Past year proved fruitful, 2007 promising for grill manufacturers
Courtney Mueller -- Casual Living, March 15, 2007
Mike Kempster Sr., executive vice president, Weber-Stephen Products Co.
2006 was a good year. We saw some softness early, but had a good finish ... wouldn't say it was great, but OK.
From the perspective of a U.S. manufacturer, the competitive nature of the business is a real challenge. Chinese manufacturers have labor that is significantly less expensive. You also have a consolidation of retailers. The top six retailers (Home Depot, Lowe's, Target, Sears) represent the top 75% of all the dollars. If you miss any one of those you are losing out as a manufacturer. You also have retailers representing their own brands. We have extremely strong relationships with independent retailers, so we're less vulnerable than some of our other competitors.
A positive trend that came from our Grill Watch Survey shows that people are grilling more. I also think you can call this 'The Year of Infrared,' which is good and bad. Infrared puts out a lot of heat. We're concerned about customers not knowing how to cook on the infrared. Charcoal sales are up — they've been up for the past two years which is a positive thing. And bigger is better. A lot of larger grills and outdoor islands are being sold.
We're introducing a new line of gas grills under the Weber and Ducane names. The Genesis line of gas grills has a lot of upgraded features and looks. We introduced the Spirit line to compare with what Genesis has been in the past years. We also have a whole new line of Summit grills that price from $1,200 up to $2,000. Under Ducane, we have introduced six new models in LP and gas. In the supermarket arena, a whole new line-up of Weber rubs, spices and marinades will be introduced. We've been busy.
Tom Nitz, vice president, sales and marketing, Modern Home Products,/senior vp, ProFire
We were about equal to last year (in sales), which in this changing market is not too bad.
The current challenge is for dealers to really sell the customer on service and longevity. The mass merchants can't offer the customer the same level of service as an independent dealer can offer. Most mass merchant grills are imported and do not offer much of a warranty. Most of these grills are produced by companies overseas that have only been producing grills for a few years. If a customer is properly educated in these areas and can afford a better quality grill, it is really to their advantage to purchase one.
The current trend seems to the outdoor room concept. More and more people are constructing large outdoor entertainment areas. There seems to be no end to this trend. The consumer will be willing to spend more on a grill for an island because they don't want to repair or replace that unit in a few short years.
We have also seen a revitalization of the mid-priced cast aluminum grill. As more people become disenchanted with the mass merchant grills, they are turning to the mid-priced segment.
Our biggest introduction for 2007 is Modern Home Product's acquisition of ProFire Grills. We are making a real commitment to the outdoor entertainment segment with this acquisition.
Most dealers are making a larger commitment to the mid-priced and high-end market. They are realizing you can not compete with the big boxes on price. There is still a large opportunity for the independent dealer to be successful in the grill market.
Ted Scott, national sales manager, Napoleon
2006 was a very promising year for Napoleon. We had a very strong increase in our business.
We capitalized on weather trends as well ... in the North and West, we had a remarkably strong warm winter, into the first or second week of January. Because our factory is here, we can quickly and easily adjust to meet demand.
We continue to focus on specialty retailers by offering best-in-class products and customer service, and that really took us to the top in 2006. The specialty retailer that is in the business and knows his stuff and knows how to compete in the business will do well in 2007.
The grill business is still in a strong growth area. There has been some confusion with the import product being carried at mass merchants, but we see some trend toward the specialty retailer, and this is not just for grills, it's a lot of product manufactured offshore.
The last two to three years, there has been a trend toward an all stainless steel grill. The outdoor kitchen is huge. There's a bit of a misconception that they have to be (expensive), and we try to offer a range of price points. Grills are getting larger and larger. Last year, when we introduced our Gemini at HPBA, it was a 750-sq.-in. unit, and we actually had a dealer say, "It's great, but we need a bigger one." Multifunctional grills are doing well. You can smoke, you can do direct and indirect cooking. Cedar plank and rotisserie cooking is huge.
For 2007, we expanded our Prestige line-up. We also have a brand new (stainless steel) product, Mirage.We have new built-in products and waterfalls. Thirty percent of your grill business should be accessories. It's offering a lifestyle.
Tiny Girl, Big Dream