Tabletop vendors adapt to casual lifestyles

Also face higher cost for raw materials, fuel

By Cinde W. Ingram -- Home Accents Today, 4/1/2007

Tabletop Manufacturers have adapted to the casual dining trend and are expecting 2007 to be good, based on an extremely strong start.

Abigail Voelker, co-owner of Abigails, said its 2006 sales were up. "We had a wonderful year," she said. "Our merchandise was on point so we felt lucky. Going into this year, our sales have been strong as well, however I hear from retailers that their sales aren't as strong."

Zrike President David Zrike also described 2006 as a solid year. "We experienced significant growth but not quite the projection," he said. "This year is off to a very strong start, especially in our specialty store segment. All our winter markets showed growth. I expect 2007 to be a very solid year, but see real growth potential in 2008 and '09 as the economy and the retail climate begin to stabilize."

Andrea by Sadek experienced a good 2006 and started this year with outstanding sales, namesake Andrea Sadek said. While the typical post-show season usually results in a week to 10-day shipping backlog, the company had such good winter markets, its backlog lasted until the High Point Market.

"We're doing everything we can to get products out to our retailers, but we were fortunate enough to have the challenge of having a great January/February and a higher than normal backlog," Sadek said. "It's coming from both sides, that is, our existing retailers doing great and we're adding a really strong level of new customers to our company."

Adam Taylor, vice president of sales, Arte Italica, described the tabletop niche as extremely healthy. A late fourth quarter spike in sales energized both retailers and vendors at the end of 2006. "We had a bit of a slump last year and the previous year, but so far this year brought the best January and February I remember in many years," Taylor said. "We had what I like to call an old-fashioned show season. There was energy. There were lots of buyers. The buyers were buying. They weren't kicking tires; they were there to buy product. It was just like the old days, we all kept saying.

"I'm just thrilled about this year and every other vendor that I talk to feels the same," he added. "All indications are that we're going to have a good 2007. And I think if we all — including the retailers — have a positive outlook about it, we can't help but succeed."

Vietri expects its sales to be slightly up this year, according to Doug Vaughn, president; Susan Gravely, founder, CEO and head of product design and Frances Gravely, founder and vice president of communications. "Our core business continues to grow — with tabletop-related product being a slower growth portion than the other product categories, such as gift, garden, home decor, flatware and bath," Vaughn said.

"The tabletop category has been through monumental change in the last six years or so that the category as a whole has struggled for an identity and place," Vaughn added. "A byproduct of that struggle is consolidation, commoditization and even stagnation. While the shake-out that has occurred over the last years has probably been healthy in some ways, tabletop as a whole is still far from a 'healthy' or vibrant category. There are really two segments of the tabletop category, but it is no longer an upstairs/downstairs distinction but rather where the product is sold best defines who you are."

Recognizing casual dining styles are replacing traditional, more formal ones, the tabletop market is responding by providing what today's consumers want.

Within the evolving category, the focus is changing from pure tabletop to tabletop entertaining, Zrike said. "For our company, we are approaching the marketplace in a much more creative way, catering to the new style of partying and entertaining. Also, we are continuing to focus on brands which differentiate us from the mass market product that's being sold."

Vietri's management also noted the ongoing struggle between the multistore independent channel and the big box segment.

"In the better specialty customer base, where Vietri is, we still see our retailers wanting to be able to provide the 'mix and match' originality of our product, as well as the Italian handmade craft, which makes gifts and tableware purchasing a 'feeling' as well as a buy," Susan Gravely said. "There are some wonderful names and designs appearing in the mass channel. It is not clear, however, which direction the major retail players will go in their sourcing — the higher margin direct model or a branded and multi-look approach. The direction they ultimately commit to will have a dramatic effect on this segment of the business."

Abigails finds ease of care extremely important now, Voelker said. "People want things that go in the dishwasher, the microwave and the oven — and that's from a customer perspective. White products are still extremely popular and so is using white-ware that can be mixed and matched."

For example, consumers can intermingle Abigails' white Fleur de Lis pieces with its New Orleans product and a newly introduced Wildflowers Collection. Voelker noted outstanding reception of another new collection, Beachcomber. "We have never had anything to hit the first day out like this bake-ware in shell shapes," she said. "We don't know whether it's because it's a little bit different look or because it's so practical — you can bake in it and it goes from freezer to oven. There are so many qualities that people really seem to appreciate."

Voelker said consumers will buy extremely expensive products and low-priced ones, but there seems to be no middle ground. "We just hope it continues because it has been good for us, but to be competitive is very hard," she said. "It's a real challenge to find things that are unique because of this situation where there are a lot of good things out there at very inexpensive prices."

Sadek agrees tabletop is a challenging market. "Formal tableware, bridal registry tableware is certainly having a difficult time," she said. "We've been doing well in our tableware despite that through innovative design and motif, but also in terms of fashion colors. We've really been focusing on a group of collections that typify a design trend we think of as casual elegance. It's a little younger, more fun, cleaner and for casual everyday use, but it's still elegant."

Andrea by Sadek is addressing those consumers with updated toile patterns and its Vera Bradley collections. "Last year we introduced our all time best-selling dinnerware pattern in Java Blue, which was casual in the sense it mixes porcelain and ceramics, and timely in terms of color trends mixing turquoise blues and browns," Sadek said. "It could be both elegant and very formal or it could be more casual and everyday. It had a fashion-forward motif using an elephant pattern, which has been very timely for us. This year, we're following that up with our Peacock Collection, which is also very timely in terms of fashion colors. It has a brown element, but the blues and the greens are a little stronger than the brown. The motif is a peacock feather, which we're seeing throughout the market whether in prints and fabrics of ready-to-wear or in home decor and upholstery."

Other best sellers are Andrea by Sadek's Bunny Toile, a green design on a white background, and Barnyard Toile, a black design on a white background. "These are Country French casual, which is always wonderful for kitchen and casual dining," Sadek said.

Tabletop manufacturers have to keep reinventing their lines, Taylor said. "You've got to be innovative and have good pricing, not bargain pricing," he said. "You've got to know your customer, your consumer and what they want.

"As a vendor, many times we never see the consumer; we see the buyer; we see the stores but we never talk to the person who is actually using our product," Taylor said. "It's easy to sit in your ivory tower and forget about the consumer when they're ultimately the ones who are buying your product and making you successful."

For Vietri, casual elegance has been part of its mission since 1983 through working with its vendors to create product that stimulates a memory or a lifestyle of gathering family and friends together to enjoy life. "We continue to be driven by the feelings and emotions of our designs — 'the work of many hands' by maestro Italian artisans who have a passion for their craft, the Italian culture, history, design expertise and ideal lifestyle in many ways," Frances Gravely said. "What drives our sales is what has always driven our sales — our Vietri look and the casual-yet-elegant lifestyle inspired by the Italians, our history and our passion for Italy."

"The biggest challenge continues to be the consolidation of major stores as well as increasing prices from Asia, due to inflation including labor and gasoline rates," Zrike said. "Metals and stainless continue to skyrocket. In the ceramics industry, China has been faced with a change in its tax rebate structure, which has already caused a 5% increase and we expect to see an additional 5–8% increase during 2007."

Other manufacturers echoed concerns about raw material and fuel costs.

"Raw material prices worldwide have taken a 15–20% jump — metal products particularly and it's pretty staggering, but even the others because you have to have oil and fuel to stoke furnaces," Voelker said. "The price of oil worldwide has just put a damper on everything."

Taylor views the biggest challenge as "having great, innovative product that is truly marketable. It doesn't have to be one-of-a-kind, but it can't just be a reinvention of something that's already done."

In response, Arte Italica is among those vendors combining materials in new ways. "For example, we were the first to combine pewter and ceramic into a dinnerware eight years ago and now lots of other people do that," Taylor said. "And now we are the first to combine glass and pewter into dinnerware. We're not reinventing something we've already done, we're taking two materials that don't normally go together and making them into something wonderful. It's been extremely well-received and it's retailing well, too."

The health of independent retailers is at the top of tabletop vendors' concerns. "Trying to be unique is much more difficult today with many brands looking for growth vehicles and choosing the mass retailers as that impetus," Vaughn said. "A few brands have done an admirable job of a two-pronged approach in selling to both channels, but it is definitely becoming much more difficult with the opposing interests and very different business models of the mass retailer where price is among the major drivers of a relationship and the individual independent retailers that still require high levels of distinctive and quality product, touch and service, which of course add to the cost of doing business.

"In addition to the normal business challenges we all face — finding and keeping the right people, controlling costs, knowing our customers and understanding trends while designing and delivering product, etc. — the biggest challenge is in defining who you are and fighting the urge to be everything to everybody," he added. "Our industry as a whole has definitely had an identity crisis which increases the temptation to 'chase' trends or business rather than creating business through innovation and a loyalty to your mission."

Andrea by Sadek expects its antique reproduction dinnerware to be in vogue again once the casual trend turns around. "We expect 2007 is going to hold with the challenging time on the tabletop side and that our success will come through innovation and design; being on-time with fashion, colors and motifs," Sadek said. "We think it's the same challenge it has always been, being on-trend with design."

David Zrike

Susan Gravely, Doug Vaughn, Frances Gravely

Andrea Sadek

Adam Taylor