Zwilling stays at cutting edge of the kitchenware industry

Strategic investor says benefits of landmark initiatives would be felt throughout the globe

Constant innovation, globalization and tradition are the core competitiveness of German kitchenware company Zwilling J.A. Henckels, according to its global CEO Erich Schiffers.

His company had a turnover of $722 million in 2014, with growth of more than 22 percent.

The company aims to become the No 1 supplier of premium goods for the modern living kitchen instead of merely a cutlery corporate, Schiffers said during an exclusive interview at the company's exhibition booth at the recent Frankfurt Trade Fair.

Founded in 1731 in Germany, the cutlery brand has become recognized globally with products available in more than 100 countries.

In recent years, Zwilling has brought its expertise to cookware designed for precision cooking and manufactured for culinary experts. For instance, it acquired the French cast-iron cookware brand Staub and Belgium premium cookware brand in 2008.

Tradition will serve as a strong base for the company's future, according to Schiffers, who became its CEO in September.

"The core competence of a company cannot be acquired. It grows," said the 50-year-old.

"When you concentrate on things that made you strong in the past, you also have a good guideline for the future. It helps you set priorities and avoid mistakes."

The company's tradition of producing quality-based, instead of price-based, products has driven it toward innovations, according to Schiffers.

Before turning to business, Schiffers served in the then West German air force for two years in the mid-1980s.

"In the military I got to know people from totally different educational backgrounds. To learn about how they think was a great experience," Schiffers said.

Schiffers, who had a strong interest in the combination of finance and marketing, later studied business administration and marketing, and acquired a cost accounting doctorate in 1993.

Schiffers joined Zwilling as the head of business development in 1996, after working for several years at the consulting firm A.T. Kearney.

According to Schiffers, his personal management style is very team-centered.

"To become and stay successful, you need dedicated and passionate colleagues at each level of the organization, especially at the interface with the consumers," he said.

China has become the biggest single market for the company globally.

While 88 percent of Zwilling's group sales are generated outside of Germany, China accounts for more than 25 percent of its total group sales. This share is expected to increase, Schiffers said.

Meanwhile, Zwilling is the biggest player in the country's premium stainless steel cookware market, whose estimated market value was 1 billion yuan ($161 million) in 2014.

After more than 20 years of development, China's cookware industry is gradually maturing.

With more than 1,300 relevant companies, the industry has maintained an overall average growth rate of 8 percent annually in the past years, according to a report in 2014 by www.chinabgao.com, a website specializing in market analysis.

Products by Chinese manufacturers account for more than 90 percent of the total domestic market. Imported brands are mainly limited to the high-end market.

In the premium-level cookware market in China, Zwilling's main competitors include German brands Fissler and WMF.

Zwilling is launching more of its innovation projects in China, which, Schiffers believes, is important not only as a domestic market.

"Many Zwilling products were first developed there. This is a new approach. Once the product is successful in China, it can be also promoted to other regions," said Schiffers.

Catering to the specific needs of local consumers has contributed a lot to the company's success in China and globally, according to Schiffers.

Suiting Chinese habits

For example, besides Chinese chefs' knives, woks and kitchen machine, the company has now developed pans with a copper sandwich layer to suit Chinese cooking habits, while most cookware in the world uses an aluminum layer, said Ma Lifeng, general manager of Zwilling J.A. Henckels Shanghai.

The company will invest more in new machinery for its production line in Shanghai for capacity growth, quality improvement and innovation, Schiffers said.

As China's economy enters the "new normal" period with slower growth, Schiffers said the company is prepared for challenges, including a drop in sales due to possible weaker consumer confidence.

In 2014 its China branch had growth of 20 percent and is expecting an average growth rate of 10 percent in the next two to three years, according to Schiffers.

"However, challenges create new opportunities. Sometimes you need challenges to become better," Schiffers said, adding that the current situation urges his company to focus more on end consumers in product development.

Schiffers has noticed the transition of Chinese manufacturing from being price-oriented to quality-oriented.

"Any current or future brand can be our competitor. This may come soon. So we are going to be prepared," Schiffers said.

"We like competition because it generates new ideas. But we are focusing more on our own operations and strategy instead of our competitors."

The company is adopting new business formats at a rapid pace, such as TV shopping and online shopping, although traditional approaches, such as sales points, remain important.

"Four years ago, online shopping was almost zero. Now it's really big for us," Schiffers said. Its Chinese branch is cooperating with major Chinese e-commerce platforms such as Tmall to expand online business.

The biggest challenge for Zwilling at the moment is how to satisfy consumers not only with products but also great services in respective distribution channels, according to Schiffers.

The company will focus more on interacting with customers through new channels such as social media.

"Social media is really the digital tool to find the right consumer touch point. We have to be intelligent in building up an efficient social media mechanism," said Schiffers.

Zwilling's China branch has established a gourmet school to promote the idea of modern kitchen in China. More such schools are being planned, according to Ma.

"It's a perfect approach for social media as young people cooking or baking at the school often share their experiences using popular social network apps," Ma said.

liuxiangrui@chinadaily.com.cn

(China Daily USA 03/30/2015 page13)