Published in September, 2019
Anil Taneja, Director, LITOSonline.com
First, a sharper definition of the word 'fabricator' is due before we proceed further so as to better differentiate from other businessmen also involved in the natural stone industry. For the purpose of this article 'fabricators' refers to those companies whose initial 'raw material' is usually a slab, be it marble or granite or whatever other stone. Fabricators should not be understood to be those who process blocks into slabs in the factories with block-cutters, multi-wire machines or gangsaws, though there are some companies who tend to control inhouse the entire value chain from blocks to slabs to cut to size to installation.
Another clarification- while the natural stone industry is fragmented all over the world, consisting of usually small size companies almost everywhere, the industry structure can be different in different countries, depending on factors too numerous to name here.
The fabricators may often be smaller in size compared to quarry owners or factories. In fact, in the vast majority of the cases all over the world, they are usually small sized family owned employing from basically 2 or 3 employees to perhaps 15 or 20, in the developed world.
Fabricators have occupied a very key role in recent decades in the stone industry. During the last three decades they have been the 'face' of the natural stone industry to the world, that part of the industry with whom a large part of the end consumers dealt with whenever they needed to install a new kitchen top counter, reform a home, or do even small sized projects where the fabricator would also offer service of installation.
The fabricators have always considered themselves to be businessmen with the ability to influence the end consumers, to inform them what type of natural stone is best for their particular needs. Whether it was a kitchen shop owner who has a client looking to reform the kitchen, or a home owner or interior designer doing some renovation work, the fabricator's opinion and his expertise was valued. He was, after all, the expert in a dazzlingly complex industry where so many different criteria needed to be considered before making a decision as to which stone to use.
Till recently it used to be good business for the fabricator, a business often passing from one generation to another. Tough, but fascinating, an industry where people ended up falling in love with natural stone and their work. What more can one ask for in life?
It used to be so.
For the reality is, in recent years, in many countries especially in the developed economies, the dynamics have changed in a dramatic manner.
The appearance of new artificial materials has been a dramatic game changer. The appearance and growing popularity of quartz and now big format porcelain, have changed the dynamics completely.
In theory these changes should not have affected the fabricators much- after all, their 'raw material' continues to be slabs, an intermediate product, which has to be further cut and shaped to become an end product. Businessmen need to be practical people and adapt to a new reality or else, no matter what be the industry, they will not be able to survive. In fact, in many countries, this is exactly what is happening. Fabricators that a decade ago would be doing 80 to 90 % of their business in natural stone, in many markets, are now doing the reverse- their business is now often just 20% in natural stone, rest is in quartz or porcelain.
But what happened is that not just new materials appeared in the market, which required more precision in cutting compared to natural stone, or were substitutes that the natural stone lover never ended up really liking. The whole business dynamics changed too. The manufacturers of artificial stone were different kind of suppliers. They were not just financially stronger compared to the stone processing factory owners, they were and are, more marketing oriented. It was and is a new mentality- the new materials businessmen realised they needed to promote their materials to the end users, to create demand, among those who actually made the purchase decisions, be they interior designers or architects, or home owners. This required a new mentality- of spending big money in building brands, of actually making the effort to place well designed samples in thousands of kitchen and home decoration stores, of having a permament presence in media not just targeted at professionals but also ordinary people in a very sophisticated way, of taking part not only in B to B fairs but those where specifiers would be present, of developing extremely expensive and sophisticated logistics. A lot of money, but also the right mentality, is needed to do all this.
The people behind the new materials understood something that natural stone people had never even considered - that in the modern world , the actual cost of production of a product is not very relevant, that value lies in marketing and logistics. These areas could require as much investment every year as was spent in buying the most expensive machinery in the plants.
Something else too - natural stone does have its issues. As everyone in the industry knows (but the outside world does not and does not need to know either), not all stones are adequate or recommendable for all applications. No two stones are the same, is a often used cliche- but this also means a lot of specialised knowledge is required. The new artificial materials are, in the age of convenience, simpler to specif (they are all the same), simpler to stock, simpler to sell, and often simpler to install. Less complications for many people in an age where people value convenience.
This, for the conservative and very fragmented natural stone people, was a revolutionary challenge. The fabricators and, indeed, the entire stone industry people, never realised that for the most part, if they were doing well, it was because there was no real alternative to their product. The competition as they defined it, was other people selling same kind of natural stone.
Selling? The harsh reality that even now many people in the natural stone industry find hard to assimilate, is, the industry has never been selling (let alone marketing). People have been buying natural stone, they were not being sold natural stone. The fabricators, the first line of soldiers of the industry, (the wholesalers who can be considered to be the second line of soldiers)- they were not sellers, they were merely processors of demand. What the market wanted, they supplied (or stocked). But whose responsibility it is to sell? Typical answer- not me. Someone else.
Well, the market changed. The new materials, cleverly marketed as being more modern in an age where fashion and perception is everything, was what the sheep (sorry, people) now wanted. The lady of the house would read about the new modern exciting materials for the kitchen and the home in the home design magazines, would go to the kitchen shop to see well displayed samples of a particular company or brand, and make the decision. She had, in fact, already made her decision when she left her house. Of course, she (for mostly it is she) wanted nothing else. The kitchen shop owner had no reason to push natural stone- most of the times he or she would not even be able to show a single sample of natural stone. And why should he or she ask the home owner to go to that industrial estate far away that, by the way, is not even easy to find, where the fabricator had his workshop, which most of the time was not even clean, full of dust and noise, had nothing to display, perhaps not even a chair to sit, and where the fabricator would often bring out a small 10×10 cm badly cut or polished sample and say- "Well, the stone looks like this but better"?
Did you say, natural stone is a luxury product ? What a way to sell a luxury product ! Would you pay a fortune to buy a luxury watch in a open air market where the next person is selling cheap clothes ? Have you ever seen a showroom for a luxury car where, under the same roof, the dealer also sells second hand cars ? And where the mechanic is just a few metres away in his uniform banging away with his tools? Well, this is more or less what the fabricators have been doing.
Where are the showrooms for natural stone, centrally located, where the end consumers can go to choose their stones? There are very, very few in the whole world. Stockyards yes, sometimes designed as good showrooms too, and far away from cities, but even that is rare.
So today, what does the fabricator do? He is no longer an autonomous businessman, or considered a professional whose expert opinion must be listened to. The interior decorator or the kitchen shop owner tells him- "This is what you need to cut and install in this place. Take it, or leave it. I can go to someone else, if you don´t want to work with this material and at this price". The fabricator is being reduced to becoming a mere installer, with no decision capacity. Moreover, in so many projects, the builders, architects and other specifiers want to simply get the work done on time and within budget. The artificial materials often come direct from the factory, pre-cut to the required measurements, ready for installation. Being often thinner, they are thus lighter in weight, their handling is easier. Now where does the fabricator come in except being asked to do the installation? Even in USA where the fabricators today are on top of the world,will soon feel the heat as the porcelain companies gradually develop their own in-house capabilities of cutting and installation to try to capture more of the value added chain in an increasingly competitive market.
The reality is, therefore, grim for the fabricator. In many developed economies, labour is increasingly expensive and, moreover, there is a real shortage of qualified labour. Anything that needs manual intervention in the value chain ends up not only becoming more expensive, is also a real hassle. Not a desirable product.
Yes, human behaviour is shaped by clever marketing. But just as people want to be considered ' modern' and not ' old fashioned', they also want to have something unique in their homes. They do not really want imitations (the greatest mistake currently being made by the artificial stone companies). The world is also very increasingly sensitive to natural products in a positive way. These are tremendous arguments, the fabricator needs to understand the power of these arguments and, more important, transmit this conviction which he already has, with the passion that exists within him but is not expressing it, not communicating it to those he must try to reach out to.
Yes, the fabricator must make the effort to learn that if he is selling a luxury product, it must also be a luxury experience for the buyer. How to transform his business so that all interaction with outsiders is a luxury and unique experience, that is his true challenge.
Is it too much to ask?
There will surely be major upheavals in the natural stone industry very soon. As is already becoming noticeable, the world is being absolutely inundated with artificial stone, it is obvious a situation of massive oversupply exists of ' me too' products imitating natural stone. Do not forget that Chinese, Indian and other suppliers of artificial stones have barely started.
How long before the stockyards of the world have no place to stock these huge volumes of artificial stone , the prices crash ,and these are no longer a good business for the intermediate channels? Probably only those companies in artificial stone who have managed to build a solid brand and develop super efficient logistics systems will survive. Time will tell.
Will natural stone come back in fashion soon? What is 'soon'? One year, two years, 5 years, a generation? I wish I could answer that question. But no one can wait for the tide to turn, that is certain. So the fabricators need to do what all businessmen are having to do in these crazy times-acknowledge that the environment around them has changed, adapt to the fast changing reality, and for once, make a real effort at reaching their end customers, innovate and develop new applications in natural stone.
All of this is doable- all of it.