According to the  CSIL report ‘The European Market for Outdoor Furniture’ (March 2024) the outdoor furniture market in Europe has gone through one of the most dynamic transformations among the sub-segments in the furniture industry and its evolution was highly conditioned by the COVID-19 pandemic.

The market for outdoor furniture in Europe amounted to around EUR 3.5 billion and while it performed better when compared to the sector average over the past couple of years, in 2023 it was realigned. The largest markets are Germany, the United Kingdom, Italy, and France accounting for a combined market share of over 60%.

The production of outdoor furniture in Europe was worth around EUR 2.5 billion in 2023, decreasing by 5% if compared to 2022. Despite this, the output level of the European industry expanded significantly since 2018 posting an average growth of 5% per year. The major manufacturing countries are Italy, Germany, France, and the United Kingdom, which together provide around 60% of total European production.

In 2023, Europe grappled with elevated uncertainty, sluggish economic performance, and a pronounced deceleration in the construction industry. This strained the demand for outdoor furniture among European consumers, especially in the lower and middle-price segments. This stems from a higher cost of living due to inflation, rising interest rates, and increased prices for commodities and energy. Outdoor furniture is an open market with imports representing a large share of consumption. This reflects the internationalization strategy operated by European manufacturers locating plants where raw materials are sourced (teak wood, rattan, etc.) and the cost of labor is lower.

Leading European outdoor furniture brands rely largely on imported products from Asian countries although recent supply chain disruptions are bringing some challenges to their organization. Some of the companies increased their share of imports from neighboring countries (Baltics, Poland, Romania) to minimize transport costs and reduce delivery times.

RETAIL, CONTRACT AND HOSPITALITY BUSINESS

Another interesting component has been the impact of the contract segment in the outdoor furniture market. In the past two years, it has been the contract segment which has buffered many companies from decreasing revenues, becoming a fundamental part of yearly income for many companies. Specific sub-segments such as hospitality, restaurants, education, as well as nautical furniture created a surge in demand more than others.

Although most sales in the market continue to be in the retail segment, in the past 2 years the share of contract projects sales for companies has overall increased. During the first part of the pandemic, the drop in the outdoor furniture market was contained thanks to the good performance of the retail channel and e-commerce while the contract market suffered significantly. However, starting from 2021, most manufacturers experienced a rebound of projects as many activities put on hold restarted.

Traditionally, a relevant part of the outdoor furniture demand comes from the hospitality business, however, commitments in the marine segment are also increasing significantly for manufacturers like Manutti, Talenti and Kettal among others.

NEW PRODUCT TRENDS

It is also worth mentioning that in recent years customers started to conceive the equipment of outdoor spaces as a part of a wider project of furnishing their homes, responding to a concept lifestyle in which the outdoor areas (balconies or gardens) are conceived to be used all year long, even in winter. The pandemic reinforced this trend.

Within the more traditional product categories, upholstered furniture and seating solutions continue to take center stage. Although chairs continue to hold a greater share of the total production, upholstered products have shown aboveaverage growth levels especially since the pandemic. Many of the new collections are characterized by a design with multiple shapes, with profiles and coverings that are suitable for both uses.

One particular niche that is expanding rapidly regards outdoor kitchens. Although margins are still comparatively small relative to other product categories, the expanding demand is creating a void in the market that companies are eager to fill up. Both established market leaders in the segment as well as new, smaller, and more specialized manufacturers are entering this space as players recognize how this sub-segment of the outdoor furniture market has great potential for growth.