The housewares industry continues to face numerous headwinds in 2022 from unprecedented customer demand and associated supply chain chaos to labour changes and evolving buying behaviour, according to the International Housewares Association (IHA).

Many housewares executives have found a way to manage these headwinds while also putting plans in motion to not only maintain their position, but build on it.

“Unpredictability felt like the new normal in 202l, and now we’re going through another unimaginable event with the Omicron variant, But our industry has become more resilient, and we’ve learned to adapt quickly. Together we can face any challenge thrown at us,” IHA chair and Peugeot Saveurs North America managing director, Yvette Laugier.

Pretika Corporation president, Thom Nichols said, “There’s a lot of pivoting taking place. It’s about not being complacent; you have to innovate. And that doesn’t just mean product development, that can mean everything from product channels to supply chain management and within your own organisation.”

Picnic Time CEO, Paul Cosaro agrees, saying their company moved from “survival mode” to looking at ways to invest in the future in 2021. “Now that we’re on such a great path, we’re asking how we can capitalise on it.”

That concept of being even more strategic and intentional is one echoed by The NPD Group vice president and home industry advisor, Joe Derochowski.

“Housewares buyers and sellers have been incredible. I’ve been so impressed with their ability to adjust and adapt during the pandemic. But the reality is the door is still open for innovation both in terms of products to solve many new consumer needs, as well as new ways to engage with consumers and address evolving relationships to market, sell and deliver those products,” he said.

Unprecedented demand and rising costs

In 2021, sales of housewares and small appliances increased 5% in unit terms compared to the previous pandemic highs of 2020, according to NPD’s Early Indicator Report. Comparing 2021 to the more ‘normal’ year of 2019, unit sales increased a more dramatic 24%.

NPD reports top selling categories in 2021 included air fryers, toaster ovens, deep carpet cleaners, air purifiers, hair stylers, handheld massagers, cookware, portable beverageware and food storage.

While unit sales define the unprecedented demand, rising costs have kept housewares sellers on their toes and eroded profit margins.Companies had to absorb those costs early on, but most have now implemented new pricing on new orders. Others have adjusted product mix or promotion levels to emphasise products with better margins.

Supply chain chaos

One of the most documented costs has revolved around sea freight. Although freight rates began to decrease slightly last November when peak shipping season ended, they remained “extremely elevated” at eight to nine times the pre-pandemic norm, according to the Freightos FBX Index in mid-December.

“Ocean transportation costs continue to be the largest product input concern for companies who import from outside North America. I think companies who have been paying spot rates will likely see some stability in 2022, while those who had contracts in 2021 will likely see a large spike. It is expected there will be capacity issues for all of 2022,” Honey-Can-Do International CEO, Steve Greenspon said.

In the middle of unprecedented demand, pandemic-related closures and other delays, sea travel times have also remained volatile. That has caused some companies to increase inventories, if possible, or adjust orders to focus on higher-selling or smaller items that take up less space in a shipping container.

“A bright spot for us has been how solutions-oriented our vendors and buyers have been and how we’ve found new and creative ways such as switching ports or going direct import to ensure product flows to where it is needed,” Newell Brands CEO for the food business unit, Kris Malkoski said.

The people side: Labour and consumer behaviour

Labour shortages in the US and around the world have affected most companies in the pandemic era, and the housewares industry is no exception. Hiring new employees and keeping existing ones is expected to remain a challenge in manufacturing, warehouses and office jobs into 2022.

Several housewares executives say they’re planning to invest even more in their company culture and team, and help employees navigate physical and mental health concerns, as well as work-life balance.

“We’re definitely investing in our people. To me, that’s what’s gotten us through this,” Picnic Time’s Paul Cosaro added.

The big question is how consumer lifestyles and behaviors (and spending on housewares products) will change as the world opens up more. According to NPD’s Future of Home Forecast, unit sales of housewares and small appliances will decrease 5% in 2022 compared to 2021 but remain 14% over pre-pandemic levels of 2019.

“Many new needs will develop in 2022 as consumers adjust how they spend their time. Whether returning to the office, entertaining more or many other changes in how we spend our time, consumers will be craving new solutions and creating a whole new set of needs for the industry to address,” Derochowski said.

Most housewares executives acknowledge consumer spending may include more out-of-home experiences in 2022 but remain optimistic they can take advantage of gains made in the last few years.