Share-ify, the industry-leading, secure, private network for trading partners and customers to share business information, has announced its 2023 results with a 35 percent increase in sales year over year and a forecast that 2024 will be even better. Photo courtesy of Ales-A/iStock / Getty Images Plus via Getty Images.

Robert Carroll

Robert Ruckle

John Godina

The Coatings, Adhesives, Sealants and Elastomers (CASE) industry plays a pivotal role in a wide range of sectors, from automotive and construction, to electronics and consumer goods. As a dynamic and evolving market, CASE faces a complex set of trends, challenges and opportunities. From the increasing demand for sustainable and environmentally friendly products, to the growing influence of advanced technologies like smart coatings and additive manufacturing, the industry is navigating a rapidly changing landscape. However, alongside these innovations, it must also address supply chain disruptions, raw material shortages, regulatory pressures and shifting consumer preferences. This article brings together quick insights from John P. Godina, Vice President of Manufacturing & Sales at Catalynt Solutions, Inc.; Robert Ruckle, Global Marketing and Sales Director at Siltech Corp.; and Robert Carroll, President of R.E. Carroll Inc., to explore the current market dynamics, emerging trends, and the key challenges that companies in the CASE sector must overcome to remain competitive in an ever-changing global economy.

GROWTH IN THE CASE MARKET

PCI: What regions are experiencing the fastest growth in CASE demand, and why?

Godina: The last two years have been challenging in the CASE market. Coming off the COVID phenomenon, where people were stuck at home doing DIY projects rather than new construction, we moved into a market of significantly increased interest rates. This market was driving new construction, and large-scale remodeling down even further. Despite reaching the end of the "season," we started to see growth in the architectural paints and concrete coatings sectors, driven by the recent interest rate drop and anticipated further decreases.

Ruckle: Due to the post-pandemic supply chain issues, manufacturers have been moving production to Mexico and India, with Southeast Asian countries like Vietnam gaining share as well.

SUSTAINABILITY

PCI: What are the major challenges and opportunities related to sustainability in the CASE sector?

Godina: The challenges and opportunities related to sustainability have remained the same in the CASE sector for decades. Minimizing waste from production, reducing VOCs, and finding renewable raw materials are at the top of every producer’s mind. On top of this, the national push for a carbon-neutral footprint presents a significant challenge for the CASE sector. However, the most difficult hurdle in reaching these goals remains the consumer's willingness or ability to pay for these improvements. While “green” products are appealing, they are seldom the more affordable option.

Ruckle: To me, the first major challenge is precisely defining sustainability. Obviously, the idea of protecting our environment and society is critical, but just how do we do that in our petroleum-centric existence?

Suppliers can do calculations for carbon footprint, percent new carbon, etc. but until these terms are clearly and specifically defined everyone’s answer will vary and have little value. Third-party certifications will likely dominate early adoption of truly sustainable practices in the CASE market. Suppliers will look to these third parties to both set the questions and grade their performance.

The other challenge will be keeping up with the new market drivers such as switching automobiles to electric power trains, generating more electricity without petroleum, and meeting impending new regulations. Business opportunities will change from existing, outdated applications to new ones driven by the new demand in batteries, electronics, nuclear power, etc. An organization’s predictive ability and responsiveness will be tested.

Carroll: The biggest challenge we see is overcoming the increased cost of materials classified as sustainable. There is interest from customers until it comes to the cost, then that interest disappears.

MARKET DYNAMICS

PCI: What are the primary drivers behind changing consumer preferences in the CASE market?

Godina: The three main drivers we've observed over the past decade are ease of application and cleanup, durability, and environmental impact, including health and safety considerations. Whether it is a specific retail chain eliminating a certain raw material, the government changing regulations due to environmental concerns, or the average consumer’s desire for single-coat applications, products are constantly evolving.

Ruckle: Sustainability, regulatory changes and reshoring to ensure supply chain success are the main drivers near term.

Carroll: Key drivers include the continued push to lower VOCs, and the transition from solventborne to waterborne coatings.

TECHNOLOGICAL ADVANCEMENTS

PCI: What role do digitalization/automation/AI play in your manufacturing process or future plans?

Godina: Since COVID, hiring and retaining personnel has become challenging, and those who stay now command significantly higher wages. Although the industry is just beginning to explore AI, it has focused on automation for many years. Not only does automation reduce what is typically a company’s greatest expense (personnel), it aids in repetitive consistency. Finally, as the development of AI moves forward, model and formula advancements should move at an unprecedented rate. With increasing global competition, efficiency and adaptability are crucial for this market sector.

Ruckle: In our case, we continue to rely on natural intelligence until a relevant AI application is demonstrated.

FUTURE OUTLOOK

PCI: How might consumer behavior and technological advancements reshape the CASE market in the near future?

Godina: In a world driven by instant gratification and the demand for all-in-one solutions, technology will be crucial in advancing the CASE sector into the future. Advancements in tools like digital color matching have already made it simple for consumers to display their personal tastes.

As AI becomes more mainstream, custom formulations are expected to become accessible at the consumer level, enhancing satisfaction through personalization. This demand for tailored solutions should also drive improvements in quality and efficiency at the industrial level. We are already seeing how advancements and changes in aftermarket segments, like automotive coatings, positively impact OEM coatings in lasting ways.

Ruckle: It is clear that the pandemic created a frame shift in market dynamics and that five and 10 years from now will likely look very different. End-use and business consumers will dictate the market pull, as always. The question is what will the market pull center on? It is a critical time for businesses to think outside of the norm.