Homewares: Trends and Opportunities Around the World in 2015 and Beyond

M. CRUZ DEL BARRIO
HEAD OF HOME AND GARDEN RESEARCH
7 March 2015
HOMEWARES: TRENDS AND OPPORTUNITIES AROUND THE WORLD
2015 AND BEYOND

© Euromonitor International
2
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 On the ground researchers in 80 countries
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Our Expertise
 Consumer Trends & Lifestyles
 Product Categories & Distribution channels
 Economics & Forecasting
Who Is Euromonitor International?
INTRODUCTION

3
Euromonitor International’s Network and Coverage
INTRODUCTION

4
Euromonitor International’s Research Methodology
INTRODUCTION

HOMEWARES: MARKET OVERVIEW
CASE STUDY: GROUPE SEB – HOW TO BECOME A LEADER
FUTURE CHALLENGES AND OPPORTUNITIES
KEY TAKEAWAYS

US$84bn
GLOBAL RETAIL SALES OF
HOMEWARES (2014)
13%
GLOBAL GROWTH
(ANNUAL AVERAGE
2008-2013)
0.1%
OF TOTAL SALES
COME FROM THE US (2014)

7
Homewares
US$84 bn
Dining
US$37 bn
Dinnerware
US$17bn
Beverageware
US$13 bn
Cutlery
US$7 bn
Kitchen
US$47 bn
Cookware
US$26 bn
Kitchenware
US$21 bn
The Building Blocks of the Global Homewares Industry

8
Homewares value sales by region (2014)
Western Europe
32%
Australasia 1%
Middle East and
Africa 4%
Asia Pacific
30%
Eastern Europe
8%
North America
16%
Latin America
8%
China Leads Growth in Emerging Economies…

9
Homewares value sales by region (2014)
Developed
markets
48%
Middle East and
Africa 4%
Asia Pacific
30%
Eastern Europe
8%
Latin America
8%
… but Developed Countries Remain Key Players

10
How does Homewares Compare with other Industries?
70
75
80
85
90
Global Retail Sales by Industry, US$ billion, 2014
US$Billion
Coffee Laundry
Care
Ice
Cream
Vitamins and
Dietary
Supplements
Traditional
Toys and
Games
Homewares

11
Homes = Homewares: Rising Ownership Drives Sales
0
500,000
1,000,000
1,500,000
2,000,000
2,500,000
3,000,000
China Turkey Brazil Russia S. Korea US
Net New Housing Completion (Selected Markets, 2008-2013)

12
-30 -25 -20 -15 -10 -5 0 5 10 15 20
Spain
Mexico
US
France
Brazil
Turkey
S. Korea
Russia
China
New Housing Completions Growth:
Top and Bottom Countries, 2012-2014 % CAGR
2012-2014 % CAGR
Homes = Homewares: My Home is My Castle
Housing
construction
growing
fastest
Housing
construction yet
to recover to
pre-recession
levels

13
Cooking is More than a Necessity
-2
-1
0
1
2
3
-2
-1
0
1
2
3
Stove Top
Cookware
Food Storage Kitchen
Utensils
Ovenware Beverageware Cutlery Dinnerware
%AnnualGrowth
US$Billion
Homewares Growth by Category (2008-2013)
2008-13 absolute 2008-13 CAGR %

14
-3
-2
-1
0
1
2
3
2007-08 2008-09 2009-10 2010-11 2011-12 2012-13
%ValueGrowth
Homewares retail sales growth by category (World, 2013)
Beverageware Cutlery Dinnerware Cookware Kitchenware
Growing Cooking Interest Boosts Sales
Growth
Drivers

15
15
20
25
2008 2009 2010 2011 2012 2013
US$perhousehold
World: Dining and Kitchen
Expenditure per Household, US$, 2008-2013
Dining Kitchen
Cooking Related Products Prove to Be More Resilient
US$105
US$94
US$90

16
0%
25%
50%
75%
100%
Brazil Russia India Germany China France Japan UK US
Never prepare Less than 5 minutes 5-15 minutes 15-30 minutes 30+ minutes
How much time do you spend preparing lunch?
Euromonitor Survey on Eating Habits Around the World in 2013 (I)
%ofrespondents

17
0%
25%
50%
75%
100%
China Japan India US UK Russia Brazil France Germany
Never prepare Less than 5 minutes 5-15 minutes 15-30 minutes 30+ minutes
How much time do you spend preparing dinner?
Euromonitor Survey on Eating Habits Around the World in 2013 (II)
%ofrespondents

18
Stove Top Cookware vs Ovenware: Tale of Two Products
-1.0 -0.5 0.0 0.5 1.0 1.5 2.0 2.5
Asia Pacific
Latin America
Australasia
North America
Middle East and Africa
Eastern Europe
Western Europe
US$ billion
Stove Top cookware Vs. Ovenware absolute growth (2008-2013)
Stove Top Cookware Ovenware

19
Roasting and Baking are Regional Preferences
93% of households have a microwave
0 20 40 60 80 100
China
Japan
Mexico
Chile
US
Brazil
Russia
UK
Ovens: Household penetration (2014)
0.1% of households have an oven
%ofhouseholds
100%

20
China Shows No Interest in Microwaves
93% of households have a microwave
0 20 40 60 80 100
China
Mexico
Russia
Brazil
Japan
Chile
UK
US
Microwaves: Household penetration (2014)
Negligible household penetration
91%
%ofhouseholds
93%

22
Groupe SEB: A History of Success
• Net Sales in Small Appliances (2013)
US$ 5.4 billion
• Net Sales in Homewares (2013)
US$ 2.8 billion
• Sales growth between 2008-2013
+6.5% CAGR

23
1,800
1,900
2,000
2,100
2,200
2,300
2,400
2009 2010 2011 2012 2013
US$million
Groupe SEB Cookware Sales 2009-2013, US$ million, Retail Value RSP
Groupe SEB a leading player in cookware

24
Acquisition of leading
local brands
Control of retail
network
Introduce other SEB
brands to market
• Supor
• Imusa
• Maharaja Whiteline
• Company operated
stores
• Third party retailers
• Imusa and Home &
Cook outlets
Groupe SEB global strategy

25
0
50
100
150
200
250
300
2009 2010 2011 2012 2013 2014
Consumer Appliances:
Imusa brand volume sales 2009-2014 (‘000 units)
Volumesales(‘000units)
Company
operated stores in
Colombia (2014)
22
Largest cookware
company in the
US by value sales
(2014)
3rd
SEB’s Acquisitions to Bolster Retailing Presence (I): The Americas
Groupe SEB
takeover

26
Company operated
stores in China
+1,000
Cookware brand
in China by sales,
2014
1st
SEB’s Acquisitions to Bolster Retailing Presence (II): China
0
100
200
300
400
500
600
2009 2010 2011 2012 2013 2014
Kitchen: Supor Brand Sales in China (US$ mn)
2009-2014
Valuesales(US$million)

27
Currency Fluctuations Hit SEB
-20
-15
-10
-5
0
5
10
Japan Russia Turkey
%y-o-yvaluegrowth
Sales Growth Performance:
Local Currency and Euro Y-o-Y Exchange Rates 2012-2013
Local Currency Euro Y-o-Y Exchange Rates

29
Commoditization of homewares
Competition from private label
Unclear brand segmentation
The Future Comes with Many Challenges

30
Strong growth forecast
Buoyant housing market
Strong social mobility
Young population
Strong growth in
multiple retailers
Contrasting Factors Shaping the Future of the Regions
Weak growth forecast
Struggling property
market
Uncertain economic
situation
Ageing population
Distribution networks
saturated but good
growth in online sales• Asia Pacific
• Latin America
• Middle East and Africa
• North America
• Australasia
• Western
Europe

31
Fastest Growing Markets
-2
0
2
4
6
0
50
100
150
Western
Europe
Australasia North
America
Eastern
Europe
Latin
America
Asia
Pacific
Middle
East and
Africa
2013-18CAGR%
US$perhousehold(2013)
Homewares: Inverse correlation between spend per household
and forecast growth
2013 US$ per household spend 2013-18 CAGR%
China Indonesia
Brazil UAE
Thailand
Growth will Come from Emerging Economies

32
0
2
4
6
8
10
12
0
10
20
30
40
50
60
70
Brazil US Russia Germany South Korea Argentina
%share
US$mn
Highest growth countries in Ovenware
and Share of Silicone in 2013
2009-13 absolute growth Ovenware 2013 silicone share in Ovenware %
Growth Through Innovation: Silicone in Ovenware

33
0
5
10
15
20
25
0
100
200
300
400
500
China Germany Russia US Canada South Korea
%share
US$mn
Highest growth countries in Kitchen Utensils
and Share of Silicone in 2013
2009-13 absolute growth Kitchen Utensils 2013 silicone share in Kitchen Utensils %
Growth Through Innovation: Silicone in Kitchen Utensils

34
■ Hygienic
■ Light
■ Easy to clean and store
■ Safer for baby food
■ Cheaper than glass and
ceramics
■ Limited cooking usage
(mainly baking)
■ Greater loyalty to
metal and wood in both
developed and
developing countries
The Pros and Cons for Silicone

35
Smart Objects and the Internet of Things
US (2014)
SKE Lab Neo Smart Jar
112%
Tablet
Penetration
162%
Smartphone
Penetration
SEB Groupe: 40% of R&D allocated to
Smart Objects and Connectivity in 2014
Source: www.Indiegogo.com

37
Key Takeaways
Emerging
Markets
• Growth
potential
• Lower
expenditure
per household
Developed
Market
• Stagnant
growth
• Higher
expenditure
per household
Creating
Value
• New Product
Development
• Materials and
formats
Smart
Home
• Homewares
as part of the
“Internet of
Things”

38
THANK YOU FOR LISTENING
M. Cruz del Barrio
Head of Home and Garden Research
cruz.delbarrio@euromonitor.com
Euromonitor International
60-61 Britton Street
London EC1M 5UX
www.euromonitor.com
Note: 2013 figures are based on part-year estimates. 2014 data is preliminary. Both are subject to change. Final data to be published May 2015

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