Housewares makers are counting on consumers to buy their products to provide some emotional comfort during currently uncertain economic times.
``People are more likely now to stay close to home and we, as an industry, are positioned to help that home environment,'' said Mark Bissell, chairman of the International Housewares Association.
``Although large-scale purchases of homes and cars will undoubtedly be affected well into 2002, I believe we will see purchases of housewares - especially those under $10 at retail and impulse in nature - continue to rebound early [in 2002],'' said Douglas Taeckens, president and chief operating officer of housewares producer Helmac Products Corp. of Alpharetta, Ga.
Taeckens' comments were part of a forecast issued by IHA of Rosemont, Ill.
Housewares, ranging from plastic storage containers to cookware to small electric appliances such as carving knives, were a $65.5 billion market at the retail level in the United States last year. Average annual sales growth was about 5.9 percent in the 1996-2000 period, according to IHA. Globally, nearly $270 billion was spent on housewares in 2000.
Housewares should weather a recession well because they ``soothe the need to shop,'' according to James Tennant, president of Home Products International Inc. of Chicago. Products retailing for under $50 are especially appealing, Tennant said by telephone. Plastic storage containers certainly fall into that category, and Tennant said sales continue to grow for the containers, though profit margins are a challenge.
Growth prospects for plastic storage products have enticed Iris USA Inc. to plan for an injection molding plant in Mesquite, Texas. Iris expects to begin production in September at the plant, its third U.S. operation. However, the Japanese-owned firm is delaying final decisions on the plant's size until it has a better read on how well housewares markets will hold up.
Appliance markets promise to be relatively flat in 2002 after a 3 percent decline in 2001, according to a forecast by the Association of Home Appliance Manufacturers in Washington. Still, U.S. appliance shipments in 2002, at nearly 63 million units, are well above the historical average.
Suppliers of plastic parts to appliance firms will experience uneven demand, reflecting majors' manufacturing strategies.
Benton Harbor, Mich.-based Whirlpool Corp. is expanding refrigerator production at its Fort Smith, Ark., facility, to the benefit of local suppliers. The world's largest major appliance producer hired 320 additional workers to add a third refrigerator shift at Fort Smith. Custom injection molder Moll Industries Inc. and thermoformer Alltrista Corp. are two nearby plastics vendors that will gain extra business. The expanded Whirlpool business was a factor in Alltrista's recent decision to keep the Fort Smith operation when it sold its other thermoforming plants to Wilbert Inc.
Maytag, on the other hand, decided to cut back production of clothes washers and dryers at its Newton, Iowa, plant this month because of high inventories. The firm earlier hired about 200 extra workers for Newton to handle a backlog of orders that built up by September.
Maytag said appliance industry sales were high in the third quarter following weakness earlier in the year. Industry sales continued to be strong in the fourth quarter.
Appliance firms are trying new tricks to stimulate purchasing. Bold colors, once mainly available only from Europe, are being introduced by North American firms seeking to sell appliances at premium prices. Whirlpool, for example, has a cobalt-blue refrigerator and dishwashers with doors in several colors in its KitchenAid line.
Whirlpool last month launched a new washer and dryer it claims feature ``space-age design'' and high energy efficiency. Those, too, are aimed at the high-price market niche dominated by European-made products. The new appliances are priced more than twice that of standard Whirlpool models.
Housewares producers, too, are tapping their ingenuity to differentiate themselves and to prime the market.
Under new President and Chief Executive Officer Joseph Galli, Newell Rubbermaid Inc. has launched initiatives that he claims will allow it to ``continue to gain traction and give us confidence as we look to 2002 and beyond.'' Galli noted Newell Rubbermaid's new television campaign for home products, the first TV network effort for the housewares major in three years. It will spend $15 million on the ``How Life Gets Organized'' campaign during three months to capitalize on the Rubbermaid brand name.
The Freeport, Ill., company has accelerated new product development and is reviewing product categories with key accounts at major retailers like Wal-Mart, Home Depot and Target.
Tupperware, meanwhile, continues to broaden its marketing beyond direct sales through home demonstrations. The Orlando, Fla., plastic housewares giant agreed to offer its products at 25 Kroger Co. and Fry stores through independent Tupperware sales staff. The agreement follows recent Tupperware moves into sales through shopping malls, the Internet and television shopping.