12 June 2012



Chief executive of kitchen manufacturer Hettich, Dr Andreas Hettich, talks to Tim Wallace about business and admits the company still has room to grow... 


How's business?


"Internationally the economy is doing ok. If you look at the European markets, Germany is quite strong but the south of Europe is still a disaster. Eastern Europe is okay, Russia and Asia are strong. Everyone seems to be raving about Russia... It seems to be closely related to the oil price. If the oil price goes up, we know there's money in the country and if the oil price goes down, we know there isn't. It's quite simple. Russia is doing well and even North America is now picking up a little bit."


What about the UK?


"It's not as bad as we thought before. We have two driving factors, one is that we still have a lot of room to grow in the UK, our market share could be higher and the second is that we're driving the market hard with new products. I'm confident that this will be a good year. Last year we increased our turnover 10% in the UK and we expect to do something similar again this year."


Would you describe the UK as a key target market?


"Definitely. Globally, everybody is talking about Asia as a fast growing market but in absolute numbers, Europe in total is our core market. It's still a market where we can grow, both in quantity but also in quality. We are quite happy about the development in the UK."


Do you think the Grey Pound as we call it in the UK is an untapped area?


"I think there's still a lot of potential, especially in the kitchen area. We need to persuade these people that it's worth them having a new kitchen as they're going to be using it for the next 15 years and also, modern kitchens are more ergonomically designed, which makes it easier for them."


Do you think retailers are missing a trick by not looking at that area of the market as much as they should be?


There's more potential so I think we should think how we could more strongly tap into that market. Everyone's always thinking about the young and the internet and so on. We shouldn't reject the older customers as I think they're more focused on quality and higher priced kitchens. I think we are still quite far away from that target group. Yes, we are talking to our customers and trying to point them in this direction and with our products.


We've been hearing how the market is polarising up and down and the middle is dying. Would you go along with that?


"Nobilia are one of the fastest growing companies in Germany and they're mid-market. At least there you can't say the middle is dying. The lower end of the market is growing faster. There's a slight shift and at least in the last three to five years, the premium market is shrinking, the middle market is more stable and the lower end of the market is growing. I think it's more about what you have to do to be successful in the middle market. If you're a small producer you have to be special and just with a standard middle price kitchen, you cannot compete with the big ones. I wouldn't say the segment is dying but it's more dominated by the big players."


Which kitchen manufacturers are impressing you?


"Nobilia, because even with a market share of around 30% in Germany they are still picking up market share, year on year, it's growing fast. It's very aggressive. It's the most efficient factory and they're very, very focused on all the processes. It's very well managed production and processes and a very high quality level. So even being in the lower mid to higher mid markets, it's very good quality and the dealers are very happy with them.


"If you look more to the premium market, I personally think Siematic are most focused on the functionality of the kitchen. Some are focused on design, which are very nice to look at but with Siematic, you can still cook and that's not true for every premium kitchen, so that's what impresses me; the technical detail of these kitchens."

Is there a big difference between a German and an Italian kitchen?


"In general, Italian manufacturers are much more focused on design, but it's not that simple as there are some Italian manufacturers that are very interested in technical solutions. They test things, which is good as they find out if their solutions are working. In Germany this is not always the case as they're a little bit more conservative. You can often find many new materials and new solutions in Italy and you can't find that many new things in Germany. So if you want to know what might be the trends for the future, I think Italy is the place."

Hettich puts a big focus on predicting future trends. How important is that to you?


"Very important. We spend a lot of time and effort looking to the future so we are already looking at scenarios for how people will live in 2030 and we're working together with other companies, in appliances and a logistic company to see how living will change. On the other hand, our industry, from a long term perspective, is very conservative. It's more evolution than revolution.


"One of the reasons is that you can show big kitchens but 95% of the whole sale is just small rooms, so you'd have to change the whole house to fit in a kitchen. All of the time, architecture changes and I would say it takes 30 to 50 years before architecture grows like that, so furniture, to some extent must follow architecture. Certain trends are about colour, materials and so on but you can't implement everything in the mass market."

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