Your Business Outlook - May 2003

Injection molders of housewares hoped for average annual growth of more than 8% from 2001 to 2006 when they were interviewed in 2001 for Mastio & Company’s Injection Molding Market Study. Based on more recent interviews, however, some housewares molders indicated that average growth of 5.0% is more on target. The theme most molders articulated was the feeling that the housewares market will outpace the gross domestic product (GDP). Average growth of 5.0% would take total resin consumption in this market from an estimated 1.579 billion lb in 2001 to 2.0155 billion lb in 2006. This excludes poundage for tumblers and glasses, furniture, and appliances, which are not considered housewares for the purposes of this study.

 The National Housewares Manufacturers Association (NHMA) has identified several market opportunities for new products. One of them is the rising senior population with discretionary income to beautify homes and invest in ergonomically designed housewares. Another is growth in leisure activities such as home entertaining.

There has been a trend for the last decade to purchase more dry food in bulk quantities at coop or warehouse clubs. These products are stored in stay-fresh plastic containers. Another example is the large population of working consumers, which prompted the creation of a casserole-size, microwaveable dish that allows the same container to be used to cook, serve, and store leftovers.

 

Foreign competition

According to NHMA, the average U.S. household spends more money in a year on housewares like cookware and storage containers than on fruits, vegetables, and dairy products. On the other hand, NHMA feels profit margins for housewares molders will remain under significant pressure. Recent cost increases for raw materials, transportation, and labor are squeezing profits. Imports and consolidation in the retail sector will also continue to reduce profits, NHMA predicts.

Over the past 10 years, housewares production in other parts of the world has picked up speed. The most typical competitors for U.S. molders are in countries where labor is less costly, such as Mexico and China. An exception is Israel, which also competes in the North American market.

A few housewares producers have closed up shop in recent years, examples being Tucker Housewares and Tamor Plastics. In 2001, three producers accounted for 65.1% of the market: Home Products Div. of Newell Rubbermaid, Inc.; Tupperware Div. of Tupperware International; and Sterilite, Inc.

 

Polyolefinspredominate

Polypropylene and HDPE are the major resins used for injection molded housewares. Polypropylene represented 63.7% of total market poundage in 2001. HDPE accounted for 18.2%. Other resins used for housewares included LDPE, LLDPE, and polystyrene.

Mastio & Company, based in St. Joseph, Mo., is a consulting firm specializing in industrial-consumer opinion research and market trends in the plastics industry. For more information, call (816) 364-6200 or visit www.mastio.com/pt/outlook.html.