Household Cooking Equipment

Industry Snapshot

The U.S. Census Bureau reported that a total of 117 establishments operated in this industry in 2007. These companies shipped more than $4.6 billion worth of merchandise that year, of which outdoor barbecues/grills accounted for $2 billion and electric ranges shipped $1.6 billion worth, which represented nearly 90% of total industry shipments. Other types of appliances accounted for the remaining amount. Two-thirds of these operations employed less than 10 people, and about 25 percent had at least 100 employees. The largest concentrations of operations in this industry were in California (15%), Texas (11%), and Florida (7%).

Organization and Structure

Household cooking equipment was part of the appliance market that included washing machines, refrigerators, and other long-term appliances. Most appliances were purchased for new housing, replacement, or remodeling. Because people bought household cooking equipment to furnish their homes, housing slumps sometimes hurt the industry severely. By the 1990s this was a mature industry, with much consolidation occurring among the major appliance manufacturers. Replacement of old and worn out appliances drove the market, since most major appliances lasted 10 to15 years.

Five major corporations dominated the household appliance industry during the 1990s. Many of the main appliance manufacturers attempted to expand their markets globally, often by opening factories in Europe and Asia. By the mid-1990s, about 98 percent of all major appliances, except microwave ovens, were American-made. Smaller appliances such as coffee makers, food processors, and toasters, were often imported from Europe.

Background and Development

Before the advent of the Franklin stove (invented by Ben Franklin), food was typically cooked in a fireplace or potbellied stove. Franklin's invention was only a slight improvement over open-hearth cooking, since his stove was only an iron box with flues.

During the nineteenth century, cast iron ranges that burned coal or wood were developed, but food still had to be monitored constantly because these heat sources were unpredictable. While these stoves enabled a variety of foods to be cooked at once, they were dirty and a fire hazard.

Gas burning stoves were also developed in the nineteenth century. They concentrated heat at the cooking source and ensured that food was cooked more evenly and all the way through. The transition to gas cooking, however, required a major plumbing overhaul as pipes had to be hooked up to a stove. Middle- and upper-class housewives used the first gas stoves. Thermostatically controlled gas ovens began appearing in 1915 and essentially freed cooks from the kitchen, since food could be left unattended for brief periods of time.

The 1893 Columbian Exhibition at Chicago featured a "Model Electric Kitchen." Attempts to use electricity in home cooking occurred as early as the late nineteenth century. In 1905 the "General Electric Range" was introduced. Equipped with its own switchboard, it sat on metal legs with the oven well above the cooking surface. Until 1912 most electric ranges were converted gas cookers made of cast-iron and some insulation. In this type of range, all the heating elements were sealed in airtight containers to prevent them from burning out. Electric cookers relied on the "Bastian heater," or a wire spiral contained inside a quartz tube. An improvement on this theme, the Dowsing Electric Fire with sausage lamps, featured resistance wires of nickel and chromium that heated without oxidization. Early electric cooking overloaded circuits and was not made efficient until power companies were able to supply more electricity to homes.

Eventually, tabletops, cabinets, and drawers were added to gas-burning stoves, which transformed the devices into "kitchen furniture." Because of the gas stove, cooking utensils evolved from wood to heavy cast iron and tin to lightweight aluminum, tempered glass, and ceramic. By the 1920s, gas ranges were made of white porcelain enamel. Within a decade, they were produced in decorative colors to match other kitchen appliances and cabinetry. Gas ranges helped revolutionize cooking, making it more sanitary and time saving.

Some consumers favored gas ranges over electric ovens because food could be cooked faster on a gas range, and gas ovens did not interfere with other electrical appliances. A gas range also left no residual heat. On the other hand, an electric range did not need to be lit and offered features such as an automatic oven timer.

In 1945, Percy L. Spencer, a researcher at Raytheon Co., invented the microwave oven. Spencer looked for a way to cook by radio waves. It wasn't until he was working around a magnetron that he discovered that a candy bar melted in his pocket even though he had not felt any heat. He placed Indian corn in front of the magnetron and witnessed kernels popping.

Spencer later added a cabinet with trays to the machine and created the first "radarrange." Microwave ovens were used commercially before entering the home cooking market. Raytheon and Litton Industries Inc., both defense contractors, tried to sell microwave ovens in the United States without much success. Most consumers thought it was unnecessary to use a microwave in addition to a gas or electric range.

The Japanese were among the first big manufacturers of microwave ovens, in part because the appliances fit the Japanese lifestyle. Japanese cooking required reheating, and since most Japanese houses and kitchens were small, microwave ovens were the perfect space savers. Japan exported microwaves to the United States in the 1970s, and within five years, the market had swelled to 2.2 million microwaves. American appliance manufacturers began promoting microwave ovens again in the late 1970s, but by that time, the Japanese controlled 25 percent of the market.

Samsung and other Korean manufacturers entered the American market during the early 1980s by supplying merchandisers such as J.C. Penney Company Inc. with inexpensive microwave ovens. U.S. manufacturers eventually began producing microwave ovens that would compete directly with imported models.

Americans soon began to perceive microwave ovens as an adjunct to the kitchen. Microwave ovens could reheat leftover food and frozen items quickly, cleanly, and conveniently. However, studies in the late 1980s showed that gas or electric convection ovens were still used to prepare the main meal or to cook meals from scratch. By the mid-1990s, more than 90 percent of American households had a microwave, and nearly 9 million microwave ovens were being shipped annually.

Sales of major appliances peaked in 1987 with 38 million units sold, but the industry endured a slowdown during the early 1990s. Overall product shipments of appliances grew 3 percent in 1993 to $17.7 billion, while housing starts only increased about 4 percent during the same period of time, according to the 1994 U.S. Industrial Outlook. Household cooking equipment represented an estimated $3.3 million worth of shipments, or about 20 million units in 1993.

In the mid-1990s, cooking appliance trends continued to emphasize cleanability, convenience, and sophisticated design, with a growing concern for energy efficiency. Major manufacturers focused on improving the overall product with new engineering. Consumers were becoming interested in convection cooking appliances such as wall ovens. Improvements in technology were helping gas ranges compete with electric ranges and microwave ovens. Also, glass "cook tops" that covered burners and electric coil eyelets became popular, as well as microwave and conventional oven combinations that saved space and were more energy efficient than separate units.

Total industry shipments grew consistently throughout the 1990s and into 2000, increasing from $3.52 billion in 1997 to $4.09 billion in 2000. The cost of materials over this time period increased from $1.79 billion to $2.24 billion, reaching $3.47 billion in 2006.

There were 24 establishments whose primary product was electric household cooking equipment, including microwave ranges, ovens, and surface cooking units. This segment shipped $2 billion worth of merchandise, spent $999 million on materials, and invested $66 million in capital expenditures. It employed 9,106 people and had a payroll of $269 million. The largest shipment values in this segment originated in Tennessee.

There were 10 establishments whose primary products were gas household ranges, ovens, surface cooking units, and equipment, including parts and accessories. This segment shipped $394 million worth of merchandise, spent $264 million on materials, and invested $19 million in capital expenditures. It employed 2,980 people and had a payroll of $69 million. The largest value of shipments in this segment originated in Tennessee.

There were 35 companies whose primary products were other types of household ranges and cooking equipment. This segment shipped $1.1 billion worth of merchandise, spent $489 million on materials, and invested $33 million in capital expenditures. It employed 5,140 people and had a payroll of $128 million. The largest value of shipments in this segment originated in California, followed by New York.

As more companies conducted business via the Internet, some appliance manufacturers tailored their sites to provide information to customers without undermining the dealers who sold those appliances at retail outlets. For example, Whirlpool Corp. set up more than 3,000 customized pages on the World Wide Web for the use of its dealers. In 1999 Whirlpool launched an interactive site on the Internet where visitors could experiment with the company's products in a virtual, three-dimensional kitchen, design kitchens with a selection of Whirlpool appliances and customized floor plans, and research technical information about the company's merchandise. During the late 1990s and early years of the first decade of the 2000s, consumers tended to conduct research, often on the Internet, before they invested in major appliances.

In another innovative Internet venture, Whirlpool owned a 37 percent interest in Brandwise.com, a site where consumers could search a vast database to determine which appliances and prices best suited their needs. The site was unusual because it provided consumers with information about appliances made by various companies, not only Whirlpool, and it also offered the data for sale to Whirlpool's competitors. By sponsoring the service, Whirlpool gained access to valuable marketing data about people who visited the site, allowing it to design products better suited to the needs of its customers.

Current Conditions

The U.S. Census Bureau reported that, of household cooking equipment shipped by the entire industry, electric ranges constituted about $1.6 billion while gas ranges constituted only $130 million in 2006. The electric appliances included ranges, ovens, surface cooking units, and equipment, in addition to parts and accessories for ranges and ovens such as burners, oven racks, and broiler pans. The largest product segment in this industry was outdoor barbecues/grills, which generated nearly $4 billion.

Growth in the appliance industry was continuing into the mid-years of the first decade of the 2000s, and was expected to increase even further in later years due to continued consumer spending on homes, as well as the increase in housing starts. Higher-end offerings were showing the largest growth in the middle of the decade, as "smart" technology was showing up in everything from microwaves to convection ovens to dual fuel ranges. Features such as induction, halogen, sealed burners, solid black glass and ceramic cooktops, and downdraft and radiant heating techniques also were in solid demand.

The global economic recession of 2008, which continued into 2009, caused a decrease in earnings throughout the industry. Total shipments generated $4.86 billion in 2006, decreased to $4.61 billion in 2007, and then dropped significantly to $3.6 billion in 2008.

Industry Leaders

As the world's largest manufacturer of various major appliances, Whirlpool Corp. of Benton Harbor, Michigan dominated the household cooking equipment industry. In 2008 the company had some 70,000 employees and sales of $18.9 billion. It was the primary supplier of household cooking ranges to be sold under the Kenmore brand name at retail outlets of Sears, Roebuck & Co. Whirlpool also made household cooking equipment under the Whirlpool and Kitchen Aid brand names. The company's marketing strategy has been to produce specific appliances to serve a widening global consumer base. For example, in Africa it sold a 42-inch oven large enough to cook a whole sheep or goat.

General Electric Consumer & Industrial sold household cooking equipment under the GE, Hotpoint, and Profile brand names. The company had 70,000 employees and sales of $15.5 billion in 2006.

Maytag International Inc. of Schaumburg, Illinois (formerly Maytag Corp.) had sales of $33 million in 2006. The company was purchased by Ripplewood Holdings in 2005. Maytag's marketing strategy emphasized its product features and their benefits to consumers.

Workforce

The U.S. Census Bureau estimated that 15,392 people were employed in this industry in 2007, down from the 16,409 who were employed in the manufacture of household cooking appliances in 2006. The vast majority of employees were production workers who numbered 12,697 and earned less than $341 million in wages.