2014 KITCHEN REMODELING STATISTICS Research Institute for Cooking & Kitchen Intelligence Research Institute for Cooking and Kitchen Intelligence (RICKI_: Helping kitchen related business make smarter decisions and better products by delivery actionable insights and identifying trends through dedicated kitchen research. RICKI was founded in 2006 by a group of professional market researchers. The Executive Director of RICKI spent 18 years in the home improvement industry and was a former president and board member of one of the leading associations for the overall home improvement sector, the Home Improvement Research Institute (HIRI). The study was first conducted in 2006 and is repeated every two years, with some adjustments made based on RICKI member input. RICKI is a membership-based organization consisting of leading manufacturers, retailers, wholesalers and other kitchen-related businesses. RICKI has established itself as the trusted source for kitchen research and trends for well-respected brands like MasterBrands and Moen.

THE STUDY How valuable is it to a designer to know what their customers truly want or need in a kitchen remodeling project? What you will learn: How customers are currently using their kitchens. Their design preferences. Their remodeling experiences. The study was conducted online among 1,234 U.S. consumers between the ages of 18 and 74 from March 18 through March 24, 2014. Data were weighted to reflect key population demographics of the U.S. adult population based on Census Bureau figures. In addition to gathering data from the general population on various topics, the study includes in-depth questions related to kitchen remodeling. A subset of respondents who had remodeled or made improvements to their kitchens in the past 12 months and spent at least $2,500 was oversampled to allow for additional analysis, a total of 300 respondents. When data are comparable (i.e., question wording is exactly the same and the base of respondents is exactly the same) and meaningful (i.e., statistically significant differences surface), data are compared to those from previous waves (2006, 2008, 2010 and 2012). MARGIN OF ERROR: Statistically significant differences are noted at the 95 percent confidence level.

THE DEMOGRAPHICS Gender Total Dwelling Male 45% Single-family 71% Female 55% Multi-family 29% Age Home Ownership Status 18 to 44 47% Homeowner 58% 45 to 64 35% Renter 40% 65 to 74 18% Other Arrangement 2% Household Income Community Type Less than $25K 22% Urban (within a mile of downtown) 30% $25K to $49.9K Suburban (more than a mile from downtown, but not in the country) $50K to $99.9K $100K or more 20% Rural (where houses are few and far between) 15% Have Children in Home Total (<18 years old) <2 years old 17% 2 to 4 years old 26% 5 to 12 years old 65% 13 to 17 years old 41%

THE DEMOGRAPHICS COOKING ENTHUSIASTS KITCHEN FOCUSED More women than men Median age of 42 More likely to own their home Consider kitchen heart of the home 2x more likely to have remodeled or improved their kitchens in past year More likely to use design pro 2x more likely to be planning a kitchen project for coming year KITCHEN FOCUSED More women than men Median age of 41 More likely to own their home Consider kitchen heart of the home 3x more likely to have remodeled or improved their kitchens in past year More likely to use design pro 2x more likely to be planning a kitchen project for coming year In addition to highlighting meaningful year-to-year trending in this report, survey results will be shown for two segments of people those who love cooking and those who consider the design of their kitchens a reflection of who they are, which are described here.

The SHE Economy Buying Power Central THE DEMOGRAPHICS The SHE Economy Buying Power Central Women purchase $4.4 T worth of products and services a year and control 90% of household purchasing decisions. Women control 60% of personal wealth in the U.S. They deal with money holistically and approach buying differently than men do, which can baffle some marketers. Nine out of 10 women in the U.S. feel advertisers don’t understand them. According to Nielsen, the female messaging should be positive and not focused on negative comparisons or associations

Source Types That Remodeling Customers Use for Ideas THE IMPORTANCE OF QUALIFYING Source Types That Remodeling Customers Use for Ideas 47%

THE IMPORTANCE OF QUALIFYING Remodeling Customers Use of Kitchen Designers Increase Significantly in Past 2 Years +12 Point Change!

2 out of 3 Remodeling Customers Would Use a Design Pro THE IMPORTANCE OF QUALIFYING 2 out of 3 Remodeling Customers Would Use a Design Pro if Doing Remodel Again NO 38% YES 62%

Design Professionals Are Most Influential in THE IMPORTANCE OF QUALIFYING Design Professionals Are Most Influential in Cabinetry and Flooring Decisions 32%

Those Improving Their Kitchens Have Spent More Lately THE IMPORTANCE OF QUALIFYING Those Improving Their Kitchens Have Spent More Lately Question: How much did you spend on your kitchen remodel or improvements, including materials, labor and design assistance? Spending on Kitchen Project: 2006 2008 2010 2012 $2,500 to $4,999 40% 39% 38% 42% $5,000 to $9,999 29% 26% 27% $10,000 to $14,999 9% 12% 18% 17% $15,000 or more 22% 24% 14% $25,000 or more 10% 8% 2014 41% 19% 17% 23% 16%

THE IMPORTANCE OF QUALIFYING Nearly 2 out of 5 Remodeling Customers Would Spend More If Doing Kitchen Project…This is An All-Time High! SEGMENTS - Men are far more likely than women to express regrets about not spending more – 49% of men say they would spend more if they had it to do over compared with 32% of women. - And the difference between those with kids spikes 20 points (48% vs. 28% of those with no kids in the home). - Urbanites are more likely than their counterparts to wished they had spent more as well. Balancing what you want your kitchen to be with the realities of your household budget, if you were doing the same kitchen project right now, would you spend more, less or about the same amount?

Spend more money on project THE IMPORTANCE OF QUALIFYING Kitchen Remodelers Regret Not Spending More If Doing The Same Kitchen Project Now* 40% Spend more money on project Spend same amount of money on project - 56% Spend less money on project- 4% A sizeable minority of kitchen remodelers say they would spend more on the project if they had it to do over – even given their current financial realities. This figure is at an all-time high. CONSUMERS NEED TO BE CONVINCED THAT UPGRADING NOW RESULTS IN FEWER REGRETS LATER *Balancing what you want your kitchen to be with the realities of your household budget, if you were doing the same project now, would you spend more, less or about the same amount? SOURCE: RICKI – Remodelers 360 from respective study periods

THE IMPORTANCE OF QUALIFYING Kitchen Remodelers Regret Not Spending More (by generation demographics) WOULD SPEND MORE Balancing what you want in your kitchen to be with the realities of your household budget, if you were doing the same kitchen project right now, would you spend more money on it, spend less money on it or spend the same amount. WOULD SPEND MORE Matures = 22% Baby Boomers = 19% Gen X = 42% Gen Y = 46% CONSUMERS NEED TO BE CONVINCED THAT UPGRADING NOW RESULTS IN FEWER REGRETS LATER SOURCE: RICKI – Remodelers 360 from respective study periods

Cabinets Are at The Top of Products that are Worth the Splurge TRENDS IN ITEMS PURCHASED Cabinets Are at The Top of Products that are Worth the Splurge 39% 38% 36% 35% 32% 31% 29% Cabinets Countertop Faucet Sink Dishwasher Microwave Range/Oven/Cooktop +If changing your kitchen now, which of the following items would you be most willing to splurge on … (top 7 items from list)

Biggest Shifts: Cabinets Up, Wallpaper Down TRENDS IN ITEMS PURCHASED Biggest Shifts: Cabinets Up, Wallpaper Down Item Purchased for Recent Kitchen Remodel/Improvement Percentage Point Change 2006 to 2012 2012 to 2014 Flooring -22 +7 Reconfigured kitchen or added walls -14 +4 Television +6 +3 Island -4 +2 Refrigerator +1 Range/Oven/Cooktop -17 No Change Dishwasher -8 -1 Sink -18 Faucet -20 -2 Countertop -5 Storage/Organizational Features -11 -6 Paint/Wallpaper -16 Cabinets -24 +12

Area Under Sink & Organizing Utensils Rank #1 in Importance TRENDS IN ITEMS PURCHASED Area Under Sink & Organizing Utensils Rank #1 in Importance For Essential - Must Have’s in Cabinetry

The One Thing Consumers Who Remodeled Would Do Differently THE IMPORTANCE OF QUALIFYING The One Thing Consumers Who Remodeled Would Do Differently The word cloud below was created by extracting words used most by study participants who did a kitchen project in the past year to describe what they would do differently. NOTE: Words appearing more frequently in the comments of respondents are represented by larger font sizes. The different colors do not carry any weight or value, but rather serve as a way to add visual interest and make the word cloud easier to read.

Digging Deeper Uncovers a Common Theme: THE IMPORTANCE OF QUALIFYING Digging Deeper Uncovers a Common Theme: Wishing They Would Have Gone for It! “Blow out the kitchen. One big project instead of a bunch of little ones.” “Do it faster by using my credit card to purchase, instead of saving money to purchase.” “I would have purchased higher-end materials.” “Hire some help earlier in the process.” “I would have spent a little more to get the design and colors exactly right.” “I would think seriously about borrowing money to do more at once.” “I love the kitchen as it is, but I would buy nicer cabinets.” “Make it bigger. It is way too small and I love to cook.” “Do the project more quickly, rather than in stages.” “Do a little more instead of planning for more improvements later on this year.” “I would add more lighting to the entire kitchen area.” “I would have reconfigured the layout of the kitchen, rather than use the existing footprint.” “I would have done all the upgrades at once, instead of just some”

THE IMPORTANCE OF QUALIFYING 1 in 3 Americans Plan to Make Some Changes to Their Kitchen in the Coming Year YES 33% NO 67%

Key Takeaways THE IMPORTANCE OF QUALIFYING Spending on kitchen projects soars Between 2012 and 2014, spending doubled from 8% to 16% , representing 1 in 6 kitchen projects. 1 in 4 homeowners (25%) updated their kitchens in the past year. Bigger budgets mean bigger buys Cabinets up 12% points from 2012 levels! More involvement of design professionals The use of designers increased significantly in the past two years (up 12% points). Design pros are having the greatest influence over cabinet, flooring, appliance and faucet decisions. Most signs point to good times ahead for the industry. Although remodeling is down somewhat overall, budgets are much bigger, the use of design pros is up, and one in three U.S. households – which translates to 38 million total – say they plan some type of kitchen improvement in the coming year.

Key Takeaways THE IMPORTANCE OF QUALIFYING Even more wish they had spent more money! A record 1 in 4 people who remodeled or improved their kitchens said they would spend more money if they were doing the same project now given financial realities. This proportion has risen steadily since 2010 from 31% to 40%. A question asking what ONE thing they would do differently …reveals a common feeling of regret. Magazine and RETAIL STORES top the list of idea sources for kitchen projects Most signs point to good times ahead for the industry. Although remodeling is down somewhat overall, budgets are much bigger, the use of design pros is up, and one in three U.S. households – which translates to 38 million total – say they plan some type of kitchen improvement in the coming year.

THANK YOU FOR YOUR SUPPORT! To find out more about this study or RICKI, visit www.KitchenTrends.org