Portfolio: Presentations

Trends in the Tableware Market

By Laurel M. Sheppard

The tableware or tabletop market is part of the multi-billion housewares industry. In the U.S., sales of housewares grew about 7% to $58 billion (retail), according to the National Housewares Manufacturers Association. The tableware market represents about 7% of this total or $7.8 billion.

The tableware market can be broken down into three categories: dinnerware (plates, bowls, cups, saucers and mugs), glassware (beverageware, stemware and barware of both glass and crystal) and flatware (eating utensils). China and ceramic dinnerware represent about 74% of all U.S. dinnerware sales, with glass and glass-ceramic representing about 23%[1].

As with other industries, the tableware industry has seen much consolidation and acquisition in recent years. Royal Copenhagen also has merged with Orrefors/Kosta Boda to form Royal Scandinavia. After gaining control of more than 80% of Germany's Rosenthal AG, Waterford Wedgwood Plc has become the world's largest tabletop company, with estimated sales in excess of $775 million. Five companies now dominate 92% of the dinnerware market, according to Macomber Reports: Lenox, Noritake, Wedgwood, Royal Doulton and Mikasa. Royal Doulton has also reorganized into five core businesses: tableware, hotel and airlines, giftware and collectibles, glassware, and crystal/premier gifts.

Joint ventures are also becoming more common. Libbey Inc. became a joint venture partner with Mexico's largest glass tableware company, Vitrocrisa. European tableware companies have also followed this trend, including Royal Doulton and Wedgwood, in order to meet competition from Asia and elsewhere[2].

In addition, tableware manufacturers are expanding their markets in several ways. One way is by tapping into the multi-billion dollar licensing industry. Another approach is to establish exclusive marketing agreements. For instance, Oneida Ltd. has reached an agreement to exclusively market and distribute Schott Zwiesel crystal in the U.S. The agreement provides Oneida with a new product category for its foodservice tableware unit, and significantly broadens its consumer retail line of crystal.

World Glassware Market

Over 300 manufacturers producing artware, crystal, ornamental ware, and other types of glassware make up the global glassware market[3]. About a third of these companies produce tableware. World imports of glassware (including tableware) totaled about $8.4 billion in 1996, a decline of 9% from the previous year, Figure 1. Of this total, the U.S. leads in the share of imports at 18%, followed by France and Germany each about 10%, United Kingdom at close to 6% and Italy at a little over 5%. World exports totaled nearly $8.8 billion, a decline of 7% from the previous year, Figure 2. European countries lead in the share of total exports: France at 20%, Germany at 13% and Italy at 11%.

Sales of glassware to and from the far east have expanded in recent years[4], Figure 3. Though exports have decreased from Japan, imports from certain European countries have increased. Japanese imports of tableware products were expected to increase in the last year or so, despite strong competition from home-based suppliers. More recently, total imports have begun to decline. Imports represent about a third of the Japanese domestic market, which is valued around 43 billion yen or 110,000 tons.

The leading importer to Japan is France, which has about a 25% share of the import market by value. French glassware is known not only for its luxury-grade handmade crystal, but also for the world’s most highly developed mass production system for affordably priced glassware as well. This reputation is what makes French products so popular in the Japanese market. The next largest importer to Japan is Taiwan, followed by Italy, the Czech Republic and the United States.

On the other hand, countries like Hong Kong and Thailand saw glassware imports increase for 1994, with the value of imported glassware in Thailand increasing by 57% from 1993 to over $1 million. European countries are the leaders in imports for Thailand, with Germany ranked number one followed by France and England. Thailand exports about 30% of its total production (~100,000 tons) of glassware. There are about 23 manufacturers producing glass kitchenware and tableware. Most of them are located in Bangkok and nearby provinces. The domestic market can be divided into three groups depending on quality and price: the high price segment shares 20% of the total market, the mid price segment shares 35% and the low price segment accounts for 45% of the market.

Glassware in Thailand can be divided into three types: soda lime, crystal and borosilicate. Soda lime is made locally, whereas crystal and borosilicate are imported from European countries. General glassware is imported from Asian countries such as Indonesia, Philippines and Singapore. Indonesia is very competitive with Thailand in glassware production due to the abundance of raw materials and the low cost of energy and labor.

Demand for tableware products in both these countries was expected to grow for 1996-97, paralleling the economic growth. Imports to Thailand were expected to grow at a steady pace, especially for high-quality glassware products from Europe and elsewhere[5]. However, the recent Asian economic crisis has probably resulted in a decrease in demand for Thailand and surrounding countries.

The US Glassware Market

The U.S. consumer glassware industry consists of producers of table and kitchen glassware--including cookware, tableware, tumblers, stemware, and other ornamental, decorative, and novelty products--and represents about 36% of the total glassware market. This is a mature industry dominated by several major companies that produce a broad range of basic glassware products, but it also includes a sizable number of small and medium-sized companies specializing in certain product lines. There are from 50 to 75 firms located throughout the United States, four of which dominate the industry. However, competition among U.S. producers is strong. The top eight companies account for about half of the total value of U.S. shipments for this industry sector, according to the Office of Consumer Goods.

Libbey Inc. is the largest producer of glass tableware in North America with total annual revenues over $400 million. The company has plants in California, Louisiana, Ohio, and Ontario, Canada. Its Syracuse China subsidiary produces dinnerware for the foodservice industry and its World Tableware subsidiary imports metal flatware, hollowware, and ceramic dinnerware. Libbey also is a joint venture partner with Mexico's largest glass tableware company, Vitrocrisa, and exports to more than 100 countries. Vitrocrisa is considered the market leader in Mexico and all of South America.

During the 1980s, the U.S. glassware industry experienced considerable restructuring. Overcapacity and stiff price and import competition forced the industry to close inefficient plants and reduce employment. Concurrently the industry upgraded its technology, equipment, and product design to improve its competitive position. It also improved its product delivery, reliability, and upgraded customer services. The industry has plants mainly in Pennsylvania, West Virginia, Ohio, and Indiana, with a total of about 26,000 workers.

The industry supplies about two-thirds of the domestic market and produces mostly machine-made glassware. Handmade glassware, generally more costly to produce because of higher labor costs, reportedly has accounted for less than 15% of U.S. consumer glassware production in the past, though recently it has become more popular. In 1996, U.S. consumer glassware shipments totaled $1.884 billion, an increase of 2.5% from 1995, Figure 4. Exports accounted for 11% of the total value or around $207 million, with Canada and Mexico the leading markets.

In 1997, domestic exports of four categories reached about $250 million, Figure 5. Exports appear to be significantly declining, from $191 million in 1997 to $132 million in 1998 (January-September), with the breakdown by category shown in Figure 6.

Interest in glass art has grown rapidly for collectible items. Limited editions have become best sellers for some companies. Reproductions of museum pieces have become popular. However, the market for glass art products is heavily segmented with companies generally selling at a specific market level. This niche depends heavily on the quality name that a company or artist has developed for their products.

Of the total U.S. tabletop market, glassware and crystal represents about 41% of this total[6]. Of the glassware segment, beverageware dominates at almost 50%. Giftware dominates the crystal segment, at over 60%, followed by stemware at around 26%. Glassware and crystal are mainly sold through mass merchants (32%) and department stores (27%)[7].

The industry continues to face significant competition from foreign producers. In the 1970s imports increased substantially and the output of U.S. manufacturers fell. Some of the causes of this situation included high labor and fuel costs, inadequate marketing, and outdated technology. In 1997, U.S. imports for consumption reached about $818 million (Figure 7) and appear to be on the increase. Preliminary data for 1998 show an increase of about 5% to $632 million for January-September, with the breakdown shown in Figure 8. Over 50% of imports come from Western Europe.

The US Glassware Market

The tableware market in Eastern Europe has seen much change in recent years, especially when privatization began in the early 90s. Many factories were closed and at some companies, the workforce was cut by more than 50%. However, both glassware and porcelain companies have modernized their plants over the last few years, which has improved sales and profits.

Exports have become an important part of the overall market; for instance, the biggest customer for Polish tableware is the U.S., followed by the UK[8]. Such demand has resulted in some companies expanding their production capacities. Improvements in productivity will have to continue in order to compete with the Far East.

Export sales for some companies have increased due to the help of export management companies. For instance, about half of Poland's overseas sales are handled by a single company, Minex, a former state-owned export-import company that still represents many Polish companies. Sales for the UK branch, Vitrominex, have increased by 30% a year since 1994[9]. Several export sales companies have recently been established in Czech Republic, including A-NET, Bohemia Crystalex Trading (formed by two of the country's largest domestic glassware producers, Crystalex and Sklo Bohemia), and Glassexport. Table I shows some of the major tableware companies in Eastern Europe.

Table I. Major Players of the Eastern European Market

Source: Tableware International, November 1996, p 32-45

During 1995, the value of glassware imports from eastern European manufacturers (Czech Republic, Hungary, Poland, Russia, the Slovak Republic, and the Ukraine) reached $176 million, 30% higher than the previous year[10]. Shipments of glassware to France from eastern Europe rose by 30% to nearly $20 million, while shipments to Germany advanced by over 40% to top $100 million. Holland and the UK also saw increases, to $12 million and $27 million, respectively. Similarly, sales of china from eastern European suppliers also increased.

Regarding total market share of glassware shipments to western Europe in 1995, the Czech Republic led at 40.4%, followed by Poland at 28.2% and Romania at 19.3%. The Slovak Republic and Hungary represented only 7% and 4.8%, respectively.

In France, glassware products account for about one-third (~$1 billion) of total houseware product sales, representing the largest segment within the houseware product category (defined as tableware, glassware, cookware, cutlery and plasticware). Drinking glasses account for 55% of the overall glassware market, followed by ovenware at 39% and crystalware 6%. Verrerie Cristal d’Arques dominates the everyday glassware segment and holds 90% of the total market. The company is the world leader in glass tableware and cookware. Verrerie de Saint Gobain is the second largest French manufacturer of glassware.

Exports represent two-thirds of total production in France and continue to play a major role in industry expansion. Sales of high quality crystalware are gradually declining as everyday glassware becomes more popular. Glassware is the second largest import segment of housewares and account for about a quarter of all imports. Of the total French glass industry, glass containers and crystal glassware combined represent 60%.

The U.K. glassware market grew by 7.4% between 1992 and 1996, reaching a value of 318 million pounds. Glassware can be categorized into three types: soda lime, crystal and heat resistant. In real terms, the level of spending on glassware has fallen mainly due to the trend towards casual dining. There has been a move away from hand-made crystal towards less expensive soda lime ware or simpler designs in plain crystal. This shift has contributed to a fall in average expenditure on drinkware. Volume sales of soda lime have risen ahead of crystal. However, crystal still performs well in the giftware market. It has benefited from improvements in the UK tourism market, as well as for the need for special occasion giftware, such as that for weddings and anniversaries. Heat-resistant glassware has seen the sharpest rise in sales, partially due to the increased attention given to home cooking.

The UK glassware industry is being challenged by the increasing sophistication of plasticware and ceramics. However, the glass industry has already begun to respond to changing market conditions. Between 1997 and the year 2001, the UK glassware market is forecast to grow by only 0.9%, reaching 323 million pounds.

For 1997, forecasters indicated revived activity in some markets. Several Western European countries predicted economic growth over 2%[11]. Unemployment has been falling in some key markets, while interest rates have been falling, boosting spending in many sectors, including tableware. However, competition is increasing from inexpensive tableware imported from southeast Asia. For instance, in France China accounts for about a third of imported porcelain products.

As their domestic markets shrink, European companies will probably have to rely on increasing their sales by exporting more to Asia and other countries. For instance, the Taiwanese domestic market for imported gift and tableware is growing, especially for that from England. Sales of Royal Doulton products exceed $1 million per year in this country. Daum glassware is expected to reach $360,000 per year.

Other countries’ exports are growing. Irish tableware exports, including pottery, increased to $115 million in 1996. 1997 exports were expected to increase by 10%. The exports of Italian tableware including china, crystal and pottery improved by 25% to around $380 million in the period January to October 1996. Italy benefited from the upturn in the market in Europe and North America and the weak value of the lira when compared with other currencies.

The Portuguese tableware industry has grown over recent years and has a small domestic market since most of the products are exported. Spain, however, is a net importer of tableware with imports running at twice the value of exports. The German tableware market is expected to only grow by 6% by 2000. Mexico is also expanding into Europe, with the best prices coming from the recycled glassware sector.

The Changing Consumer

Tableware can be classified in six basic ways: style (formal or casual, traditional or contemporary); material (fine china, stoneware, glass); place of origin (imported vs. manufactured domestically); price segment (high-end, mid-range, or low-end); distribution channel (department stores, mass merchants, specialty stores, etc.); and retail category (the "upstairs" china/crystal/silver department vs. the "downstairs" housewares department)[12]. The housewares mass market dominates the U.S. dinnerware market.

In recent years, the global tableware industry has faced changes in purchasing habits of consumer products, lifestyles and attitudes toward the home. Consumers have turned toward a more casual lifestyle around the world. Since many consumers now consider tableware a replaceable fashion product, manufacturers and retailers are aggressively designing new patterns to keep with this trend. This casual trend has even extended to the foodservice industry, with some restaurant chains using "warm" tableware patterns[13].

Even so-called formal crystal stemware is being used in casual ways by the consumer. In response, major companies like Noritake and Lenox have developed more casual lines of crystal or have repositioned their formal stemware at lower prices[14]. Wedgwood is trying to address this trend as well by introducing a casual, less expensive range of tableware over the next few years.

The casual trend has also resulted in a demand for brightly colored glassware. Such colors as Spanish green and Mediterranean blue have emerged as everyday basics in glassware[15]. This color trend is expected to continue into the millennium. The interest in embossed and textured looks in glassware also continues to grow. The growth of casualware has increased the market for specialty glassware (such as sugar containers and creamers), while the market for stemware and barware remains flat[16]. Decorated glassware has also become more popular, especially fruit and flower decorations with gold accents.

While casual tableware patterns are popular, a steady demand for formalware continues. A survey in Elegant Bride magazine reports that 2 million couples are married every year in the U.S., and 93 percent of them register a tableware pattern. Couples are looking for quality over quantity when selecting formalware to reflect the trend to smaller, more intimate gatherings.

Another market study by Roper Starch and Modern Bride magazine estimates that U.S. brides will spend $1.65 billion on tableware, and 95% of GenerationX brides have registered. Though registering for formalwear appears to be down slighlty, promoting fine crystal and china for casual entertaining has been recommended for increasing sales. The study also showed that about 40% prefer to make their own combinations, rather then select the traditional five-piece setting.

These trends are leading to a new style defined as transitional, which is something between casual and formal. Formal companies have thus explored a more proactive, two-pronged marketing approach: open-stock availability of their traditional lines, and the introduction of open-stocked casual lines. Some tabletop manufacturers have responded with comprehensive, mix-friendly stories in open-stock, comprised of several coordinating patterns, plus accessories in the same or alternative materials.

Much of the recent U.S. growth in tableware is coming from lifestyle stores, specialty stores and home superstores who do such open-stock merchandising[17]. Open stock merchandising allows the customer to add to their collection as desired. For instance, over 60% of dinnerware and glassware businesses at Macy's West, both in tabletop and housewares, are open stock. Open-stock merchandising of glassware is also becoming more common even at the mass market levels[18].

According to one major glassware producer this growth from lifestyle and home superstores is expected to continue[19]. Such stores are open to innovative products, are quick to jump on fashion trends and are in tune with consumer needs. The consumer's confidence in a strong economy also has played a role though other tableware experts point out that actual spending on tableware is sometimes lagging behind this confidence. About 23% of all crystal and glassware are sold through specialty and lifestyle stores[20]. Specialty stores have been generating new business, while department store sales have remained stable, and mass merchandiser sales show no growth.

Another trend is the renewed interest in handmade tableware; about 25% of the U.S. glass tableware market in 1996 was handmade. Though technology has been developed to achieve a hand-crafted look for certain designs, some tabletop makers claim there will always be a customer who wants the truly hand-crafted product[21]. In fact, at a recent tabletop trade show, 45% of the exhibitors offered hand-crafted products[22]. Such products are sought after by consumers because they are often of limited edition, made to order or one of a kind. To some tableware has become as much a decorative statement as it is functional.

This decorative/giftware market thus may be the way to go. Unity Marketing (Stevens, PA) estimated 1997 retail sales of decorative accessories and gifts in the U.S. at $47.4 billion - an increase of 8.5 percent over 1996. Virtually 9 out of every 10 American households made a purchase of at least one item classified as a "gift." Home decorative accessories were the fastest growing segment, increasing to $10.8 billion in 1997, a 18.8 percent increase from the previous year.

Future Outlook

The outlook for the tableware market in the United States for 1998 holds promise, as consumer confidence in the economy is at a 28-year high. Experts expected the U.S. economy to grow by over 3% in 1997. Economic growth of 2.5% was predicted in 1998. Europe was expected to see an increase in economic growth by 3% in 1998, compared to 2.7% in 1997. However, export growth in this region is expected to slow, from 10-15% to 5-10%, mainly due to the economic crisis in Asia. Exports of luxury goods to this region are predicted to suffer.

Both Europe and the U.S. will continue to face the challenges of increasing competition from low labor-cost countries and the increasing rate at which consumers' tastes change. More flexibility and efficiencies in the production process are needed to meet these challenges[23].

Overall, the outlook for Asia is not as bright for some countries. Thailand, Indonesia, South Korea, and Japan were expected to have negative growth in 1998, and the recent recession in Japan will probably continue this trend for that country. Though Noritake’s Tableware Division increased sales by 4.2% in 1997, this growth is probably due to a strong export market for their products. Hong Kong and Taiwan were expected to have 1998 growth rates of 4% and 6%, respectively. China was also expected to have a slower economy.

As in other consumer market segments, changing societal trends will also continue to shape the growth of the tabletop industry. Companies that identify and fill a particular market niche will continue to thrive in the coming years. Author’s Note: This article is based on a paper presented at the 18th International Congress on Glass, San Francisco, California, July 5-10, 1998. For a copy of the figures, contact the author at lashpubs@infinet.com.

References

[1] The Tabletop Market in the U.S., Packaged Facts, March 1996, New York, New York.

[2] R. Weightman, "Challenging Times for International Tableware," Tableware International, February 1997, pp. 80-85.

[3] World Glassware Industry Directory, 1996, Ashlee Publishing Company.

[4, 5] J. Aczel, "Far East Demand for Tableware Expands," Tableware International, August 1996, pp. 66-67.

[6, 7] "Industry Tops 3% Growth," Household Furnishing News, September 15, 1997, pp. 3-28.

[8. 9] "Polish Tableware: Good Quality at a Surprisingly Low Price," Tableware International, November 1996, pp. 28-29.

[10, 11] J. Aczel, "East "European Countries are a Major Supplier to the West European Tableware Markets," Tableware International, November 1996, pp. 30-45.

[12] The Tabletop Market in the U.S., Packaged Facts, March 1996, New York, New York.

[13] "Casual Tableware Market Expands in USA as Consumers Follow Fashion Trends," Society of Glass and Ceramic Decorators, 1997, pp. 1-5.

[14] "Industry Tops 3% Growth," Household Furnishing News, September 15, 1997, pp. 3-28.

[15] "Industry Tops 3% Growth," Household Furnishing News, September 15, 1997, pp. 3-28.

[16] "Casual Tableware Market Expands in USA as Consumers Follow Fashion Trends," Society of Glass and Ceramic Decorators, 1997, pp. 1-5.

[17-20] "Industry Tops 3% Growth," Household Furnishing News, September 15, 1997, pp. 3-28.

[21] T. Traster, "Ye Olde Manufacturing Shoppe," Tableware Today, October/November 1997, pp. 52, 57.

[22] "Tabletop Market Buyers Seek More Handmade Products," The Crafts Report Online, October 1996

[23] CI Staff Report, "Dinnerware Market Reflects Slow Growth in New Households," Ceramic Industry, August 1997, pp. 29-31.

For additional information:

P. Wongvarnrungruang, Thailand: Tableware and Kitchenware, U.S. Department of Commerce, International Trade Administration, 1996

Friends Syndrome Helps German Retailers, Tableware International, Vol, 27, No. 6, 1997, p. 30-31

Export Markets are the Future for UK Companies, Tableware International, Vol. 27, No. 8, 1997, p. 31

Marketing Guide—Glasswares, Japan External Trade Organization, 1997

I. Lepine, Housewares: France, , U.S. Department of Commerce, International Trade Administration, 1996

"Made in Europe is the Label that Sells Tableware in Taiwan," Tableware International, Vol. 27, No. 7, 1997, Pp. 61-63

J. Aczel, "Irish Tableware Continues to Expand in World Markets," Tableware International, Vol. 27, No. 4, 1997, p. 32

"Italian Tableware Exports Continue to Improve," Tableware International, Vol. 27, No. 5, 1997, p. 32-33

K. Krassner, "Tabletop Taps into $110 Billion Licensing Industry," Tableware Today, February/March 1998, p. 27

T. Traster, "Cents and Sensibility," Tableware Today, April/May 1998, pg 50

Office of Consumer Goods, International Trade Administration, outlogla.html at www.ita.doc.gov