SIC 3631
HOUSEHOLD COOKING EQUIPMENT



This category covers establishments primarily engaged in manufacturing household electric and nonelectric cooking equipment, such as stoves, ranges, and ovens, except portable electric appliances. This industry includes establishments primarily engaged in manufacturing microwave and convection ovens, including portable. Establishments primarily engaged in manufacturing other electric household cooking appliances, such as portable ovens, hot plates, grills, percolators, and toasters, are classified in SIC 3634: Electric Housewares and Fans. Establishments primarily engaged in manufacturing commercial cooking equipment are classified in SIC 3589: Service Industry Machinery, Not Elsewhere Classified.

NAICS Code(s)

335221 (Household Cooking Appliance Manufacturing)

Industry Snapshot

The U.S. Census Bureau reported that in the late 1990s a total of 84 establishments operated in this industry. They shipped $4.09 billion worth of merchandise and spent $2.2 billion on materials in 2000. About 55 percent of these operations employed at least 20 people, and about 35 percent had at least 100 employees. The largest concentrations of operations in this industry were in California and Tennessee.

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 10-15 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.

In 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' 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 over-loaded 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 they offered features such as automatic oven timers.

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. Eventually U.S. manufacturers 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.

Current Conditions

The Census Bureau reported that in the late 1990s, of household cooking equipment shipped by the entire industry, gas appliances constituted about 17 percent, and electric appliances constituted about 51 percent. The electric appliances included ranges, ovens, surface cooking units, and equipment (48 percent); and parts and accessories for ranges and ovens such as burners, oven racks, and broiler pans (2 percent).

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 value of shipments in this segment originated in Tennessee.

There were 10 establishments whose primary product was 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 product was 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 Illinois, followed by Tennessee, and California.

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.

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 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.

Industry Leaders

As the world's largest manufacturer of various major appliances, Whirlpool (Benton Harbor, Michigan) dominated the household cooking equipment industry. In 1998 the company had 59,000 employees and sales of $10.3 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 Co. sold household cooking equipment under the GE, Hotpoint, and RCA brand names. Its GE Appliances subsidiary (Louisville, Kentucky) had 22,000 employees and sales of $5.6 billion in 1998. In 1997 GE introduced a double wall oven that featured both convection and conventional heat sources. Priced at about $1,200 to $2,200, convection ovens usually sold for about twice as much as gas and electric ovens. In 1999 GE launched its Advantium oven, which could cook food four times faster than conventional ovens and could also function as a microwave oven. It used halogen lights to cook the food from both sides at the same time. Cooking instructions for more than 80 dishes were programmed into the appliance.

Maytag Corp. (Newton, Iowa) had 20,595 employees and sales of $4.1 billion in 1998. It sold ranges under the Maytag, Magic Chef, Admiral, Hardwick, and Jenn-Air brand names. Its Jenn-Air Co. subsidiary, also known as Jenn-Air and Magic Chef Products (Indianapolis, Indiana), had 1,340 employees and sales of $190 million. In 1999 Maytag introduced its Gemini electric range, which featured two ovens that allowed consumers to cook foods at two different temperatures at the same time. The ovens could also keep food warm at a steady 145 or 170 degrees, and they operated on the standard 220 volts and 30 amperes that other ranges used. Maytag's marketing strategy emphasized its product features and their benefits to consumers.

In 1997 Raytheon sold its Amana Appliance subsidiary (Amana, Iowa) to Goodman Holding Company L.P. Amana had 5,500 employees and estimated sales of $590 million in 1998. In 1997 Amana introduced a miniature oven that used halogen lights to cook food from the inside out, like a microwave unit.

United States Stove Company Inc. (South Pittsburg, Tennessee) had 150 employees and estimated sales of $26 million in 1998.

Other leading manufacturers of household cooking equipment during the 1990s included White Consolidated Industries, Inc. (the American subsidiary of the Swedish company AB Electrolux); Sony Electronics, Inc.; Sharp Electronics Corp.; and Sunbeam-Oster Company, Inc.

Workforce

The Census Bureau estimated that 17,727 people were employed in the manufacturing of household cooking appliances in 2000. This included 15,004 production workers who earned an average hourly wage of $11.11. Total payroll for the category was $505 million.

America and the World

Many appliances were American-made, but others were imported from countries such as Japan, South Korea, Mexico, China, and Taiwan. In the early 1990s, according to the 1994 U.S. Industrial Outlook, imports were increasing at an annual rate of about 7 percent while exports were increasing at about 6 percent.

American appliance manufacturers such as General Electric formed joint partnerships with foreign companies to make stoves and microwave ovens overseas for the American market. Many of these foreign-made appliances were then sold under an American label. The U.S. Industrial Outlook stated that "Mexico is expected to increase its lead regardless of the fate of the North American Free Trade Agreement, because of the growing integration of its appliance industry with that of the United States." Countries with traditionally lower wages, such as South Korea and China, were expected to continue as major suppliers of small appliances. Microwave ovens still represented the majority of imported appliances, but demand for microwaves had begun to taper off.

Competing for a leadership position in the global marketplace, Whirlpool owned stakes in Inglis of Canada and in an Italian company. Whirlpool also developed joint ventures with companies in India, Mexico, and the Netherlands. The leading markets for American appliances were Canada, Mexico, Japan, Germany, and Saudi Arabia, respectively. The lowering of tariffs in the early 1990s led to significant increases in exports to Canada and Mexico.

Research and Technology

This industry experienced a substantial increase in technological innovations during the 1990s. This was due in part to national efficiency standards for major household appliances, including kitchen ranges and ovens, that the U.S. Department of Energy published in 1994. The standards were scheduled to become effective by the end of 1997.

Features such as induction, halogen, sealed burners, solid black glass and ceramic cooktops, and downdraft and radiant heating techniques were also introduced during the 1990s. The new technologies made ovens "selfcleaning," more fuel and energy efficient, safer, and streamlined for decorative purposes. A consumer could reheat, thaw, barbecue, broil, grill, griddle, bake, boil, and poach food at the same time, on the same appliance, and in less time.

Further Reading

Babyak, Richard J. "Technology Backs Design: Appliance Makers Displayed More Than Just New Looks, They Showed New Ways to Get the Job Done." Appliance Manufacturer, April 1997, 19.

Beatty, Gerry. "Consumer Advertising Expenditures Continue to Climb." HFN The Weekly Newspaper for the Home Furnishing Network, 11 October 1999, 87.

——. "Maytag Unveils 2-Oven Range." HFN The Weekly Newspaper for the Home Furnishing Network, 29 March 1999, 1.

"Big Business Meets the E-World: Sears? Whirlpool? Now Even These Guys Want to Create E-Businesses. It's Weird, It's Awkward, but It's Also Absolutely Necessary." Fortune, 8 November 1999, 88.

Lazich, Robert S. Market Share Reporter 1996. Detroit: Gale Research, 1996.

——. Market Share Reporter 1997. Farmington Hills, MI: Gale Group, 1997.

Lowe, Linda. "High-Style Kitchen Appliances." Builder, May 1997, 260.

"Product Roundup." HFN The Weekly Newspaper for the Home Furnishing Network, 4 October 1999, 69.

United States Census Bureau. "Statistics for Industries and Industry Groups: 2000." Annual Survey of Manufacturers. February 2002. Available from http://www.census.gov .

U.S. Department of Commerce. Census Bureau. 1997 Economic Census. Washington, DC: GPO, 1999. Available from http://www.census.gov/prod/ec97/97m3352c.pdf .



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