Glass remains half full for manufacturers
Furniture Today Staff -- Casual Living, March 15, 2006
Manufacturers of barbecues and barbecue accessories are saying business is pretty good despite challenges posed by imports, shipping and competition with mass merchants, who are quickly making strong gains in the industry.
The outdoor living concept still is catching on with homeowners, and manufacturers like Viking continue to introduce innovative outdoor kitchen items to separate its products from those found at mass merchants.
According to Casual Living's 2004 Universe Study (Nov. 2005), grill sales increased 5% between 2002 and 2004, from $3 billion to $3.2 billion. Home improvement centers like Home Depot and Lowe's and discount department stores such as Wal-mart, Kmart and Target increased in sales in the category, while specialty stores lost revenue.
"Imported grills with less expensive, less dependable parts that claim to be high-end are trying to creep in and grab a piece of the market share," said Taylor Calhoun, outdoor product manager for Viking Range.
"There are lots of grills out there," added Jerry Scott, vice president of sales and marketing for R.H. Peterson. "We strive to provide products and services not available with mass merchants. We find that we're served better by having experts who can talk to customers and direct them. I think the high-end domestically manufactured grill is still in a growth mode — this is powered by the concept of the Outdoor Room growing beyond southern California and Florida."
The City of Industry, Calif.-based manufacturer of grills and grill accessories, fireplace accessories, outdoor lighting and outdoor fire pits remains strongly committed to specialty patio and barbecue stores so consumers won't find R.H. Peterson's FireMagic grills at big box stores or even home improvement centers.
"(The specialty store) is where FireMagic grew up," Scott said.
Consumers won't find Rasmussen grills for sale in big box stores, either. The company works only with two-step distributors and specialty retailers. Rett Rasmussen, vice president of Whittier, Calif.-based Rasmussen Gas Logs & Grills, said most customers who shop at big box stores will rarely step into a specialty store, though he acknowledged that is becoming less the case.
"The specialty retailer still needs to differentiate their offerings and services from a big box store," he said.
Redding, Calif-based Barr Brothers generates sales from its online business as well as specialty store sales, especially from BBQ Galore locations across the U.S. The company, however, is striving to get into the big box business.
"It's really tough to try and break through," said Bill Foster, national sales manager for the garden, grill and grill accessories manufacturer. "There's so much competition, but there's more volume there."
Rasmussen sees foreign competition as the biggest challenge the grill industry faces. "Many domestic manufacturers are going over to the Orient to have their product produced for them, or taking designs and putting their own nameplate on them," he said.
Rasmussen's company, on the other hand, is going counter-trend. The company had products made in Taiwan a few years ago, but has since invested in its own domestic capabilities and "bringing business back home."
"The benefit of that is greater control over quantity, materials, the fit and finish and the balancing of inventory," Rasmussen said.
Foster sees shipping as the greatest obstacle. "Shipping is always an issue," he said. "It's now so expensive and UPS just upped its fuel surcharges."
Although manufacturers may agree on the challenges facing the grill industry, they don't share similar views on how business has been.
Rasmussen said some areas are doing better than others, but declined to elaborate. "It could always be better and it could be worse," he said.
For Viking, the 2005 season was "right at about the average it has been the past couple of years," Calhoun said. "We expect to have a big year this year because we have several new products out that greatly enhance the line."
This includes Viking's all stainless steel cabinetry line that allows consumers to build a complete outdoor kitchen.
Barr Brothers had a phenomenal year in 2005, up 30–40% from the year before. "We've done a lot of Internet business, Christmas was huge," Foster said. "Sauces and rubs are like gangbusters, too."
R.H. Peterson had a successful year, particularly with built-in models, and will introduce innovative products this month at the Hearth, Patio and Barbecue Expo in Salt Lake City. Those include the Monarch Magnum grill, highlighted by a hot surface ignition system revolutionary to the industry. Powered by a household current, the Monarch is actually plugged in, heats up and ignites the gas barbecue. This is in contrast to a traditional spark system, where moisture and dampness may cause a grill not to operate.
A mid-season introduction from the company also proved popular. The inferno burner is a side infrared cooker that allows consumers to have an infrared cooking capability without taking up half of the grill's cooking surface. R.H. Peterson also aims to carry a variety of accessories, from side coolers to storage drawers, caddies and refrigerators, so homeowners can design an outdoor kitchen with all the features of an indoor kitchen.
"We're looking to always improve the barbecuing experience by staying a step ahead," Scott said. "All the signs are positive."