It’s safe to say that 2021 was anything but a typical year for the Kitchen & Bath industry. So much happened, with every sector doing its share of scrambling and improvising to meet the unusual challenges. Here, we share the K&B industry’s top ten highlights. 

 

1. Outsized Revenues – The final Kitchen & Bath Market Outlook(KBMO) update projected full-year 2021 industry revenues of $167 billion, a nearly 20 percent YOY gain over $141 billion in 2020. 

2. Soaring KBMI Scores – Member optimism has never been higher as reflected in the Kitchen & Bath Market Index (KBMI) scores. Using a scale of 1-100, with anything above 50 reflecting expansion, Q1 registered the all-time highest future business condition expectation at 82.4. Compare this to the 19.8 Index a year earlier.

3. Housing’s Positive Perfect Storm – Record low mortgage rates and record high home appreciation as well as a sharp increase in new home sales and growing mobility due to the pandemic created the ideal backdrop for robust remodeling activity.

4. Discretionary Spending Boost – Increased income due to government stimulus checks and increased savings provided many homeowners with substantially more discretionary income that was put towards kitchen and bath remodels.

5. Premium Projects Shine – The strongest remodel activity involved high-end projects with full-year projected gains of 22 percent, more than double the gains for low-end. More time at home due to the pandemic convinced many to invest in serious redesigns.

6. Product and Feature Upgrades –  Certain product segments in 2021 were more likely to receive premium treatment than others. This was driven by the 57 percent of smart home upgrades that were premium in nature,  followed by over 50 percent of all water filtration systems, appliances and countertops. Even standard features like flooring and lighting often involved premium upgrades in 2021.    

7. Supply Chain Disruptions – Supply chain has been the  number one industry concern throughout 2021. In fact, an astounding 97 percent of the industry has been affected by it, with nearly 70 percent of designers switching to products and brands never previously used in an attempt to maintain supplies for clients.

8. Growing Backlogs –  Supply chain issues leading to product shortages were not the only challenges faced by the K&B industry in 2021. Inflated pricing and a scarcity of skilled labor were also high on the list of challenges, leading to growing project backlogs. Over half the designers surveyed noted backlogs in excess of three months. On the positive side, these substantial backlogs will eventually be filled, likely translating into a strong start for 2022. 

9. Creative Problem-Solving – Since traditional products and brands were often in short supply in 2021, this was a year of improvisation. Many K+B segments plan to switch to domestic suppliers from foreign to cut delivery times. Meanwhile, Industry retailers and manufacturers are stockpiling products and raw materials whenever possible. And, as previously mentioned, designers are opting for new brands to keep projects moving along.   

10. Single-Family-Renters (SFRs) – Although the concept of build-to-rent housing isn’t new, SFRs are rapidly gaining in popularity. It’s estimated that the concept will result in an additional $4 billion in top-line K&B revenues for 2021. Of all rooms, Institutions report they receive their best ROIs for kitchen and bathroom remodels, with nearly three in four upgrading those rooms before initially renting.