| KN26033 |
| KEY NOTE CHINA AND EARTHENWARE PLUS: FEBRUARY 2003 |
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This report covers: china,earthernware,tableware,kitchenware,stoneware,hard porcelain,bone china,oven-to-tableware,ornamental ware, informal dining, oriental designs, department stores, variety & discount stores, supermarkets, specialist china stores, gift shops, mail order, direct selling, catalogues, collectors' market, promotional market, key trade associations, exhibitions, conferences,
Companies & Brand Names covered include: Churchill China, Denby, W.Moorcroft, Portmeirion Group, Royal Crown Derby, Royal Doulton, Villeroy & Boch (UK), Josiah Wedgwood & Sons, Aynsley china, Spode, Wade ceramics, Waterford Wedgewood,
| Executive Summary | |
| 1. Market Definition | |
| REPORT COVERAGE | 2 |
| MARKET SECTORS | 2 |
| By Type of Material | 2 |
| Earthenware | 2 |
| Hard Porcelain | 3 |
| Bone China | 3 |
| Stoneware | 3 |
| By Type of Product | 3 |
| Ovenware, Tableware and Kitchenware | 3 |
| Ornamental Ware | 3 |
| MARKET TRENDS | 4 |
| Informal Dining | 4 |
| Oriental Designs | 4 |
| Direct Selling | 4 |
| MARKET POSITION | 4 |
| The UK | 4 |
| Table 1: Household Expenditureon Glassware, Tableware andHousehold Utensils (£m),1997-2001 | 5 |
| Europe | 5 |
| Table 2: Estimated Population of Selected European Countries(000), July 2001 | 5 |
| 2. Market Size | |
| THE TOTAL MARKET | 6 |
| UK Manufacturers’ Sales | 6 |
| Table 3: UK Manufacturers’ Salesof Ceramic Household and Ornamental Articles (£000),1997-2001 | 6 |
| The UK Retail Market | 6 |
| Table 4: The UK Market for Chinaand Earthenware by Valueat Current Prices (£m at rsp),1998-2002 | 7 |
| BY MARKET SECTOR | 7 |
| Ovenware, Tableware and Kitchenware | 7 |
| Table 5: The UK Market for Ovenware, Tableware and Kitchenware by Valueat Current Prices (£m at rsp and percent), 1998-2002 | 8 |
| Ornamental Ware | 8 |
| Table 6: The UK Market for Ornamental Ware by Valueat Current Prices (£m at rsp and percent), 1998-2002 | 8 |
| OVERSEAS TRADE | 9 |
| Table 7: UK Trade Surplus in China and Earthenware (£m), 1996-2001 | 9 |
| Table 8: UK Imports and Exports of China and Earthenwareby Value (£m), 2000 and 2001 | 9 |
| Imports | 10 |
| Table 9: UK Imports of China and Earthenware by Sectorby Value (£000), 2001 | 10 |
| Intra-EU Arrivalsby Country of Origin | 10 |
| Table 10: UK Intra-EU Arrivals of China and Earthenwareby Country of Origin by Value(£000 and percent), 2001 | 11 |
| Extra-EU Importsby Country of Origin | 11 |
| Table 11: UK Extra-EU Imports of China and Earthenwareby Country of Origin by Value(£000 and percent), 2001 | 12 |
| Exports | 12 |
| Table 12: UK Exports of China and Earthenware by Sectorby Value (£000), 2001 | 13 |
| Intra-EU Dispatchesby Country of Destination | 13 |
| Table 13: UK Intra-EU Dispatches of China and Earthenwareby Country of Destination by Value (£000 and percent), 2001 | 14 |
| Extra-EU Exportsby Country of Destination | 14 |
| Table 14: UK Extra-EU Exports of China and Earthenwareby Country of Destination by Value (£m and percent), 2001 | 15 |
| 3. Industry Background | |
| HISTORICAL BACKGROUND | 16 |
| NUMBER OF COMPANIES | 16 |
| By Turnover | 16 |
| Table 15: Number of UK VAT-Based Enterprises Engaged in the Manufacture of Ceramic Household and Ornamental Articlesby Turnover (£000 and number),2001 and 2002 | 17 |
| By Number of Employees | 17 |
| Table 16: Number of UK VAT-Based Local Units Engaged in the Manufacture of Ceramic Household and Ornamental Articles by Number of Employees, 2001 and 2002 | 18 |
| REGIONAL VARIATIONS INTHE MARKETPLACE | 18 |
| DISTRIBUTION | 19 |
| Manufacturers | 19 |
| Distributors and Importers | 19 |
| Retail Outlets | 19 |
| Specialist China Stores andGift Shops | 19 |
| Department Stores | 19 |
| Variety and Discount Stores | 19 |
| Supermarkets | 20 |
| Furniture andHome Interior Stores | 20 |
| Home Shopping | 20 |
| Mail Order, Direct Selling and Catalogues | 20 |
| The Internet | 20 |
| The Collectors’ Market | 21 |
| The Promotional Market | 21 |
| HOW ROBUST IS THE MARKET? | 21 |
| LEGISLATION | 22 |
| Ceramic Ware (Safety)Regulations 1988 | 22 |
| Company Tax | 22 |
| The Cost of Employment | 23 |
| Tariffs | 23 |
| KEY TRADE ASSOCIATIONS | 23 |
| Association for Ceramic Trainingand Development | 23 |
| British Ceramic Confederation | 23 |
| British Ceramic Plant and Machinery Manufacturers’ Association | 24 |
| British Hardware & Housewares Manufacturers Association | 24 |
| Ceramic Industry Forum | 24 |
| CERAM Research | 24 |
| Craft Potters Association | 24 |
| European Ceramics Society | 24 |
| Giftware Association | 25 |
| Guild of Specialist China &Glass Retailers | 25 |
| EXHIBITIONS ANDCONFERENCES | 25 |
| UK Exhibitions | 25 |
| Exclusively Housewares | 25 |
| Interceramex | 25 |
| Showcase | 25 |
| Spring and Autumn Fairs | 26 |
| Stoke Show | 26 |
| Top Drawer | 26 |
| Overseas Exhibitions | 26 |
| Ambiente | 26 |
| International Housewares Show | 26 |
| Macef | 26 |
| Maison & Objet | 26 |
| New York Tabletop Market | 27 |
| Tendence Lifestyle | 27 |
| Conferences | 27 |
| PUBLICATIONS | 27 |
| Ceramic Ambitions &Strategic Directions | 27 |
| Global Ceramic Review | 27 |
| Tableware International | 28 |
| 4. Competitor Analysis | |
| THE MARKETPLACE | 29 |
| MARKET LEADERS | 29 |
| Churchill China PLC | 29 |
| Denby Group PLC | 30 |
| W Moorcroft PLC | 30 |
| Portmeirion Group PLC | 31 |
| The Royal Crown DerbyPorcelain Company Ltd | 31 |
| Royal Doulton PLC | 32 |
| Villeroy & Boch (UK) Ltd | 33 |
| Josiah Wedgwood & Sons Ltd | 33 |
| OUTSIDE SUPPLIERS | 34 |
| Clay and Other Raw Materials | 34 |
| Finishes | 34 |
| Equipment | 35 |
| Services | 35 |
| ADVERTISING ANDPROMOTION | 35 |
| Main MediaAdvertising Expenditure | 35 |
| Table 17: Main Media Advertising Expenditure by the Household Ceramic Industry (£000), Years to September 2001 and 2002 | 36 |
| Methods of Advertising | 37 |
| 5. Brand Strategy | |
| INTRODUCTION | 38 |
| LEADING BRANDS | 38 |
| Aynsley China | 38 |
| Denby Group | 38 |
| Portmeirion Group | 38 |
| Royal Doulton | 39 |
| Table 18: Royal Doulton PLC —Sales by Brand (£m), Years to31st December 2000 and 2001 | 39 |
| Spode | 40 |
| Villeroy & Boch | 40 |
| Wade Ceramics | 40 |
| Waterford Wedgwood | 40 |
| GIFT OF THE YEAR | 41 |
| 6. Strengths, Weaknesses, Opportunities and Threats | |
| STRENGTHS | 42 |
| WEAKNESSES | 42 |
| OPPORTUNITIES | 43 |
| THREATS | 44 |
| 7. Buying Behaviour | |
| AVERAGE WEEKLYHOUSEHOLD EXPENDITURE | 45 |
| By Decile Group | 45 |
| Table 19: Average Weekly Household Expenditure on Kitchen and Garden Equipment and Household Hardwareby Gross Income Decile Group (£), 2000/2001 | 45 |
| By Age | 46 |
| Table 20: Average Weekly Household Expenditure on Kitchen and Garden Equipment and Household Hardwareby Age of Head of Household (£), 2000/2001 | 46 |
| OWNERSHIP ANDEXPENDITURE LEVELS | 46 |
| Table 21: Ownership of, and Expenditure on, China Crockery and Other Crockery in the Past 12 Months ( percent of adults), 2002 | 47 |
| By Age | 47 |
| Table 22: Ownership of China Crockery and Other Crockeryby Age ( percent of adults), 2002 | 48 |
| By Social Grade | 48 |
| Table 23: Ownership of China Crockery and Other Crockeryby Social Grade ( percent of adults),2002 | 48 |
| By Region | 49 |
| Table 24: Ownership of China Crockery and Other Crockeryby Region ( percent of adults), 2002 | 49 |
| 8. Current Issues | |
| MERGERS AND ACQUISITIONS | 50 |
| Apilco, Deshoulières andPorcelain de Sologne | 50 |
| Franklin China | 50 |
| Steelite International | 50 |
| BOARD AND MANAGEMENT CHANGES | 50 |
| Churchill China PLC | 50 |
| Waterford Wedgwood PLC | 50 |
| NEW PRODUCTS | 51 |
| Belleek Pottery Ltd | 51 |
| Spode | 51 |
| Wade Ceramics | 51 |
| Waterford Wedgwood | 51 |
| 9. The Global Market | |
| INTRODUCTION | 52 |
| THE US MARKET | 52 |
| Market Profile | 52 |
| Table 25: Growth in US Sales of Tabletop Items by Sector ( percent),2001-2002 | 53 |
| Principal Competitors | 53 |
| THE EUROPEAN MARKET | 53 |
| Market Profile | 53 |
| Principal Competitors | 54 |
| Table 26: Waterford Wedgwood PLC — Turnover and Operating Profitby Country of Operation (em),Years to 31st December2000 and 2001 | 54 |
| Table 27: Churchill China PLC — Turnover by Country ofDestination (£000),Year to 31st December 2001 | 55 |
| THE ASIAN MARKET | 55 |
| Market Profile | 55 |
| Principal Competitors | 55 |
| 10. Forecasts | |
| INTRODUCTION | 56 |
| Economic Outlook | 56 |
| Table 28: Projected Growth inGross Domestic Product —the World and Selected Countries( percent), 2002-2003 | 56 |
| New Export Markets | 57 |
| Demographics and Lifestyle | 57 |
| FORECASTS 2003 TO 2007 | 57 |
| Table 29: The Forecast UK Marketfor China and Earthenwareby Value at Current Prices(£m at rsp), 2003-2007 | 58 |
| MARKET GROWTH | 58 |
| Figure 1: The UK Market for China and Earthenware by Valueat Current Prices (£m at rsp),1998-2007 | 58 |
| 11. Company Profiles | |
| Churchill China PLC | 60 |
| Denby Group PLC | 62 |
| W Moorcroft PLC | 64 |
| Portmeirion Group PLC | 66 |
| Royal Doulton PLC | 68 |
| Josiah Wedgwood & Sons Ltd | 70 |
| 12. Company Financials | |
| 13. Further Sources | |
| Associations | 74 |
| Publications | 75 |
| General Sources | 75 |
| Bonnier Information Sources | 75 |
| Government Publications | 76 |
In a climate of low inflation, low interest rates and high consumer confidence, shoppers spent freely on consumer goods, including china and earthenware, throughout 2002. The sector further benefited from sales of items commemorating the life of the Queen Mother and honouring Her Majesty the Queen in her Golden Jubilee year, but discounting and cheap imports kept a check on the market's value growth. Sales are estimated to have grown by just 1.1 percent during the year.
The bridal market is of great importance to the china and earthenware industry, sustaining the premium end of the market. In 2000, the number of people marrying increased for the first time in 8 years. This increase was probably part of the `Millennium effect', but there are indications that the trend is continuing as people re-evaluate their priorities in a changed global atmosphere. However, they are also marrying later in life and will almost certainly have accumulated some household articles already, so the industry must strive to encourage more frequent replacement of articles in what is now a much more fashion-led, rather than purely functional, market.
The UK ceramics, tableware and giftware industry is characterised by a large number of small and medium-sized enterprises, with a handful of large global operators. Ceramics production is one of the UK's traditional industries, but it is suffering from greater competition from overseas, with global production concentrated in mainland Europe and the Far East. Recent years have seen a diminishing UK trade surplus, and there is pessimism in an industry that is finding it difficult to attract and maintain skilled staff, having made huge numbers redundant in the late 1990s. Royal Doulton PLC and Waterford Wedgwood PLC, which dominate the industry, have both had to cut jobs. The latest blow was the closure of Royal Doulton's Baddeley Green factory in Stoke-on-Trent in January 2003; the company has moved production of its Royal Albert china to its facility in Indonesia, in a move that some feel may prove damaging to public perception of the brand.
Despite the apparent gloom, the UK ceramics industry is renowned for its craftsmanship and design skills. Its brands, some of which date back to the 1700s, are respected and sought after worldwide. The Association for Ceramic Training and Development (ACTD) believes that the training of employees has never been more important; it is essential that companies maintain and develop their competitive edge.
The industry has begun to acknowledge its own shortcomings, including overcapacity, high stocks and manufacturing inefficiencies, and it has benefited from recent investment and technical innovation. However, there is some uncertainty about the UK's economic outlook, and Key Note anticipates that retail sales of china and earthenware will enjoy only modest growth over the next few years. It is to be hoped that china and earthenware will not suffer the same fate as some other sectors of UK manufacturing industry.
Text © 2003 Key Note
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Last updated by Amanda Porteous July 2003
