Kitchen Cabinets in the U.S.

Kitchen Cabinets in the U.S.

The kitchen is the epicenter of modern American family life and the media’s makeover darling. In spite of all this attention and excitement, the kitchen cabinet industry may very well be in for a sustained slowdown according to a new report by Specialists in Business Information (SBI).

After several years of accelerated growth, apparent consumption of kitchen cabinetry in the United States eclipsed the $14 billion mark in 2006. However, homeowners reigned in spending and homebuilders pared back on construction bringing harder times to kitchen cabinet manufacturers bringing the market down an estimated 13% in 2007. With economic uncertainty and a housing depression unfolding into 2008, it’s pretty clear that the immediate outlook for the kitchen cabinet market looks bleak. But the real questions are when will there be a bottom and how soon will growth return?

This report presents data and analysis on the U.S. market kitchen cabinet manufacturing and its prospects for growth. It explores the key economic and housing related indicators, end-user, product and market trends with expanded coverage of green factors, and competitive issues affecting the kitchen cabinet manufacturing.

Report data were obtained from government sources, trade associations and publications, business journals, company literature, and investment reports. Statistics describing the value of shipments for kitchen cabinets are derived from the U.S. Census Bureau’s Census of Manufacturers and Annual Survey of Manufacturers, and are augmented by estimates and forecasts by SBI. In most cases, historical data are provided for 1998 through 2007, with forecast data from 2008 to 2012. Because some data are taken from the Census of Manufacturers, which is generated every five years for years ending in 2 or 7 (the last census being 2002), SBI occasionally includes 1997 to show an actual base. At other times, estimates for years falling between 1997 and 2002 were used.

Statistics describing the value of imports and exports for kitchen cabinets were derived from the U.S. International Trade Commission database. SBI defines the market for kitchen cabinets as apparent consumption, which is calculated as the value shipments, plus the value imports, less the value exports.

Other data analyzed in this report include several metrics describing residential construction and housing such as home improvement spending and new home sales.

Simmons Market Research Bureau’s winter 2008 survey, based on a sample of over 20,000 respondents, provides the primary research data on consumer remodeling habits and kitchen cabinet expenditures.  
 

Chapter 1 Executive Summary

Scope of the Report

Methodology

Market Size and Growth

Market Drops 13% to $12.4 Billion

Figure 1-1 U.S. Kitchen Cabinet Value of Apparent Consumption 1998-2007

(in billions $)

New Home Market Drags Down Remodel Market

Figure 1-2 Total New and Remodeled Kitchens and Share of Total Kitchens

1998-2007 (millions units, percent)

Figure 1-3 U.S. Kitchen Cabinet Value of Apparent Consumption 1998-2007

(in billions $)

Market Forecast

Kitchen Cabinet Market to Reach $12.9 Billion

Figure 1-4 Projected U.S. Kitchen Cabinet Value of Apparent Consumption

2007-2012 (in billions $)

Economic Issues

Producer Prices

Lumber Prices Plummet, Provide Relief in Tough Times

Total Residential Investment and Rates

Figure 1-5 Comparison of Total Residential Investment, Residential

Improvement Spending, Average 30-Year Mortgage Rate and Average Prime

Rate 1990-2008, Quarterly (in billions $, percent)

Building Permits by Region

Residential Markets Head South

New Home Sales

Existing Home Sales

Home Maintenance and Improvements Lose Some Steam

Trends and Growth Factors

The Multi-Faceted Kitchen

My Lifestyle, My Ego, My Kitchen

The Outdoor Lifestyle

Design With Single Women In Mind

Baby Boomers Aging in Place

Universal Design

Remodeling Opportunities

DIY Home Improvement

Form Gets More Function

Consumers Comfortable With Color

Aesthetic Focus on Natural, Reusable and Sustainable

Clutter Leads to Increased Storage Needs

Mainstreaming Green

Market Outreach

Changing Distribution Landscape

Big Box Affecting Distribution and Manufacturing

Consolidation Affects Marketplace

Marketing and Promotion

Magazines and Websites

Trade Shows

Word of Mouth Goes Hi-Tech

Targeted End-User Marketing

Strange Cabinet Partners

Reality TV: A Product Placement Haven

Importance of Company Ethics

Consumer Home Improvement Activity

Household Remodeling Activity and Intent Stable

Bathroom Most Popular Improvement Area

Kitchen Cabinet Purchase Steady

Demographic Characteristics of Recent Kitchen Cabinet Purchasers

Household Expenditure on Kitchen Cabinets

DIY vs. Service-Supplied Kitchen Cabinet Work

Retail Preferences

Table 1-1 Percentage of Kitchen Remodelers, Planners and Cabinet

Purchasers Who Shopped in the Last Three Months, by Store, 2008

Chapter 2 Market Size and Growth

Scope of the Report

Methodology

Market Size and Growth

Market Drops 13% to $12.4 Billion

Figure 2-1 U.S. Kitchen Cabinet Value of Apparent Consumption 1998-2007

(in billions $)

Value of Trade Components

Table 2-1 U.S. Kitchen Cabinetry Value of Shipments, Imports, Exports and

Apparent Consumption, 1998-2007 (in millions $)

Imports Making Inroads, Capture 7% of Market

Figure 2-2 Kitchen Cabinet Net Shipments (Shipments minus Exports), by

Value and Percent of U.S. Apparent Consumption 1998-2007 (percent)

Figure 2-3 Kitchen Cabinet Imports, by Value and Percent of U.S. Apparent

Consumption 1998-2007 (percent)

Canada, China Top Countries for Imports

Table 2-2 U.S. Kitchen Cabinetry Value of Imports by Country of Origin 1998-

2007 (in U.S. $)

Figure 2-4 Top Ten Kitchen Cabinet Value of Imports by Country of Origin 2007

(percent)

Value of U.S. Exports Boom

Figure 2-5 U.S. Kitchen Cabinets Value of Shipments and Exports, and Exports

as a Percentage of Total Shipments, 1998-2007 (percent)

Table 2-3 U.S. Kitchen Cabinetry Value of Imports by Country of Origin 1998-

2007 (in U.S. $)

Figure 2-6 Top Ten Kitchen Cabinetry Value of Imports by Country of Origin

2007 (percent)

New Home Market Drags Down Remodel Market

Figure 2-7 Total New and Remodeled Kitchens and Share of Total Kitchens

1998-2007 (millions units, percent)

Figure 2-8 U.S. Kitchen Home Improvement Spending 1998-2007

(in billions $)

Market Forecast

Kitchen Cabinet Market to Reach $12.9 Billion

Figure 2-9 U.S. Kitchen Cabinet Value of Apparent Consumption 2007 to 2012

(in billions $)

Chapter 3 Competitor Profiles

Overview

Figure 3-1 Share of U.S. Kitchen Cabinet Sales 2007 (percent)

American Woodmark Corporation

Overview

Performance

Figure 3-2 American Woodmark Net Sales Fiscal Year-End April 2004-2008

(in millions $)

Figure 3-3 Percent Change in American Woodmark Kitchen Cabinet Unit

Volume and Price per Unit , Fiscal Year End April 2003-2008 (percent)

New Home Market Hits American Woodmark Hard

Figure 3-4 Share of American Woodmark Kitchen and Other Cabinet Sales by

End Market: New Home Building versus Kitchen Remodeling Fiscal Year End

April 2004-2008 (percent)

Figure 3-5 American Woodmark Customer Mix Fiscal Year End April 2008

(percent)

Product Highlights

Masco Corporation

Overview

Product Highlights

Performance

Figure 3-6 Masco Corporation Net Sales 2003-2007 (in billions $)

Figure 3-7 Masco Corporation Customer Mix 2007 (percent)

Figure 3-8 Estimated Masco Corporation U.S. Kitchen Cabinet Net Sales

2003-2007 (in millions $)

MasterBrand Cabinets, Inc. (Fortune Brands, Inc.)

Overview

Product Highlights

Performance

Figure 3-9 Fortune Brands, Inc. Home & Hardware Net Sales 2003-2007 (in

billions $)

Figure 3-10 Estimated MasterBrand Cabinets U.S. Sales 2003-2007 (in

millions $)

Norcraft Companies L.P.

Overview

Product Highlights

Figure 3-11 Share of Norcraft Sales by Brand 2007 (percent)

Performance

Figure 3-12 Norcraft Companies Net Sales 2003-2007 (in millions $)

RSI Holding Corporation

Overview

Product Highlights

Performance

Figure 3-13 RSI Holding Corp Net Sales 2002-2006 (in millions $)

Chapter 4 Economic Factors

Overview

2008 Real GDP Growth Forecasted at a Meager 1.1%

Figure 4-1 U.S. Current-Dollar GDP vs. Real GDP, 2000-2008 (in trillion $)

GDP Price Index Ticked Up

Figure 4-2 Percentage Changes in U.S. Current-Dollar GDP, Real GDP and the

GDP Price Index, 2002-2008 (%)

Economic Future Uncertain

Personal Consumption Slows

Figure 4-3 U.S. Current-Dollar vs. Real Personal Consumption Expenditures,

2000-2007 (in billion $)

Figure 4-4 Percentage Changes in U.S. Current-Dollar vs. Real Personal

Consumption Expenditures and Inflation, 2001-2008 (%)

Kitchen Cabinets and the Economy

U.S. Dollar Decline

Figure 4-5 Federal Reserve Bank of Atlanta’s Trade-Weighted U.S. Dollar

Index, January 1995-May 2008 (index)

Producer Prices

Figure 4-6 Wood Kitchen Cabinet and Countertop Manufacturing Producer

Price Index and the Wood Kitchen Cabinets and Cabinet Work Commodity

Index 1998-2008 (index)

Figure 4-7 Percentage Changes in the Wood Kitchen Cabinet and Countertop

Manufacturing Producer Price Index and the Wood Kitchen Cabinets and

Cabinet Work Commodity Index, 1998-2008 (%)

Lumber Prices Plummet, Provide Relief in Tough Times

Figure 4-8 Hardwood and Softwood Lumber Commodity Price Index 1998-2008

(index)

Figure 4-9 Percentage Changes in the U.S. Hardwood Lumber and Softwood

Lumber Commodity Price Index, 1998-2008 (%)

Housing Market Trends

Total Residential Investment and Rates

Figure 4-10 Comparison of Total Residential Investment, Residential

Improvement Spending, Average 30-Year Mortgage Rate and Average Prime

Rate 1990-2008, Quarterly (in billions $, percent)

Building Permits by Region

Figure 4-11 U.S. New Housing Units Authorized by Building Permits, January

1998-April 2008 (in thousands of units)

Residential Markets Head South

New Home Sales

Figure 4-12 Seasonally Adjusted Annual Rate of U.S. New Single-Family Home

Sales by Region, January 1998-May 2008 (in thousands of units)

Figure 4-13 Annual U.S. New Home Sales by Region, 1963-2007 (in thousands

of units)

Existing Home Sales

Figure 4-14 Annual U.S. Existing Home Sales by Region, 1997-2007 (in

thousands of units)

Pending Home Sales

Figure 4-15 U.S. Pending Home Sales Index by Region, 2004-2006, January

2007-May 2008

Home Maintenance and Improvements Lose Some Steam

Figure 4-16 U.S. Quarterly Expenditures for Home Maintenance/Repairs and

Improvements, 2004-2007 (in billion $)

Chapter 5 Trends and Growth Factors

The Multi-Faceted Kitchen

My Lifestyle, My Ego, My Kitchen

Service Me!

Design Me!

Customize Me!

Virtual Cabinets

The Outdoor Lifestyle

Design With Women In Mind

Baby Boomers Age In Place

Boomers Prefer Staying Put, Investing in Home

Universal Design

Remodeling Versus Refacing

DIY Home Improvement

Form Gets More Function

Consumers Comfortable With Color

Aesthetic Focus on Natural, Reusable and Sustainable

Clutter Leads to Increased Storage Needs

Getting Green

New Infrastructure for a Green Market

The Consumer Has Spoken…a Little

Differentiating What is “Green”

The Coming Residential Wave

Manufacturers Pour on the Green

Can Green Boost Kitchen Cabinet Industry?

Green Opportunity For Small Businesses

Self-Cleaning Paints

Chapter 6 Market Outreach

Changing Distribution Landscape

Big Box Affecting Distribution and Manufacturing

Consolidation Affects Marketplace

Marketing and Promotion

Magazines and Websites

Trade Shows

Word of Mouth Goes Hi-Tech

Targeted End-User Marketing

Strange Cabinet Partners

Reality TV: A Product Placement Haven

Importance of Added Values

KCMA Making Green Inroads

Importance of Company Ethics

Chapter 7 Consumer Home Improvement Activity

Note on Simmons Market Research Bureau Consumer Data

Household Remodeling Activity and Intent

Table 7-1 Percentage of Households Who Did or Plan to Do Remodeling, 2004- 2008

DIY vs. Service-Supplied Home Improvement Work

Table 7-2 Percentage of Households Who Did Work Themselves or Hired a

Professional, 2004-2008

Demographic Characteristics of Recent Remodelers

Table 7-3 Demographic Indicators for Households Who Have Remodeled in the

Last 12 Months, 2008 (index)

Table 7-3 (cont.) Demographic Indicators for Households Who Have

Remodeled in the Last 12 Months, 2008 (index)

Demographic Characteristics of Future Remodelers

Table 7-4 Demographic Indicators for Homeowners Who Plan to Remodel in the

Next 12 Months, 2008 (index)

Home Improvement Expenditures

Table 7-5 Percentage of Homeowners Spending on Home Improvements in

Last 12 Months, by Spending Range, 2004-2008

Home Improvement Activity By Room and Intent

Table 7-6 Percentage of Homeowners Who Remodeled in Last 12 Months, by

Room, 2004-2008

Table 7-7 Percentage of Homeowners With Plans to Remodeled in Next 12

Months, by Room, 2004-2008

Demographic Characteristics of Recent Kitchen Remodelers

Table 7-8 Demographic Indicators for Households Who Have Remodeled

Kitchen in the Last 12 Months, 2008

Demographic Characteristics of Future Kitchen Remodelers

Table 7-9 Demographic Indicators for Households Who Plan to Remodeled

Kitchen in the Next 12 Months, 2008

Other Kitchen Improvement Specific Product Activity

Table 7-10 Percentage of Total Population Who Purchased Kitchen Products in

Last 12 Months, 2004-2008

Table 7-11 Percentage of Kitchen Remodelers and Cabinet Purchasers Who

Purchased Kitchen Products in Last 12 Months, 2008

Demographic Characteristics of Recent Kitchen Cabinet Purchasers

Table 7-12 Demographic Indicators for Households Who Bought Kitchen

Cabinets in the Last 12 Months, 2008

Household Expenditure on Kitchen Cabinets

Table 7-13 Percentage of Kitchen Remodelers and Cabinet Purchasers

Spending on Kitchen Cabinets in Last 12 Months, by Spending Range, 2008150

DIY vs. Service-Supplied Kitchen Cabinet Work

Table 7-14 Percentage of Kitchen Remodelers and Cabinet Purchasers Who

Did Kitchen Cabinet Work Themselves or Hired a Professional, 2008

Retail Preferences

Table 7-15 Percentage of Kitchen Remodelers, Planners and Cabinet

Purchasers Who Shopped in the Last Three Months, by Store, 2008

Table 7-16 Percentage of Kitchen Remodelers, Planners and Cabinet

Purchasers Who Purchased in the Last Four Weeks, by Store, 2008

Appendix Selected Addresses