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Heightened Demand Pressures Cookware Supply Chain

While the COVID-19 pandemic may have spurred the growth of cookware and bakeware in a variety of ways, the category is now up against an increasing battle of supply and demand. Retailers of differing sizes have been looking to add to their assortments or bolster holiday offerings, but suppliers have been backing down, citing too much demand and not enough product.

“The reality is that anyone in this business today— everyone is upside-down. You cannot get enough product and nobody saw it coming. I knew in good times and in bad that these categories would always be stable, but this is a whole new thing. These sales rates are not achievable,” said one vendor.

The supplier went on to explain that it has had to turn down significant business with major retailers because there is simply not enough inventory to back up the demand.

“To make that order, I would have to pull that supply from somewhere else and I won’t be able to supply our regular customers,” the supplier said. “It’s frustrating to leave that money on the table, too, but I have to be able to have product when my customers need it.”

Added another cookware vendor, “We have put more thought into whether or not to accept new accounts in recent months. Demand is at an all-time high and our focus has been on growing existing accounts along with adding a few new accounts that we know have upside in the quickly changing retail climate.”

The pandemic, said another cookware vendor, has put a lot of pressure on the cookware and bakeware segments as manufacturing has had to pivot quickly to address sourcing, social distancing, and other uncommon pressures along the supply chain. However, it has made the most sense for this cookware company to continue to focus on its current retail partners throughout the rest of the year, a choice the company made with purpose and intent.

“For us, it’s not keeping us from opening new accounts, but we’re not focused on opening new accounts — we’re focused on supporting our current retail partners. Along with our retailer partners, we’re having an incredibly strong year, all while keeping our team members and partners safe, but the demand we’ve seen in 2020, thus far, has been simply unbelievable,” said the vendor.

The cookware vendor went on to explain that the shortage of stock has put a damper on sales this year, as many vendors have had to leave lucrative money-making offers on the table as the demand is simply too great to fulfill. However, the vendor noted, when manufacturers compare year-over-year sales, they may be pleasantly surprised at what they see.

“Given the incredible growth most brands have realized up to this point in the year, I’m sure many will realize impressive year-over-year growth when they compare sales to 2019. But it might not be nearly as much as it would have been if they were in stock always on all products retailers and consumers were demanding,” the vendor said.

A bakeware supplier told GOURMET INSIDER® off the record that the company is booked with product sales through the first quarter of 2021. While that is a bright spot for the company, there is a downside— it has scaled up production to three shifts a day, seven days a week and is still unable to take on new customers and fulfill unusually large orders.

“For our business, I’m thrilled that we have been able to keep up with even a portion of the increased demand because it has meant that we are, oftentimes, the only product in stock on a retailer’s shelf, meaning customers don’t have another option of what to buy besides our goods,” said the manufacturer.

But, another vendor said that despite the supply chain issues, it is not turning down any new accounts. Instead, it is turning away some online retailers or delaying shipments to these accounts due to the increased demand for drop-shipping from brick-and-mortar retail partners.

“Many of our retail partners are asking us to handle fulfillment for them. We weren’t expecting these needs so soon, but our team is working very hard to get us to a place where we can operate drop shipping efficiently,” said the vendor.

The demand issue is not just one that the U.S. is seeing, either. It is a global problem and one that shows no signs of slowing into the new year.

“This isn’t just a problem at home. This is happening in Europe, Asia and Australia. Our manufacturing plant is already booked out through March of next year. People are staying at home and cooking more. Restaurants aren’t open, or people aren’t comfortable eating out, and this is not going away. We have sold more niche items than we ever have before and I think that’s the reality— people are being more experimental with their cooking,” the manufacturer said.

And, added another cookware vendor, while suppliers may be struggling to keep up with demand now, that’s not necessarily a bad problem to have as many consumers have become a bit more understanding about stock and shipping issues.

“We don’t foresee this hindering the growth and demand of cookware and bakeware throughout the U.S. Manufacturers with the strongest inventory standing will fulfill those gaps and ultimately, come out of this ordeal stronger than before,” the vendor said.

For more on the cookware supply chain, see the September 14, 2020, issue of Gourmet Insider sister publication HOMEWORLD BUSINESS®

 

 



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