HIGH POINT — A disrupted bedding supply chain is driving raw material prices higher, forcing some manufacturers to raise prices and to work overtime to find new vendors and components, and leaving retailers scrambling to get goods.
A combination of factors — including COVID-19 shortages, hurricane disruptions in the chemical supply chain and a booming housing market — is roiling the bedding industry’s supply chain. This at a time when retail bedding business is booming.
It all makes for a major challenge for bedding producers and retailers.
Derek Miller, chief sales officer at Serta Simmons Bedding, said in SSB’s recent virtual tradeshow that the industry faces “unprecedented material shortages” and added that SSB is “catching up as quickly as possible.”
Retail bedding prices could head a notch higher, but that isn’t expected to slow demand for bedding, which is experiencing strong pent-up demand following pandemic-prompted retail lockdowns earlier this year.
“I have been in the bedding and furniture industry for 33 years and never have seen this type of supply disruption,” said Richard Fleck, president of Paramount Sleep. “It is forcing us to develop a whole new set of operating standards that we will carry into the future. It is constant innovation, creative thinking and patience that has kept our shipments largely on-time.”
Shaun Pennington, president of Diamond Mattress, said his company is also taking actions to deal with the supply chain disruptions.
“We are not sitting idly by,” he said. “The entire Diamond team is actively evaluating new vendors and materials to ensure we can maintain quality and the absolute best costs for our customers. Fortunately, while we have experienced some fabric challenges, our vertical integration to cut our own foam and produce our own coils, as well as our 80 years of relationships, has allowed us to maintain supply and negotiate pricing so Diamond can create more value for our customers.”
He said Diamond is absorbing as much of the price increases as possible but will be forced to increase its prices for the first time since 2017.
What is striking about the current disruption in the supply chain is the prevalence of issues across the supply chain.
“We are seeing significant price increases in key raw material categories along with major supply chain disruption,” Fleck said. “Basically, every raw material you build a mattress with has been impacted in some way.”
He provided this overview:
- The leap in demand for personal protection equipment has fractured the supply chain for nonwoven materials, causing major cost increases.
- Wood has seen “massive price increases” due to housing demand, home projects and tariffs on imported Canadian wood.
- Encased coil deliveries are anywhere from three to five weeks out. The increase in demand for nonwoven materials has stalled the availability of the spring encasements and driven prices up.
- Foam producers declared a force majeure due to the impact of hurricanes in the gulf region, a major hub of chemical supplies in the United States. Producers are on allocation, and foam prices have seen double-digit increases.
- Fabric deliveries (especially knits) are anywhere from eight to 12 weeks out due to unit demands. Suppliers are working on securing additional looms to increase knitting capacity.
- Employment issues are impacting the availability of many ancillary items. Hiring has been a challenge for many suppliers and bedding companies in general. Competing against government worker incentive programs makes finding workers even more challenging.
Paramount has raised its foundation prices and anticipates a price increase on mattresses, or a product surcharge. “There are too many variables still in play on mattress raw materials, so we are waiting till we gather further data,” Fleck noted.
What will retailers do with those higher costs? Probably pass at least some of them along to consumers, producers say.
“To me, it appears to be both inflationary as well as driven by the challenges of COVID-19,” Pennington observed. “These increases will push up costs a price point on many products. Retailers are going to either re-merchandise, change specifications on existing products, or absorb the increases. I assume a mixture of these three items will occur.”
Getting the goods
Fleck said that some of the company’s retailers told him they don’t mind the increases as long as they can get goods.
The COVID-19 pandemic quickly made its impact felt in the nonwoven supply chain, driving up prices for encased coils and other bedding components.
The use of key nonwoven materials soared as those materials were used in medical and healthcare applications for face masks, medical gowns and medical drapes.
And that brought about widespread shortages of spunbond pointbond polypropylene, used in various construction fabric applications in both furniture and bedding, including fabric-encased coils and dustcover, flange, quilt-backing, filler cloth and inner-panel applications, among others.
Leggett & Platt, a major supplier to the bedding industry, responded to those shortages by implementing a 15.5% price increase on all fabric-encased coil systems.
“The combination of material shortages from the COVID-19 pandemic and increased demand for ‘at home’ products have created an unparalleled environment in the global industrial market,” L&P said in an overview statement. “The current situation has certainly impacted everyone in the bedding industry, resulting in supply chain disruption and increased costs for component materials, which has led to some price increases.
“We have expanded our nonwoven supply chain, and although we expect nonwoven markets to be extremely volatile as long as demand for PPE remains strong, we believe we will see improvements in the supply chain during the fourth quarter, hopefully easing some of the current challenges within the bedding industry.”
HS Manufacturing, a division of Hickory Springs Manufacturing Co. and a supplier of components for the furniture and bedding industries, recently said its business has returned to pre-COVID-19 levels.
The company attributed that progress to its domestic production capacity, a “solid supply chain” and raw material availability.
“We encourage our industry partners who are experiencing delays or challenges in acquiring components and/or materials to contact us, so that we can help them bridge the gap in their production,” said Mark Jones, president and CEO of HSM. “There seems to be an industry-wide perception that everyone is experiencing delivery issues and supply chain disruption, but that is not the case at HSM. We have enough inventory and production capacity to service the marketplace.”