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issue: January 2007 APPLIANCE Magazine

International Housewares Association
Innovation, Convenience and Style


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by Phil Brandl, president, International Housewares Association (IHA)

Small appliance sales are being fueled by innovations that save time, offer multiple uses and bring a coordinated sense of style and color to kitchens and other rooms in the home—rooms that are being expanded to accommodate non-traditional activities.

According to the International Housewares Association’s (IHA) State-of-the-Industry (SOI) Report, U.S. consumers spent $76.3 billion on housewares at retail in 2005, an increase of 17 percent over 2004 figures. Household electrics accounted for 14 percent of all U.S. housewares sales, kitchen electrics 8.4 percent and personal care electrics 4.6 percent. Household electrics, cook and bakeware, kitchen tools, and tabletop combined for nearly half of all sales reported by IHA member companies for 2005.
In a move applauded by IHA’s Consumer Advisory Council, many manufacturers have shifted their focus to full lines of small appliances that can be coordinated with major appliances and counter space, and are upgrading commonly owned products with new innovations and features.
At the retail level, this trend can translate to higher price points that consumers are willing to absorb—if they perceive that the products will make their life stylish and easier and save time. Consumers, including our Council members, are attracted today to the counterworthiness of their small appliances, particularly those that are part of a kitchen or bathroom upgrade and are in full view.
“Our model is innovation-based and striving to put new products in categories that have been stagnant, draw the consumer in and give them a reason to buy,” says Randy Hales, president of Back to Basics. “We want the consumer’s thought process to be, ‘Let’s buy this new toaster rather than waiting until ours simply doesn’t work anymore.’”
The Back to Basics Egg & Muffin Toaster, for instance, was introduced in October 2005 with “zero” market presence and became the top-selling toaster in the nation by December 2005, Hales says. Noting that the “bottom has been hit” in low price points, Hales says his company introduced higher price points while being very careful to maintain quality, make the new products “feature-rich” and coordinate each product in a full category line.
Small appliance manufacturers are still dealing with cost pressure from steep increases in raw materials and energy in 2005. The prices of metals such as copper, zinc and aluminum used in many small electric appliances have been a particular challenge, says Sam Weiner, president of EdgeCraft Corp.
Still, Weiner adds, sales have been healthy, especially in the second half of 2006, and he expects that trend will continue into 2007 as his company continues to make adjustments in pricing to compensate for cost pressures in some product categories.
While retailers are traditionally resistant to small appliance cost increases on their shelves, Weiner believes they do understand the logic and necessity for higher price points. “Retailers want their suppliers to be healthy financially and want them to have sufficient resources for research and development in order to come out with new products,” he says. “They understand the increasing costs that are pervasive right now with commodities. In general, retailers appreciate the quality we offer.
“Having lived long enough to go through several cycles, I can say that (commodities prices) tend to overshoot on the high side and undershoot on the low side; and some commodities that have reached excessive prices will collapse,” Weiner added.
Mark Bissell, president of Bissell, Inc. agrees that cost pressure on small appliance makers has been a factor in the market.
Bissell also believes that the trend toward the “healthy home and healthy living” is increasingly significant for small appliance makers as consumers demonstrate they want green personal hygiene products, organic foods, home-based exercise equipment, and spa-like atmospheres in bedrooms and bathrooms. He notes the growing popularity of HEPA-based air filters in small appliances to trap allergens and other airborne particles, saying it reflects a “way of thinking in the industry. It’s an interesting trend with many subtle factors.”
One overriding trend, according to IHA’s State-of-the-Industry Report, could buoy up the small appliance market for years to come, even while costs escalate. The average size of new homes increased 10 percent during the 1990s, with the “monster home” trend even more prevalent from 2000 to 2005, according to Ed Detgen, director of marketing for Danze, Inc., in a manufacturing forecast by Mintel International Group, Ltd. included in the SOI. This means more housewares, including more small appliances required for homes that have multiple kitchens or cooking areas and family and living rooms.
“Upgrades in kitchens and baths are definitely a trend, and how the trend is manifested from year to year is what captures people’s imagination,” he says.
“The kitchen is now where the family comes together,” adds Margie Rowe, brand manager for the Moen ShowHouse collection, in the same forecast. “Because of that, the kitchen is changing to reflect people’s desire for stylish spaces, even down to the fittings.”
The consensus of small appliance suppliers indicates that despite challenges in raw material costs, there is ample room for growth if suppliers and retailers know their customers’ needs, and make design and innovation key elements in their market strategies. As Randy Hales said, the consumer responds to innovation.

 

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