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A DRINKING PROBLEM? RISING COSTS AND A FOCUS ON EMPHASIZING PARTICULAR ITEMS RATHER THAN COLLECTIONS LED TO A SLOWDOWN IN SALES IN THE BARWARE CATEGORY.

Byline: Nathan Weber, Allison Zisko

After a year of robust growth, especially for barware tools such as corkscrews, the barware industry slowed in 2005, a victim of rising costs, retailer consolidation resulting in the loss of stores and, according to some, a trend toward emphasizing particular items rather than barware collections, where the biggest profit lies.

The category, which crosses tabletop and housewares, is still large, with retail sales during the year reaching an estimated $1.45 billion, not including furniture like portable wine cellars and bar stools. But that amount is just 1.6 percent higher than it was the year before, a tiny gain wiped out by the year's inflation of around 3 percent.

"We're facing the toughest conditions we've faced in years," said Mark Fisher, president of Godinger, a tabletop company that manufactures barware for all channels of distribution.

Price point is more important than ever, he said, and consumers are extremely value-conscious, a point echoed by Jeffrey Leute, brand director for Mikasa giftware, and Nancy Meyer, director of marketing for Waterford Crystal.

According to Fisher, multipiece sets of glassware continue to be popular with consumers; he noted a movement from beverageware sets of four to sets of 12 at department stores, an attempt to raise the average ticket. Everyone is looking to upgrade, Fisher said, "but Mrs. Jones doesn't." Mass merchants still primarily offer the four-piece sets.

Last year, the barware market was driven by boxed sets, higher perceived value sets and add-on gift sets to the basic box, Leute said. "We've also seen the basic wine glass business grow," whereas the bridal stemware business has faltered. Meyer noted a shift toward the ends of the market: either heavily bridal or very basic.

Of the four subcategories tracked by HFN, bar tools, including corkscrews, cocktail strainers, lemon squeezers, bottle stoppers and the like, yielded the highest growth rate, at 3.6 percent. Ice buckets and coolers were the runner-up, generating an increase of 3.2 percent. Glass and crystal sets, including decanters, rose just 1 percent, as did glass and crystal drinkware. Again, all these growth rates were before inflation.

Novelty items across all categories have boosted business, but prices for things like bottle stoppers and wine charms have gone down and counteract retailers' quest for higher register rings.

As in 2004, drinkware comprised the category's largest portion, accounting for two out of every five dollars taken in. That was not surprising, given a glass breakage factor. Glass and crystal sets, decanters and related items of both plastic and steel, took the second-largest portion, around 33 percent. Bar tools accounted for a nearly a quarter of the sales, and ice buckets and coolers took the remaining 4 percent.

Among channels of distribution, specialty stores gained the most, with a 3 percent increase, bringing their share to 36 percent. Department stores gained one point, as did the mass merchants and warehouse clubs. The losing channel, surprisingly, combined catalogs, the Internet and other media.

These market shares, however, reflect only averages combining all subcategories and all vendors or brands. They do not reflect the share for every type of barware product or, indeed, vendor. The mass merchant channel, for example, sold only 16 percent of the overall barware market in 2005, but captured up to 80 percent for particular products, depending on price points and other factors. Likewise, department stores, with 30 percent of the share overall, captured as much as 50 percent for the products of certain vendors.

Retail Sales of Home Barware

($ in millions)

2005; 2004; % Change

$1,449.60; $1,426.41; 1.6%

Share of total barware; 2005; 2004

Glass & crystal drinkware; 40%; 40%

Glass & crystal set, decanters & related items*; 33%; 33%

Ice buckets & coolers**; 4%; 4%

Corkscrews & other bar tools; 23%; 23%

*Glass & crystal only

**Plastic & stainless steel

Percent of Barware Retail Sales by Channel

; 2005; 2004

Department stores; 30%; 29%

Mass merchants & clubs; 16%; 15%

Specialty stores; 36%; 33%

Catalogs, Internet & other; 18%; 23%

Caption(s): Nine bottles fit horizontally and two stand vertically in the Cuisinart Private Reserve Wine Cellar, which operates without a compressor to prevent wine-damaging vibration and noise. / The Tuscany Classics stainless-steel ice bucket from Lenox taps into the giftware aspect of the barware business. / Godinger recently introduced Caitlin, an oversized stemware collection, with an updated bucket-shaped bowl.
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Article Details
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Author:Weber, Nathan
Publication:HFN The Weekly Newspaper for the Home Furnishing Network
Article Type:Market overview
Geographic Code:1USA
Date:Jul 10, 2006
Words:720
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