Is the housewares market resistant to recessions? Executives interviewed at the 2009 International Housewares Show said: It depends.
While many housewares products fall into the category of discretional spending, others show less elasticity of demand. Changing consumer behaviors and needs during an economic downturn also creates unique opportunities some pro- ducts thrive on.
For instance, who would mind some lighthearted moments at the end of a stressful day? That explains why California Clock Co. is embracing sales growth for its Kit-Cat clocks. The company has seen a pattern of higher demand during downturns, including after the Sept. 11 terrorist attacks, according to national sales manager Dave Dongarra.
In fact, the Fountain Valley, Calif.-based company was founded in 1932, in the middle of the Great Depression.
“Our products make you laugh, and they are affordable and made in America,” he said in an interview at the show, held March 22-24 in Chicago. The iconic clock is molded with high-impact ABS in the shape of a cat. The tail swings as a second hand and its eyes move to give watchers the impression that it's watching back.
The Kit-Cat clock has kept its original look but also expanded into different series, sizes and colors. Dongarra said the company's manufacturing side has remained steady in the past year.
The ongoing recession has also prompted many belt-tightening Americans to return to traditional home values, including the focus on the family meal and a better home environment. “People seem to be eating out less. The economy is having a cocooning effect,” said Peter Goldman, president of the home section of research company NPD Group Inc. of Port Washington, N.Y.
The changes are creating more demand for food-preparation, food-storage, cookware [and] home-storage items, among others. The sales of home organization projects, for example, will increase 4.5 percent annually to $8.6 billion in 2011, according to Cleveland-based consulting firm Freedonia Group.
“If there's such a thing as a recession-proof product, this [plastic container] is it,” said Allin Russell, marketing director of Auckland, New Zealand-based Sistema Plastics. “People are packing their lunches and keeping their leftovers.”
The privately owned company has been growing at least 20 percent annually for the past decade. Last year, the 24/7 factory added machinery and workers, bringing its totals to 32 injection molding machines and 140 employees.
Despite the general consumer-spending slump in the marketplace, Leominster, Mass.-based United Solutions Corp. recorded a nearly 10 percent growth in sales in 2008. The company is celebrating its 90th anniversary this year and is on track to repeat last year's sales growth, said Frederick Beauregard, vice president of sales and marketing.
Although the injection and blow molder changed its name from United Plastics back to United Solutions in 2006 to reflect a broader product line, the company still believes that plastic offers value, and cited stabilized resin prices as a positive factor. “We are optimistic that [resin prices] will stay at that level for the remainder of this year, so we can focus back on product development rather than price increases.”
United Solutions operates three manufacturing sites across the country, in Leominster, Mass.; Sardis, Miss.; and Gilbert, Ariz.
Snapware Corp.'s 2008 business grew at double digits and it expects the trend to continue in 2009, said CEO Craig Allen, stressing the importance of new products to that end.
The Mira Loma, Calif., firm is holding off on plans to add production in the Midwest, but it has improved logistics and equipment and implemented lean concepts, Allen said.
Pleasant Prairie, Wis.-based Iris USA Inc. is optimistic about its plastic storage products, even though business has taken a dip. “People are staying home more. … They find it necessary to clean up and organize their homes,” said category manager Karla Sturycz.
Some companies are paying close attention to growing niche markets in the U.S. For instance, the Latin market keeps growing, despite the recession. Imusa USA LLC of Doral, Fla., which makes plastic food-storage products and similar items, said its sales grew 85 percent in 2008. Regional sales director Jhonn Valencia said Imusa runs in-house plastics operations in Colombia and China.