by Cynthia Challener, CoatingsTech Contributing Writer
Success in the paint and coatings industry relies heavily on innovation and the continual advancement of science and technology into new frontiers. As such, strategies for the adoption of new technologies directly impact the performance of companies involved in all aspects of the paint and coatings value chain. To learn more about how different supply chain members approach technology adoption, CoatingsTech surveyed several different raw material and coatings manufacturers about the importance of megatrends and other key drivers of technology adoption, as well as their thoughts on the role of marketing in directing investments in innovation, the best mechanisms for determining real market needs, and their specific approaches to innovation.
Participants in the survey include Eric Dumain, North American commercial director for Coatings at Arkema; R. Scott Dautel, global marketing manager for Coatings at Ashland; Barry S. Snyder, senior vice president & chief technology officer, and Joanne R. Hardy, global R&D director, both with Axalta Coating Systems; Camilo Quiñones-Rozo, market segment manager for Architectural Coatings with BASF Corporation; Michael Bessel, director of technology at BYK USA; Sjaak Griffioen, director of innovation, Strategy and Sustainability at DSM Coating Resins & Functional Materials; Robert Wendoll, director of environmental affairs and Sam Carrillo, senior product manager, Marketing, both at Dunn-Edwards; Steve Willoughby, global market segment leader for Coatings, and Jami Arrowsmith, business manager for Coatings, both with Eastman Chemical Company; Eric Post, director of K-FLEX Global Sales with Emerald Performance Materials; Rich Stewart, Americas Coating Resins marketing manager for OMNOVA Solutions; and Michael T. Venturini, marketing director for Coatings at Sun Chemical Performance Pigments. Their comments are provided below.
Q. What impacts do megatrends (economy, environment, consumer interest, etc.) have on paint and coating technology needs?
Post, Emerald: Many major segments are seeing robust growth alongside a global economy continuing to rebound from the recession. Macroeconomic growth emerging from the recession has been gradual but solid, and consumers have become progressively more optimistic. Architectural continues to be the fastest growing sales segment for coatings as the once crippled housing and construction markets continue to recover and flourish. OEM coatings are following, as sales and volume increase tempo for industrial and automotive OEMs. For protective coatings specifically, APAC is far and away the predominant region with very healthy growth in this segment thanks to rapid industrialization and a thriving automotive industry. Consolidation is also an important trend impacting coatings, and we’ve seen it have a very positive impact on innovation in recent years. As manufacturers look to enhance their position and fill gaps in their portfolios by picking up companies with complementary products, they also augment or synergize their R&D capabilities, allowing them to introduce new technologies and expand into niche areas.
Dumain, Arkema: In the architectural coatings segment, housing and construction needs are driving the market, with regional differences based on the state of each economy. In the United States, the housing market is showing strong growth signs, and the remodeling market is improving. These factors make us think that growth there will exceed GDP. Europe remains stable, and Asia-Pacific, specifically China and India, seem to be working through excess inventory, meaning current growth rates are lagging GDP. Industrial segments are improving even more than architectural due to increased sales of durable goods, appliances, and home and garden supplies. In the United States, nonresidential fixed investment is expected to post respectable gains in the 3–5% range in the next two years, following a modest correction in 2016. Marine and protective markets are taking longer to recover from recent losses, but we fully expect to see growth there as well. Protective coatings are doing relatively well compared to marine coatings, and will improve as the oil and gas segment recovers. Marine coatings demand has been impacted by slowdown of new build activity, as well as dry docking and maintenance.
Snyder, Axalta: Megatrends such as environment, economy, and consumer interests impact paint and coating technology needs through raw material choices and requirements. Our customers’ needs are continuously evolving and we must adapt and, ideally, keep ahead of where those needs are headed.
Hardy, Axalta: For example, environmental concerns have driven dramatic changes in the materials we use today, with water-based systems moving up the performance ladder from the early days in decorative paints to the highest performance automotive coating systems on the market. This has taken intensive development effort throughout the entire industry on the part of materials suppliers, coatings manufacturers, and applications equipment vendors.
Willoughby, Eastman: In looking at global megatrends, four stand out: a drive to improve health and wellness, natural resource efficiency, the emerging middle class, and the need to feed a growing population. Among these trends, three relate directly to coatings: health and wellness, natural resource efficiency, and the emerging middle class. With more people in the middle class able to afford higher quality cars and trucks, consumers expect their vehicles to have durable coatings that protect their investment from harsh weather conditions. At the same time, the health and wellness trend is prompting greater scrutiny of processes and raw materials as businesses seek to reduce their impact on air, water, and other resources. For formulators, the goal is to reduce volatile organic compounds (VOCs) in automotive coatings without compromising the car’s appearance and the coating’s durability.
Arrowsmith, Eastman: The emerging middle class has more disposable income and is seeking upscale housing. In places like China, housing trends have increased the demand for low-odor interior paint. As a result, formulators of architectural coatings need to meet performance, compliance, odor, and aesthetic requirements as they develop coatings that comply with regulations and meet or exceed consumer expectations.
Venturini, Sun Chemical: Megatrends like globalization, consumer interest, and socio-ecological issues all play a significant role in shaping the path of our industry. As globalization continues, companies are migrating toward the best available technology for both performance and eco-sustainability regardless of the region where it is used. In some sense, products are developed for just one market.With regards to socio-ecological trends, there are several facets that encompass sustainability, including renewable raw materials, new environmentally friendly technologies, and responsible manufacturing. Sun Chemical strives to meet the demands of customers for sustainable solutions by utilizing all three of these approaches.
Griffioen, DSM Coating Resins: Resource/raw material reliability and stability and the drive for more sustainable solutions are definitely driving the technology needs in the paint and coating industry. For DSM this translates into the fact that we focus on carbon footprint reduction of our total portfolio without making any concessions to quality. All our innovation efforts are based on either waterborne, powder, UV, or plant-based coating technologies. All these technologies are intrinsically lower in carbon footprint in its final application versus solventborne systems. Higher performance in combination with reduction of VOC to zero, as well as the reduction or even deletion of substances of high concern do give companies like DSM fantastic opportunities in new polymer design. Regarding the trend in customer interest, nowadays customers are increasingly involved in creating the best possible solutions. With our technical teams, we aim to create a sustainable coatings future together with our partners and customers.
Stewart, OMNOVA: OMNOVA is innovating to keep pace with multiple megatrends by bringing improvements to existing resin technologies. For example, there have been significant changes in the way consumers shop, with more and more going online. It is what many are calling the “Amazon-effect.” We see retailers struggling (e.g., Sears/Kmart). Many are closing stores or reducing their store footprints because of this trend. While this has reduced some demand for coatings, it is also driving retailers to improve their store environments and make them more appealing and more “shoppable.” For example, polished concrete floors provide a natural, yet professional image that these big-box do-it-yourself (DIY) and warehouse stores want. However, it has become apparent that polished concrete also presents challenges in maintaining its appearance long-term.
Quiñones-Rozo, BASF: As demographics, resource availability, regulation, and technology change over time, customers adjust their expectations towards paint products. For example, demographic and socio-economical changes are shifting consumers’ needs and disposition towards architectural coatings. In the DIY space, this shift calls for products focused around ease of application, offering a trouble-free paint experience, and the reward of a smooth final appearance. The professional market on the other hand focuses heavily on greater efficiencies. With labor being a significant component of their cost structure, contractors seek products that allow them to get the most out of every man-hour (e.g., outstanding coverage and durability).
Dautel, Ashland: Global megatrends, used in the proper context, are intended to identify high-growth technologies/industries for the near future and can connect emerging trends to their impact on more established industries, such as architectural paints and coatings. Considering that R&D resources within coatings producers are always constrained, it is useful to understand how these resources are being applied. Segmenting the R&D effort through discussions with senior R&D leadership and our customers can provide valuable insights. One provocative question is, “If you have to estimate your allocation of R&D resources into two buckets, one being cost reduction and the other being technology advancement, what would be the percent allocation?.” Since 2009, we’ve seen these resources shift dramatically toward cost savings. In other words, architectural paint manufacturers felt improving the profitability of existing products was more critical to their future success than to win market share via true performance innovation. In the past few years, this seems to be swinging back towards innovation in the developed world. However, cost saving remains a high priority.
Q. What about issues specifically related to the paint and coatings industry?
Snyder, Axalta: One area where the end-consumer interest directly ties into coating technology needs is in color. Color trends, particularly in fashion, correlate directly to color popularity for coatings and influence the styling efforts of coating companies. Pigment choices as well as coating compositions are affected as companies aim to create the varied effects seen with new color trends in fashion and other more obviously consumer focused end-markets.
Quiñones-Rozo, BASF: Globalization will continue to be an important component. As paint manufacturers further consolidate, companies that used to concentrate on a specific region now span several continents. Suppliers with a reliable global footprint become critical partners for the expanding manufacturers’ procurement and supply chain organizations, as they seek to expand their tried-and-true inputs/processes across all regions.
Dumain, Arkema: In the paint and coatings industry, we are seeing continued corporate consolidation worldwide, with several large coatings companies making important acquisitions recently. We believe this is driven, in part, by a need for faster-than-market growth, as well as companies seeking better synergies in areas such as manufacturing, organizational structure, and purchasing. Local market needs, in terms of coating aesthetics, economics, and service conditions, emphasize the need for regionally localized R&D, manufacturing, and marketing. We see many companies moving to a “technology platform” approach, enabling better commercialization of specialized products customized for local conditions.
Wendoll, Dunn-Edwards: Issues specifically related to paint and coatings include development of new resins capable of improving performance with little or no added VOC, and increasing use of renewable biobased materials in place of petrochemicals.
Bessel, BYK USA: A driving force for the development of new paints and coatings is the increase in regulations, the commitment from industry to reduce environmental hazards and risks, as well as the carbon footprint of products. Many consumer-related product developments and technical improvements focus on adding value for the customer, such as longer lifetimes of coatings, ease of application, and absence of undesired properties such as smell or long drying/curing procedures.
Arrowsmith, Eastman: Environmental regulations heavily influence how manufacturers formulate paint. As they develop coatings, manufacturers must comply with existing environmental standards while also keeping an eye on where regulations may go in the future. It’s imperative that raw material suppliers have in-house experts who understand what’s required to meet environmental standards in various places around the world, so they can partner with formulators to help them reach their compliance goals, regardless of the application.
Willoughby, Eastman: Ideally, raw material suppliers work with customers to help them understand how to achieve compliance without sacrificing appearance, durability, and other important performance characteristics. Raw material suppliers must understand that formulators are looking to balance compliance, performance, and appearance; they can’t focus exclusively on any one attribute.
Hardy, Axalta: Specific environmental regulations will impact coating compositions. One of the largest impacts is in solvent choice and the transition to higher solids or waterborne materials. These regulations may impact states differently and sometimes only portions of a portfolio will be available in particular regions of a country or an economic union like the EU. These types of regulations impact the immediate customer, but the ultimate consumer of the coated material is not affected as ultimate performance properties will be the same.
Venturini, Sun Chemical: The reduction of VOCs is a key issue facing the coatings and adhesives markets, and is playing a very significant role in shaping the paint and coatings industry at large. Years ago, soap and water clean-up drove waterborne resin development for architectural coatings and continues today with the zero-VOC coatings that surpass the durability and function of the solvent-based alkyd paints they replaced.
Griffioen, DSM Coating Resins: Focus on alternative raw materials creating the highest performing paints partially made from waste or from renewable raw materials. It is now all about paints and coatings with higher performance than currently available without any negative environmental or indoor air quality impact.
Q. What are the key drivers that will have the biggest impact on paint and coating technology needs in the near future? In the longer term?
Bessel, BYK USA: The desire for higher functionality, better durability, ease of application, and faster curing will all impact the future. Reducing costs for existing high volume and mature products will also play a role.
Dautel, Ashland: Despite improving economic conditions since the 2008 global recession, downsizing of residences in western markets (North America and Europe) has slowed the growth of architectural paints and coatings to 1–3% year over year.In emerging markets (China, India, PacRim), we have very recently seen annual architectural coatings growth drop from double-digit to a steady state rate of 4–8% as years of overbuilding settle to more sustainable levels. Latin America, the Middle East, and the other regions in Asia are virtually flat. Specific to environmental awareness, the nonstop drive toward sustainability, lower VOC, and stronger substance restrictions continues to affect the paint and coatings industry dramatically. In North America, nearly 50% of the top architectural paint lines are now reporting [near] zero VOC, (typically defined as < 5 g/L of VOC content via gas chromatography after tinting). This is a voluntary move by the industry, given that up to 50 g/L VOC (as determined by U.S. EPA method 24) is permitted even in the strictest of product categories and regions, such as the Southern California Air Quality Management District (SCAQMD). In Asia-Pacific and China, we are seeing a slow but very significant shift towards elimination of solvents and any ingredients that are perceived to have negative impacts on human health. There is an intense concern regarding toxicity, sensitivity, and unhealthy air/water, especially among the younger generations. This has led to intense interest in coatings that can scavenge airborne toxins, thereby promoting potential improvement of indoor air quality. For similar reasons, zero-odor materials (regardless of VOC content) is an important trend. In the EU, REACH will achieve full implementation in 2018, and substances not pre-registered will face intense requirements for testing and registration. This is a costly endeavor for new technologies and innovative raw materials as the costs and time involved in registration may inhibit the introduction of these materials to the EU-member countries.
Numerous other countries are now progressing toward setting up their own programs that emulate the EU REACH model, including China, Korea, Malaysia, and Russia. The potential cost, testing, and manpower burdens that this places on raw material suppliers is significant and will ultimately reshape the supply chain.
One other trend influencing the coatings industry is rising labor costs. This has been an issue in the West for decades (and, in fact, drove the DIY segment and formation of Big Box retail outlets), but now is becoming very influential in the emerging world as well. China is a great example, where labor costs have risen dramatically in the past 10 years. We see this influencing architectural paint technology in the forms of a need for better hiding and thus completion of a paint job with fewer coats and less labor. “Paint & Primer in One” is a powerful selling feature in architectural paint that is rapidly permeating emerging markets. “One Coat Hide” is the ultimate goal and we are seeing some premium products emerge (initially in the North America and Europe) that are delivering on this promise. Achieving this at lower cost and across the color spectrum will keep the industry busy for many years to come.
Wendoll, Dunn-Edwards: The key environmental drivers continue to be: reducing or eliminating exposures to hazardous chemicals, conserving natural resources, minimizing ecological impacts, and maximizing energy efficiency in the built environment.
Griffioen, DSM Coating Resins: Longer term, the switch to renewable resources as well as using building blocks from waste will become mainstream as a means for providing solutions. Most technologies, including polymer building blocks, are already available. It is just a matter of time before these building blocks become mainstream.
Post, Emerald: For architectural and protective coatings, low-VOC and air pollution concerns continue to be a huge driving factor, guided by consumer preferences, tightening regulations around the world, and “green” certification programs such as LEED v4, EU-Ecolabel, and AgBB. Low-VOC coatings are decreasingly considered “alternative” as awareness about the potential harmful effects of VOCs spreads and limitations are set by regulatory agencies. However, consumers still demand performance and economy from low-VOC coatings, and eliminating VOCs has traditionally been associated with many performance-related challenges, for example, compatibility, freeze-thaw resistance, open time, weatherability, and scrub resistance. We have worked with many customers looking for help to overcome these performance road blocks as they reduce VOCs and achieve the best value. Much R&D activity throughout the market is focused on low-VOC technologies to meet increasing requirements, resulting in new generations of high performing coalescents, resins, reactive modifiers, tougheners, defoamers, colors, and other additives.
Adoption of these new offerings is coupled with a growing preference toward waterborne chemistry. Powder coatings are also growing where waterborne paints would be undesirable, as they generate no VOCs while also maximizing properties essential to challenging end uses. For powder coatings as well as industrial and protective coatings, offering development is geared toward achieving higher performance where coatings failure is not an option. For example, today’s fusion-bonded epoxy (FBE) coatings are utilized in end uses such as pipelines, and they rely on advanced resins, tougheners, and other materials to maximize performance characteristics that are absolutely critical: impact strength, flexibility, resistance to chemicals and UV, performance in extreme temperatures and pressures, and overall toughness. Other important drivers include solutions for specific and widespread issues related to coatings performance, such as corrosion and antifouling, as well as unique functional benefits such as heat reflective properties, noise vibration, insulation, self-cleaning, microbial resistance, and graffiti resistance. Nanocoatings and other smart coatings allow a greater degree of tailoring for highly specialized end uses.
Dumain, Arkema: There are three clear drivers. First, as population grows and the middle class develops in fast growing regions, there will be greater demand for coatings of all kinds. Typically, we see more demand for improved balance of performance, cost, and quality. A second driver is the increased volatility in the supply chain and associated raw materials. As a result, we expect to see an increase in strategic relationships and communications between resin manufacturer and formulators, as well as between formulators and end users as demand grows and supply fluctuates worldwide. This will be even more important with the increasing importance of sustainability throughout the value chain. The third driver is continued growth in the more environmentally friendly coatings, particularly in water-based, powder coatings, and high solid systems. Key challenges here include dry film performance and preservation in liquid coatings (in the case of water-based systems). In powder coatings, we see a stronger playing field thanks to new application areas such as MDF.
Quiñones-Rozo, BASF: In the short-term, technology needs in architectural coatings will continue to be driven by regulation and consumer awareness around low-VOC coatings. Increasing price of raw materials will be another important factor, as paint manufacturers seek alternative products and technologies that allow them to control the formulated cost of a can of paint without compromising performance. In the long-term, demographic and socio-economical changes will require new technologies to address shifting demands. Millennials are increasingly postponing the decision to purchase a residence, whereas aging baby boomers have less inclination to paint themselves. While this shift bodes well for professional painters, they are themselves experiencing labor shortages. Another important force to be reckoned with is the accelerated adoption of digitalization across all aspects of the business. The free flow of information and the interconnected nature of the digital world would lead to greater efficiencies. We are already previewing this future with novel and faster capabilities to develop new products and greater online engagement and information sharing with end customers. Another critical aspect in the long-term is how paint manufacturers and suppliers will adapt to a post low-VOC marketplace. For the past two decades, innovation in the coatings industry has focused largely on addressing low-VOC regulations, leading to reformulation of paints and development of alternative products. Once low-VOC formulations become the industry standard, paint manufacturers and suppliers will have to shift their focus towards new attributes in order to differentiate themselves from competitors. This shift will likely redirect their attention to performance improvements and further functionalization of coatings.
Snyder, Axalta: Key market drivers that impact coating technology needs in the near future continue to be related to appearance and productivity. In addition, ever-increasing demands for protection and new concepts in appearance, energy efficiency, waste-reduction, and cost are perennial drivers of innovation in the industry
Hardy, Axalta: Improved appearance continues to be a driver for the OEMs striving for luxury appearance on all vehicle types. Productivity improvements that lower overall production costs during manufacturing continue to drive coating technologies in the short-term; refinish shops as well are looking for productivity enhancements. In the longer term, market drivers may change as the consumer changes. Shared vehicles and autonomous vehicles may influence different coating performance needs, ultimately driving new technology.
Willoughby, Eastman: In addition to environmental challenges, coatings manufacturers are being asked to do more with less. Part of the pressure comes from automotive OEMs needing to reduce energy consumption. The most energy-intensive process in manufacturing a vehicle is the automotive paint shop, driving a focus on coatings technology for energy reduction. You can see examples of OEMs trying to use less energy in the adoption of compact paint processes that involve fewer baking steps, the elimination of layers, and the use of higher solids coatings to increase throughput from the same manufacturing equipment. These changes at OEMs have implications upstream for coating formulators and raw material suppliers. As OEMs make these transitions, they’re looking to their coating formulators to provide solutions that enable the use of less energy while maintaining an appearance that’s consistent with their brands. It’s critical that raw material suppliers step up with new technologies to meet this downstream demand. With the right additives and systems, coating formulators can meet OEMs’ demands for coatings that enable energy efficiency without appearance and durability trade-offs.
Venturini, Sun Chemical: In the short-term, environmental issues are strong driving factors affecting all aspects of the coatings market, and there are opportunities for companies to offer products and services that are eco-friendly. In the long-term, globalization may play an even larger role than today as large scale consolidation continues to spread technology and best practices to all regions.
Q. What is the role of the marketing organization in determining where investments in R&D and innovation should be targeted?
Quiñones-Rozo, BASF: At BASF, the marketing organization provides strategic direction, bringing the customer perspective into the opportunity identification process. It identifies trends and future market needs at an early stage, turning attractive topics into growth fields. As the source of market insight, marketing establishes priorities and plays a key role in the definition of R&D resource allocation. Once the development process is ongoing, marketing collaborates closely with R&D to verify that the eventual product indeed delivers the intended value to our customers.
Venturini, Sun Chemical: Sun Chemical’s marketing team is central to our tailor-made solutions approach in identifying and understanding our customers’ needs. Together with our technical teams, we focus on our strategy to deliver innovation and quality solutions that are tailor made for each customer. Sun Chemical is one of the only pigment producers still heavily investing in research and development. As a result, we have a rich pipeline of new products in all categories, including classical, high performance, and effect pigments, and preparations that will support our growth globally. Because Sun Chemical delivers solutions tailor-made for each customer, the requirements of each paint manufacturer can be different and unique, but generally can include a variety of characteristics such as: high quality and performance, capacity improvements, color strength, high transparency, durability (lightfastness and weatherfastness), environmental benefits, and fast turn-around times.
Stewart, OMNOVA: OMNOVA’s marketing organization is tasked with leading the charge for gathering Voice of Customer (VoC), analyzing trends and competitive actions, and evaluating potential innovations that can deliver the proper return on investment.
Wendoll, Dunn-Edwards: As with all businesses, prioritizing investment opportunities for the product development process requires a very thorough understanding of customer expectations and product performance needs. Defining the project and forecasting financial impacts are a couple of the key drivers for allocating resources to a project.
Dautel, Ashland: Within Ashland, marketing absolutely plays an essential role. R&D resources are allocated according to industry segment and by project portfolio. Thus, when available resources are fully committed, new projects have to wait or something has to be stopped. Our projects and portfolios are managed via a strict stage-gate process. Determining which new projects are qualified to enter the process lies largely with the marketing organization. It is marketing that manages the front end of innovation via Voice of Customer (VoC) interviews and via close collaboration with technical applications leaders. The Ashland multi-functional teams meet regularly with strategic regional customers to review R&D progress. In addition, Ashland strives to make sure the stage-gate process is rigorous and serves as a funnel, where weak projects will “fail fast” so better projects can be resourced and started. Gate presentations are created by industry marketing managers together with project teams who look down the value chain and define the value proposition of our offering with an intense focus on improving profitability, efficacy, and usability for our customers. Ashland’s stated goal is to be “always solving” our customers’ challenges and developing alluring and robust new products. As such, one can imagine that marketing is extremely influential with respect to which specific efforts get resourced vs which get killed.
Griffioen, DSM Coating Resins: Marketing is essential. Marketing spots the trends in the market and connects with customers to make sure we meet their needs. Customers are an important driver for our extensional innovation program. We are focusing on further development of our current portfolio based on our clients’ input. For more radical and step-change innovations, marketing also looks further in the value chain where trends are formed. All-in-all, marketing plays a crucial role in our innovation success.
Dumain, Arkema: Strategic relationships between formulators and suppliers are more important than they have been in a really long time. Marketing is the key link between the customer voice and product designers. It is made of the people best suited to articulate the unmet need and unsolved problem, knowledge that is critical when designing products to meet those needs. As it pertains to innovation, customers expect solutions that increase end-user productivity and profitability. Faster curing at lower material utilization with fewer energy inputs, all while carrying a smaller environmental footprint, will continue to be sought after. Sustainability innovations will more likely be driven by customer demands than as a response to government regulatory threats.
Hardy, Axalta: We innovate with purpose—it’s one of Axalta’s five company values—and the marketing organization plays a key role in defining market drivers and determining the voice of the customer. This information is used to generate platform roadmaps from which R&D programs are defined. Maintaining a close relationship with the customer is essential in generating a technology roadmap for product development.
Snyder, Axalta: At Axalta, we have an active portfolio management process that engages marketing, sales, and R&D to assess, prioritize, and aim our investments toward new products. Marketing assists in assessing priorities and assuring that we aim our R&D investments at the opportunities that play to our strengths, deliver on the strategic priorities of our business, and, of course, meet customer expectations.
Q. What are the best mechanisms for determining real market needs so that product development efforts result in products that will be in demand and widely adopted?
Carrillo, Dunn-Edwards: The best mechanism for determining real market needs is Voice of Customer (VoC). Whether it’s through individual customer interviews, focus groups, or paid market research studies, acquiring quality VoC allows for companies to obtain comprehensive data regarding consumer needs and expectations. This is extremely important as property owners and professional painting contractors have slightly different views of good product performance. For example, property owners put a strong emphasis on durability and longevity of a coating, whereas professional contractors are generally more concerned with application properties (hide, touch-up, application properties). This is not to say that professional contractors only focus on application properties, but products that are user friendly can help reduce total job cost for the painting professional.
Hardy, Axalta: A close relationship with the customer as well as an understanding of market changes and consumer needs is vital in strategic roadmap planning. These needs may change and analyses and product plans need to be continually refreshed. Reviewing market needs and business cases during all product development stages is a mechanism that helps to ensure products are developed that will commercialize to plan.
Dumain, Arkema: It comes back to stronger relationships between formulators, suppliers, and end-users. Today, strategic relationships go deeper and broader across organizational functions. Marketers who engage with engineers, technologists, procurement, and their marketing peers in the customer organization learn more about real market needs and where value can really be brought to the customer. As an example, due to recent demand spikes and tightness in key feedstock markets, it is more important than ever to know customer needs, in terms of both capacity and technology, in real time, as much as that is possible. This makes customer relationships crucial to competing in the current marketplace.
Willoughby, Eastman: It’s no longer enough to find insights by only interfacing with direct customers. Because we recognize this fact at Eastman, we relentlessly engage with the market to ensure our solutions are meeting the needs of formulators and, farther downstream, their customers. By understanding trends and translating their impact to end users, we can create a strong framework for developing solutions that address real market needs. The opposite approach is to develop a product and hope that someone finds a problem in the market that it can solve. That’s an outdated, ineffective, and short-sighted approach. That’s why we believe that best practice is to let market demands, regulations, and trends inform product and applications development. We also anticipate where industries are going in the coming years so we can partner with our customers to address emerging challenges.
Stewart, OMNOVA: Staying in a continual dialog with customers helps us stay grounded and keeps us ahead of the curve. We also stay in tune with the market through seminars, periodicals, trade shows, industry experts, and even getting to job sites to see the products in action. This last method really helps to generate product ideas that are truly differentiated. OMNOVA also does a lot of benchmark testing against competitive resins and finished paints to evaluate gaps where we can help paint companies achieve more sales through a truly improved and differentiated product. It is our paint and coatings customers that bring our products to the market for end-use, so the better we collaborate the better we all succeed. We are continually testing our products to find new ways to improve them, and we even customize products for unique customer needs.
Dautel, Ashland: The very best methods for raw material suppliers to understand market needs in a way that benefits new product development is through constant, direct contact with our customers at every level including management, marketing, R&D, sales, etc. We use many methods including [formal VoC] interviews, joint-development programs, and data analysis. In addition, Ashland has found that development of new measurement science technology, including cutting-edge test methodology, apparatus, and advanced analytical chemistry, gets the attention of the top product development minds in the industry. This opens the door for Ashland to collaborate with our customers at a higher level, leading to development projects with a strong customer or industry pull. We focus constantly on how these factors contribute to our customers’ manufacturing efficacy and profitability. Without a doubt, new technology where R&D leaders from top customers are going out of their way to collaborate with raw material suppliers to get samples and progress a project forward is perhaps the strongest tell that we are on the right track to a winning new product or technology.
Griffioen, DSM Coating Resins: At DSM, we have a VofC program, and with new developments, we always have customers involved in the project to make sure we design what they want. For longer-term efforts, we design and innovate with a more transformational objective like circularity in carpet, or powder coatings for wood, or the use of novel biobased building blocks for our Decovery® product range.
Post, Emerald: It is critical but challenging to understand how evolving needs will shape the future of the industry. Perhaps most importantly, we work closely with our customers to ensure we understand how we can bring the most value to their products. We also participate in key industry events and associations and closely watch market trends, for example, through market reports. These tools ensure we are always meeting real needs within the markets we serve today, while also ensuring we have a pulse on where the industry is headed so we can identify emerging opportunities, gaps, and needs, and focus our R&D accordingly. This affects both the development of new solutions and the refinement of existing technology platforms for continuous improvement and emerging needs. One of the bigger challenges for bringing new offerings to market is the constantly changing regulatory landscape. Programs such as EPA’s New Chemicals program target newly developed molecules, while the EU regulation concerning the Registration, Evaluation and Authorization and Restriction of Chemicals (REACH, EC 1907/2006) is aimed at evaluating both new and existing substances. Within the U.S. market, new uses of existing substances are evaluated under Section 5(a) of TSCA through the Significant New Use Rules (SNURs), which have been made even more stringent with recent TSCA modernization efforts. New materials must be compliant with appropriate regulations regarding manufacture and sales in each and every region. We work closely with customers to stay ahead of the curve with global regulations, addressing requirements up front as a key part of the process of evaluating new development opportunities. We also stay on top of the constantly changing regulatory landscape by through avenues such as participation in trade association regulatory working groups, direct active monitoring of regulatory agency publications and initiatives, and the use of industry intelligence publications.
Quiñones-Rozo, BASF: In addition to direct customer input, another important factor to attain wide adoption in the market place is “end-to-end thinking.” The complexity of the coatings industry requires a thorough understanding of the entire value chain to ensure that the products being developed address the specific needs of the different stakeholders involved. In addition to an exhaustive understanding of the immediate customer needs, marketers ought to understand the conditions and forces that shape the expectations and requirements of the end customer.
Arrowsmith, Eastman: First and foremost, marketing must understand industry trends and develop actionable insights from them. These insights can come from anywhere—from direct customers all the way down to consumers. For marketers looking at the coatings industry, these insights might connect back to performance and the technologies that enable superior performance.
Willoughby, Eastman: For example, marketing may determine that consumers want products that look new longer. That means formulators must improve their coatings’ weathering, scratch resistance, and overall durability. Then, they ask how their company can provide technologies to enable these attributes. Marketing should be able to determine how and where the insights they develop align with their company’s ability to create a solution that’s truly unique.
Q. What approaches does your company take to ensure the development of new products that meet real market needs? Can you provide any specific examples of successes?
Hardy, Axalta: Axalta uses a stage-gated model with detailed deliverables at each stage of development to ensure the development of products meet real market needs. Business cases are presented with market analysis to key stakeholders from all areas of the business as the decision makers. A cross-functional team is assigned at the beginning of a program and is needed throughout the development to allow each role to assess the program from a market, financial, technical, process. and commercial view.
Snyder, Axalta: We bring applications experts, formulators, and researchers to the market to assure we have multiple perspectives on the issues. Sometimes our customers are unable to fully describe the situation they face, and we need to triangulate to truly determine what is needed and how to fulfill this need. For example, recent changes to VOC legislation in China led the market to look for water-based solutions to meet requirements. As it turns out, the most environmentally responsible option for some of our customers and, of course, also compliant with the new regulations, was a high-solids solventborne product. On the refinish side of our business, we engage directly with body shops all over the world. For some who have used solventborne refinish products for years, the switch to water is a learning process. Storing tints and dosing colors brings challenges. To overcome some of these issues in the EU we recently launched Syrox™, our latest waterborne product that sprays like solvent and is packaged in a unique, easy-to-dose squeeze bottle. The combination of great paint and unique packaging has helped ease the transition for a number of body shops in Europe.
Quiñones-Rozo, BASF: We collaborate with paint manufacturers closely during our multi-step product development process. Customers are engaged early to gather feedback on the early concepts and subsequently involved as key milestones are attained. Over the past years, this approach has led to the development of breakthrough acrylic dispersion products such as ACRONAL® EDGE 4247—offering superior dirt pick up resistance for exterior surfaces, ACRONAL PLUS 4670—delivering outstanding TiO2 efficiency at less than 50g/L VOC, and ACRONAL PLUS 4415—displaying exceptional stain blocking for primer applications.
Carrillo, Dunn-Edwards: Product field testing that is conducted early and often during the product development cycle allows for instantaneous feedback. If field test data is used properly, it provides companies with the ability to make adjustments to the product during the development process. For example, in 2016, we launched Aristoshield, a water-based, urethane, alkyd paint line. During development of this line, we relied heavily on data from customer field tests. The feedback obtained provided us with quality information to make adjustments to the line at an earlier stage in the process. And because of this, our Aristoshield line was one of our most successful product launches in recent history, as the line provides both the durability and application components desired by consumers and painting professional.
Dumain, Arkema: Currently, customers are focused on value above all else. Arkema strives to offer a wide range of products that are engineered to match customer price-performance targets—“good, better, best” choices that allow formulators to decide which offerings best meet their—and the end-users—needs. Resins that take more effort or require special processes to produce must offer additional value for our customers to be successful. And, of course, this raises the importance of strategic relationships between us and formulators yet again. Although Arkema has been practicing this for several years, in 2017 we have formalized our strength in customer relationships under the phrase “Good Things Happen When Chemistry Gets Personal.” By maintaining strong lines of communication, we can help them better identify global end user customer needs. This lets us then develop products that excel across geographies—products our customers can leverage to make their operations more efficient and cost effective. As an example, we recently introduced ENCOR® 167S latex for high performance caulks and sealants, a binder that does not require any external plasticizers in the formulation. This was in direct response to formulators looking for ways to better develop flexible low temperature products without the side effects that can result from plasticizer migration, such as hardening, discoloration, glossing, dirt pickup, and mildew growth.
Dautel, Ashland: Extensive regular interactions with customers, particularly via technical collaboration, but also with procurement, marketing, and manufacturing leaders is by far the most effective way to identify unmet needs and dissatisfaction with current technology/raw materials. After extensive vetting with multiple customers, these findings can translate into development projects that will be formally resourced. Once up and running, this process never stops . . . at any given time. Ashland strives to have many projects “on deck” and the best ones will get resourced and “fast tracked.” A recent example of this was the effort that led to development of Ashland’s Natrosol™ Performax line of thickeners. The development of Performax was initiated after an extensive round of interviews with customers in Asia who expressed frustration with the difficulty and time involved in handling dry water soluble powders in paint manufacturing plants. Historically, powdered thickeners like HEC must be very carefully dispersed in pH-controlled water or via high-shear mixing equipment to prevent lumping of the polymer. If these powders were simply dumped into a paint letdown tank, they would lump rapidly and, once formed, those lumps would be nearly impossible to disperse. This would require filtering of the paint batch and loss of thickening efficiency.
Ashland has offered fluidized polymer alternatives, but the cost in use is comparatively high (due to processing aids and shipment of water), and this does not satisfy the need to maintain performance at a lower manufacturing cost. In response, Natrosol Performax was developed. This alternative looks and performs exactly like conventional HEC, but contains patented technology that allows the powder to be dumped directly into the low-shear letdown phase of latex paint manufacturing without lumping.
Griffioen, DSM Coating Resins: Bright science has led us to a revolution in sustainable paint: Decovery® is our novel plant-based resin technology platform for durable paints that uses biomass, enabling us to change (y)our environment without impacting it. Together with ICA Group, we developed Iridea Bio, a water-based, high performance, sustainable paint based on our Decovery® plant-based resin technology that is resistant to chemicals, lightfast, and has greater non-yellowing properties than paints formulated with plant-derived alkyd resins.
Arrowsmith, Eastman: We leverage our strong applications technology network to ensure we’re developing new products that meet real market needs. Our internal technology network brings together chemists, engineers, scientists, and technical experts who work in one of three groups: applications research, applications development, and technical service. The applications research team collaborates across the value chain to determine how to use fundamental chemistry concepts to address market needs. The applications development team then works to help customers by connecting unmet needs with the right solutions. This group can modify material composition, formulation, and processing to achieve the best performance. Then, the experts in our technical services team work closely with formulators as they integrate our products into their formulations. For instance, Eastman has developed low-odor coalescents for architectural coatings that appeal to the emerging middle class in countries such as China. With our line of Eastman Optifilm™ additives, paint formulators can meet performance, compliance, odor, and aesthetic requirements as they develop coatings that comply with regulations and still meet or exceed consumer expectations. Optifilm additives enable formulators to create low or no VOC coatings with fewer performance trade-offs.
Willoughby, Eastman: To address consumer demands for more durable coatings and formulators’ needs to decrease their environmental impact, our team developed Eastman Tetrashield™ protective resins. This new technology provides superior weatherability and mar resistance in automotive and industrial coatings, demonstrating up to twice the performance of competing alternatives in some applications. At the same time, Tetrashield resin systems enable formulators to create lower-VOC coatings. With Tetrashield, formulators can provide OEMs with coatings that look better longer and allow them to increase their throughput.
Stewart, OMNOVA: OMNOVA has continued to find success by partnering with our customers to understand the challenges and problems they are trying to solve. Our R&D teams are passionate about finding innovative ways to meet paint/coating challenges. We’ve had recent success with leading paint companies in these areas: significant improvement in adhesion to multiple substrates with PLIOTEC HDT16; dramatically improving upon corrosion-resistance for DTM coatings with PLIOTEC SC140 and PLIOTEC HDT12; creating PLIOTEC GAR130, an epoxy-fortified acrylic resin for a one-part DIY-friendly garage floor coatings, which is rapidly changing the market; and creating PLIOTEC WPM120, a styrene-butadiene resin that can achieve an incredibly low perm rating of less than 0.1 for waterproofing membranes and air and vapor barriers.
Venturini, Sun Chemical: Sun Chemical’s solutions tailor-made approach is central to meeting our customers’ needs and overall needs of the market. By developing solutions specifically for a customer rather than trying to adapt general products, we ensure specific requirements are met.For example, regionally we have seen strong growth in real estate investment and building construction in North America and Asia. Architects are increasingly turning toward powder coatings because of the combination of environmental benefits and durability. This trend has been driving both volume and innovation at Sun Chemical with the development and expansion of Benda-Lutz® MAXAL EC aluminum flakes for use in powder architectural coatings. For decorative liquid and powder coatings, designers are seeking multilayer effects similar to those developed for the automotive industry. Sun Chemical understands the technology and can deliver the right combination of products. In 2016, we introduced our SunMICA Deep Black Pearlescent pigment, which is well suited for powder coatings applications to create deep, rich, and reflective charcoal effects. Technology innovations in both effect and high performance pigments continue to influence the automotive OEM coatings sector. We are especially seeing unique applications for transparent, durable high performance pigments like our newest Perrindo Red 179 in tinted clearcoats and in combination with effect pigments for highly chromatic basecoat/clearcoat systems. Compact painting processes are simplifying the process for three-layer topcoats and expanding their usage. From a new product perspective, Sun Chemical introduced Benda-Lutz® COMPAL WS VOC-free, highly concentrated aluminum preparations for coatings and inks in 2016. This new technology enables customers to use the same product for waterborne, UV, and high solids coating chemistries by providing broad compatibility that is optimized for long-term gassing stability in aqueous environments. Additionally, each COMPAL WS preparation is delivered in an easily dispersible granular form for safe and easy handling, improved shelf stability, and various transportation advantages. In addition, coatings producers are increasingly formulating and making purchasing decisions to meet a clear set of socio-environmental requirements, independent of regulations. As a result, we expect to see even further growth in high performance pigments as replacements for heavy metal pigments. To meet this demand, Sun Chemical has introduced Fanchon Yellow 184, expanding our product range for heavy metal replacement. Several grades are available including zinc-free versions that provide customers options to meet their stability and temperature requirements.