Housewares Report: Investing in the Nest
Posted on September 5, 2013 by
Home storage, floor care and healthy food prep poised to grow as consumers hunker down at home By Allison Zisko
The Haan MultiForce Pro is a steam mop that can be used indoors as well as outdoors.
A gradually improving housing market and
a more financially confident consumer have put the housewares industry--traditionally a resilient category to start with--in a position to grow. Industry observers predict that the home storage and organization, floor care and cookware categories in particular will benefit as consumers invest in the homes they already own and undertake modest makeovers.
"To no one's surprise, housewares as a category is doing well," said Phil Brandl, president of the International Housewares Association, who described overall business as "modestly up" so far in 2013. That being said, the industry is divided between companies with fresh, new ideas who are doing "wildly well" and those who are affected by consumers concerned with recent volatile pricing for oil and gasoline, Brandl said. He described the current state of the housewares industry as one marked by "pockets of exuberance" mixed with "pockets of caution."
The housewares industry seems to be growing a little faster in 2013 than in previous years, noted A.J. Riedel, head of Riedel Marketing Group, a market research firm. "I think consumers are more comfortable with their financial futures," Riedel said. Not because of the slowly but steadily improving economy, she said, but because consumers have paid down personal debt and have more discretionary dollars to spend. "I think people will be spending more money on their homes," Riedel predicted.
The FastTrack organization system from Rubbermaid was designed to keep tools, hoses, sports equipment and other stuff off the garage floor. rubbermaid.com
Home improvement projects typically involve painting and replacing flooring, which often means removing carpeting and replacing it with hardwood floors, according to Riedel. This bodes well for the floor care category--vacuum cleaners as well as steam mops.
"Carpet care and vacuuming are not going away anytime soon," Brandl said. However, business migrations and transitions take place every day in the housewares industry as consumer lifestyles change, he said.
"We've found deep cleaning has a connection to general economic variables like home remodeling and new home sales, whereas vacuums are not as affected [by] a changing economic climate," said Ryan J. McLean, vice president and general manger of global marketing for Bissell, which is seeing growth in its partnerships, including the Swiffer Bissell SteamBoost and its manual carpet cleaning products. "As home remodeling increases, so does the trend toward more hard surfaces in the home. This provides additional growth opportunities in our hard surface products such as steam mops and stick vacuums."
Rubbermaid's HomeFree closet system is a do-it-yourself kit that is customizable.
"Home remodeling is a reason we hear consumers give for buying a new cleaner, so it certainly doesn't hurt," said Dan Gregory, president of TTI Floorcare, the parent company of Hoover and Dirt Devil. "But we attribute most of our growth to innovative new cleaners. People will always need to clean their floors. It's our job to create the most powerful and convenient ways to do so." This year the company launched the Hoover WindTunnel Air Steerable upright vacuum and the Hoover Power Scrub Deluxe, a carpet washer, both of which have been well received by consumers, according to Gregory.
Chad Nordhagen, director of marketing for Bona USA, said business has benefitted from both home remodelings and what he called "nesters." The improved economy has prompted some homeowners to refinish their floors, while the so-called nesters continue to wait out the economy or were hard hit during the recent recession and want to keep their homes looking beautiful without the expense of remodeling. Bona has products for both of these groups, and recently launched the Bona Floor Design Guide application that helps consumers decide the best type of floor for a renovation.
Storebound offers the Dash juicer and plans to expand its offerings in the category. storebound.com
Haan's floor-care business has been driven this year by its MultiForce line, which was introduced last year, said Barry Witte, vice president and general manager. "Consumers have recognized the value of the versatility of this innovative steamer," Witte said. This line offers scrubbing capability and can also be used outdoors.
"Although we have seen the increase in the overall trends of hard floor growth in homes, we are not yet seeing a direct correlation to category growth in steam cleaning," Witte said. "Steam only has approximately 12 percent U.S. household penetration, and we see immense room for growth."
Consumers who opt to stay put in their homes are putting their energies into making them as neat and organized as possible, and want to make use of all available space. Home storage and organization is starting to be a growth category, according to Riedel, but consumers are more interested in organizing systems than in individual storage items. "They are looking for solutions, not products," Riedel said.
Barry Witte of Haan sees "immense room for growth" for steam cleaners.
Savvy retailers continue to capitalize on this. The Container Store's whole business is built around storage and organization, and it offers its own, proprietary organization system, elfa. Other retailers have plenty of options to choose from vendors such as Rubbermaid, Pro-Mart, Umbra and many others.
"We see continued opportunities for growth in closet and garage organization as the baby boom generation downsizes and seeks solutions to organizing their belongings in smaller spaces," said Azad Alex Sabounjian, president of Pro-Mart Industries. Some of the company's best-selling organizers are its vacuum compression storage SmartBags and MagicBags, Carousel shoe and purse organizers, pop-up organizers for storage and laundry, storage racks, organizers for jewelry, and coffee pods.
"Overall, the home organization market is growing, no question," said Scott Griffith, marketing director for Rubbermaid, Consumer. "Folks are staying in their homes longer and want to make the most of what they have."
These consumers want flexible, attractive solutions that can be shown off in the main living areas of their home rather than tucked away in attics or basements, Griffith said. For that reason, Rubbermaid recently introduced Bento boxes, modular storage boxes with flexible, pop-up dividers that can double as home accents. A couple of years ago it introduced its HomeFree closet organization system and continues to introduce add-ons to that system. HomeFree offers an entire closet system in a box. It requires do-it-yourself assembly but needs no cutting-- the shelves, for instance, can slide to the length they need to be. Add-ons include items like cubbies, shoe racks and belt storage. As a consumer's storage needs evolve, the system can evolve by adding pieces or re-arranging the unit. "I think that's what is driving consumer interest these days," Griffith said.
The same approach works in the garage, another recent target area for zealous home organizers. For garage organization, Rubbermaid offers the FastTrack system, a rail-based wall-mounted contraption that has interchangeable hooks and accessories designed to keep the flotsam and jetsam off the garage floor. Like the HomeFree system, FastTrack can be reconfigured as storage needs change.
Pro-Mart offers several items in the garage storage category such as shelving, closets, and other organizers. "Consumers who moved from houses to apartments use shelf-storage rentals where they also need to buy garage organizers to meet their excess belongings," Sabounjian said.
Design-oriented Umbra likes to have fun with storage. "At Umbra we always want to push the boundaries of function and form," said Matt Carr, director of design. The company studied the closet storage already on the market, Carr said, and found that it was "mostly rectangular and boring, zero fun." After pondering what other shapes it could employ in closet storage, Umbra came up with the Little Black Dress, an over-the-rod system with pockets for jewelry and other small items and hooks for scarves or belts, shaped like a dress. It has all the features and benefits of storage with a bit of character, Carr said. It similarly redesigned other utilitarian objects, like shoe racks and hanging shelves in closets.
In addition to home remodeling, consumers continue to be motivated by the desire to live and eat more healthfully, and are interested in the housewares products that help them achieve those goals. Juicers and tools and gadgets for prepping and storing fresh fruits and vegetables are two examples.
"Overall there has been growing awareness of the benefits of juicing through infomercials, documentaries, cleanse programs and an abundance of new juice bars opening across the country," said Evan Dash, CEO of Storebound. "Retailers quickly identified the trend and associated opportunity and shifted resources to drive sales of the category." Storebound's juicer business is relatively new, but it is expanding all aspects of the business, including centrifugal juice extractors, slow juicers and citrus juicers and will offer several new models over the next 12 months (for more on juicers, see page 50).
Looking ahead, Riedel sees more growth in grilling as it evolves into a year-round activity in many parts of the United States. She also predicted the slow emergence of induction and sous-vide cooking, techniques which are popular outside the United States but have not quite caught on here. Nonetheless, as home remodels increase, more consumers may consider installing induction cooktops. That will signal an opportunity for the cookware industry to introduce more induction-ready cookware than it has so far.
The housewares industry is always poised to respond to changing consumer lifestyles, Brandl said, and is driven by design, color and innovation. "There are always fresh, new ideas," he said. - David Gill contributed to this story