Spectacular Style, Focused Functionality to Drive Product Development While
Industry Prepares for New Era of Homeowners
ORLANDO, FL (January 12, 2006) -- The housing industry has been a key driver of the economy over the past decade, sparking a new construction and remodeling boom, thus creating incredible equity for homeowners.
But what does the future hold, particularly as new construction moderates, the population becomes more diverse, the average homeowners are aging along with the housing stock, while Generation @ is right around the corner and about to change the way everything is done?
For Bruce Carbonari, president of Fortune Brands Home & Security, who spoke today at the International Builders'Show in Orlando, Fla., these questions frame every decision made for the company's top home product brands such as Moen, Aristokraft, Diamond, Decorá, Omega and Therma-Tru Doors. Carbonari, who has led the development of Fortune Brands Home & Security into an industry powerhouse, has his finger on the pulse of the trends in economics, design, demographics and technology to ensure the company is meeting the needs of homeowners, remodelers and new construction professionals today while preparing for the future.
Carbonari points to five major trends that are -- and will continue -- impacting the industry. He also sees changes coming in the way products are designed as more and more customers expect more customization.
"Our breadth in the industry and our strength across channels of distribution give us an excellent platform from which to observe -- and influence -- industry trends," said Carbonari. "We serve all of the top 10 builders, our products can be found throughout the retail channels and we have a very strong presence with remodelers. And, our brands rank first or second in each of their respective categories -- Moen is the number one brand of faucets, MasterBrand Cabinets is the number two supplier of kitchen and bath cabinetry and Therma-Tru is the number one preferred brand of entry and patio doors."
On Carbonari's list of trends to watch are:
The new American homeowners -- Today, the fastest growing groups of new homeowners are Hispanic and Asian. America's fastest-growing ethnic group, Hispanic-Americans will be nearly one-fourth of the U.S. population by 2050 according to the latest Census Bureau projections . Hispanic-Americans today are significant furniture and home accents shoppers, with the highest plan-to-buy index of any ethnic or racial group for decorative accessories.
- Hispanic-Americans are very attentive to their homes, focusing on décor and taking on home improvement projects for beautification or room addition purposes
- With more than 20 percent of all construction jobs in the U.S. going to Hispanic-Americans, there is a high skill level that drives many home improvement projects and purposes
- Hispanic-Americans are entering the middle class at a rapid pace, and home ownership is the quintessential achievement of "the American dream."
- Asian-Americans represent another fast-growing, increasingly affluent segment of the U.S. population. More than one-half of Asian-American households have an income of $50,000 or more and nearly one-fourth have household incomes of $100,000 or more.
- 53 percent of Asians in the U.S. own their own homes, compared to 71 percent of Whites and 46 percent for African-American and Hispanic-Americans.
The increase in household wealth -- A rise in home equity and home prices have created a new audience of wealthy homeowners, with a propensity toward remodeling and customizing their home as their best investment.
- The repair and remodel market is projected to hit $291.5 billion for 20062
- Household home improvement budgets will rise to $3,796 this year, up 31 percent from $2,888 in 2000, and 42 percent from $2,660 in 19973.
- Half of home improvers will spend more than $2,000, up from 39 percent three years ago. In addition, households with income of $50,000 or more will spend $4,267 this year, up 12 percent from $3,800 in 20004.
- Many homeowners named home improvements (44 percent, up from 33 percent in 2000) as their #1 spending priority from discretionary budgets5.
- Homeowners were expected to tackle $275 billion worth of home improvement and repair projects in 20056. In 2004, more than 6 percent of homeowners spent at least $20,000 on their projects7.
The Baby Boomer homeowner in retirement -- The generation that inspired bell bottoms, the VW Bug and the real estate boom is going to impact housing all over again as its members retire and relocate. Today, Baby Boomers are the largest group of homeowners, and younger Baby Boomers – born between 1956 and 1964 – on average have higher incomes that let them budget more for their home improvement expenses. The Baby Boom generation still wields considerable spending power, but sees that power virtually matched by both the Generation Y and Generation X consumer groups.
- There are 42 million Boomer households today, which will grow to 45 million by 2010
- These Boomers have the highest home spending in the consumer life cycle, typically buying trade-up homes around age 44, hitting peak spending at 48, then buying vacation homes around 52 before their retirement homes at 658
Generation @ home -- When the generation that created MyPlace.com buys homes of its own, the housing industry will definitely feel the shift. Among the most critical findings of a recent Casual Living study is the growing influence of Generation Y consumers – those homeowners who were born between 1976 and 1985. By 2010 there will be 78 million Generation Yers who have the potential to outstrip their Baby Boomer parents'influence on the home furnishings market.
- The members of Generation X and now Y have much different expectations about products and customer service. They want to learn, plan and shop online. They expect to be able to customize everything they order. They don't respond to traditional advertising.
- Younger homeowners see the kitchen area as the nerve center of the home and have greater needs for home organization solutions to efficiently use this important space
- The younger homeowners want more flexibility from their homes. They expect to have home offices or work spaces, they expect their homes to be technologically advanced, they expect their spaces to be flexible as their family grows.
- They also want gathering spaces both indoors and out for family and friends. More homes are being built with front porches than ever. In 2003, a record-setting year for housing starts, 50 percent of all single-family new homes had a front porch, according to the National Association of Home Builders, up from just 42 percent in 1992.
The age of the U.S. housing stock -- After several waves of building booms over the past four decades, the average age of the housing stock throughout the U.S. is growing older. The median age of existing homes has risen to 32 years old with the oldest homes in the Northeast and Midwest regions. Major cities in the Sun Belt are also emerging as key remodeling markets. This will drive significant infrastructure improvements for these homeowners as they try to update their homes for modern technology and energy management systems.
- Kitchens, bathrooms and living rooms are the most likely interior spaces to be improved in existing homes. Overall, recent home buyers spent more than $4,900 during the first year. Buyers of older homes spent an average of $3,600, while those who bought new homes spent an average of $7,000. Purchasers of both types of homes reported that they did improvements to support new features and change the décor9.
- Curb appeal remains important as homeowners look to update tired, dated exterior. One growing trend is the remodeling of entryways, which can add up to $24,000 to the perceived value of a home, just by replacing the front door, according to Therma-Tru's Home Valuation Study
- About 40 percent of respondents who sold a home prior to this purchase said that they made improvements to their previous home to get it ready to sell. The most common improvements prior to sale are interior painting, exterior structural improvements, new flooring, interior structural improvements and replacing cabinetry and countertops. The most frequently improved rooms are kitchens, bathrooms, and living rooms.
Carbonari noted that these trends are having a direct impact on the products developed by Fortune Brands Home & Security, as well as the way they market those products. Among some of the most significant developments for the company include:
- More diverse architectural styles, from interior cabinets with Mission and Prairie-style design to the
Therma-Tru® American Style Collection™ of exterior doors for bungalows and Arts & Crafts Style homes and
Felicity™ Kitchen and Bath faucets from ShowHouse™ by Moen
- More options for customization, from new glass designs for exterior doors that allow homeowners to match the decorative glass in both their entry and patio doors or weather-resistant entry doors such as the
Therma-Tru® Classic-Craft Collection™ and patio doors with Tru-Defense™ Impact Rated Glass that protect the home again nature's fury
- New finishes and styles that coordinate throughout the home, from exterior door hardware in oil-rubbed bronze to cabinet door hardware in bronze and pewter to new faucet designs from Moen such as the stylish new
Icon™ and Eva™ bath suites
- Cabinetry that takes on the look of fine furniture, both in finish and in craft with
Diamond Cabinet's rich Sangria finish and with Aristokraft Cabinetry's extensive new collection of embellishments
- New kitchen and home organization solutions, such as Diamond's mini message center cabinet, since space is often at a premium for homeowners, and they are looking for organizational cabinet accessories and configurations that provide the most efficient use of their space
- Flexible design, as consumers are choosing cabinet doors that have a transitional style and are appropriate for both contemporary and traditional design possibilities.
Aristokraft's new Saybrooke door is styled to reflect the growing trend toward a transitional design with a mitered square door front and raised panel
- Functional design, from new faucets such as the Chateau® faucet with ChoiceFlo™ technology, which is the first filtering faucet to feature dual waterways in the spout – with two independent valves – to allow for both filtered and non-filtered water to outdoor faucets like the
first single-handle, single-hole, hot-cold sill faucet. This unique faucet features technology similar to that in a shower valve, allowing both hot and cold water to flow freely outdoors
About Fortune Brands
Fortune Brands, Inc. is a leading consumer brands company with annual sales exceeding $7 billion. Its operating companies have premier brands and leading market positions in home and hardware products, spirits and wine, and golf equipment. Home and hardware brands include Moen faucets, Aristokraft, Omega, Diamond and Schrock cabinets, Therma-Tru door systems, Master Lock padlocks and Waterloo tool storage sold by units of Fortune Brands Home & Security LLC. Jim Beam Brands Worldwide, Inc. is the company's spirits and wine business. Major spirits and wine brands include Jim Beam and Maker's Mark bourbons, Sauza tequila, Canadian Club whisky, Courvoisier cognac, DeKuyper cordials, Starbucks™ Coffee Liqueur, Laphroaig single malt Scotch and Clos du Bois and Geyser Peak wines. Acushnet Company's golf brands include Titleist, Cobra and FootJoy. Fortune Brands, headquartered in Lincolnshire, Illinois, is traded on the New York Stock Exchange under the ticker symbol FO and is included in the S&P 500 Index and the MSCI World Index.
To receive company news releases by e-mail, please visit
www.fortunebrands.com.
About Moen Incorporated
Timeless designs that reflect good taste. Faucets and fixtures that are livable and enduring. These are just some of the reasons why Moen is the #1 faucet brand in America. In addition to stylish and affordable faucets, Moen also offers residential and commercial sinks and a full range of tub and showering packages. Moen brands include ShowHouse™ by Moen and the Cleveland Faucet Group®. ShowHouse by Moen offers high-end, luxury faucets and accessories to consumers with discriminating tastes. The Cleveland Faucet Group manufactures affordable, durable sinks and faucets for the multi-family housing market. Creative Specialties International®, a division of Moen, offers complete suites of decorative bath accessories including innovative bath safety products that are fashionable – not institutional.
With Moen, you'll always find the perfect balance between styles you'll love and innovation you can live with. Buy it for looks. Buy it for life®.
For more information on Moen visit www.moen.com or call 1-800-BUY-MOEN (800-289-6636).
About Master Brand Cabinets
MasterBrand Cabinets Inc. is the second-largest cabinet manufacturer in North America. Its cabinet brands include Aristokraft, Capital, Decorá, Diamond, Home Crest, Kemper, Kitchen Classics, Kitchen Craft, Dynasty/Omega and Schrock. For more information or to locate the MasterBrand Cabinets dealer nearest you, visit
www.masterbrand.com.
About Therma-Tru
Therma-Tru Doors manufactures the most preferred brand of fiberglass and steel exterior door systems. Founded in 1962, Therma-Tru pioneered the fiberglass entry door industry, and today offers a complete portfolio of entry and patio door system solutions, including decorative glass doorlites, sidelites and transoms, and door components. For more information on Therma-Tru Doors, visit www.thermatru.com or call (800)537-8827.
12004 U.S. Census Bureau
2Joint Center for Housing Studies at Harvard, the Census Bureau and the NAHB
3Home Improvement Research Institute (HIRI)
4Home Improvement Research Institute (HIRI)
5Home Improvement Research Institute (HIRI)
6Joint Center for Housing Studies at Harvard, the Census Bureau and the NAHB
7Home Improvement Research Institute (HIRI)
CONTACT: Therma-Tru, Sara Theis, 419-891-7400 ext. 7426.
