Whats Cooking Pulse on Consumer Behavior May 2020 Managing - PowerPoint PPT Presentation

What’s Cooking… Pulse on Consumer Behavior May 2020

• Managing Director for Cookware Manufacturers Association • 30 yrs + Consumer Product Manufacturing Experience • Product Development Team Leader • BS Engineering from Michigan State and Penny Rosema Masters from Notre Dame Managing Director Cookware Manufacturers Association 2

Some Brands You Know… 3

Agenda • 2019 Trends • COVID19 Influence on Demand • Demand Drivers • Consumer Insight Cookware & Bakeware 4 Unsplash Photo: by Hans Peter Gauster

2019 Data Cookware & Bakeware 5

4.2%* 2.43 Billion Cookware 2018 vs 2016 0.98% Cookware 2019 vs 2018 Total Cookware 6 *Note: 2018 Year over Year comparison is with 2016

7%* 1.46 Billion Aluminum 2018 vs 2016 5.38% Aluminum 2019 vs 2018 Aluminum Cookware 7 *Note: 2018 Year over Year comparison is with 2016

2%* 568 Million Stainless 2018 vs 2016 - 8.4% 2019 vs 2018 Stainless Steel Cookware 8 *Note: Year over Year comparison is with 2016

Aluminum 2019 Up 5.3% In Short, We Note… • Thicker Gauge Colored Alum Up 23% • <8ga Colored Alum Down 13% Stainless Steel 2019 Down 8.4% • Multi-ply Stainless Steel Down 9.8% • Fabricated Bottom Down 5.8% • Single Wall Down 1% 9

-4 %* 372.5 Million 2018* vs 2016 -4.4 % 2019 vs 2018 Cast Iron/Porcelain on Steel/Copper Percent is a mix of three categories. Cast Iron Cookware remains a strong category 10 *Note: Year over Year comparison is with 2016

-2 % 2018 vs 2016 2019 Bakeware *Note: Year over Year comparison is with 2016 11 As of this presentation Date - Data for 2019 Bakeware under further evaluation. Bakeware is up 10-20%

37.1 Million 6%* 2018 vs 2016 .08 % 2.5% 2019 vs 2017 Tea Kettles 12 *Note: Year over Year comparison is with 2016

Cookware & Bakeware Imports • Private label and imported cookware shipments were up in 2019 over 2018. China was the major producer of imported cookware/bakeware • In the first six months of 2019, imports were up 1.5% over 2018 in dollars and up 5.9% in units. Average price per unit is down -9% • Trade agreements, tariffs and retaliatory tariffs continued to put pricing pressure and impose uncertainty in the industry. • Impact of COVID-19…undecided 13

• Income • Wealth • Uncertainty Recovery Factors Looking Ahead Video Link – Dr Marci Rossell Photo by Bud Helisson on Unsplash 14

Income Haworth Connect Economic Insights: Dr Marci Rossell LINK Not evenly distributed across workers, categories or industries Income at 20k/year twice as likely to have lost their job vs those at 80k/year Primarily high touch industry – jobs that can’t be done at a distance Manufacturing jobs – some have slowed while other have increased labor force 15

Wealth Haworth Connect Economic Insights: Dr Marci Rossell LINK Bond Market – impact of government stimulus Stock Market – impact varies by company Real Estate – Commercial Real Estate – Residential 16

Uncertainty Haworth Connect Economic Insights: Dr Marci Rossell LINK Economist watching prior pandemics COVID 19 will change the way we work COVID 19 will change the way we spend COVID 19 will change the way we vacation “Be Watching, Be Innovative, Be Agile” Joe Derochowski, NPD 17

• Income / Unemployment • Residential Real Estate • New Home Buys • Residential Construction • Home Remodeling • Other Demand Drivers • Life Moments Demand Factors • Entertainment Cookware & Bakeware 18 Unsplash Photo: by Hans Peter Gauster

Unemployment 4/4/2020 Unemployment Claims 11,976,000 5/2/2020 Unemployment Claims 22,833, 000 fred.stlouisfed.org/series/CCSA 19

Housing: New construction Census.Gov – Housing Construction Link Time Series / Trend Charts – Rhand Column Select Date Range | Category | Type Source: Census.Gov 20

Housing: New Home Sales Census.gov- New Home Sales Link 21

Home Remodeling Leading Indicator of Remodeling Activity – LIRA 22

Entertainment Indicator Retail Trade: Beer, Wine, & Liquor Stores in California Q1 2020: 17.48802 Thousands of Persons Seasonally Adjusted Link 23 https://fred.stlouisfed.org/series/SMU06000004244530001SA

In Short, Note… • Unemployment not evenly distributed • Watch Residential Real Estate • Follow the Entertainment Indicator • Expect changes in how we spend, work, and vacation 24 Image : Creatv-eight on Unsplash

Consumer 25

Link E-commerceRetail Sales –Percent of Total Sales 26

• Brick-and-mortar plays an integral role • Digital presence is key to consumer engagement • Omnichannel Opportunities Department Store Insight TAG – Dana Telsey April 2020 27 Telsey Advisory Group (TAG) is a registered broker dealer offering equity research, trading and investment banking services.

Consumer I wish, I want , I hate l Provide the tools they need Strategy l Watch and Listen Consumer Focus l Wow Factor IHA / NPD Webinar – Joe Derochowski 28 YouTube Video Link IHA Webinar

• Cost of Food won’t outpace the budget • 3-4x more cost effective to eat at Insight home • New Behaviors – “help consumer Joe Derochowski, NPD stay in the game” 29 YouTube Video Link IHA Webinar

• Working / Teaching / Meal Prep • Virtual - Happy Hour / Family Hour Other Observations • One Dish Meals • Health Focus • Family Activities • More Snacking 30

Consumer Experience • Focus on how consumer is spending their time • Focus benefits and ease of use • Focus on consumer needs 31

Consumer Looking for help… l Good cooking is a combination of the Consumer Preferences right tools with simple techniques Strategy and instructions and Retailing Strategies l Digital - “Alexa what is the best…” l Customize the Consumer Experience Homeworld Business – loo for Forecast 2020 [subscription required 32

BOPIS Buy Online Pick-up in Store …now pick- up @ the Curb. Health & Wellness Healthy eating AND cost conscience Endless Aisle providing wider array of products with alternate delivery option. Trends Space Considerations Stackable cookware and other innovative ways to leverage limited storage. Urbanization and downsizing. 33

Resources Cookware.org 34

CMA’s Mission & Who We Serve Cookware Manufacturers Association Promotes the Optimal and Appropriate Design, Manufacture, Sale, Use & Servicing of Cookware and Bakeware Through Quality Standards Development, Information Sharing, Education, and Impartial Communication to Members of the Association, Their Trade Partners and to Consumers 35

Cookware.org: Retailer Links Unsplash Photo by : Marcin Kempa 36

Cookware & Bakeware Engineering Standards 37

Retailer Tools Retailer Tools What’s available ? 38

Resources from the CMA Guide to Cookware—available online! 39

• IHA - The Inspired Home Show • IHA Presentations • HomeWorld Business • National Retail Federation • Telsey Group – Dana Telsey • National Association of Manufacturers Other Resources NAM COVID-19 Resource Page Industry Links 40

Shifting Consumer Behavior During COVID-19 NPD Group’s Joe Derochowski provides a look at how consumer spending has already shifted since Covid-19 took hold, and how emerging spending behavior in the US lines up with other countries that have weathered this situation. 41

LINK 42

Contact Info: Penny Rosema (616) 987-3520 prosema@cookware.org Cookware.org 43