furniture demand are trending positive for the current year," said Tom Reardon, BIFMA executive director. "Corporate profits are healthy, service sector/white collar employment is increasing and investment in new office construction is stable. All of these factors have a positive impact on furniture demand."
"The trend that I have seen in the industry is certainly the push for sustainability," said Gary Scitthelm, vice president of global sales and marketing at Haworth. "I think that North American customers, in particular, are quickly catching on to the benefits of it. Two or three years ago, people thought that sustainable design and sustainable approaches in the industry meant a premium and that you had to pay to follow that approach - you couldn't get your return on investment. The biggest trend that we're seeing now is that people are [finding] that sustainability doesn't cost more initially, and the ongoing benefits are enormous."
"I think it is certainly true that the environmental movement has been very, very big in growing consideration in the industry. And to some degree I think the industry can take a lot of pride in that," said Mark Schurman, director of external communications for Herman Miller. "On the other side of the equation, I would say that the architects and interior design professionals have been terrific advocates to influence our mutual customers in corporate America to look at these issues - not just as the right thing to do, or purely altruistic, but also because there are very sensible business advantages in terms of the quality of the environment, everything from indoor air quality to the experience of the interior space for the employees and customers."
"Environmental and sustainability issues are having a significant impact on the market and in shaping the association's agenda," Reardon said. "Fifteen years ago, our primary involvement in environmental issues was in the area of regulatory compliance. Now we are working to inform our members regarding the benefits of voluntarily embracing the principles of sustainability."
Office Industry Taking the GÃÆ?ÃÆÃÂ¿LEED'
BIFMA says its voluntary Sustainability Guidelines, released in March, "serve as a road map for any office furniture manufacturer or supplier desiring to become a more sustainable company." As part of its sustainability initiative, BIFMA has developed a standard and a test method for measuring office furniture emissions, which is currently under review by the American National Standards Institute. According to BIFMA, the objective of the standard/test is to "provide an open, scientifically-based and harmonized test method acceptable to the U.S. Green Building Council as an option under the LEED-CI 4.5 credit." (For information on LEED-CI, see box below.)
"One of the two existing options available to earn the LEED-CI 4.5 credit is to test the specific product using the RTI/ETV test protocol," Reardon explained. "As the RTI/ETV protocol is not currently maintained by any entity and has a number of shortcomings, we envision that the BIFMA test method and standard currently going through the ANSI canvass (public review) process will prove to be a more suitable option to earn that credit.
"BIFMA's involvement in developing a furniture emission test method was motivated by several factors, including a GSA request from many years ago," Reardon continued. "The test method and standard are not designed to help companies using particleboard, MDF or any other specific material. The standardized test method is intended to bring some commonality and consistency to this emerging field...We have had several meetings with representatives of the U.S. Green Building Council and they are very supportive of our work."
Reardon added, "I envision that more architects, building owners, managers, operators and investors will see inherent value in GÃÆ?ÃÆÃÂ¿building green.' These market forces will continue to evolve and drive demand toward greater options in environmentally-preferable products."
"The more recent industry trends [for sustainability] are a great reflection of an industry-wide awakening...that there really is a financial return on these things, and you have the added benefit of staying in front of government regulations," Schurman said. "It's always nice to be perceived as an advocate, as opposed to an opponent of such things."
Sandy Horton, director of product line management at Kimball Office, agreed. "As an active member of the U.S. Green Building Council, we help our clients achieve their goals for the environment and LEED-CI certification through products that incorporate design for the environment strategies, including cleaner materials, renewable materials, increased recycle content, and the ability to be easily reused, refurbished and recycled. We're also designing our facilities to meet LEED-CI criteria, including our flagship showroom in Jasper, IN, and our new Chicago showroom," Horton said.
However, whether the sustainability issue will impact the residential market still remains debatable. "I think the interesting question is when will this start to spill over into the consumer side and residential homes and the residential furniture industry?" Schurman queried. "I think the trend has been much less evident there, and I'm not quite sure why. It will be interesting to see if the USGBC can have as much influence on that side in the future. With an individual consumer, you can only influence a couple thousand square feet, so the cost per sale, so to speak, is higher."
Practicing What They Preach
While the USGBC and other green groups have drawn more attention to environmental building design, many major office furniture manufacturers, including Haworth, Herman Miller, Kimball Office and Steelcase, already have green policies in place.
Steelcase's commitment is perhaps one of the more well-publicized. The company made news in 2001 when its wood manufacturing plant in Grand Rapids, MI, became the first-ever LEED-certified manufacturing facility. (See Wood & Wood Products, January 2002.) In addition, the company has: eliminated virtually all VOCs from its Grand Rapids metal furniture plant; eliminated almost all hazardous waste generation; and announced that it will use certified woods and be PVC-free by 2012.
Similarly aggressive is Herman Miller's push to follow the principles found in Cradle to Cradle, a novel by William McDonough and Michael Braungart that investigates the conflicts between industry and the environment, and maps a new set of design and production principles. All new Herman Miller products created since 2001 have to pass the Cradle to Cradle protocol, Schurman said.
"The intent here is to create products with closed-loop lifecycles, so that any materials and processes that go into production end up as either organic nutrients that go back into the soil, or technical nutrients that are benign to the environment, plastics and so forth, that can be recycled," he said.
Haworth, likewise an advocate of LEED and the Cradle to Cradle principles, also has a long-standing commitment to the environment and the organizations that support it. In addition to Haworth's efforts in day-to-day operations, the company's showroom space at Chicago's Merchandise Mart is LEED certified. Cementing its involvement, Haworth CEO Franco Bianchi was recently nominated to the USGBC board.
"The efforts that we go to for using sustainable products has been a big deal for us," Scitthelm said. "Part of Haworth's approach has always been about eliminating waste. Eliminating waste, whether it be scrap or packaging, translates into a better bottom line, which then translates into a better product as well. Even lean manufacturing processes have been worked into this sustainability ideal - using less physical space for production."
Kimball is another company with a long-term commitment to the environment. What differentiates Kimball Office, however, is that its parent company, "Kimball International, is the only major furniture company to own timberlands, actively promoting research and education in sustainable forestry," Horton said.
"Our commitment to environmental stewardship began long before the green movement became popular," Horton added. "For as long as we've been around, Kimball Office has used conservation and sustainability to guide how we design, build and plan for the total life cycle of our products. Many of our programs and initiatives have been GÃÆ?ÃÆÃÂ¿firsts,' and we continue to promote industry standards for the long-term protection of our environment."
Kimball's environmental policy includes, among other things, a strong emphasis on the use of sustainable products.
"We select materials that are as environmentally sensitive as possible, while still meeting the engineering requirements for the product's use," Horton said. "We try to use the smallest amount of dissimilar materials possible in our products for easier recycling, and we do our best to increase their already high recycled content."
Monitoring Imports for Sustainability
Tracking the sustainability of products produced in-house is one thing. When it comes to imported components, however, it becomes a little more difficult.
"Herman Miller certainly imports a lot of components and raw materials," Schurman said. "In terms of our international suppliers, we have a program that monitors their performance in a variety of aspects, and among them environmental factors play a part when we decide whether or not to continue business contracts."
According to Horton, Kimball Office has an Environmental Task Team that researches all of the components purchased from international suppliers. "We make sure the components are as environmentally sensitive as possible, while still meeting our stringent engineering requirements for product performance, durability and reliability," Horton said. "Our component specifications remain consistent, regardless of where they are sourced."
Like Herman Miller and Kimball, Haworth also has an internal certification process in place. "When these imports come to North America, we need to stay behind them and monitor them," Scitthelm said. "It's important that we have our own process in place to do so."
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