Ovens & Stoves

INDUSTRIAL CODES

NAICS: 33-5221 Household Cooking Appliance Manufacturing

SIC: 3631 Household Cooking Equipment

NAICS-Based Product Codes: 33-52211318 through 33-52211421 and 33-52213112 through 33-52213123

PRODUCT OVERVIEW

Ovens and stoves are appliances that are used to produce heat most commonly for cooking and baking. An oven is an enclosed chamber used for baking, heating, and drying. A stove is an open apparatus used to produce heat by the combustion of fossil fuels. Ovens and stoves may be separate appliances, or they may be combined into one appliance called a range.

While in the past most cooking appliances were fueled by wood or coal, cooking today is done on appliances fueled by electricity, natural gas, or liquid petroleum (LP)—usually propane. These modern cooking appliances offer a wide variety of functions and features. What they all have in common is their primary function, namely the preparation of food through the application of heat—cooking, baking, boiling, and broiling.

During the nineteenth century cast iron ranges that were fueled by coal and wood began to overtake open-hearth cooking. This was an improvement but did not reduce the need for a cook to constantly monitor foods being cooked since the heat source was unpredictable. Gas burning stoves were also introduced in the nineteenth century but did not have wide application because of the need to do gas line plumbing in order to install the systems, something only affluent households could afford. In the early twentieth century thermostatically controlled gas ranges appeared and freed up cooks to leave food unattended for short periods of time.

In 1905 General Electric introduced its first range. In the early days of electric ovens most units were retrofitted gas cookers made of cast-iron with added insulation. Electric units were problematic in the early days as they would frequently overload circuits. As electric power became more ubiquitous in the United States, the popularity of electric cooking appliances grew. The units themselves grew as well with the addition of counter top-like extensions and drawers making them more like kitchen furniture. Both gas and electric ovens and stoves became more elaborate usually offering both a cooktop and an internal oven. By the 1920s gas ranges were present in most U.S. households. It wasn't until the late 1920s and early 1930s that electric ranges began to compete seriously with gas ranges. Over the next decades, electric ranges became the norm and began to outnumber gas units.

One of the reasons there are far more electric ranges in American homes today has to do with their purchase price relative to gas appliances. The cost of a new electric range is lower than the cost of a similar unit fueled by natural gas. The purchase price of an electric range runs about 40 percent lower than its gas equivalent. The cost of operating the appliances is another matter.

Although electric ovens and stoves far outnumber gas units, the popularity of gas appliances is rising. Credit for gain in share is usually assigned to three different cultural factors. First is the fact that a gas stove is slightly less expensive to operate due to the lower cost of natural gas. Over time this enables a buyer to recuperate the higher initial purchase price of the gas stove from power savings. Second is the social phenomenon often referred to as cocooning. Starting in the mid-1990s, Americans began to stay at home more; they entertained more at home and spent more of their free time there. This trend led to increased spending on the home. For example, the U.S. Department of Commerce reported that spending on products for the home increased 26.7 percent from 1997 to 2000. Spending in certain categories show the interest consumers had in making their homes comfortable. Spending increased on major appliances (28.1%), kitchenware (26.1%), curtains and draperies (25.7%), and in many other sectors.

The third factor credited for giving gas stoves a lift has to do with the rising popularity of the culinary arts as a hobby and the preference that most chefs have for gas over electric cooktops.

Many of the same factors that have helped to increase the popularity of gas cooking appliances have also energized the growth of dual-fuel ovens and ranges. Usually these dual-fuel units offer a gas cooktop and an electric oven. These high-end appliances thus have a full range of sophisticated options, such as convection ovens, self cleaning features, and steaming elements. Cooking appliances in the early twenty-first century offer a proliferation of high-end features and increasing energy efficiency.

MARKET

Household cooking appliances and parts is a $6 billion market in the United States. Every year between 8 and 10 million new ovens and stoves are sold in the United States, the world's largest single market for such appliances.

Household ovens and stoves are part of the durable goods sector, a sector defined as including items expected to last at least three years. Ovens and stoves are expected to last close to 20 years. According to Appliance Magazine, electric ranges have an average life expectancy of 16 years and gas units have an average life expectancy of 18 years. The term white goods is often used to describe the market made up of large household appliances—ovens and stoves among them. In colloquial speech the term range refers to both the portion of the cooking appliance in which baking is done, the traditional oven portion, as well as the cooking surface on top, the cooktop. Most household stoves or ovens combine these two cooking areas into a single appliance, although it has become fashionable during the early years of the twenty-first century to design kitchens in which the cooktop, or stove, is separate from the built-in oven or double oven.

Two-thirds of U.S. homes have electric ovens; one-third have gas-fueled ovens. However, in recent years the popularity of gas ovens and stoves has grown. In 2000 electric ovens and stoves represented 74 percent of new unit shipments, gas units 26 percent. By 2005 gas ovens and stoves had gained ground. According to the U.S. Census Bureau's Current Industrial Report series, gas ovens and ranges represented 35 percent of new units shipped, 9 percentage points more than they did just five years earlier. Since ovens and stoves are durable goods, the dominance of electric ovens and stoves in the home will continue for some time to come, despite the growing popularity of natural gas appliances.

The value of all shipments of cooking appliances is provided in a U.S. Census Bureau report titled Current Industrial Reports. Shipments of electric ranges, ovens, stoves, surface cooking units and parts in the United States in 2005 were valued at $2.555 billion, up 18 percent from the domestic shipments seen in 2000. Gas cooking appliances saw an even more dramatic rise of 78 percent during the period 2000 to 2005. Domestic shipments of gas ranges, ovens, stoves, surface cooking units and parts totaled $780 million in 2000 and by 2005 they reached a total value of $1.39 billion. Together, domestic shipments of electric and gas cooking appliances and parts in 2005 were valued at $3.945 billion.

However, those figures are only part of the picture. Imported appliances represent an important portion of the cooking appliance market in the United States; they accounted for one-third of the total value of shipments. Imported electric and gas ranges, ovens, stoves, and surface cooking units and parts in 2005 were valued at $2.1 billion. The total value of all domestically produced and imported appliances shipped during 2005 was $6.043 billion of which $425.6 million were exported.

Household cooking appliance sales rise and fall in tandem with the housing market. As durable goods, these appliances are used for an average of 16 to 18 years making them the category of major household appliance with the longest life. The strength of the new home construction market has an obvious impact on the sale of this category. Existing homes also drive sales of cooking appliances. The U.S. housing boom of 2002 through 2005 helped make this a period of high sales for cooking appliance manufacturers.

Low interest rates were one of the major factors fueling the housing market. Record low 30-year conventional mortgage rates in 2003 resulted in increased housing starts. The attractive interest rates also encouraged a great number of people to refinance their homes; such families often take on additional mortgage debt to remodel. Kitchens, great rooms, and kitchen/family room combinations were a particularly popular target for face-lifts.

The housing market began to cool in 2006 with housing starts falling and inventories of existing housing stock on the market rising sharply. This slowdown is likely to have an impact on the household appliance sector in the near term. Rebuilding needs in the Gulf Coast region after the heavy destruction caused by Hurricanes Katrina and Rita in the summer of 2005 are expected to keep the demand for household appliances from dropping during 2006.

In fact, the Association of Home Appliance Manufacturers (AHAM) projects continued growth in the sector through 2006. Between 8.5 and 10 million ovens and stoves are sold in the United States each year, according to AHAM. The projections for 2006 unit sales in the U.S. foresee the sale of 6.24 million electric appliances and 3.92 million gas units for a total of 10.15 million units.

KEY PRODUCERS/MANUFACTURERS

The U.S. cooking appliance industry is mature; it has seen a great deal of consolidation during the close of the twentieth century and the first years of the twenty-first century. The names of many now defunct oven and stove manufacturers of the past live on today as brand names marketed by a shrinking number of appliance manufacturers. Names like Amana, Tappan, and Thermador are examples of brand names that have outlasted the companies that created them.

In 2005 the leading names in cooking appliance manufacturing in the United States were General Electric, Whirlpool Corporation, Maytag Corporation, Electrolux, and Peerless Premier Appliance Company, in that order. General Electric was the leader in shipments of both electric and gas ranges. Whirlpool shipped the second highest number of electric ranges and Electrolux shipped the second highest number of gas ranges in 2005.

That same year, two of the five leading manufacturers of ovens and stoves announced an agreement to merge. After the necessary antitrust hurdles were overcome, Whirlpool purchased Maytag in March of 2006. The resulting Whirlpool Corporation is the world's leading manufacturer and marketer of major home appliances. Brand names offered by Whirlpool include Amana, Bauknecht, Brastempt, Jenn-Air, KitchenAid, Maytag, and Whirlpool. In addition, Whirlpool produces many, although not all, Kenmore appliances which are made under contract for Sears, Roebuck and Company.

The Kenmore brand complicates the subject of market leader because Kenmore is the leading cooking appliance brand sold in the United States, but Kenmore units are produced for Sears, Roebuck and Company by all of the leading manufacturers. Statistics reporting on manufacturer's annual shipments, however, do not segregate Kenmore machines.

The leading manufacturers in this market are Electrolux, General Electric, Peerless-Premier Appliance Company, and Whirlpool Corporation.

Electrolux

Founded at the beginning of the twentieth century this Swedish firm was first involved with floor-cleaning devices and later expanded into larger household appliances and commercial grade kitchen machinery. In 2005 the company's worldwide net sales were $16 billion and it employed more than 57,000 people in 150 countries. Nearly half of Electrolux's net sales are made in Europe with an additional 40 percent originating in North America. Latin America is its next biggest market and represented 5 percent of net sales in 2005.

Brands sold by Electrolux in the United States and Canada include AEG-Electrolux, Frigidaire, Tappan, and Westinghouse. Electrolux produces Kenmore appliances under contract with Sears, Roebuck and Company. Brand names used by Electrolux in Europe include Arthur Martin, Chef, and Rex.

General Electric

When it comes to the home appliance sector, General Electric (GE) is one of the largest players. Its strength in the appliance category comes from its cooking appliances. When it comes to the sale of ovens and stoves in the United States, GE is the leader, with 49 percent of the electric range market in 2004, and 36 percent of the gas range market. This enormous company had revenue from all operations in 2005 of $150 billion and employed more than 300,000 people worldwide.

The GE name is the company's strongest brand and most of its specific brand names include the GE prefix. They include GE Profile, GE Profile Performance, GE Monogram, and Hotpoint. GE produces Kenmore appliances for Sears, Roebuck and Company, as do many of its competitors.

Peerless-Premier Appliance Company

This company, headquartered in Belleville, Illinois, is the result of the merger of Premier Stove Company, founded in 1912, and the Peerless Enamel Products Company that began in 1928. By comparison, Peerless-Premier is a small manufacturer in this group of large international corporations. It employees fewer than 500 people but is the only remaining private company manufacturing ovens and stoves in the United States.

Peerless-Premier markets its ranges under the Premier brand name. The company also builds private label gas and electric ranges for other major original equipment manufacturers.

Whirlpool Corporation

Whirlpool is headquartered in Benton Harbor, Michigan, and began as the Upton Machine Company in 1911. Washing machines were its first home appliance but by the turn of the twenty-first century Whirlpool was among the largest manufacturers of household appliances globally. With the purchase in 2006 of Maytag, the company has secured this leading position for the foreseeable future.

Whirlpool has annual sales in the range of $19 billion and more than 80,000 employees worldwide. In addition to ovens, stoves and ranges, this company manufactures washers and dryers, refrigerators, freezers, dishwashers, trash compactors, room air conditioners, and microwaves. It has a strong international presence and is a leader in the home appliance field worldwide.

While not a key producer in the industry based on sales or revenues, Aga Consumer Products Limited is a British company known for its high-end line of ovens and ranges. Aga provides leadership in terms of design and quality and it serves a sort of bridge between household cooking appliances and commercial grade appliances.

Other prominent companies that manufacture ovens and stoves include Bosch-Siemens, Fischer and Paykel, Indesit, Küppersbusch Hausgeräte AG, Matsushita, Samsung, Sanyo, and Viking Range Corporation.

MATERIALS & SUPPLY CHAIN LOGISTICS

Making any heavy, durable good requires a significant capital investment. Making ovens and stoves is no exception. Metals and other heavy materials must be transported to the manufacturing site and transformed. Forging, stamping, pressing, and enameling processes are all involved in the manufacture of cooking appliances. To these heavy construction aspects of producing a stove is added the more delicate work of producing and programming computer processors and electronic control devices required to implement the technical features now common in most units.

The manufacturers themselves do not, of course, carry out all of these functions themselves; typically they organize and oversee the process. They manage the supply chain. The evolution of manufacturing has produced an environment in which manufacturers primarily assemble parts they have designed and paid others to make to their specifications. The assembly process for ovens and stoves involves some transformation of materials, but for the most part the various components of the ovens and stoves are produced by subcontractors and are then shipped to the manufacturer ready for assembly. The manufacturer designs the product and contracts with parts manufactures to make the parts and then oversees and manages the process of bringing everything together, assembling the final product, and perhaps doing some finishing work. It is rare that a manufacturer owns every element in the supply chain, from raw materials through assembly of a final product. Consequently, and as the old saying goes, a company is only as good as its suppliers. The efficient management of one's network of suppliers is an important part of good business management today.

The trend today is toward producing less of what is needed to make durable goods and to outsource the parts production as much as possible. Companies like to retain design, branding, and marketing functions.

Materials Consumed

U.S. Department of Commerce data provide an overview of the inputs involved in manufacturing cooking appliances. The single most costly input to the production process, after labor costs, is the cost of iron and steel. These materials, along with forging and stamping, account for nearly 12 percent of total inputs to the manufacture of cooking appliances. Other important inputs, in terms of the overall cost of all inputs, are plastics (6%), watches, clocks and related devices (4.3%), aluminum (3.5%), and paperboard containers (2%).

Commodity pricing, for metals, has been one of the challenges for cooking appliance manufacturers in the twenty-first century. The first years of the century have seen a continued expansion of the globalization trends first seen strongly in the 1990s. This has led to tightening supplies for many primary commodities. The high price of metals, as the largest material inputs to the manufacturing process, has caused manufacturers' profit margins to shrink. The competitive pressures on the price of the final product has kept pace with commodity price pressures and left manufacturers with little opportunity to pass along the higher cost of inputs as higher prices. Consequently, manufacturers have looked for savings on the production side of the equation.

Moving production facilities to areas with relatively low labor costs has been one of the strategies used by appliance manufacturers in the United States to reduce production costs. Free trade agreements and reduced tariffs have made it easier for manufacturers to move their production facilities to locations with low labor costs without having to factor in higher costs for importing the finished products. Ovens and stoves made in Mexico, for example, can be brought back to the lucrative U.S. market free of import duties thanks to the North American Free Trade Agreement (NAFTA) of 1992 and subsequent trade agreements.

Europe and Asia have both experienced a similar migration of appliance production from higher labor-cost areas to lower labor-cost countries in Eastern Europe or China, respectively. Another related emerging trend in supply chain management in this field is the outsourcing of the entire manufacturing process. In a report produced by the Office of Health and Consumer Goods, part of the U.S. Department of Commerce, this phenomenon is described as follows:

Appliance companies have long purchased appliances to be sold under their own brand from other domestic manufacturers to fill out a line or for cost reasons. International agreements of this type have been common for small appliances but are now becoming more common for the larger appliances.

Consequently, a brand takes on a somewhat new meaning. No longer does a brand name necessarily mean that the product was produced by the owner of that brand name. Sears, Roebuck and Company, which does not manufacture at all, has done this for a long time with their Kenmore brand, but until recently this outsourcing of the entire manufacturing process was less common for brand names such as Whirlpool or JennAir. Some argue that this evolution is a natural and rational response to cost pressures and one of the by-products of those price pressures. Others argue that the practice actually encourages consumers to view large cooking appliances as just another commodity, the purchase of which is done based on price alone, and that the practice therefore contributes to the competitive pricing of these appliances. Whatever the case may be, the trend is clearly evident and may be expected to continue.

DISTRIBUTION CHANNEL

The distribution system for ovens and stoves, much like the system for other durable goods, is a multi-tiered system. Manufacturers use distributors and wholesalers who work with retailers in order to get the products to the end user.

Major home appliances, like ovens and stoves, are an important category for retailers who participate in this sector. The purchase of an oven or stove is a big-ticket item. Such a purchase represents the beginning of a relationship between the retailer and the buyer. Customers who purchase a new range will count on the retailer either to provide the necessary service on the range or to be the intermediary between themselves and the manufacturer for services, parts, and many warranty matters.

Low interest rates, a strong housing market, and the cultural trend towards spending more time at home have combined in the first years of the twenty-first century to produce a robust market for household appliances. Such a strong market has encouraged retailers who have not traditionally been involved in home appliances to realign their offerings and try to get involved, or, if already involved, to increase their involvement with this robust market.

As the leading retailer of home appliances in the United States, Sears, Roebuck and Company plays a unique role within the sector. Sears is both a major appliance retailer and a major consumer of cooking appliances for branding with its Kenmore label. Sears contracts with manufacturers to produce its line of Kenmore home appliances. Within its retail outlets, Sears sells its Kenmore brand as well as other name brands. After the purchase of Sears in 2004 by the discount retailer, Kmart, Kenmore appliances began to appear in Kmart stores for the first time, having been sold until then exclusively through Sears' stores and catalogs. Kmart has subsequently begun to expand strongly into the appliance arena.

The second and third largest retail outlets by sales of cooking appliances are Lowe's and Home Depot, respectively. These two, large, home improvement retailers have benefited from the cocooning trend and have each expanded their lines of kitchen appliances. Both retailers carry most of the popular range brands and highlight their floor displays with whole kitchen vignettes. This is something the "big box" stores can more easily do than their retail competitors; the latter have a higher cost per square footage for space, like those in traditional shopping malls and downtown locations.

The fourth largest seller of home appliances in the United States is Best Buy. Traditionally this company has focused on electronic appliances but has begun to market kitchen appliances more aggressively in order to take full advantage of the marketing potential resulting from the strength of the U.S. housing market.

The increasing number of retail outlets offering major household appliances has had an impact on the relative power that manufacturers have in their relationships with retailers. Competition for favorable positioning within a store and within the retailer's web presence has become more important for manufacturers. They must work hard to have their products stand out in the crowd. Having many brands of cooking appliances presented side by side for easy comparison increases competition and makes it more difficult for a manufacturer to have its products seen as anything more than a commodity differentiated from other like items by more than price. These factors give retailers a more powerful position in the relationship between manufacturer and retailer.

While the Internet has become an important outlet for the direct sale of many products, ovens and stoves are not among those products. As has occurred in other industries, the Internet has served the cooking appliance industry well as a means to improve communication between manufacturers and wholesalers, dealers, and retailers. Direct online selling has not, however, proven to be a successful strategy to date. Because of the distribution networks that most manufacturers have in place, and the sales and service agreements they have with their dealers, it has been important for them to develop Internet strategies that do not undermine these relationships by attempting to sell directly to customers online. Instead, most cooking appliance manufacturers use their Web sites to provide information and promote their products while offering the visitor a way to get in touch with one of the manufacturer's dealers or distributors in the visitor's local market. As early as 1999 Whirlpool Corporation launched an interactive, three-dimensional Web site on which visitors could design a kitchen and customize the floor plan and placement of Whirlpool appliances throughout. In an InternetWeek article published in 2001, the lessons that Whirlpool learned in its early online experience were summarized this way: "Fewer than two percent of buyers of major appliances are comfortable purchasing them over the Internet, but up to 40 percent of consumers research major products over the Net before buying them in stores."

KEY USERS

Most purchases of new residential cooking appliances in the United States are what are referred to in the business as distress purchases. This means that the purchase is made in order to replace an appliance that has failed or broken. Distress purchases account for almost two-thirds of the sales of new ovens and stoves in North America. The remaining one-third of purchases are made in order to upgrade a functioning appliance; the majority of such purchases are the result of a residential move or a home remodel.

Institutional buyers are another outlet for cooking appliances but, except in the case of residential builders, these buyers are purchasing commercial grade appliances which are different from household cooking appliances.

ADJACENT MARKETS

The trajectory of the housing market has a strong bearing on the market for cooking appliances in the United States. Since the average house has six major appliances, the number of new houses built annually has an important impact on sales of all major household appliances.

Although only about 20 percent of the sales of new ovens and stoves each year are directly associated with new housing stock, the strength of the housing market also has an important impact on sales associated with upgrading appliances. An estimated one-third of all purchases of new ovens and stoves in the United States are made in order to upgrade from existing and functional machines. Kitchen remodels are one of the more popular ways in which to spruce up a home in advance of trying to sell it. When the housing market is strong, housing prices are pushed up and this leads to people investing the increased value of the house into upgrades and additions.

The housing market in the United States has been at record levels during the period 2002 through 2005, buoyed by low interest rates and flexible lending practices. Housing starts as well as sales of existing housing stock both set records during this period. Housing starts, as measured by building permits issued, grew every year from 2000 to 2005, as shown in the Figure 162.

Sales of existing homes peaked in 2005, according to the National Association of Realtors, reaching just under 6 million homes sold. The pattern of strong growth in the housing market came to an end in 2006 when sales began to slow and the inventory of housing stock on the market grew.

In addition to the housing market, other markets whose trajectories influence the sales of ovens and stoves are the markets for microwave ovens, toaster ovens, and food service. Microwave ovens had an important and negative influence on the sale of stoves when they were first making their way into the mass market in the late 1960s and the 1970s. As they became a common feature of most U.S. kitchens, their impact on the sale of ovens and stoves declined. Other than temporary living arrangements such as college dormitories or motel rooms, most microwaves are used in kitchens equipped with more traditional ranges as well.

The toaster oven is another appliance that competes with ovens and stoves at the margins. Most toaster ovens are used in fully equipped kitchens; those used in more temporary living arrangements are used precisely because they are small and inexpensive. Where toaster ovens are used alone, a full oven or stove is not likely to have ever been an option. Nonetheless, the sale of small stoves can be negatively impacted by the availability of inexpensive toaster ovens.

Another market adjacent to household cooking appliances is the food service industry: fast foods, prepared foods, and restaurants. The more people eat outside the home, the less wear-and-tear they cause their cooking appliances and the longer life those appliances are likely to have.

The tendency of Americans to eat out has been rising for several decades. Between 1986 and 1996, total food service sales in the United States grew 69 percent to $286 billion. Growth continued at a brisk pace and by 2005 had reached $476 billion according to the U.S. Department of Agriculture. Despite this robust growth in what may be viewed as a competitor to the household cooking appliance market, the sales of ovens and stoves have a robust growth rate during this same period. What is not clear is whether the growth rate for cooking appliances may have been greater yet had the trend toward eating out not also grown strongly.

RESEARCH & DEVELOPMENT

Much of the research and development work being done by cooking appliance manufacturers is focused on developing more energy efficient and environmentally safe appliances. The Current Trends section discusses advances in these areas further.

New materials and coatings are two additional areas of focus for R&D efforts in the cooking appliance industry. Dramatic advances have been made possible with the spread of tough, lightweight, and corrosion-resistant modern plastics. However, one of the problems faced by the appliance industry has been that colors fade at different rates on parts made from different materials. The use of Low Temperature Arc Vapor Deposition (LTAVD) systems is one way in which cooking appliance manufacturers are addressing this problem. LTAVD systems are used to apply most metal alloys, metal nitrides, and metal carbide compounds onto components made from almost any substance: metals, plastic, plastic-polycarbonate blends, foam, and graphite. This ability of LTAVD technology to apply metal coatings successfully to dissimilar materials opens the door for new designs and new manufacturing systems. For example, the controls to be used on a graphite-coated oven can now be coated to match the body of the appliance instead of requiring the design to incorporate a different finish for the trim and control pieces.

CURRENT TRENDS

The new ideas for oven design are focused in two areas, gaining greater energy efficiency and offering users high-end features in stylish packages.

During the 1990s a great deal of work was done to make home appliances more energy efficient—at least in part because of regulatory requirements that were put into place in the United States during that decade. The U.S. Department of Energy (DEO) has had authority since 1987 to set national energy efficiency standards for all major household appliances. In addition to these energy efficiency standards, the DEO and the U.S. Environmental Protection Agency (EPA) together oversee the Energy Star labeling system. This is a labeling system used to identify, based on federally established guidelines, the most energy-efficient products on the market. The need to meet U.S. energy efficiency standards, the desire to place an Energy Star label on new appliances, and rising energy costs have combined to create an environment in which advances in features that help to achieve energy conservation have become ever more popular.

Some of the new technologies being used to gain energy efficiency are convection ovens, quartz-halogen ovens, induction cooking elements, and so-called rapid-cooking appliances which combine several types of heating elements to achieve greater efficiencies.

Convection ovens use fans to circulate heat around food. This reduces the cooking time and also minimizes the problem of hot spots common in traditional ovens. Convection ovens also allow for multiple dishes to be placed in the oven and cooked evenly and at the same time.

Quartz-halogen ovens use very high heat light bulbs to cook the food. The ovens heat very quickly reaching 90 percent of full operating temperature within 5 seconds. They also cool quickly. This can speed cooking time which, in turn, reduces energy consumption. The quartz-halogen technology is more prevalent in commercial ovens and in industrial applications but is beginning to make inroads into household cooking appliances as well.

Induction cooktops are different from other electric cooktops in that they do not use heating elements. The induction device generates heat in the cooking vessel itself using magnetism. The device is a powerful, high-frequency electromagnet; the electromagnetism is generated by electronics in the induction element located under the unit's smooth ceramic surface. When a sizable piece of magnetic material is placed in the magnetic field generated by the induction device, the field transfers or induces energy into that metal. That transferred energy causes the magnetic material, the pot or pan, to become hot.

The surface of the induction cooktop does not heat to the touch giving it a significant safety benefit over all other cooktops. Induction cooktops also heat more quickly than more traditional electric cooking elements, saving energy. The downsides to induction cooktops are the high purchase price and the need for special magnetic cookware. Research is being done to develop newer technology that will allow induction cooktops to work with any metal cooking vessel, including copper and aluminum. This new technology is not yet available on the market but holds the promise of enlarging the available cookware that must be used with induction cooktops.

Rapid-cook appliances combine several types of heating elements, including convection, quartz-halogen, and microwave. These units are sometimes referred to as trivection ovens. Rapid-cooking appliances cut cooking time substantially, often by more than half and require no preheating, making for very efficient use of energy.

A growing demand for dual-fuel cooking appliances is another trend in the market. Dual-fuel units offer buyers benefits in two areas. First, these units tend to be energy efficient, taking advantage of instant on and off control on the cooktop and convection features in the oven. Second, dual-fuel units cater to the enthusiast chef and as high-end appliances come in styles that appeal to the design trends of the day. Most models are offered in stainless steel finishes, bright color enamel finishes, and some are designed to have a retro feel, harkening back to the styles of the 1940s and 1950s.

Popular and trendy cooking features include advanced self-cleaning features, smooth cooktops, and refrigerated ranges.

TARGET MARKETS & SEGMENTATION

The target markets for ovens and stoves are all households large enough to accommodate fully functional kitchens. The market segments follow income trends, with the largest number of units targeted at buyers with modest budgets; very large volumes compensate producers for the relatively modest margins achievable in this very competitive segment. The middle of the market is represented by the affluent upper-middle portion of the population, a segment whose income has grown more rapidly than that of the great majority of families. This segment is interested in full-featured and innovative products and is willing to pay the price for innovation. The high-end, a relatively small market, extends from buyers of the most expensive household appliance and fades into that segment of the very affluent who leave the household category altogether and install commercial grade equipment.

RELATED ASSOCIATIONS & ORGANIZATIONS

Asociacion Mexicana de Empresas, del Ramo de Instalaciones, http://www.americmx.com

Association of Home Appliance Manufacturers, http://www.aham.org

Bakery Equipment Manufacturers Association (BEMA), http://www.bema.org

Canadian Appliance Manufacturers Association (CAMA), http://www.electrofed.com

China Household Electrical Appliances Association, http://www.cheaa.com

Fabricators & Manufacturers Association International (FMA), http://www.fmanet.org

Gas Appliance Manufacturers Association (GAMA), http://www.gamanet.org

National Association of Metal Finishers (NAMF), http://www.namf.org

North American Association of Food Equipment Manufacturers (NAFEM), http://www.nafem.org

BIBLIOGRAPHY

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Darnay, Arsen J., and Joyce P. Simkin. Manufacturing & Distribution USA, 4th ed. Thomson Gale, 2006, Volume 2, 1405-1413.

"Existing Home Sales." National Association of Realtors. Available from 〈http://www.realtor.org/Research.nsf/Pages/EHSdata〉.

George, Nicholas, and Peter Marsh. "Steel Prices Prompt Profit Warning from Electrolux Manufacturing." The Financial Times. 24 September 2004.

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Lewis, David. "Whirlpool in Whirlwind of Online Activity—Appliance Maker's Initiatives Target Consumers, Partners and Employees." InternetWeek. 11 June 2003.

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Pinkham, Myra. "Appliance Market Cooking Up Another Successful Year." Metal Center News. March 2006.

"The Share-of-Market Picture for 2005." Appliance Magazine. September 2006.

Sullivan, Patrick, and Gary Larson. "Might Metallics: Arc-Vapor Deposition Process Provides Durable Cosmetic Finishes." Appliance Design. October 2005.

"Who Makes What? (The Appliance Name Game)." Consumer Reports Annual Buying Guide. 2003.

see also Microwave Ovens