Orthex operates in the European home storage, food storage and kitchen utensils market, which was estimated to be worth approximately EUR 8.0 billion in 2019. Orthex’s core markets include the Nordic countries of Finland, Sweden, Norway, Denmark and Iceland and Orthex’s key export markets, the Western European countries of Germany, France and the United Kingdom. Together, the Nordics, Germany, France and the United Kingdom comprise Orthex’s addressable market that was worth approximately EUR 4.0 billion in 2019.
Orthex is also active in other continental European countries, Austria, Switzerland, Netherlands, Belgium and Spain. These countries comprised a market worth approximately EUR 1.2 billion in 2019. The rest of Europe added an additional market of EUR 2.8 billion in 2019.
Orthex’s addressable market 2019, bn €1
Between 2019 and 2025, Orthex’s core markets for home storage, food storage and kitchen utensils are estimated to grow at a compound annual growth rate (“CAGR”) of approximately 2 percent, in line with average historical development. The total food storage market is expected to grow the fastest of the three main markets, at a CAGR of approximately 2.3 percent between 2019 and 2025, driven by demand for high value products.
The resilience of the market is primarily based on the underlying need-based demand for home and food storage products and kitchen utensils, meaning that purchases of such products are made regardless of economic conditions.
Main industry trends and market drivers
The global megatrend of urbanization is especially prominent in Orthex’s core markets. As the area allocated for housing is more sparse and expensive in growth centers benefiting from urbanization, consumers often choose location over space, resulting in increasing supply of smaller homes. Small spaces, in turn, drive demand for functional storage solutions and household products that allow efficient use of the living space. Despite households being inhabited by fewer people, the need for necessities, such as home storage, food storage and kitchen utensils, remains nearly the same per household.2
Consumption patterns supporting Orthex’s business are mainly related to how people spend their time at home:
- the increased interest in cooking at home
- increased interest among households in keeping their homes organized
- the demand for houseplants
- increasing popularity for gardening herbs and vegetables at home and indoors
With polarizing consumption patterns, there is an increasing demand for premium household products in addition to budget products. Retailers fill their assortments with both private label and premium brands to cater to both categories.3
Changing consumer habits are forcing companies in the homeware market to update their product assortments. Companies are expanding from food storage products to encompass other multi-use containers. The kitchen products assortment is being expanded with a variety of new gadgets and utensils. Consumers’ desire to recycle is creating demand for waste management storage.
There is a greater focus on design, which allows for storage products to function as interior design elements. Riding the home investment wave, high-end options are increasingly apparent across the spectrum.
For Nordic and Western European consumers, sustainability is increasingly among their top priorities. Consumers place a heavy emphasis on sustainability and expect companies to take the initiative and help them in making more sustainable purchasing decisions.4
Fragmented competitive environment
Orthex estimates that it had the leading market position with an estimated 20–25 percent market share measured by net sales in 2019 of the approximately EUR 140 million home storage market in the Nordics and strong positions in the food storage and kitchen utensils markets.
The European homeware market is fragmented with, according to Orthex’s estimate, over 30 relevant competitors in Europe, of which 15 are approximately the same size as Orthex in terms of net sales. While the market is competitive, fragmentation provides a lower threshold for gaining market share and for finding attractive market niches.
- Source: The company’s estimate based on the following sources: Euromonitor, 2019 data, EUR market size for food storage and kitchen utensils in Europe for 2014–2025; Orthex’s estimates and analyses; GDP forecast Europe; McKinsey & Company’s analysis Autumn 2020 commissioned by Orthex.
- Source: Eurostat, 2008–2018 perspective, million households and average household size.
- Source: Euromonitor, 2013–2018 perspective, percentage of private label products in Western Europe for kitchen utensils and food storage.
- Source: McKinsey & Company, July 2019, Generation Z and Millennial Survey.