If It Ain't Broke
With the cabinet industry celebrating its 118th consecutive month of sales growth, the industry looks to continued success with new innovations in design and style.
By Andy Jenkins
Certain aspects of the cabinet industry have gained a soap-opera-esque feel. You can almost hear the announcer's booming voice posing these questions: Will the housing bubble burst? How long can the streak continue? When will the industry's perch at the top come crashing down?
Dick Titus, executive vice president of the Kitchen Cabinet Manufacturers Assn., might tell you that any rumors of the industry's demise have been greatly exaggerated. And, with the industry's growth for 2005 hitting 13.3 percent and the KCMA celebrating the industry's 118th consecutive month of sales growth, it would be hard to argue with him.
"Back at the very beginning of the year, there appeared to be some softening of the housing market - some of that was due to weather situations we now think. It looked like the naysayers and doomsday folks were going to finally prove to be right," Titus says. "But since then, the housing market seems to have bounced back. It looks like it is going to be a great spring, and I think most of the economists now are of the opinion that it will probably be the third or fourth quarter before things begin to soften more noticeably."
Titus says that a softening of the housing market seems much more likely than the catastrophic bursting that some have warned of for 2006's housing numbers.
"The biggest thing that falls into the doomsday predictions centers around the housing bubble," Titus says. "That has been pretty well debunked to this point, and even if it proves to be accurate, it will only be in a few markets, and not across the board. We don't see a bursting of the housing bubble [to be] as huge of a threat as it may have been implied."
With the cabinet industry so closely tied to the U.S. housing and remodeling markets, record-breaking new-home sales in 2005 were certainly a welcome sight. Last year's new single-family homes sales reached 1.282 million units, according to the U.S. Department of Commerce, surpassing 2004's record 1.203 million units.
Titus adds that the cabinet industry has the added benefit of cashing in on a hot remodeling market. The National Association of Home Builders reports that remodeling dollars spent was at an all-time high in 2005 - exceeding the $200 billion mark for the first time in U.S. history. Furthermore, the NAHB Remodelers Council forecasts the largest increase in remodeling spending in more than ten years - jumping 13.2 percent to $238 billion for 2006.
"The devastating 2005 hurricanes, combined with a rebound in the rental market, are expected to spur an historically high increase in spending this year as repair work proceeds in the Gulf states and apartment owners renovate properties to maximize rental income," says Vince Butler, a home builder from Clifton, VA, and chair of the NAHB's Remodelers Council. "The massive owner equity and low refinance rates that fueled recent growth will continue to drive strong expansion."
All of this appears to spell continued success for the cabinet industry on the whole, Titus says. Cabinet sales have been up for the first two months of 2006 - 11.3 percent for January and 17.2 percent for February.
"For right now, consumer confidence is still high and people are still spending money. The Congress, now in an election year, will probably try and do something to sweeten the pot to make people feel better about the economy," Titus says. "By the end of the year, we are anticipating a year similar to last. Housing has demonstrated its strong life and it keeps going. I think that is a major reason why everyone I have talked to in the industry is pretty positive."
Other positive signs for the cabinet industry's future, Titus says, have been the recently planned or completed expansions from some of the biggest names in cabinets. KraftMaid, Merillat, and the Elkay Group trio of Mastercraft, Yorktowne and Medallion all have large-scale expansion plans in the works.
"There are a lot of expansions planned or underway. Plants adding technology bode well for the industry," Titus says. "I think that the positive thing I've heard from the continuing discussion of imports and China, etc., is that when you look at our industry, the significant improvements and expansions are occurring here on shore. Those kinds of improvements or investments would not be made unless the industry was planning to stay."
For complete coverage of expansions within the cabinet industry, see the cover story in last month's Wood & Wood Products.
Along with expansions of cabinet manufacturing facilities, Titus says that employment in the cabinet industry also has risen over the past eight years - from 120,000 domestic cabinet employees in 1997 to 170,000 in 2005. This comes, Titus says, as U.S. manufacturing employment has decreased by roughly 50,000 jobs during the same time period.
Finding the right kind of labor, however, has proven to be a formidable challenge facing the cabinet industry. Titus says that there are not only problems finding people to fill highly skilled woodworking positions, but finding employees educated in the industry's newer technologies can be a problem as well.
"This is definitely a concern that we hear about," Titus says. "Equipment operators and people who can handle the computerized equipment that is used today are the skilled workers that are needed, as much as someone who can bring the craftsmanship type of work with wood. We don't want [skilled woodworking] to become a lost art, though. There are some things going on to try and increase awareness of those skills, too."
Rounding out the list of hopeful prospects for his industry's growth, Titus says that the seemingly never-ending introduction of new and different products has kept competition sharp between cabinet manufacturers.
"People in the industry are constantly working to differentiate themselves from the competition and to provide an attractive product for the consumers," Titus says.
A Fashionable 2005
In the last year, the cabinet industry has continued its transformation into a more fashion-
"The semi-custom side of the industry is really becoming very close to custom today," Titus says.
Andy Wells, senior director of product design and merchandising for MasterBrand Cabinets Inc., says the industry is coming of age as of late.
"Where before the industry was more naive and juvenile and not entirely sure what it was, it is beginning to realize that it truly is a fashion business," Wells says. "And, as such, this is great news because the stance the consumer has taken is ÃÆÃÆÃâÃÆÃÆÃâÃâÃÂ¢??It's all about me.' People are striving for uniqueness and individuality [in the kitchen] the same way someone does with a clothing outfit or a car."
Titus says that customers' demands for unique cabinetry have forced the industry to rely more heavily on new technologies, and also to focus on researching the trends that consumers are following.
"Some of the finishes and special effects that we are seeing help provide people with something in their kitchen that stands out or makes them look different from the house next door or down the street," Titus says. "There is an ongoing, never-ending focus on research and development to recognize opportunities and needs. The diversity of materials and finishes, and the variety of available product, always seems to be increasing. You get different door styles using some different species of wood perhaps, or just materials or finishes and new ways of putting things together. All of that is continuing and trying to keep pace with consumers' desires and what their preferences are."
Connie Edwards, director of design for American Woodmark Corp., has also seen a push for more individualized style and design options with cabinets.
"I think that from a style standpoint, it is so highly personalized today that it can be hard to categorize styles," Edwards says. "There are probably about four major styles, but everyone is able to do their own thing today, and there is such a broad range of materials."
On the whole, Edwards says that consumer preferences have recently been leaning toward a cleaner and simpler style overall. Edwards says this style has recently made its way down from the extremely high-end markets and is now becoming a little more mainstream.
"This isn't a hard and cold look. It's very organic in its nature. In some parts of the country, it may mean that this movement is going away from cathedral door styles and going to square door styles with cleaner, simpler lines - maybe more stacking of cabinets and staggering of cabinet heights," Edwards says. "This is certainly influenced by the more contemporary look of stainless steel appliances, but I also think it is influenced by the fact that more people are looking for just a simpler and calmer environment to come home to. And that doesn't mean that it is boring by any means - it's just a cleaner look with simpler lines."
As far as finishes are concerned, both Wells and Edwards have seen similar trends over the past year or so. Each says that glazes continue to be popular. Finishes with darker, warmer, richer tones seem to be the most popular today.
"It's corny to say, but black is eternally fashionable," Wells says. "We've taken black and evolved it into our chocolate, cocoa and coffee colors. We think about solid color more today than we ever did. It's very fashionable to take not only one door styling color, but mix two into a unique room solution. No longer is anybody really looking for toast-colored cabinets on all four walls."
Edwards thinks it is no coincidence that this move toward darker finishes has come as the isolated kitchen has become an architectural style of the past.
"It's hard to find a new house plan that includes an isolated kitchen - it doesn't fit with our lifestyles today," Edwards says. "For remodeling, people are also trying to open the kitchen up to other parts of the home so that at the end of the day, when people are cooking, everybody is together. That trend is driving this push toward mid-range and darker finishes, because those tones are more compatible with furnishings today."
Edwards says she has heard the kitchen called "The New Greeting Room" - the first place that guests are ushered into once coming through the front door. This continuing trend, Edwards adds, has created the need for kitchens, and thus cabinetry, to serve multiple functions.
"This whole common room area, combining the kitchen and the family rooms, has a lot to do with the fact that maybe both parents in a family are working, and the children are in sports and other extracurricular activities. The only time that everyone is actually together may be in the evening when they are preparing a meal," Edwards says. "This has caused kitchens to be more flexible. Islands may be used for homework and craft projects and not simply just for cooking."
Another trend that continues to evolve in the world of cabinets has been interior features. A cabinet's function inside has become just as important as its look on the outside, Wells says. Both he and Edwards agree that interior organization with cabinets is no longer a luxury reserved for the high-end markets.
"I think the only new story with interior features is that they are becoming almost a requirement, rather than an option," Edwards says. "People want a certain amount of rollout trays. And that has become almost an acceptable minimum, where they used to be considered almost an upgrade. I think people just expect that there will be a certain level of interior features with their cabinets."
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