The State of the K&B Industry
Supply chain disruptions, sourcing challenges, and over-the-top price hikes have affected virtually every product line used within the kitchen and bath industry, but none more than cabinets.
Let’s start with a brief history of lumber to understand how we got there. When the pandemic began, hardwood and softwood mills either reduced production or closed outright in anticipation of slower business or stay-at-home orders. While supplies were falling, demand began to increase steadily. A confluence of factors were the cause, including a pandemic-related increase in DIY, a housing market that exceeded expectations, and a greater desire to remodel based on the sharp increase in time spent at home. According to the Kitchen Cabinet Manufacturers Association, cabinet sales were brisk, up 15% in 2021 vs. 2020. The supply/demand imbalance caused hardwood prices to rise significantly, affecting popular cabinet woods such as oak, maple, hickory, and cherry. Luckily, the only cabinet softwood that ranks in this group is pine since softwood prices went through the roof, reaching an all-time high of $1515 per thousand square feet in late May of 2021, nearly 400% above pre-pandemic levels. It has since come down significantly as suppliers have ramped production. This is the cost inflation backstory, but as prices begin to settle, significant challenges remain in acquiring products.
As a result, designers are scrambling to source products anywhere they can be found. According to the Q1 NKBA /John Burns Kitchen & Bath Market Index (KBMI) report, the days of brand loyalty are gone. When designers were asked which product categories they are using brands they haven’t tried in the past, 22% said cabinetry, more than double the next closest categories of refrigerators and faucets, at 10% apiece. Product scarcity and shortages of specific wood types have been causing havoc.
Nearly two in three designers said they are leveraging new brands based on better lead times and availability. While nearly half plan to eventually return to their historical brands, many aren’t sure. Cabinets are the top category being substituted for each of kitchen and bath’s four industry segments: manufacturing building and construction, retail sales, and design.
As one designer said, “It’s taking upwards of 20 weeks to get cabinets in. This is the third different cabinet line I’ve tried.” Another noted, “Cabinet lead times remain at three to four months, minimum, and we’ve had multiple price increases with four different lines we carry.” In this quest for substitute brands, cabinets and refrigerators have been identified as the most challenging product lines to find, each noted by over 60% of respondents. One respondent offered the solution of increasing storage space so that cabinets and appliances can be ordered months in advance.
Eventually, supply and demand for cabinets will be more aligned as lumber prices settle down and the housing market cools. Until then, flexibility and creativity will be on full display as industry professionals do whatever it takes to fill the needs of their customers.
Robert Isler is a Market Research Analyst at National Kitchen & Bath Association. He develops macroeconomic and industry survey analyses for nearly 14,000 member companies comprised of manufacturers, designers, showroom owners, and specialists across North America. He also disseminates reports on current and anticipated trends within the $158 billion kitchen and bath industry.