Cookware Tackles Tariffs, Direct-To-Consumer Challenges

NEW YORK— Over the past few years, the cookware industry has been faced with a host of challenges. The PFOA/PTFE scare in the non-stick segment brought forth a new product, ceramic, which shifted the market and dollars in the category. Changing consumer purchasing patterns made an impact on the industry from a financial standpoint, as more expensive sets gave way to open stock pieces. The influx of copper-coated ceramic offerings from As Seen On TV manufacturers disrupted the traditional purchasing route and redistributed market share.

   Now, cookware manufacturers are dealing with two major issues in the market— the growth of new, direct-to-consumer brands and the continued threat of increasing tariffs on the domestic steel and aluminum industries.

Chris Welch, director product management, Bradshaw Home, noted that the cookware business has shifted in the past few years, in part due to these and other changes in the marketplace.

“For the industry as a whole, our sense is that growth has slowed from the big gains we saw over the last few years. Some of that can be attributed to the slowing of copper ceramic non-stick— which certain brands and retailers anticipated and did well to position them for the next thing,” he said.

However, vendors also noted that are some bright spots in the category. Consumers are looking for durable goods and are willing to spend more money on products that are built to last.

“Durability is key so cookware that is scratch resistant is very important,” said Alex Wittner, vp/housewares at Gibson Overseas. “But, contemporary style is also important for the home chef. When you cook and entertain at home you need to make an impression. A popular trend across all segments is versatile, great looking cookware that can go from oven-to-table,” he said.

According to Meyer Corp., consumers are looking for multi-functional features, durability when it comes to weight and longevity and moreover safety, when it comes to the non-stick coating.

Bradshaw’s Welch also noted that there will also be continued demand in the market for cookware pieces that complement a consumer’s set as well as those goods that are not only durable, but solve problems for the consumer.

“We foresee an interest in cookware that features unique storage solutions— cookware that saves space or is organized in a way that protects the cookware. This concept isn’t new to the market but there’s definitely room for improvement in that category. We see retail space dedicated to that category, and multiple brands entering so we feel that there is a demand from consumers,” he said.

Mark Harris, evp/sales at Frieling, noted that as sous vide is catching on, cookware that complements this will also be hot on the consumer’s wish list.

“Cookware trends tend to follow food trends. The next cookware trend is being defined by the most popular cooking trends as we speak. I think we’ll see a lift in stock pot sales as the sous vide stick continues to add momentum,” he said.

Additionally, ethnic cooking continues to make gains in cookware as cohesion between global influences— thanks to social media, consumer interest in cooking shows on channels like Food Network and the continued boom of Internet influencers— further inspires home chefs in recipe recreation.

“For the last few years, global food trends have exerted an influence on the development of cookware. There is increasing demand for vessels that are called for in certain recipes such as a wok for Asian cooking and one-pot meals or a caldero and comal for Hispanic cooking,” said Gibson’s Wittner.

However, while some predict that new products aren’t necessarily in-demand, new colors and fresh styles are.

“Retailers haven’t specified a new need for specialty cookware for ethnic cuisine, nor are we seeing additional retail space being dedicated to an ethnic trend. The trends we are seeing are in color. For example, the use of black or steel but designed to be more attractive,” noted Welch.

Impact of Direct Sales

While direct-to-consumer sales have always been in and around the cookware realm, it seems that as of late, new, smaller companies are beginning to create much more of a buzz around them. Companies such as Made In and Great Jones are focused on bringing consumers quality cookware that is also affordable, a la the Warby Parker model for eyeglasses.

“Because personalization has become a consumer expectation in all categories we are going to see the emergence of more and more direct-to-consumer cookware brands. These brands will have to focus on the experience of cooking to meet the consumers where and how they want to shop,” said Matt Reigle, vp/retail and strategic marketing for Regal Ware.

Bradshaw’s Welch noted that direct-to-consumer sales are beginning to pick up steam and it’s something the cookware business should be keeping an eye on going into 2019. However, he feels that the issue should not disrupt the category as much as the copper-coated ceramic cookware influx did.

“[Direct-to-consumer brands] are no longer one-product line competitors. They’ve also seen that this category can work for their model. The direct-to-consumer business model is being looked at differently now. Companies are doing

a better job and we’ve seen increased

competition, but nothing to the degree of what we saw with the copper trend a few years ago,” he said.

But while some manufacturers have been watching direct-to-consumer sales continue to see growth, others see this issue as an opportunity to do market research and figure out what type of cookware the consumer wants— and learning how to use that research to their advantage in the coming years.

“It’s been fascinating to watch new cookware brands pop up out of nowhere on the Internet over the past year, with seeming instant success online while having zero placement at brick and mortar retailers,” said Jennifer Dalquist, evp/sales and marketing for NordicWare. “Younger generations are sending a signal that mainstream big-brand cookware that their parents owned isn’t necessarily what they want. We are observing renewed interest in unique materials and technology used on cookware, but younger generations want reassurance that there is a genuine benefit and that it’s not just marketing fluff.”

Tariffs Cloud Outlook

The potential tariffs on steel and aluminum, while having the most impact on domestic sales, have kept manufacturers on their toes during the past year. Tariffs include a 25% tax on imported steel and 10% tax on imported aluminum, which have served to raise prices of both materials not matter their country of origin. While the 10% tax on imported aluminum has affected some businesses and manufacturers, there is a reprieve at the moment, as the 25% tariff has not yet been enacted. This has given companies some time to react and put in place strategies around the potential price increases and market shifts. Many vendors that spoke to HomeWorld have not seen a significant impact on their business as of yet, but are being proactive about them.

“Tariffs on steel have been a big talking point in the housewares industry over the last number of months. However, for our business, the impact has been manageable for us. Gibson has developed a global sourcing network and is able to replace any disruptions caused by tariffs with other manufacturing sources in places like India and Indonesia,” said David Nicklin svp/marketing and licensing for Gibson Overseas.

The tariffs have also led product suppliers to have conversations with retailers about the potential for price increases sometime in the near future. While some suppliers said they have been able to manage the impacts of the 10% tariff on raw materials, the 25% tariff, if implemented, would be more challenging to deal with and they would need to up the price of products sold to retail. 

That being said, many in the cookware industry are beginning to accept these changes and are putting plans in place to continue to offset them in order to continue to drive the cookware business forward.

“Tariffs are more than likely the new normal and we need to adapt and overcome. The greatest impact in our business has been in our overseas markets which represents 70% plus of our business. Retaliatory tariffs are making selling into foreign markets more difficult,” said Reigle.