The FUTURE of LEAD CRYSTAL CONSUMER PRODUCTS IN THE UNITED STATES Timothy Maher October 2004, ICF Technical Exchange Conference- Karlovy Vary

INTRODUCTION Challenging Times Challenging Markets Changing Consumer Industry Consolidation Shrinking Revenue/profits

BACKGROUND INFORMATION CHANGING CONSUMER EMERGING WORKFORCE  Smaller  Different Values WORKPLACE DEMOGRAPHICS

Emerging Workforce Has Different Values Post war Leading edge boomer Trailing edge Boomer Generation X N Generation 18-25

How Workplace Demographics Are Evolving Smaller Elderly population will increase 80% by 2025, working age adults and children by only 15% Less Male Women will comprise 48% of the workforce by 2015 More Ethnically Diverse By 2025, nearly 40% of workers will be Hispanic, African-American, or Asian The U.S. Workforce of the future will be:

MARKET SIZE & SHARE 1983 –2003 (U.S. Imports) MARKET SIZE MARKET SHARE: PRODUCT TYPE MARKET SHARE: EXPORTING REGION

Market Size : U.S. Imports Average Annual Growth: 4% Compounded (Millions of Dollars)

Share By Product Type (Stemware vs Giftware)

Share By Exporting Region

Top 15 Exporters to United States (Millions of Dollars) Ireland Austria France Germany Czech Rep Poland Slovenia Italy SlovakiaN/A Hungary China Sweden U.K Switzerland Japan

Market Size: MARKET SIZE LAST 6 YEARS U.S. IMPORTS- Custom’s Value

Market Size Last 6 Years U.S Imports Millions of Dollars % Change +4% +13% -5% -18% N/C -4%

SALES BY RETAIL CHANNEL OF DISTRIBUTION 2000 – 2002 Retail Sales Crystal Products Retail Sales Channel Of Distribution

Crystal Retail Sales (MILLIONS OF DOLLARS) Source: HFN $762 $725 $711

2000 – 2003 Crystal Retail Sales (millions of dollars) $762 $725 $711 $678 Source: HFN

SALES OF CRYSTAL VS. GLASS  U.S. Crystal & Glass Imports:  ( )  U.S. Crystal & Glass Imports:  Stemware  Giftware

U.S. Crystal & Glass Imports ( Millions of Dollars ) Lead Crystal Imports 1.3% Compound Annual Growth Glass Imports 8.3% Compound Annual Growth

Crystal & Glass Imports - Stemware (Millions of Dollars) Lead Crystal Stemware 2% Compound Annual Growth Glass Stemware 10% Compound Annual Growth

Crystal & Glass Imports - Giftware ( Millions of Dollars ) Crystal Giftware 1% Compound Annual Growth Glass Giftware 7% Compound Annual Growth

STRATEGIC ISSUES Identify Consumer Wants & Needs Vs. “Consumer Lifestyles” Understand Changes In Shopping Patterns  Decline of Traditional Department Store  Emerging Channels of Distribution Reduced Consumer - Communication Reduced Consumer Choices Consumer Focus Vs. Retailer Focus Unique “Point Of View” Vs. Commodity Product (Price) Marketing

U.S. Department Store Death Spiral (Share of Non-Automotive Retail Sales)

Annual E-Commerce Retail Sales (U.S) Billions of Dollars E- Commerce will account for 5% of U.S Retail Sales by 2010

INDUSTRY DIRECTION Leaders Must Lead Aspirational, Life Enhancing Product Design & Quality As Strategic Imperatives Diverse Marketing Programs Required To Reach Consumers- Where They Now Shop “Brand Building” Must Include All Aspects of Marketing Equation:  Product  Price  Place  Promotion