Paints, Varnishes, and Supplies

Industry Snapshot

The paint, varnish and supplies wholesale distribution industry is a relatively small one that had just 4,604 establishments and 24,286 employees in 2008, according to a D&B Marketing Solution industry report. Total sales for the industry were relatively steady during the first decade of the 2000s, with reported sales of $3.8 billion in 2003, $3.7 billion in 2006, and $3.98 billion in 2008. Wholesale suppliers of paints (including those that supplied paint, varnish, and supplies) dominated the sector, with 3,821 establishments and $2.9 billion in revenues (nearly 75 percent of industry sales). Wall coverings were the only other significant source of revenue for the sector, with 461 establishments and $649 million in sales (16 percent of industry sales). States with the highest concentration were California, Texas, Florida, and New York. The average establishment accounted for $1.1 million of the overall sales.

Establishments with four or less employees in 2008 accounted for 69 percent of the industry and 17 percent of revenues. There were 690 establishments with between 5 and 24 employees, which accounted for 37 percent of industry revenues. Businesses that employed between 25 and 99 totaled 106 and accounted for 20 percent of industry revenues. Companies that employed over 100 numbered 14 and accounted for 15 percent of revenues.

In an economic landscape dominated by an economic recession in the late years of the first decade of the 2000s, the paint industry held its own. Although the overall retail sales of paint were down during 2008 by about 3 percent, sales were expected to rebound during 2009. Consumers cut back on discretionary spending, but paint and paint products were considered more of a necessity. Those who decided to stay put rather than move up in housing following the crash of the housing market in 2007 may have opted for the less expensive option of sprucing up their existing homes with fresh paint. Conversely, those who braved the dismal realty market and attempted to sell their homes purchased paint to make their homes as attractive as possible to buyers.

While wholesale suppliers maintained a fairly steady flow of business to small- and mid-sized customers during the downturn in the economy, large paint suppliers were harder hit as they tended to supply paint to the new housing and automobile industry, two of the sectors hardest hit by the recession. However, according to a 2009 market research report by The Freedonia Group, the U.S. wall coverings industry, which saw an overall decline in the years just prior to 2008, was expected to rebound and grow by an estimated 4.2 percent annually through 2013. According to the report, wallpaper is expected to once again regain popularity.

The industry's leaders in 2009 included Dunn-Edwards Paints with estimated 2007 sales of $300 million and 1,700 employees, and FinishMaster Inc. with $467 million in 2007 sales and 1,910 employees.