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The dawning of a new year always generates great anticipation about how business will fare in the coming months. In the housewares sector, the industry begins asking questions such as: What cuisines will consumers be eating? Where are they going to eat? Who will be preparing the meals, and how often will they do so? The answers to these questions help manufacturers, importers, and retailers predict to some extent the direction of the coming year.

However, understanding consumer eating trends isn't the only predictor of success. Integral to the decision-making process is the overriding question of the economy's health, affecting as it does consumer buying patterns.

"U.S. retail housewares sales rose to $75.3 billion in 2001, up from $69.5 billion in 2000," stated Phil Brandl, president of the International Housewares Association, as he cited IHA's just-released 2002 State of the Industry Report. In my own informal survey of kitchenware manufacturers, most seemed quite optimistic about the business prospects for this year. Naturally, their optimism is tempered with caution, but altogether, they expect 2003 to be a good year for housewares.



Driving the Business

Superior customer service and new products constitute the equation for success that will help drive the kitchenware business in the coming year say vendors. Several manufacturers report that retailers have begun to concentrate on providing better, "not just lip" service to their customers. Retailers are realizing that if they truly focus on customer service in this iffy economy, they can build a loyal client base that will return again and again to their stores for all their kitchenware needs.

"This will become more and more important as retailers try to upgrade and upsell those consumers who have the money and are willing to spend it," said one small electrics manufacturer.

The second necessary component of the equation for higher kitchenwares' sales is new products. Every January, the "What's new?" question is posed by hundreds of retailers at hundreds of booths at numerous trade shows. Perhaps this year, the answer to that question is even more important than in recent ones. As retailers seek ways to entice customers to indulge in both initial and repeat visits to their stores to drive sales, the display of new products on the shelves becomes paramount. And, "What's new?" doesn't mean just a new color for a coffee maker or a kitchen tool.

"If you have exciting new products, people will buy," assured another manufacturer. "If you have another 'me too' product — another coffee maker with a clock or in another color — and you try to beat out 50 other similar coffee makers, then that isn't very exciting for consumers," explained one manufacturer.

The uncertain economic climate is making consumers more fiscally conservative and therefore, more likely to be very selective in their purchasing decisions. So, if they are using that disposable income to purchase a new coffee maker, they'll be less likely to purchase a replacement model with just a new color than one that actually offers them features not available on the units they already own.

Further, if consumers see the same product in numerous establishments, what can you stock that will attract them into your store and win their loyalty?

"What retailers must seek out are products that can help differentiate them from their competition," said one manufacturer.

Easier said than done, right? Manufacturers queried for this article agree that now, more than ever, specialty retailers must be diligent about differentiating themselves, whether it is via exceptional customer service or by stocking unique, exciting new products. If retailers can accomplish this, then customers will buy new gadgets, teakettles, or stand mixers to replace their old ones.



Trading Up

In recent years, the accomplished home chef has provided the specialty business with its financial base, while occasional 'mainstream' consumers have supplemented that business by trading up their kitchen tools and gadgets. Such trading up has strengthened in recent years due to the prevalence of cooking shows and heightened interest in cooking magazines. These venues exposed consumers to a wide variety of cuisines, dishes, and cooking techniques, prodding them to purchase the best cookware, gadgets, and tools to replicate at home what they've learned from the TV chefs and cooking magazines.

In the coffee category for example, five or six years ago a coffee maker that retailed for over $100 wasn't available in the U.S. Today, price resistance is irrelevant, as consumers want to duplicate at home the fine coffee experience they enjoy in coffee cafés. Expect high-end fully automatic espresso machines for home use to become increasingly desirable in the coming year. While the market for fully automatic espresso machines is just heating up, Starbucks' offering of a fully automatic machine on its Web site is already brewing up greater demand.

A comparable step-up mentality is also true for nearly every kitchenware category, right down to gadgets. As consumers use a tool for daily culinary endeavors, they become acquainted with its function, and in turn, begin to demand one that performs with greater ease and more precision.

Another factor propelling the move towards upgrading kitchenware is the home-remodeling craze. As kitchens assume a whole new look, consumers seize the opportunity to replace their old cookware, cutlery, and even gadgets by purchasing products that better complement their new designs. For instance, stainless steel remains quite popular, with kitchen tools in all shapes and sizes matching the basic construction material of new professional-grade kitchens. Similarly, for consumers seeking to add just minor personality to their newly remodeled kitchen, color is an excellent option.

To entice consumers in 2003, kitchenware manufacturers are developing high-quality line extensions, thereby offering consumers a full range of improved kitchen products. Whether it is Cuisinart repositioning and repricing in the blender category with several introductions, Capresso's premiere of new fully automatic espresso machines, or Lamson & Goodnow's addition of SKUs within their cutlery line, manufacturers are pushing hard to distinguish their offerings and provide retailers with a plethora of new choices for their customers.

"We continue to work every day on producing better-quality products," explained one manufacturer. "Quality, innovation, and service are what it is all about for specialty consumers."



Food Preparation at Home

Home and hearth are the bywords for 2003, as the cocooning trend continues unabated. Manufacturers repeatedly cite the nesting and home orientation trends that gained strength following September 11th as a key indicator of where the industry will focus. Consumers nesting at home as they strengthen familial ties have an increased desire to learn more about the cooking process. In such an environment, preparing meals is no longer viewed as a task, but rather as an event to be shared with family and friends.

But what is it that makes food preparation fun? The answer is: High-quality kitchenware products that accomplish the task with perfection, but are also stylish and design oriented so that they complement the décor, and more importantly, catch the eye of guests.

Comfort foods' popularity will be the status quo in 2003. One-pot cooking or baking Grandma's brownie recipe will never go out of style, but what is helping make food preparation even more "fun" is experimentation with traditional cuisines, as well as the addition of a bit of diversity to the family menu through the preparation of ethnic dishes. To meet this need, your customers will be scanning your aisles for a host of new special-purpose and ethnic cookware pieces. Manufacturers are responding with a variety of special-purpose products like Le Creuset's new Eastern Range that includes a Karahi Dish (the Indian version of the Chinese wok), as well as the Tawa Dish used in the preparation of flat breads.

Satisfying this demand for ethnic culinary diversity will require more diligence on retailers' part in the maintenance of the cookware category than simply having an array of cookware sets available for sale.

As always, popular brand name cookware sets will endure as an important driver of the cookware category, but beyond that, retailers are striving to differentiate their offerings and this is where specialized products enter the arena. Cookware manufacturers are also predicting a demand for open-stock items, especially those that fit into the home entertaining trend. The items will range from fondues, to raclettes, to a multitude of serving items. The Table Wok from Bodum exemplifies the various new offerings retailers will view in upcoming months. Combining convenience with up-close fun, the Table Wok sets on its stand above the burner, so that food can be prepared right at the table, enabling the host/hostess to join the guests.

The increasing emphasis on the home's importance has also led a number of manufacturers to expand beyond their traditional product categories. J.A. Henckels has expanded from cutlery to cookware and KitchenAid from small electrics to kitchen tools and now kitchen textiles. This movement not only aids manufacturers in leveraging their brand awareness and placement, but also provides retailers with built-in merchandising programs that are driven by well-known brand names.



Kitchenware as a Decorative Accessory

The expansion of the home entertainment trend has moved the housewares industry beyond purely utilitarian products to developing functional products with a decorative style. Designs have run the gamut from traditional to high-tech to literally out of this world, but manufacturers have predominately sought to combine style and beauty with elegant lines. The gadget category made its foray into this realm a few years ago when kitchen tools were transformed from utilitarian items to ones in which design was given careful consideration so that they could now be taken out of the drawer and showcased on the wall or countertop.

Hand in hand with kitchenware design is the impact color makes in the kitchen. While manufacturers report that black and white continue to be the strongest colors for small kitchen appliances, with stainless or chrome close behind, color is still an important component of the kitchenware scene, especially for certain categories.

According to the Color Marketing Group, blue in a variety of different shades will be 2003's hot color to "invigorate and enliven consumer products while providing steadfast assurance and stability during cloudy economic times." Other notable colors include technology-influenced "Silger" — a gold overlay on silver that functions as a neutral background or foreground to prints and may stand alone. Other industry sources point to muted colors, with some having an almost pastel appearance. Bolder colors plan to forge a statement as represented by Chantal's new red ceramic line, while other strong colors such as tangerine and muted purples have definite growth potential.



A Pinch of Value Sprinkled with Convenience

Value and convenience continue to be watchwords consumers will live by in 2003. It may sound like old news, but precious time is always an issue when consumers are deciding what to prepare or purchase for dinner, and each day, the answer changes for the same consumer. Although many consumers cook from scratch several times per week, others only have time to do so on weekends. Either way, from-scratch cooking is creeping back into the lifestyles of U.S. consumers as they gain culinary confidence from cooking shows, magazines, and cooking school classes. The challenge for retailers is how to meet all consumers' time constraints or lack of. Stocking products that allow consumers to quickly and conveniently prepare from-scratch recipes such as the food mill from Frieling should be well received.

In today's time-pressed lifestyle, when consumers do take the time to pamper themselves at home, it may be something as simple as brewing their coffee with a French press. Using appropriate, yet unique products to brew coffee certainly creates an ambiance; the same is true of the use of the continual parade of new tea items, from tea brewers to kettles, pot and cup sets, and beyond, in tea preparation. Whether it is the unwavering coverage of tea's healthful properties or consumers simply enjoying the process involved in preparing tea as they steal a minute or two for themselves, consumers are definitely warming up to the idea of incorporating tea into their lifestyles.

As manufacturers fill out their product lines with offerings that meet the value and convenience criteria, retailers will have to be more attentive to their product mix to ensure that customers discern the differences between offerings.



Better Basics

Though the term "better basics" has circulated for a while, manufacturers emphasize that this is what the consumers are requesting now. Exemplified by the appearance of more comfortable, ergonomic handles several years ago, the processes of redesigning, remodeling, or simply tweaking existing products to make them better, such as a nine-inch square cake pan with pop-out sides that enable bar cookies or brownies to be cut and served on the base (available from Berndes), or multiple-use items such as the VillaWare Interbake3 Interchangeable Baker that is a combination waffle maker, pocket sandwich maker and pizelle maker in one, will continue to challenge manufacturers.

The heightened consumer concern for food safety will be emphasized even more. Expect the release of a variety of products to address this concern. Features among them will include the utilization of antimicrobial substances in cutting boards, or even a special coating on the probes of the new food thermometers from Component Design Northwest that prevents the growth of germs once the probe comes into contact with moisture. Similarly, Leifheit is introducing a new line of trash bins that are designed to keep the waste disposal area as clean and sanitary as possible. The bins use Lotex Everclean, an antistick surface for easy removal and a special rubber ring in the lid that is infused with a sanitizing component that keeps the lid sanitary and clean.



January and Beyond

The new year will bring additional pressure to the industry as manufacturers raise prices in an uncertain economy under a cloud of shaky consumer confidence. Retailers must balance fiscal cautiousness with the need to provide excellent customer service. When ordering goods to stock their shelves, they must work against the knowledge that when consumers are ready to buy, they want the product immediately, and if new products are not available at their usual retail source, they'll be forced to buy them elsewhere.

As the new year commences and the show season converges upon us, take time to evaluate what will be important this year for your customers and consequently, important for you and your store. The answer lies in your Business 101 book — focus on offering a unique mix of great kitchenware products coupled with a healthy dose of superior customer service. They can't help but add up to a profitable year.