Hamilton Beach 2014 Annual Report Download - page 13

communications. In the past few years, online
sales of small kitchen appliances have grown
significantly. During 2014, approximately 17 percent
of small kitchen appliances were purchased
online. Retailers are looking for partners that
can provide not only products, but also the
capabilities and support for promotion, marketing
and distribution programs appropriate for that
channel. As consumers’ shopping habits evolve
to rely more on the Internet, HBB is focused on
providing best-in-class retailer support, increasing
engagement with end users, including maintaining
a website that is appropriate for mobile devices,
and enhancing its programs designed to make
HBB the preferred source for small appliances.
Third, in 2014 HBB announced its entry
into the “only-the-best” high-end small kitchen
appliance market segment through multi-year
licensing agreements with the Sub-Zero Group,
Inc. and the Jamba Juice Company. HBB and
Sub–Zero Group will be launching a full line of
Wolf Gourmet®branded small kitchen appliances
and cooking tools in 2015 for sale in high-end
retail channels, in Sub-Zero and Wolf showrooms
and on the Internet. This “only-the-best” segment
is a strong growth opportunity area in which HBB
has not previously participated. This segment
accounts for approximately one-third of the U.S.
small kitchen appliance market, and its target
consumer is financially strong. The company also
is currently working with the Jamba Juice Company
to create a product line focused on blending and
juicing under the Jamba®brand. HBB will introduce
the first Jamba®branded products in 2015. HBB is
pursuing other opportunities to create additional
product lines that can be distributed in high-end
or specialty stores and on the Internet.
Fourth, HBB is focused on expanding its
retail presence internationally in the emerging
growth markets of Asia and Latin America by
increasing product offerings designed specifically
for those market needs and by expanding
distribution channels and sales and marketing
capabilities. HBB’s historical strength has been
in the North American consumer goods market,
with approximately 20 percent of its total sales
occurring outside the United States in 2014. HBB’s
objective is to increase international sales to 35 to
45 percent of total sales by concentrating on key
markets. HBB’s efforts will focus on continuing to
expand its positions in Mexico, Canada, Central
America and South America, as well as in the
emerging markets of China, India and Brazil. To
achieve this growth, HBB is working to enhance
its understanding of local consumers’ needs,
increasing sales and marketing resources allocated
to these markets and developing products to
meet those needs, especially in the mid- to high-
end segments of these markets. HBB began
selling retail products in China in 2013, and in
Brazil and India in 2014. HBB expects to increase
sales in these areas in 2015.
Fifth, while HBB has a solid position in
the commercial market, it continues to focus
on achieving further penetration of the global
commercial market through a commitment to
an enhanced global product line for chains and
distributors serving the global food service and
hospitality markets. HBB is enhancing its global
commercial product line, particularly with new
innovative blending and mixing platforms, and
strengthening its food service and hospitality
offerings in order to achieve further market
penetration in this segment. Over the near term,
HBB anticipates continuing to build distribution
capabilities and resources in the international
food service market, where products and services
will be directed at global food service chains.
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