Emerging Market Research

Discussion of trends influencing demand for Pergolas and other shade structures.​
Study reveals Shade Structures will take take-off among homeowners.

Published in Aqua Magazine May, 2016

AQUA Magazine May 2016 cover

Homeowners in 2016 will seek a defined backyard environment with shade options.

Demand for outdoor living is booming. The backyard has always been recognized as a spot to entertain, play, eat, and sleep. But now, homeowners want to upgrade the look and feel of the traditional backyard. Recent surveys conducted by Kleber Associates, the AIA (American Institute of Architects), HGTV, and others confirm the separation between indoor and outdoor living is blurring. More and more, consumers want their backyards to be an open template to extend their indoor living space.

This trend was described by Andy Sears, President Structure Works/Back Yard America (Outdoor Living Experts since 2002): “It’s a growth industry; poised to get bigger. There are more things that can be brought outside to make the outside living experience better: lighting, heat, entertainment, and new bioethanol fire pits.”

In a white paper on Outdoor Living published in published April, 2015 Kleber & Associates states: Although Boomers have been essential to the Outdoor Living world, Millennials are emerging as important drivers of the outdoor living movement. They are now coming of home-buyer age and seeking homes with outdoor living areas that are already complete or containing areas that can be improved or remodeled.

This perspective is supported by a 2015 Outdoor Living Trends Survey conducted by Industry Edge. In this study, the Millennial generation (age 18-35, comprises up to 25% of the population) was found to have more interest in outdoor living than baby boomers. Key generational differences the researchers found are described below.

24% of Baby Boomers spend more time outdoors, while 62% of millenials spend more time outdoors.

The Outdoor Living Space Starts With A Deck

According to the 2014 US Census, decks, patios and porches have solid presence in US homes. Statistics for New Single-Family Houses Constructed and Sold indicate 90% of US houses built or sold in 2014 had a deck, patio, or porch outdoor structure associated with it.Interestingly, homeowners committed to Outdoor Living find that a deck or patio is critical to support Outdoor Living—but, it’s not enough. Outdoor Living requires a defined space. Mike Beaudry President NADRA (North American Decking and Railing Association) explains this further: “It’s no longer just a huge patio or a huge deck. There’s much more thinking involved in terms of how we create the ultimate outdoor living space. If we want to create the outdoor living space, then we want to expand how we are using it.” Then, there’s also the fact that sitting on the patio and baking in the sun is no fun. To really enjoyoutdoor living, Outdoor Living spaces need to provide shade. Shade is at the top of consumers’ want list in terms of Outdoor Living spaces.

Pergolas Emerge As the Next Go-To After The Deck

Pergolas, open structures without walls or a solid roof, address the need for shade in a defined space. Running the gamut in size and complexity from to “just big enough to cover a table and chairs” to a “build it your way” custom structure, pergolas define an open space without constraining it.

“People embrace the idea of an outdoor room as an extension of their home,” says Lance Servais CEO of H B & G Building Products. “Whether it’s to formalize an outdoor living area or to create a backyard retreat, a pergola defines the outdoor living experience.”

It’s no surprise to find demand for pergolas is expected to grow. Freedonia’s definitive research study of landscaping products projects 7% growth for Pergolas, Arches, and Trellises over the next 3 years. In fact, Pergolas, Arches, and Trellises are expected to outpace deck growth by more than 3:1. Freedonia substantiates their estimates with the following comments (excerpt Landscaping Products to 2017 Published July, 2013): “Pergolas are relatively low cost compared to other outdoor structures, which makes them appealing to consumers who wish to add an architectural element to their outdoor space without the cost or space requirements of a shed or gazebo.”

Eddie DeJong, Business Development Manager of New England Arbors, a leading pergola manufacturer states: “Our growth has been 15% each year over the last three years. Pergolas have become a huge thing.” 51% of respondents in the ASLA (American Society of Landscape Architects) survey conducted last spring indicate pergolas most likely outdoor structures to be demanded. The survey was fielded in February 2015, with 581 landscape architects responding.

Reinvention: New Pergola Designs Capitalize on Demand for Outdoor Structures

As few as five years ago, the typical pergola was a beamed wooden structure that required complex installation and huge outlays of time and money to maintain. Max Baldwin, President, Baldwin Pergolas, explains: “Wood was big in 2007, 2008. At that time the average homeowner had a choice: pressure treated stained or cedar. Now people want maintenance-free.”

These dissatisfactions have not gone unnoticed.

Pergola manufacturers respond to pain points comprehensively:

De-emphasize wood in new pergola design

Manufacturers offer pergolas featuring composites (aluminum, fiberglass, and vinyl) and wood/composite hybrids (wood/aluminum, wood/ fiberglass reinforced concrete) to achieve different looks and satisfy different wallets. By offering more composite structures, color can also come into play. Color becomes a big design element– some manufacturers go all go out and produce pergolas in custom colors.

Increase shade options (add louvers, more purlins, canopies-canvas and polycarbonite)

Canvas canopies and mechanical or electric louvers are named as the most frequent pergola shade upgrade. Greg Bailey President Outdoor Living Today shared this observation: “What’s blowing us away: sales of patented pergola with retractable canopy.”

Simplify installation/assembly—sell kits of engineered components vs. a pallet of parts.

Manufacturers engineer pergola components/hardware for easier installation. They package components to ship as kits for Pro contractor or DIY assembly. Detailed instructions are included in all kits; written assembly instructions are supported by step by step pergola installation training through YouTube videos; Walpole Outdoors even includes CAD drawings to supplement detailed instructions. Manufacturers estimate 60-70% of pergola kits are assembled by consumer DIYers.

Deploy Design Configurators

NADRA (North American Decking and Railing Association) recently partnered with VisionScape to provide members with interactive 3D designs that enables pros and consumers to create life-like, complete outdoor projects that include pergolas. The design can be shared on line via videos, screenshots and images for communication and collaboration between the contractor and his customer.

Invite possibility

Adding style or function to outdoor structures is increasingly common. Manufacturers identify the following accessories as popular add-ons included in outdoor living spaces: IR heat, lighting, fireplace, outdoor flat screen TV, and fans. “Composite materials vs. wood, and particularly fiberglass composites are more amenable to add-on lifestyles accessories,” says Kelly Hendrix, vice president and GM of Arbors Direct. “The beams, columns, and drafters of fiberglass pergolas are hollow. That makes it easy to string electric or speaker wiring through them to build out an outdoor kitchen or entertainment room.”

Raise the Bar: Raise the Roof

Research has confirmed: homeowners, particularly the Millennials, seek homes with Outdoor Living areas that are already complete or contain areas that can be improved or remodeled. When homeowners want to build or renovate their outdoor space, they quickly find out that a deck or patio is not enough—optimized Outdoor Living requires a defined space and shade. Pergolas, open structures without walls or a solid roof, address the need for shade in a defined space. They have emerged as the next go-to after the deck. In fact, Pergolas, Arches, and Trellises are expected to outpace deck growth by more than 3:1.

When homeowners look to build a pergola into their outdoor space, they tend to steer of the structures of the past and opt for ones that are maintenance –free, “fit” their house/surrounding landscape, and function every bit like an interior space. To convert these intentions to real growth, pergola manufacturers evolved the product to emphasize maintenance-free materials (aluminum, fiberglass, cPVC, vinyl) and redesigned components to simplify assembly and accommodate add-on accessories. These innovations ensure pergolas are a category to watch. Pergolas are on course to become a key element in the design of Outdoor Living spaces and, to become a high-margin add-on to decking installations or landscaping projects. Pergolas are a product category to pay attention to.