Fitted Kitchens Made in Germany: An Export Success Story

Germany isn’t just world champion in football, it’s a leading export nation as well. The automotive sector, engineering and the chemical industry play a major role: many corporations with an international reputation and branches all over the globe are headquartered in Germany. But major companies aren’t the only influential protagonists on the international stage, for the export business is also influenced by small and medium-sized enterprises, many of which are owner-managed and every bit the equal of the major corporations in terms of their global relevance in the respective markets. Often referred to as the “hidden champions”, they include firms like Claas, Dräger, Eberspächer, Kärcher, Meyer Werft and Viessmann.

The kitchen furniture industry is no exception and has some “hidden champions” of its own. Companies such as Allmilmö, Bauformat, Häcker Küchen, Leicht, Nobilia, Schüller, SieMatic, Warendorfer and Zeyko don’t just sell their kitchen collections on the domestic market but all over the world. In Germany, the kitchen has become the No. 1 status symbol (source: Siemens Trendreport “Future Living” 2013), and the signs indicate that its significance is growing in numerous foreign markets as well. Kitchens “Made in Germany” are associated with high quality and attractive designs. The installation of a good quality kitchen greatly enhances a property’s value – and thus often serves as a sales argument and showpiece for the seller.

In 2013, the German kitchen furniture industry generated total sales of approx. 4.2 billion euros, with kitchens worth a good 1.5 billion euros being sold outside Germany. That represents an export ratio of about 35 percent. The most important export markets are EU neighbours such as France, the Netherlands, Belgium, Switzerland and the United Kingdom. But German fitted kitchens are an export success story in overseas countries too: last year, for instance, kitchen furnishings worth 63.3 million euros were shipped to China alone. And with sales worth 28.7 million euros, Russia ranks high on the list of export markets too. 2013 proved to be an absolute boom year for exports to countries such as Sweden (plus 64.5 percent as compared to the previous year), Denmark (plus 24.7 percent), the USA (plus 22.2 percent) and Taiwan (plus 27.7 percent).

There are several crucial reasons for the German kitchen furniture industry’s success abroad:

1) The high quality of the kitchen furnishings: the production facilities of leading kitchen manufacturers are ultramodern, efficient and flexible. In this sector, batch sizes of one are the order of the day. The kitchens are put together out of top-quality materials and with the aid of a dense network of suppliers, resulting in premium products “Made in Germany”. Up to 2,500 kitchen consignments are shipped in Germany per day and manufacturer.

2) Spot-on delivery: the goods are normally delivered by the producer’s own fleet – several hundred semi-trailer trucks per major player are out and about on the roads of Europe on any given day. 10-15 kitchens are loaded into one of these trailers – or containers if they’re destined for overseas. A look at the logistics costs reveals why this does not constitute a deal breaker: freight costs amount to around 5% within Germany and 5-15% for other European countries. It is for instance possible to ship a 40-foot container with 10-15 kitchen consignments to China for only 1,500 euros, which equals just 100-150 euros per consignment for sea freight.

3) Sales and distribution: think global – act local. Whilst the production of the actual kitchen furnishings is very much focused on Germany, sales and distribution are highly decentralised. Whether manufacturers rely on their own stores, long-standing retail partners or in-house sales staff, the German kitchen furnishings industry is remarkably well positioned abroad, excellently networked and thus very much in touch not just with the customers in the individual markets but with their needs as well. The same goes for the industry’s communications focus.

New chapters are constantly being added to the success story of the German fitted kitchen – in the USA, for instance, which used to be a difficult market for foreign providers because the basic structure of an American kitchen differs considerably from kitchen set-ups in the rest of the world. Export growth of 22.2 % in 2013 and a plus of 42.4 % in the 1st quarter of 2014 (source: Federal Statistical Office of Germany, VDM/Association of the German Furniture Industry, VdDK/ German Kitchen Manufacturers’ Association) clearly show that, because the German industry is vigilant when it comes to new sales possibilities, even complex markets can become more accessible. And because the industry has a top product to offer, it scores points for the standard of its kitchens too. International kitchen events like LivingKitchen, the activities of trade and service association Arbeitsgemeinschaft Die Moderne Küche e.V. (AMK) in China and, in particular, the rising standard of living in many foreign markets, which often goes hand in hand with the desire for a kitchen “Made in Germany”, promise many positive developments for German kitchen manufacturers. In fact, when it comes to ensuring that German fitted kitchens continue to rank amongst the world champions, conditions couldn’t be better.

Source: Koelnmesse, reprint free of charge.