DEL.ICIO.USCalphalon launches new electric cookware line
Newell Rubbermaid unit banking on more economy-minded consumers cooking at home
The Atlanta Journal-Constitution
Saturday, October 25, 2008
Rolling out a line of higher-end kitchenware might not seem like a good move at a time when consumers are being urged to cut spending.
Then again, the new frugality could prompt them to spend more time in their own kitchens, where they’ll want to use quality equipment.
Newell Rubbermaid
Newell-Rubbermaid’s new line of small, high-end electric appliances includes a waffle iron, grill, crock pot and convection oven.
Newell Rubbermaid
The $250 convection oven can cook a 12-inch pizza or a whole chicken.
Kitchenware giant Calphalon, a unit of Sandy Springs-based Newell Rubbermaid, is banking on the latter.
The company recently launched a small line of countertop cookware after several years of consumer research.
The stainless steel-coated line of “small electrics” includes a convection oven, a removable plate grill, waffle iron and a slow cooker. That national rollout this fall followed a debut at Bloomingdale’s in July.
In its research, Calphalon sent a design team into consumers’ homes to watch what they used, how they used it and what niches the company could capitalize on.
“In the last year and a half, we’ve really gotten to know our customer better and that has been significant because now we’re taking the best of Calphalon, our understanding of the culinary world, our design heritage and we’re adding in the consumers’ insights,” Kristine Juster, Calphalon’s president, said in a recent interview.
But Calphalon brings the line to market as consumers find themselves at an economic crossroads.
Amid rising unemployment and stock market downdrafts, consumers are expected to cut spending on dinners out and other wallet-draining pastimes. Conventional wisdom also holds that they’ll do more at-home activities such as cooking, watching movies and other less-expensive retreats.
That could be a boon to home-oriented brands such as Calphalon, which competes in the $3.7 billion-a-year cookware market. On the other hand the company, which services the middle- to high-end niches, might find itself squeezed in the short-term as consumers pinch pennies.
The convection oven, for example, which the company says is big enough to handle a 12-inch pizza or a whole chicken, retails for $250. The waffle maker, which has settings that allows for custom-tailored browning and crispness, sells for $125.
“People will certainly be spending more time at home — you can see that right now in that restaurant sales have decreased dramatically,” said Barton A. Weitz, executive director of the University of Florida’s Center for Retailing Education and Research. But he’s not certain consumers will be as willing to spend as lavishly as they had been before the economy soured.
“In the long run, there probably is a market for very high-priced quality kitchen appliances,” Weitz said. “But until people have more confidence in their financial status, I’m not optimistic that they’ll spend the money no matter what the price.”
Some 26 percent of 2,030 people surveyed by market research firm NPD Group said they plan to spend less this holiday season, compared with 18 percent who expressed that sentiment last year.
“There’s no doubt that the moderate consumer is opting out much more from a purchasing perspective and they are trading down, and you hear everywhere that promotional activity is stronger than its ever been,” Juster said.
But she and other Calphalon executives think the brand’s reputation for quality will be a powerful draw as consumers seek products that reliable and longlasting, not just cheap.
“On the upper end of the business you see people coming to brands that they trust and brands that they know can deliver the products they’re willing to pay for and we’re certainly seeing that in our business,” she said.
She has reason to be optimistic: Overall, the kitchen electric segment is down 8 percent for the year, but sales of items that cost $150 or more have increased.
“I’ve been looking for the slowdown in this premium segment but we just haven’t seen it yet,” said Peter Goldman, president of NPD Group’s home division.
Premium-priced products account for 16 percent of the cookware segment, which analysts say leaves lots of room for growth. And there are only a handful of competitors in the high-end segment — including Italy’s De’Longhi, Breville, an Australian firm, and other brands such as KitchenAid and Cuisinart.
By launching a small electrics line, Calphalon is being highly selective in which products it will include in the push, said Dave Sievers, consumer and retail practice leader at Archstone Consulting.
That explains why the company didn’t go into more common products such as coffee makers or blenders, which already are crowded with offerings at different price points.
“The low-end categories in the kitchen can be very, very competitive. Newell Rubbermaid has a history of focus and innovation in targeting the middle- and upper-end,” Sievers said. “They’re selling to people who value product innovations. Newell is trying to leverage their brand and product capabilities.”
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