The apparent mattress market breaks $1B in 2016
From the HGO Merchandiser
There was a time, not so long ago, when the mattress industry didn’t see its product as a commodity to be traded over international borders. It was very much a domestic concern with Canadian producers fighting it out for floor space on Canadian retail stores to reach a Canadian consumer. But a quick review of apparent market shows how drastically things have changed in recent years. It’s not that Canadian mattress makers have become expert exporters, although their efforts on that front have improved in recent years, it’s that Canadian retailers are buying more sleep sets from outside our borders – and from three countries in particular: the United States, China and Mexico.
A review of the apparent market – which measures the value of domestic shipments less exports plus imports and measured at wholesale prices (net of freight costs, retail mark-ups and sales taxes) – grew slightly in 2016 to $1.04 billion. This brings the industry back to where it was in 2007 if inflation is ignored. What has changed significantly is the composition of the apparent market.
Back in 2007, imports accounted for 9.0% of the Canadian apparent market for mattresses. In 2016, imports accounted for 19.2%. In fact, they grew for the second consecutive year last year and have grown in eight of the past ten years.
Indeed, imports broke the $200 million mark for this first time ever in 2016. More than half of those imports came into the country from the United States. Imports from the U.S., have been particularly strong over the past two years – growing 9.8% in 2016 to $107.4 million (a new record high), after growing 29.4% the year before. Indeed, U.S. imports have doubled since 2007.
Much of this growth has been attributed to two factors. One is the growth of the Tempur-Pedic brand in the Canadian market. Sold and distributed here by Tempur Sealy Canada (TSC), the product is made by its parent company – Tempur Sealy International – at its manufacturing facilities in Duffield, Virginia and Albuquerque, New Mexico. “As Tempur-Pedic products continue to gain momentum in Canada, U.S. imports will continue to increase,” TSC vice president and general manager Steve Millar said.
In fact, when what is now Tempur Sealy International acquired its London, Ontario-based Canadian distributor in 2009, the brand was at best a niche player in the market north of the 49th parallel. In 2016, the Tempur brand is carried by almost every major furniture and mattress retailer in the country.
While there are no accurate figures to confirm this, most industry observers also point out that most adjustable beds sold in Canada are made in the U.S. And they are one of the fastest growing bedding categories in the market.
In what’s probably not a surprise to anyone in the industry, China is the second largest importer of mattresses in Canada – a position it has held, without challenge, for the past decade. However, their imports fell 4.5% last year to $42.6 million, according to data published by Industry Canada.
For the past three years, the fastest growing importer of mattresses into the Canadian market has been Mexico. For the first time, shipments from the junior member of the North American Free Trade Agreement (NAFTA) were almost equal to those from China at $42.3 million last year – which was a 9.8% uptick over 2015.
What’s not easily discernable is where these imports from China and Mexico are being sold at retail. For example, at least one of Costco Canada’s best-selling mattress lines is made in China. Many industry insiders believe Mexico is an important mattress resource for IKEA Canada. Both Costco and IKEA are among the fastest growing mattress purveyors in the country and are counted among the seven retailers that dominate sleep product retailing in this country.