Mattress Manufacturing in the US Industry Report

Mattress Manufacturing in the USJanuary 2014   1

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Rest easy: Improved disposable incomes and
housing investment will drive mattress sales

IBISWorld Industry Report 33791

Mattress Manufacturing
in the US
January 2014

Kerry Coughlin

2 About this Industry

17 International Trade

35 Revenue Volatility

2

Industry Definition

19 Business Locations

35 Regulation & Policy

2

Main Activities

2

Similar Industries

21 Competitive Landscape

2

Additional Resources

21 Market Share Concentration

37 Key Statistics

21 Key Success Factors

37 Industry Data

22 Cost Structure Benchmarks

37 Annual Change

23 Basis of Competition

37 Key Ratios

3 Industry at a Glance

36 Industry Assistance

4 Industry Performance

24 Barriers to Entry

4

Executive Summary

25 Industry Globalization

4

Key External Drivers

6

Current Performance

27 Major Companies

8

Industry Outlook

27 Serta International

10 Industry Life Cycle

38 Jargon & Glossary

28 Select Comfort Corporation
29 Simmons Bedding Company

12 Products & Markets

31 Tempur Sealy International Inc.

12 Supply Chain
12 Products & Services

33 Operating Conditions

14 Demand Determinants

33 Capital Intensity

14 Major Markets

34 Technology & Systems

www.ibisworld.com | 1-800-330-3772 | info @ibisworld.com

Mattress Manufacturing in the USJanuary 2014   2

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About this Industry
Industry Definition

The Mattress Manufacturing industry
produces mattresses and bases for
retailers, wholesalers, hospitals, hotels
and the export market. The industry
produces innerspring, box spring and

Main Activities

The primary activities of this industry are

non-innerspring mattresses. Noninnerspring mattresses include
waterbeds and beds made from rubber
and latex. This industry does not include
air mattresses.

Manufacturing innerspring mattresses
Manufacturing box spring mattresses
Manufacturing non-innerspring mattresses
Manufacturing mattresses for waterbeds

The major products and services in this industry are
Airbeds
Foam mattresses
Futons and waterbeds
Innerspring mattresses

Similar Industries

32619 Plastic Products Miscellaneous Manufacturing in the US
These companies manufacture plastic products, including plastic inflatable mattresses.
32629 Rubber Product Manufacturing in the US
These companies manufacture rubber products, including rubber inflatable mattresses.
33261 Wire & Spring Manufacturing in the US
These companies manufacture heavy-gauge and light-gauge springs from purchased wire or strip.

Additional Resources

For additional information on this industry
www.furnituretoday.com
Furniture Today
www.sleepproducts.org
International Sleep Products Association
www.bettersleep.org
The Better Sleep Council

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Mattress Manufacturing in the US January 2014  

3

Industry at a Glance
Mattress Manufacturing in 2014

Key Statistics
Snapshot

Revenue

Annual Growth 09-14

Annual Growth 14-19

Profit

Exports

Businesses

$7.6bn

1.5%

1.7%
$197.8m $134.6m 401
Per capita disposable income

Revenue vs. employment growth

Select Comfort
Corporation 12.4%
Simmons Bedding
Company 11.7%
Tempur Sealy
International Inc.
9.2%

% change

Serta International
19.2%

10

4

5

2

0

0

% change

Market Share

−5
−10
−15

Year 06

−2
−4

08

10

Revenue

12

14

16

18

−6

Year

20

07

09

11

13

15

17

19

Employment
SOURCE: WWW.IBISWORLD.COM

p. 27

Products and services segmentation (2014)

Key External Drivers

11.5%

Per capita disposable
income

Airbeds

0.5%

Futons and
waterbeds

Demand from
furniture stores
World price of steel
Value of residential
construction

63.0%

25.0%

Foam mattresses

World price of crude oil

Innerspring mattresses

p. 4
SOURCE:
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SOURCE:
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Industry Structure

Life Cycle Stage

Regulation Level

Medium

Revenue Volatility

Medium

Mature

Technology Change

Medium

Capital Intensity

Medium

Barriers to Entry

Medium

Industry Assistance

Low

Concentration Level

Medium

FOR ADDITIONAL STATISTICS AND TIME SERIES SEE THE APPENDIX ON PAGE 37

Industry Globalization
Competition Level

Low
Medium

Mattress Manufacturing in the USJanuary 2014   4

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Industry Performance

Executive Summary   |   Key External Drivers   |   Current Performance
Industry Outlook   |   Life Cycle Stage
Executive
Summary

The past five years have not been very
relaxing for the Mattress Manufacturing
industry. Mattress sales, like those of
most household goods, increase when
residential real estate markets grow. In
2008 and 2009, residential real estate
tanked and residential construction
values plummeted, causing the recession
and, thus, falling demand for mattresses.
Consumer sentiment, disposable income
and furniture store sales all suffered
during the recession. Some of these
indicators of demand, such as the real

estate market, have not yet fully
recovered. The industry’s revenue has
begun to pick up, however, having grown
at an annualized rate of 1.5% in the five
years to 2014. In 2014, revenue is
expected to increase 1.6% to $7.6 billion
as residential construction values and
other demand indicators improve.
The industry’s minor successes over
the past five years can be largely credited
to improvements in mattress materials
and production techniques. Viscoelastic
and latex mattresses have grown as a
share of revenue; this growth has been

enabled by increasing consumer
awareness of the health benefits of
undisturbed sleep and improved body
support. Additionally, the industry
pioneered just-in-time manufacturing
over the past five years; the industry’s
major companies now favor this
approach to production, inventory and
supply chain management. As a result,
profit margins, which dropped due to the
recession, have climbed back to 2009
levels, a considerable feat given the
volatile prices of major mattress inputs
oil and steel. Consolidation has also
occurred on a large scale in the past five
years, as two firms now own the
industry’s four top brands.
Over the next five years, industry
revenue is projected to grow at an
average annual rate of 1.7% to $8.3
billion by 2019. The recovering housing
market and increasing disposable income
will help boost demand for mattresses
during the period. As residential
construction activity rises, homeowners
will replace or upgrade their existing
household goods. Hotels and motels are
also projected to purchase more
mattresses as consumers increase their
travel activity. Input prices are expected
to be less volatile than in the previous five
years, allowing companies to better
estimate production costs.

Per capita disposable income
Increases in household disposable income
generally lead to higher mattress sales and
higher average selling prices. Consumers
tend to replace mattresses at a faster rate
and upgrade to more expensive, highquality mattresses during times of income
growth. Per capita disposable income is
expected to increase in 2014, presenting a
potential opportunity for the industry.

Demand from furniture stores
Furniture stores are an important
downstream retail channel for
mattresses. Changes in demand from this
channel affect industry revenue and
profitability. An increase in consumer
mattress purchases at furniture stores
will likely lead to higher industry
revenue. Demand from furniture stores is
expected to increase in 2014.

A

recovery in the housing market will boost
demand for new mattresses

Key External Drivers

Mattress Manufacturing in the USJanuary 2014   5

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Industry Performance

World price of steel
Steel coil springs are a main input in
mattresses. When the price of steel
increases, the cost of manufacturing
finished mattresses rises. Since
manufacturers can generally only pass
some of the additional costs to
downstream buyers, higher production
costs tend to reduce the industry’s profit
margins. The world price of steel is
expected to remain fairly steady in 2014.
Value of residential construction
Changes in investment in the housing
market affect demand for mattresses. As
more residential buildings are constructed
and renovated, demand for mattresses

increases because consumers are likely to
fill their new dwellings with new furniture.
The value of residential construction is
expected to increase over 2014.
World price of crude oil
Changes in the price of oil affect the price
of polyurethane foam, a main input
material for mattresses. As the price of oil
increases, the cost of manufacturing a
mattress rises. Consequently, higher
production costs reduce the industry’s
profit margins if costs are not passed on
to consumers as higher prices. The world
price of crude oil is expected to decrease
during 2014, but its volatility poses a
potential threat to the industry.

World price of steel

Per capita disposable income
4

230

2

210

0

Index

% change

Key External Drivers
continued

−2

170

−4
−6

Year

190

07

09

11

13

15

17

19

150

Year 05

07

09

11

13

15

17

19

SOURCE: WWW.IBISWORLD.COM

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Industry Performance

Rebounding demand

The Mattress Manufacturing industry has
bounced back from its recessionary lull,
but not with enough spring to gain any
significant ground over its 2009 revenue.
Over the five years to 2014, industry
revenue has seen annualized growth of
1.5%. Per capita disposable income,
consumer sentiment, residential
construction activity and furniture store
demand for the industry are in various
states of post-recession recovery, which
has hampered significant growth. At the
same time, the industry’s product
innovations, coupled with rising consumer
awareness of the health benefits of
comfortable sleep, have contributed to
some modest growth in demand for new
mattresses over the period.
Demand for mattresses declined
alongside falling residential construction
values through 2010. Industry revenue,
however, shot up 7.7% in 2011, as demand
for mattresses returned. In particular,
rising consumer spending has supported
the industry’s growth since 2011. However,
this recovery has tapered somewhat, with

revenue growing 0.9% in 2012 and 0.6% in
2013. Due to the nature of mattresses,
consumers do not purchase them often (a
mattress lasts 10 years on average), 2011’s
major increase in sales limited the potential
for the industry to grow at a similar rate in
the ensuing years. Still, expected revenue
growth of 1.6% in 2014 to reach $7.6 billion
is the highest the industry has reported
since before the recession.

Residential construction values are a key
indicator of mattress demand, as
consumers often buy new furniture,
including mattresses, when they move
into a new home. The housing market’s
collapse was a primary cause of the
recession, while other indicators of
collapsing demand for mattresses followed
on its heels. Demand continued to fall in
2009 as the value of residential
construction fell 21.2%. Per capita
disposable income also fell for the first
time in 18 years by 3.6%. Demand from
furniture stores, which are responsible for
a significant portion of mattress sales, fell
as a consequence of reduced consumer
spending, leading the industry to record a
3.2% decline in revenue in 2010.
By 2011, most of the key variables
affecting mattress demand had

stabilized or entered a recovery phase.
Disposable income is now above its
2009 levels and the value of residential
construction has grown at an average
annual rate of 8.6% over the past five
years. Demand from furniture stores
has also increased, including a 6.5%
increase in 2012. Taken together, these
factors have helped demand for
mattresses increase slightly.
While demand drivers are on the
way up, so are imports. In the five
years to 2014, imports are expected to
increase 14.3% to $424.8 million. In
2014, mattresses made abroad will
make up 5.4% of demand, up from
3.0% in 2009 due to lower prices.
Exports are expected to increase at an
annualized rate of 2.3% to $134.6
million in 2014.

Industry revenue
10
5

% change

Current
Performance

0
−5
−10
−15

Year 06

08

10

12

14

16

18

20

SOURCE: WWW.IBISWORLD.COM

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Industry Performance

Costs, consolidation
and profit

Technology creates
an edge

Over the past five years, prices of inputs
for mattress manufacturing, such as oil
and steel, have been volatile. Oil is used
to make polyurethane foam, a key
material in mattresses; thus, as oil prices
rise, the price of polyurethane foam rises
as well. The price of oil increased
dramatically in 2010 and 2011. The price
then fell 0.9% in 2013. These fluctuations
have made it difficult for manufacturers
to anticipate future spending and control
costs. In addition, firms have had to add
flame-retardant materials to their
products to comply with new federal
standards from the Consumer Product
Safety Commission, further adding to
production costs.
To counterbalance fluctuating costs that
could impact profit, larger firms have
implemented new systems to increase
manufacturing efficiency. For example,
major player Sealy implemented “lean
manufacturing,” a quick-response, low
inventory production process with 48 to
72-hour delivery times. This method has
reduced the incidence of defects and cut
the manufacturing time per mattress from
more than 15 hours to less than five hours.
Other firms have begun adopting similar
just-in-time production strategies,
allowing them to enhance profitability.
The industry’s average profit margins
(measured as earnings before interest

and taxes) have fluctuated over the past
five years, sinking as low as a loss of
1.8% in 2009. As a result of leaner
production, gains in efficiency and
reduced wage costs, 2014 profit margins
hit 2.6% of revenue, higher than what
they were in 2009. Wages as a share of
revenue fell over the five-year period
due to an annualized workforce
reduction of 1.2% to 17,390 employees
over the same period.
Additionally, acquisitions and
mergers among major player have
increased economies of scale and
benefited industry profit. Most recently,
in March 2013, the industry’s fourthlargest company, Tempur-Pedic,
purchased the second-largest company,
Sealy. In 2012, Advent International
acquired both Serta and Simmons;
although the companies still operate
independently. In the five years to
2014, the number of enterprises has
decreased at an annualized rate of 0.4%
to 401.

Although the industry suffered from
changing demand and volatile costs,
manufacturers have been active in
product development over the past five
years. Many players have focused on
their specialty mattresses (i.e.
viscoelastic and latex mattresses).
These mattresses differ from traditional
innerspring mattresses by offering
superior support and pressure relief
through memory foam and
polyurethane foam. Since these

mattresses are more specialized and
complex than traditional mattresses,
they often have higher price tags.
According to the International Sleep
Products Association, however, in 2010,
industry revenue grew as demand for
these new products rose with the
recovering economy. As consumer
spending and health consciousness
increase further in 2014, IBISWorld
expects specialty mattress sales to grow
as a share of industry revenue.

Prices

of inputs like
oil and steel have been
highly volatile, hurting
industry profit

Mattress Manufacturing in the USJanuary 2014   8

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Industry Performance

Industry
Outlook

Over the next five years, the Mattress
Manufacturing industry is expected to
rise from its slumber. Home sales and
values will continue to grow and
consumers will purchase more
household goods, including mattresses,
as they invest in their homes and their
per capita disposable income rises. In
addition, the industry’s input costs are
expected to be less volatile, which will

Demand to firm up

The expanding housing market is
expected to encourage mattress sales over
the next five years. Although the market
declined severely during the subprime
mortgage crisis, it is expected to make
major gains over the next five years.
IBISWorld anticipates the value of
residential construction to rise at an
annualized rate of 8.4% over the period.
Many people will start moving into houses
as they regain confidence in the economy
and their household incomes improve.
The Federal Reserve has reaffirmed its
commitment to low interest rates in the
early portion of the next five years, which
will further encourage consumers to
purchase homes. As a result, demand for
mattresses will rise as consumers move
into their new living spaces and upgrade
their household goods.

Consumer preferences As mattress sales grow, the type of

mattress purchased is expected to shift
toward higher-end products. Mattress
manufacturers have recently been active
in developing viscoelastic and latex
specialty mattresses. For instance, in
2010, Sealy introduced a new mattress
line called Embody by Sealy, which
includes a variety of latex and memory
foam bedding products. Specialty
mattresses are designed to promote

help increase profit margins.
Meanwhile, innovations in specialty
mattresses will push revenue further
upward, as new products entice
consumers to upgrade their existing
mattresses. IBISWorld projects revenue
will grow at an annualized rate of 1.7%
to $8.3 billion in the five years to 2019.
In the near term, revenue is forecast to
grow 3.2% in 2015.

Rising

disposable incomes
will drive demand for highend items
International trade will continue its
upward trend as it did in the five years to
2014. Imports are expected to increase at
an annualized rate of 12.5% to $764.7
million. China is expected to continue to
hold as the top exporter to the US with
over 55.0% of imports. Manufacturers
have and will continue to move
production to lower cost countries where
they can increase profit margins by
reducing costs. Mattresses exported by
US manufacturers are expected to
increase at an average annual rate of 1.6%
to $146.0 million in 2019.

better sleep by enhancing support and
relieving pressure points. With growing
income and improved health
consciousness, more consumers are
expected to purchase these pricier
products. Additionally, higher-end
innerspring mattresses are expected to
sell better than they have in the past five
years; increasing per capita incomes
among consumers looking for a
traditional mattress will drive these sales.

Mattress Manufacturing in the USJanuary 2014   9

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Industry Performance

Changing costs and
profit

Industry
consolidation

While material input prices are expected to
increase from 2014 to 2019, they are
expected to be less volatile than they have
been in the past five years. The price of
crude oil, an input for foam, is expected to
rise at an annualized rate of 3.6%, which is
considerably less than its previous five-year
rate change of 10.1%from 2009 to 2014.
Meanwhile, the price of steel is expected to
grow at an annualized rate of 2.8%. Since
steel springs and foam made from oil are
the two main components of mattresses,
any change in the price of these inputs
directly affects industry costs. Their
diminishing volatility means firms will be
better able to anticipate future spending
and make production changes accordingly.
One production change has already
occurred: large players have become more

efficient in their manufacturing processes
in the past five years by implementing
just-in-time production. Consequently,
these firms’ production times have
decreased; firms can now deliver a mattress
five days after it was ordered. This
efficiency is expected to continue over the
next five years, partially offsetting higher
material costs. As such, industry profit
margins, measured as earnings before
interest and taxes, are expected to rise
slightly from their current level of 2.6%.

Even as demand grows over the next five
years, the industry is expected to
continue its historical trend of
consolidation, supporting growing profit
margins. Market share concentration
among the four largest companies is
54.1%, with this concentration still on
the rise. Two of them, Serta and
Simmons, are owned by the same
holding company, while the other two,
Tempur-Pedic and Sealy, have become
one under the name Tempur Sealy
International as of March 2013.
In addition, over the past five years,
many independent owners have looked
to exit the industry by selling their
companies, allowing larger players to

buy them and expand their market share.
These trends will continue over the next
five years as manufacturers looking to
expand acquire firms with popular or
promising product lines. Larger firms
with more market share and stronger
distribution channels will make it
harder for small firms to operate in the
industry, further driving down the
number of enterprises at an annualized
rate of 0.1% to 399 companies over the
next five years. Although the number of
enterprises will decrease, employment
will only decrease at an annualized rate
of 0.9% to 16,625 in 2019. Reorganization
after acquisitions will cause this slight
decrease after acquisitions.

Production

efficiency will
allow operators to offset
rising input costs

Mattress Manufacturing in the USJanuary 2014   10

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Industry Performance
The industry is expected to perform in
line with the overall US economy

Life Cycle Stage

There has been consolidation and increasing
concentration among the top industry operators

% Growth in share of economy

Mattresses are essential items and are
replaced on average every 10 years, which
generates consistent demand

20

Maturity

Quality Growth

Company
consolidation;
level of economic
importance stable

High growth in economic
importance; weaker companies
close down; developed
technology and markets

15

Key Features of a Mature Industry
Revenue grows at same pace as economy
Company numbers stabilize; M&A stage
Established technology & processes
Total market acceptance of product & brand
Rationalization of low margin products & brands

10

Quantity Growth

Many new companies;
minor growth in economic
importance; substantial
technology change

5

0

Mattress
Manufacturing
Textile Mills

Warehouse Clubs & Supercenters
Department Stores
Plastic Products Miscellaneous Manufacturing
Rubber Product Manufacturing

Decline

-5

Shrinking economic
importance

-10
-10

-5

0

5

10

15

20

% Growth in number of establishments
SOURCE: WWW.IBISWORLD.COM

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Industry Performance

Industry Life Cycle
This

industry
is M
 ature

The Mattress Manufacturing industry is
in the mature phase of its life cycle. Over
the 10 years to 2019, industry value
added (IVA), which measures the
industry’s contribution to the US
economy, is projected to decrease at an
average annual rate of 2.1% per year. In
comparison, US GDP is expected to rise
at an annualized rate of 2.7% during the
period. The difference between IVA and
GDP is the result of falling industry
wages and slightly lower profit margins.
Still, the industry has not entered a
period of decline. Its lackluster
performance has mainly been due to its
reliance on housing market growth to
boost demand, but the housing market
suffered heavy losses during the
recession. Also, the lack of substitute
products helps keep the industry out of
decline, since imported mattresses are
still relatively uncommon due to
mattresses’ heft.

Broad acceptance of industry products
and market saturation are indicators of a
mature industry, and the Mattress
Manufacturing industry satisfies each of
these criteria. Additionally, mature
industries often exhibit large-scale
mergers and acquisitions. Mergers and
acquisitions have been a major storyline
for the industry over the past five years:
brands that were once independent
companies and had been among the top
four manufacturers for years (i.e. Serta,
Sealy, Simmons and Tempur-Pedic) are
now split between two even larger
companies. Tempur-Pedic acquired Sealy
in 2013. In August 2012, AOT Bedding
Super Holdings, which through National
Bedding Company, owned Serta and
Simmons, sold their stake to Advent
International, a private equity firm. Ares
Management and Ontario Teachers’
Pension Plan, who are also majority
stakeholders maintain their ownership.

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Products & Markets

Supply Chain  |   Products & Services  |   Demand Determinants
Major Markets  |   International Trade  |   Business Locations

Supply Chain

KEY BUYING INDUSTRIES
45211

Department Stores in the US
Businesses that sell an array of products including home furnishings demand mattresses.

45291

Warehouse Clubs & Supercenters in the US
Large stores who provide an assortment of discount merchandise demand mattresses for
resale to the final consumer.

45299

Dollar & Variety Stores in the US
Stores that retail a broad range of deep discounted merchandise demand mattresses.

62211

Hospitals in the US
Healthcare facilities demand mattresses for patients.

72111

Hotels & Motels in the US
Hospitality establishments demand mattresses for hotel and motel rooms.

KEY SELLING INDUSTRIES

Products & Services

31310

Textile Mills in the US
Mills supply mattress ticking and woven upholstery fabrics (e.g. cotton, nylon, polyester, rayon).

32221

Cardboard Box & Container Manufacturing in the US
These firms supply paper and paperboard containers, including shipping sacks and other paper
packaging supplies.

32611

Plastic Film, Sheet & Bag Manufacturing in the US
These manufacturers supply plastic products in the form of sheets, rods, tubes, film and other
shapes.

32615

Urethane Foam Manufacturing in the US
These companies supply foam cores (including latex) and foam padding.

33251

Hardware Manufacturing in the US
These firms supply sleeper mechanisms for dual-purpose sleep furniture.

33261

Wire & Spring Manufacturing in the US
These manufacturers supply springs, innerspring units and box spring constructions.

The Mattress Manufacturing industry
produces a high volume of similar
products differentiated by the type of
material from which they are made.
Overall, product innovation is low,
although consumer demand for newer
and higher priced foam, latex and air
mattresses has helped boost industry
unit sales and revenue over the five
years to 2014.
Innerspring mattresses
Most mattresses in the United States are
made using innersprings. These
mattresses represent about 63.0% of
industry revenue, and about 80.0% of the
domestic mattress market in terms of

unit sales. Most of these products sell for
less than $1,000 through retail furniture
and bedding store channels. This type of
mattress uses the support of tempered
steel coils in a variety of configurations.
Layers of upholstery provide insulation
and cushioning between a person’s body
and the spring unit. This mattress type
can come in all sizes and different levels
of firmness. Sealy, Serta and Simmons
are leading manufacturers of innerspring
mattresses. Over the five years to 2014,
this category declined as a share of
industry revenue as consumer
preferences shifted toward higher priced
and higher quality foam mattresses. At
the same time, however, this category

Mattress Manufacturing in the USJanuary 2014   13

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Products & Markets

Products & Services
continued

Products and services segmentation (2014)

11.5%
Airbeds

0.5%

Futons and
waterbeds

25.0%

Foam mattresses

Total $7.6bn
continues to comprise the majority of
industry unit sales because of these
mattresses’ lower average selling prices.
Foam mattresses
Foam mattresses are the second most
popular mattress type. Over the five years
to 2014, IBISWorld estimates that foam
mattresses grew from about 20.0% of
industry revenue in 2009 to about 25.0%
in 2014 due to their higher average selling
prices and quality along with increased
demand from consumers. They can be
made of a solid core or from several layers
of different types of foam laminated
together. Advanced technology in
polyurethane foams, refinements to
traditional latex and the new viscoelastic
(memory) foams have added to the
comfort, support and overall performance
of these types of mattresses. Tempur Sealy
is the leading manufacturer that caters to
this market segment. Foam mattresses
have become more popular in the past five
years as consumers have grown more
aware of the importance of sleep for
health and the improved body support
these mattresses offer. This segment is
projected to continue to expand as a share
of industry revenue from 2014 to 2019 as
consumers become more willing to spend
on these higher priced mattresses.

63.0%

Innerspring mattresses

SOURCE: WWW.IBISWORLD.COM

Airbeds
Airbeds are mattress manufacturers’
third largest revenue generator,
accounting for about 11.5% of industry
revenue. Airbeds are now designed to
look like the familiar mattress and
box-spring combination, with an airfilled core providing the support instead
of an innerspring unit or foam core.
These designs come in a range of
firmnesses and are typically adjustable to
suit individual sleepers’ needs. Select
Comfort is the leading manufacturer of
mattresses in this market segment. Over
the five years to 2014, IBISWorld
estimates that airbeds’ share of industry
revenue has increased at the expense of
traditional innerspring mattresses.
Other products
The smallest product segments are
futons and waterbeds, which together
account for about 0.5% of industry
revenue. Most waterbeds are now
designed to look like a familiar
innerspring mattress, with a water-filled
core providing support. Quality
construction is especially critical when
water is involved; the vinyl and seaming
need to be designed for maximum
durability. Futons, which are designed
to support sitting as well as sleeping, are

Mattress Manufacturing in the USJanuary 2014   14

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Products & Markets

Products & Services
continued

also less popular than other forms of
mattresses. These products are an
affordable alternative to traditional

beds. Futons need to be flexible so they
are typically made of cotton, synthetic
fibers and foam in various combinations.

Demand
Determinants

About 70.0% of new mattress purchases
are estimated to be replacement
purchases. The average time between
mattress replacements averages about 10
years for consumers. Reasons for
replacing mattresses include upgrading
to a larger size, switching to an
electronically adjustable bed, mattress
wear and tear, and health and comfort
reasons. Although mattresses are a basic
necessity for sleeping, the demand for
new mattresses is influenced by several
economic factors.

These conditions have helped increase
the likelihood of consumer spending on
mattresses over the past five years.

The effects of wealth
Since the timing of buying a new mattress
is at the consumer’s discretion, most
consumers wait until they feel financially
comfortable to make the big purchase.
Therefore, the level of disposable income
is a key determinant for the demand for
new mattresses. If disposable income is
low and the consumer’s old mattress will
last a few more years, the consumer is
likely to put off buying a new mattress
until their disposable income rises.
Another determinant of consumer
spending is consumer sentiment, which
measures consumers’ confidence about
the current and future state of the
economy. While per capita disposable
income has remained flat over the past
five years, consumer sentiment has risen.

Major Markets

Firms in the Mattress Manufacturing
industry generate most of their revenue
by selling to a range of downstream
retailers. These retailers sell industry
products in physical stores and online to
end-consumers. Compared with other

Growth in the housing market
Another determinant of demand is the
value of residential construction. As more
consumers move into houses or
condominiums, they become more likely
to replace old furniture such as
mattresses. In turn, the amount of
merchandise bought at furniture stores
and mattress retailers increases.
However, if the level of residential
construction drops, fewer new mattresses
are purchased. Over the past five years,
the value of residential construction has
increased by 8.6%, which has increased
the likelihood of new mattress purchases.
Price
Mattress purchases are also determined
by price, as most consumers are pricesensitive when it comes to buying
mattresses. The industry’s products are
relatively expensive, so consumers are
also willing shop around for the best
available price. Mattress prices dropped
in 2010, but have risen for every other
year during the five year period. As such,
mattress prices have increased since
2009. acting as a deterrent to new
mattress purchases.

furniture manufacturing industries,
mattress manufacturers sell a lower
percentage of their products through
wholesalers and a higher percentage of
their products directly to retailers and
consumers. Sales to retailers and

Mattress Manufacturing in the USJanuary 2014   15

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Products & Markets

Major Markets
continued

Major market segmentation (2014)

6.1%

1.6%

Accommodation Exports
sector

2.2%

Healthcare sector

30.6%

14.9%
Other

Specialty bedding stores

16.8%

General retailers

Total $7.6bn
consumers are generated through
vertically integrated wholesaling and
retail operations, respectively. The
primary reason for this structure is the
industry’s short lead time between a
mattress’s purchase, production and
delivery. This model reduces costs
associated with inventory, and vertically
integrated suppliers are the most
effective at implementing it.
Over the five years to 2014,
nontraditional retail channels such as
wholesale warehouse clubs and direct
sales to consumers online have grown as
a share of industry sales. IBISWorld
expects these channels to continue to
grow in importance as a source of
industry revenue over the next five years.
Specialty bedding stores
Bedding stores specialize in retailing
mattresses and complementary bedding
products such as pillows and sheets.
IBISWorld estimates this segment
accounts for about 30.6% of industry
sales. Through bulk purchasing
mattresses from industry firms, hiring
skilled staff and maintaining extensive
advertising campaigns, specialty bedding
stores have drawn significant sales from
traditional furniture stores in the past

27.8%

Furniture stores
SOURCE: WWW.IBISWORLD.COM

five years. Leading retailers in this
category include Mattress Firm and
Sleepy’s mattress stores.
Furniture stores
General furniture stores’ purchases of
mattresses account for an estimated
27.8% of industry revenue. Sales to this
segment have suffered over the past five
years due to growing sales from specialty
bedding stores. Increased awareness of
the health benefits of sleeping has driven
more consumers to purchase mattresses
at specialty locations with trained staff.
Businesses in the general furniture stores
category include Ashley and Thomasville.
General retail stores
About 16.8% of mattresses are sold
through general retailers including
department stores and discount retail
stores. These stores offer a reduced
selection of mattresses compared to
furniture or bedding stores; however,
their prices are competitive due to their
size and purchasing power. Department
stores such as Macy’s and Bloomingdales
tend to offer higher quality mattresses,
while discount retailers such as Walmart
and Target tend to offer mid and lower
end mattresses.

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Products & Markets

Major Markets
continued

Accommodation sector
Sales of mattresses to customers in the
accommodation sector account for about
6.1% of industry revenue. Customers in
this category include a wide range of
hotels, motels and other hospitality firms.
Hotels usually buy both high-end and
mid-range mattresses, while motels
purchase lower end mattresses. Over the
five years to 2014, this market segment
has remained fairly flat as a share of
industry sales. Hotels and motels delayed
and scaled back purchases of mattresses
and delayed construction of new
properties due to the recession and its
lingering negative effects on domestic
travel and tourism spending. However,
this category’s spending began recovering
in 2010 from its recessionary drop, and
has since reached its prerecessionary level.
Healthcare sector
IBISWorld estimates that sales of
mattresses to firms in the healthcare
sector account for about 2.2% of
industry revenue. Customers in this
channel include hospital bed
manufacturers, hospitals, nursing
homes, healthcare professionals and
medical supply retailers. Over the five
years to 2014, IBISWorld estimates that
this segment has slowly grown as a share
of revenue due to increased healthcare
utilization. Healthcare demand
remained solid over the past five years,
even during the recession due to the
essential nature of healthcare services.
Also, medical technology has enabled

people to live longer lives, and with a
growing and aging population, hospital
usage has increased.
Other markets and exports
Industry firms also sell mattresses
through a variety of other means that
vary among firms depending on their size
and level of vertical integration. Other
sales channels include wholesale bedding
outlets, warehouse clubs and direct-toconsumers sales through the internet and
direct marketing. Collectively, these
channels account for about 14.9% of
industry sales. Wholesale bedding outlets
represent about 4.2% of industry
revenue, while warehouse clubs such as
Costco account for about 2.5% of
revenue. About 8.2% of revenue is
derived from sales through the internet
and direct marketing to end-consumers.
Larger industry firms, such as Select
Comfort Corporation and Tempur-Pedic
International, have increasingly focused
their efforts on selling directly to
consumers online and through direct
marketing. As such, online sales and
direct marketing have increased as a
share of industry revenue over the past
five years.
Overseas buyers represent only a
marginal proportion of industry sales, at
just 1.8 % of industry revenue. The top
international markets for mattresses
exported from the United States are
Canada, Mexico, China and Japan. High
shipping costs due to mattresses’ weight
and size keep exports fairly low.

Mattress Manufacturing in the USJanuary 2014   17

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Products & Markets

Level & Trend
 xports in the
E

industry are L ow
and I ncreasing
Imports

in the
industry are
Mediumand
Increasing

The Mattress Manufacturing industry has
a trade deficit; additionally, imports have
increased significantly over the past five
years while exports have declined. As
such, imported mattresses represent a
growing threat to the industry.
Exports
Exports currently represent about 1.8%
of industry revenue, which is an overall
drop compared to their share in 2009. In
2010, exports accounted for 1.9% As
such, exports have declined at an
annualized rate of 1.9% over the past five
years. Export levels have been somewhat
volatile during the period, and grew 9.2%
in 2011 and are expected to fall 4.3% in
2014. Over the five year period, the dollar
has appreciated slightly, which has been
detrimental to industry exports.
The majority of industry exports, at
67.1%, go to Canada. Canada benefits
from the favorable trading terms of the
North American Free Trade Agreement
(NAFTA). Also, it borders the United

Exports To...

Industry trade balance
400
0

$ million

International Trade

−400
−800
−1200

Year 06
Exports

12

Imports

14

16

18

20

Balance

States, which reduces the high shipping
costs of large items such as mattresses.
Mexico, the industry’s second greatest
export destination, enjoys these same
advantages. China and Japan also make
large purchases of the industry’s
mattresses, and are the third and
fourth greatest generators of export
revenue, respectively.

Imports From...

6%

Mexico

10

SOURCE: WWW.IBISWORLD.COM

Canada

5%

08

2%

Belgium

8%

Other

4% 3%

China Japan

57%

20%
Other

67%

China

28%

Mexico

Canada

Year: 2014

Total $134.6m

SIZE OF CHARTS DOES NOT REPRESENT ACTUAL DATA

Total $424.8m
SOURCE: USITC

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Products & Markets

International Trade
continued

Imports
Imports of mattresses have increased at
an annualized rate of 14.3% during the five
years to 2014. They have satisfied a
growing share of domestic demand during
this period; in 2009, imports represented
3.0% of domestic demand, and they
represent 5.4% in 2014. Imports have
been aided by the dollar’s slight
appreciation during the five years to 2014.
Mattress manufacturers have made
significant advances in automating
machinery in an attempt to reduce the
competitive advantage of low labor cost
countries such as China. However, China

continues to make inroads in US mattress
markets, evidenced by the annualized
growth of its imports of 23.7% over the
past five years. China is the source of
most imported mattress sales, and
accounts for 56.7% of industry-relevant
imports. Similarly, imports from Mexico
have increased significantly over the past
five years (at an annualized rate of 8.9%),
and now represent 27.5% of mattress
imports. Rounding out the top four
importers are Canada and Belgium,
which have also stepped up import levels
during the period and account for 5.9%
and 2.0% of imports, respectively.

Mattress Manufacturing in the USJanuary 2014   19

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Products & Markets
Business Locations 2014

West
New
England

AK
0.0

Great
Lakes
WA

ND

MT

2.1

Rocky
Mountains
ID

OR
1.5

West NV
1.5

1.9

SD
0.0

WY

0.4

MN

0.4

0.2

Plains

CO

1.5

KY

1.1

9

OK
1.3

NC
5.3

TN

AZ

NM

3.0

0.6

Southwest
TX
7.2

HI
0.4

Additional States (as marked on map)
1 VT

2 NH

3 MA

4 RI

5 CT

6 NJ

7 DE

8 MD

0.0
1.1

0.4

2.7

1.9

0.2

SC

Southeast

0.8

MS

AL
2.5

1.5

GA
3.8

1.3

LA
0.2

FL
6.1

Establishments (%)

0.0

0.8

AR

8

0.6

1.9

16.9

7

WV VA
1.9

0.8

1.3

CA

West

3.2

MO

KS

1.5

OH

1.9

3.6

6

3.8

IN

IL

0.6

UT

PA

2.3

1.3

0.0

1 2
3
NY
4.2
5 4

MI

2.5

IA

NE

0.0

WI

ME

MidAtlantic

9 DC
0.0

Less than 3%
3% to less than 10%
10% to less than 20%
20% or more
SOURCE: WWW.IBISWORLD.COM

Mattress Manufacturing in the USJanuary 2014   20

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Products & Markets

Distribution of establishments vs. population
30

20

10

Southwest

Southeast

Rocky Mountains

Plains

New England

Mid-Atlantic

Great Lakes

0
West

The geographic distribution of mattress
manufacturers generally follows major
population centers in order to increase
the speed of deliveries and reduce
transportation costs. The Southeast has
the largest share of industry
establishments as well as the largest
share of the nation’s population. It holds
26.6% of the industry’s establishments
and 25.4% of the US population. Florida,
the most populous state in the region,
holds 29 establishments; its share is the
third greatest of any state. The West and
Great Lakes regions have the second- and
third-largest number of establishments.
California has 80 establishments, the
most of any US state; it also has the
greatest population at 12.1% of the US
total. Texas, the second most populous
state, correspondingly has the second
greatest number of industry
establishments at 34. Regions with
smaller populations, such as the Plains,
the Rocky Mountains and New England,
have relatively few mattress
manufacturers. Over the past five years,
the total number of industry
establishments has been decreasing;
however, the distribution of the
establishments’ locations has remained
relatively constant during this time.
The location of industry
establishments is also related to wage

%

Business Locations

Establishments
Population
SOURCE: WWW.IBISWORLD.COM

costs and raw material centers. The
Southeast is the preeminent mattress
manufacturing region in part because it is
a major producer of cotton, which is a
traditional mattress input. North
Carolina, an epicenter for cottondependent textile production, has a
disproportionate number of mattress
manufacturers at 25. Additionally, wage
costs in the Southeast are lower than in
other regions, making it more attractive
for manufacturers to locate there.

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Mattress Manufacturing in the US January 2014  

21

Competitive Landscape

Market Share Concentration  |   Key Success Factors  |   Cost Structure Benchmarks
Basis of Competition  |   Barriers to Entry  |   Industry Globalization
Market Share
Concentration
Level
Concentration in this

industry is M
 edium

Key Success Factors
IBISWorld

identifies
250 Key Success
Factors for a
business. The most
important for this
industry are:

Concentration in the Mattress
Manufacturing industry is medium, since
the top four players hold about 52.5% of
the market share. About 397 companies
compete for the remaining 47.5% of the
market. Major player Sealy(prior to being
acquired) has traditionally been the
industry leader, and was number one in
shipments for several decades beginning
in the 1970s. However, strong consumer
demand for specialty mattresses helped
Serta pull ahead of Sealy in 2011, and
Serta continues to hold the number-one
position. In 2014, IBISWorld estimates
that Serta and Simmons will have market
share of 19.2% and 11.7%, respectively.
Select Comfort and Tempur Sealy are
expected to have market share of 12.4%
and 9.2%, respectively.
Over the past five years, market share
concentration has increased. The major
players have been active in merger and

acquisition activity during the period,
which has boosted industry concentration.
AOT Bedding Super Holdings, already the
owner of Serta, acquired Simmons in
2010. The two companies will continue to
compete with each other and function
independently, though. Additionally,
Tempur-Pedic acquired Sealy in 2013 and
changed the name to Tempur Sealy
International Inc. A decline in industry
participation has also boosted market
share concentration, since many smaller
firms exited the industry over the past five
years. Additionally, some large players
performed poorly during the recession.
Spring Air and Simmons filed for
bankruptcy in 2009, when each
company’s market share was low. This
resulted in reduced market share
concentration. Both companies have since
been acquired and have built up their
market share considerably.

Production of goods currently
favored by the market
Mattress manufacturers must be able to
adjust their production processes to
meet demand for different mattress
types. Premium products must be made
to high quality standards, and low cost
goods should be perceived as offering
high value for the money.

Guaranteed supply of key inputs
Access to high quality, low cost materials
ensures that production of mattresses is not
disrupted. Established links with suppliers
allows for a steady flow of key inputs and
can also provide cost savings through fixed
term contracts and bulk purchases.

Proximity to key markets
Due to the bulky nature of mattresses
and the associated high
transportation costs, manufacturers
need to be located close to retailers
and consumers.
Having a good reputation
Selling through reputable retailers and
providing customers with high quality
products with warrantees increases the
appeal of a firm’s products.

Downstream vertical integration
(ownership links)
Larger mattress manufacturers own retail
outlets, which allow them to collect the
retail markup on their products while
gaining greater control over distribution.
Access to the latest available and most
efficient technology and techniques
Developing new manufacturing
technology can help a firm gain a
competitive advantage. Improvements in
automation can increase efficiency and
reduce production costs.

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Mattress Manufacturing in the US January 2014  

22

Competitive Landscape

Cost Structure
Benchmarks

The cost structures of individual firms in
the Mattress Manufacturing industry
vary depending upon firm size, product
portfolios, supply chain relationships and
distribution capabilities. The industry
operates with a high level of automation;
automation keeps labor costs low and
allows industry firms to compete with
producers in developing countries that
use more labor intensive processes.
While labor costs are relatively low,
mattresses have higher shipping costs
than other manufactured consumer
goods due to their size and weight. In
response, industry firms have adopted a
quick service delivery model that allows
them to maintain low inventory levels.
This model enables industry firms to
meet changing consumer tastes quickly
and cost effectively.
Profit
Industry profit margins, measured with
earnings before interest and taxes,
represent about 2.6% of revenue in 2014.
As such, profit margins are currently
equal to their 2008 level and are well
above negative territory where they were
in 2009. Relatively flat demand and
volatile purchase costs over the past five
years have kept industry profit growth
subdued. The price of industry products
has increased since 2009, but not enough
to outpace rising costs associated with
repair fees, legal fees and insurance (the
“other” category discussed below). At the
same time, increased automation and
production efficiency have helped offset
volatile demand and production costs
and have allowed industry profit to
recover from low points during the
five-year period.
Purchases
Purchase costs represent the largest
expense for the industry, accounting for
about 47.4% of revenue in 2014. These
costs include inputs such as wire coils,
foam, plastic, fabric and paperboard

containers. From 2009 to 2014, purchase
costs have been volatile due to fluctuating
oil and steel prices that directly affect the
prices of foam and wire springs. Industry
operators benefited from lower input
costs in 2009 but have seen these
increase over the past few years. In the
five years to 2014, the prices of steel and
oil have increased at average annual rates
of 3.1% and 10.1% respectively. These
increases came after sharp declines
during the recession.
Wages
Labor expenses are expected to account
for 8.7% of revenue in 2014, down
slightly from their level of 11.1% in 2009.
Per-mattress labor costs have continued
to fall over the past five years due to
rising automation levels. Better
production machinery has enabled
operators to reduce their workforce, and
industry employment has declined at an
annualized rate of 1.2% over the past five
years. Because the industry is becoming
less labor intensive, the average wage has
decreased considerably to $37,976.
Marketing
Firms market and advertise their
products in order to establish their brand
name and achieve product recognition in
a crowded market. Notable industry
marketing campaigns include Serta’s
“counting sheep” and Select Comfort’s
Sleep Number ads. Marketing expenses
currently account for about 2.6% of
revenue. Marketing has remained
relatively stable over the last five years,
however, is 0.2% lower than prerecession
levels as operators have scaled back on
the number of advertisements.
IBISWorld estimates that marketing will
remain at current levels moving forward.
Other costs
Rent, utilities and depreciation are
estimated to account for 1.3%, 0.4% and
1.1% of industry revenue, respectively. These

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Mattress Manufacturing in the US January 2014  

23

Competitive Landscape

Cost Structure
Benchmarks
continued

costs have all remained flat compared to
their 2009 levels. Depreciation is relatively
low compared to other manufacturing
industries, even though mattress
manufacturers rely increasingly on
sophisticated quilters, foam compressors
and wire spring unit fabricators. While these
machines are expensive, they represent a
low cost relative to industry revenue.
Other costs, including repair fees, legal
fees, insurance, administrative expenses,

transport expenses and research and
development costs, account for the
remaining industry costs. In 2014,
these expenses are estimated to account
for about 47.2% of industry revenue, a
slight increase over their 46.3% share
in 2009. The significant increase is due
to rising transportation costs and the
large legal and administrative fees that
have been incurred recently due to
mergers and acquisitions.

Sector vs. Industry Costs
Average Costs of
all Industries in
sector (2014)
100

Industry Costs
(2014)

2.6
8.7

6.9
10.4

■ Profit
■ Wages
■ Purchases
■ Depreciation
■ Marketing
■ Rent & Utilities
■ Other

Percentage of revenue

80

47.4

60

58.6
1.1

40

20

2.6
2.8

1.4

2.6

1.7

35.9

17.3
0
SOURCE: WWW.IBISWORLD.COM

Basis of Competition
Level & Trend
 ompetition
C

in
this industry is
Mediumand the
trend is S
 teady

Manufacturers in this industry set
themselves apart from their
competitors on the basis of their
product quality, design, range of
offerings, price and service.
Internal competition
Many consumers are willing to spend a
significant amount of money on a quality

mattress. Mattresses are expected to have
a lifespan of ten years, and many
consumers consider such purchases to be
personal investments; after all, the
average person spends a third of their
lifetime sleeping. The increasing
awareness of the health benefits of sleep
has driven up the demand for premium
and specialty mattresses. Specialty

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24

Competitive Landscape

Basis of Competition
continued

Barriers to Entry
Level & Trend
 arriers to Entry
B

in this industry are
Mediumand S
 teady

mattresses can offer back support,
adjustable firmness, and adjustable
sitting and reclining positions.
Additionally, a growing number of the
industry’s mattresses are organic or
hypoallergenic. Manufacturers have to
stay aware of consumer trends and
perceptions of quality in order to produce
stock that will be in demand.
Companies have also competed on the
basis of product range. Successful
companies offer multiple product lines as
this permits them to effectively meet the
needs of many customers. When
viscoelastic and latex mattresses became
more popular, major players quickly
acquired companies that produced these,
or else they began manufacturing their
own foam mattresses.
Firms in the Mattress Manufacturing
industry compete on the basis of price
within each market segment. Since the
industry is highly competitive and most
firms carry a large array of products,
companies may differentiate themselves on
the basis of price. Mattresses are expensive,
and price can determine a consumer’s
purchase if multiple mattresses are judged
to be of the same quality.

Customer service is a further way that
major players distinguish themselves
from competitors. Industry firms sell
their goods to furniture stores, bedding
shops, wholesalers and end consumers. If
they can provide timely deliveries,
warrantee support, customer service, or
assistance in retailers’ advertising
campaigns, industry firms can increase
their attractiveness as suppliers.

The top four players in the Mattress
Manufacturing industry are estimated to
capture a combined market share of
52.5%, reflecting a medium level of
industry concentration. Consequently,
the dominance of existing players
creates a significant barrier for new
entrants to establish links with key
suppliers and customers. Heavy
investment must be made in marketing
and promotional activity to build
customers’ brand awareness and to
overcome retailers’ resistance to brands
that are not well established. To be a
viable startup in this industry, a

company should offer an innovative
product that differs from those already
widely represented in the market.
Initial start-up and entry costs for
mattress manufacturers can be high.
New entrants will need to consider the
start-up costs for capital equipment,
research, development, marketing and
the purchase of low-priced and highquality raw materials. These high costs
can be a discouraging factor for new
operators. Start-ups need to establish
distribution networks with upstream
suppliers and downstream wholesalers
and retailers. These relationships are

External competition
The Mattress Manufacturing industry
has little external competition from
domestic industries. Consumers can
choose to sleep on air mattresses (which
are not included in the industry), sofas
or in sleeping bags, but these choices are
usually made for short term periods.
Competition is steeper from abroad,
however. Imported mattresses are
gaining ground and have grown from
satisfying 3.0% of domestic demand in
2009 to 5.4% in 2014. Imports from
countries with low wage costs such as
China and Mexico are behind most of
this growth, and these countries’
mattresses represent an increasing
threat to industry firms.

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25

Competitive Landscape

Level & Trend
 lobalization
G

in
this industry is
Lowand the trend
is I ncreasing

International trade is a
major determinant of
an industry’s level of
globalization.
Exports offer growth
opportunities for firms.
However there are legal,
economic and political risks
associated with dealing in
foreign countries.
Import competition can
bring a greater risk for
companies as foreign
producers satisfy domestic
demand that local firms
would otherwise supply.

The Mattress Manufacturing industry has
a medium level of globalization. The
industry’s major players serve their US
markets with production facilities in the
United States. However, many also have
operations across Asia, Australia, South
America, Europe and the Middle East for
international consumers. Sometimes,
these foreign plants are company owned
and operated, and sometimes they are
run by another firm under license. Due to
the bulky nature of mattresses and their
related transportation costs,
manufacturers benefit from being close to
retailers and consumers.
Mattress manufacturing requires a
fairly high level of labor if specialized
capital equipment is not available.
Trade Globalization
200

Barriers to Entry checklist

SOURCE: WWW.IBISWORLD.COM

Because industry firms invest in this
equipment in their domestic plants, they
generally do not benefit from moving
operations abroad, where labor costs are
cheaper, to serve the US market. These
firms would also incur increased costs for
shipping if they structured their supply
chain in this way. However,
manufacturers may organize their
facilities differently when they are located
in countries with low labor costs, and rely
less on automating equipment.
Globalization has been on the rise due
to increased levels of imported
mattresses. The countries that have
made the biggest gains in this regard are
China and Mexico; their imports have
increased at annualized rates of 23.7%

Global

150
100
50

Mattress Manufacturing

Import

40

Medium
Medium
Mature
Medium
Medium
Medium
Low

Going Global: Mattress Manufacturing 20002014

Export

0 Local
0

Level

Competition
Concentration
Life Cycle Stage
Capital Intensity
Technology Change
Regulation & Policy
Industry Assistance

200 Export

Exports/Revenue

Industry
Globalization

complicated by pre-existing
arrangements between established
operators and suppliers and
distributors; these arrangements cover
raw materials such as springs, foam and
textiles and license agreements with
retailers. If contractual arrangements
specify exclusivity with established
firms, startups are cut out of
relationships with these suppliers,
wholesalers or retailers automatically.

Exports/Revenue

Barriers to Entry
continued

80

120

Imports/Domestic Demand

160

Global

150
100
50

2000

0 Local 2014
0
40

Import
80

120

160

Imports/Domestic Demand
SOURCE: WWW.IBISWORLD.COM

WWW.IBISWORLD.COM

Mattress Manufacturing in the US January 2014  

26

Competitive Landscape

Industry
Globalization
continued

and 8.9%, respectively. Operations in
these countries can undercut the labor
costs of those in the United States, and

can gain a competitive advantage by
being more labor intensive than those in
the United States.

Mattress Manufacturing in the USJanuary 2014   27

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Major Companies

Serta International   |   Select Comfort Corporation
Simmons Bedding Company   |   Tempur Sealy International Inc.   |   Other Companies

Major players
(Market share)

Tempur Sealy International
Inc. 9.2%
Select Comfort Corporation
12.4%

47.5%
Other

Simmons Bedding Company 11.7%
Serta International 19.2%

Player Performance
Serta International
Market share: 19.2%
Industry Brand Names
Serta

Along with Simmons, Serta is a
subsidiary of AOT Bedding Super
Holdings. Serta is currently number one
in US mattress sales, having surpassed
Sealy in 2011 (Sealy had been number
one since the 1970s). The company was
founded in 1931 and offers innerspring
mattresses under the Serta Perfect
Sleeper, iSeries, iComfort Sleep System
and Serta Brands, which include Bellagio
at Home, Hotel Mattresses, Sertapedic
and Perfect Elements.
Serta also produces non-innerspring
mattresses or memory foam under its
iComfort brands. Serta’s mattresses are
well represented in the hospitality
industry, with the company supplying
mattresses to establishments such as
Hilton Hotels, Sheraton Hotels,
Hampton Inn, Marriott, Intercontinental
Hotels Group and Wyndham Hotels.
Serta is headquartered in Hoffman
Estates, IL, operates 47 factories
worldwide and sells its products in 100

SOURCE: WWW.IBISWORLD.COM

countries. Total revenue in 2014 is
estimated to be $1.5 billion.
Serta emphasizes style and innovation
to attract consumers. In 2009, Serta
rolled out its Donald Trump home
collection; the mattresses allow users to
adjust firmness and shift the mattress
into various positions for sitting and
sleeping. In 2011, the company partnered
with the Bellagio to introduce the
Bellagio at Home mattress line. Also in
2011, Serta rolled out its iComfort
collection, which is a set of memory foam
mattresses, similar to those sold by rival
Tempur-Pedic.
In 2010, Serta’s holding companies,
Ares Management LLC and Ontario
Teachers’ Pension Plan, made a major
acquisition when they purchased
competitor Simmons. At the time,
Simmons was in Chapter 11 bankruptcy.
Serta and Simmons continue to function
as separate entities, however, and
compete with each other. The companies

Serta Corporation (US mattress manufacturing) – financial performance*
Year

Revenue
($ million)

(% change)

Net Income
($ million)

(% change)

2009

915.0

-6.4

-16.5

-30.9

2010

985.0

7.7

19.7

N/C

2011

1,163.0

18.1

41.9

112.7

2012

1,237.7

6.4

4.95

-88.2

2013

1,370.4

10.7

61.7

1,146.5

2014

1,463.6

6.8

38.4

-37.8

*Estimates

SOURCE: IBISWORLD

Mattress Manufacturing in the USJanuary 2014   28

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Major Companies

Player Performance
continued

have remained distinct in order to comply
with antitrust laws. In late 2012, Advent
International Corporation agreed to buy a
majority stake in AOT Bedding Super
holdings; existing investors Ares
Management LLC and Ontario Teachers’
Pension Plan will retain a significant stake.
Financial performance
Serta International is a privately owned
company, meaning publicly available
financial information is limited. Over the
past five years, IBISWorld estimates that
Serta’s US-specific revenue has grown at
an average annual rate of 9.9% to $1.5
billion. In 2011, new product

Player Performance
Select Comfort
Corporation
Market share: 12.4%
Industry Brand Names
Sleep Number

Best known for its Sleep Number beds,
Select Comfort Corporation was founded
in 1987 and is headquartered in
Minneapolis. The company designs,
manufactures, markets and retails
foundations, bedding accessories and
mattresses. Select Comfort has
manufacturing facilities in South
Carolina and Utah and is the main
retailer of its products through its 410
company-owned stores located within the
United States. Select Comfort employs
about 2,700 people and total company
revenue, which includes manufacturing
and retail revenue, is expected to be $1.1
billion in 2014.
Select Comfort is vertically integrated
and generates revenue by selling
products through four complementary
distribution channels. Three of these
channels (retail, direct marketing and
e-commerce) are company controlled and
sell directly to consumers. Select Comfort
claims its company stores are the sixth
most productive retailer in the country
based on sales per square foot. The
company’s fourth distribution channel,
wholesale, sells to the QVC shopping
network and to select hospitality groups

introductions and successful advertising
campaigns drove up revenue 18.1%,
propelling Serta International past Sealy
and Tempur-Pedic to become the largest
mattress manufacturer in the United
States. Furthermore, the company was
able to weather the declining economy
relatively well due to strong relationships
with growing hospitality companies, such
as Hilton Hotels. Still, similar to other
mattress manufacturers, Serta
experienced a revenue decline in 2009
due to low consumer spending. It also
faced high raw material costs caused by
high commodity prices, which increased
pressure on profitability.

and institutional facilities; it also sells to
retailers in Alaska, Hawaii and Australia.
Select Comfort’s business strategy is
largely based on marketing and retailing
its innovative independent air chamber
technology that allows couples to adjust
mattress firmness to their preference.
Customizable mattress firmness
differentiates Sleep Number beds from
one-size-fits-all products. Select Comfort
offers mattresses at a range of prices
between from $999.0 to $4,699.0.
Recently, the company has also been
active in acquisitions. In January 2013,
Select Comfort purchased Comfortaire
Corporation, a privately held company
with revenue of $10.5 million before it
was bought out. Like Select Comfort,
Comfortaire was a manufacturer and
marketer of adjustable air-supported
sleep systems.
Financial performance
Over the five years to 2014, IBISWorld
estimates that Select Comfort’s US
manufacturing revenue has increased at
an annualized rate of 14.0% to $945.0
million. The company was heavily
impacted by the recession, closing 98

Mattress Manufacturing in the USJanuary 2014   29

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Major Companies

Player Performance
continued

underperforming stores in 2008 and
2009. In 2010, sales increased, primarily
through the company’s retail channels,
and have grown every year since.
IBISWorld estimates Select Comfort’s
revenue will grow in 2014 due to the

continued strong performance of
company-owned stores. Consumers are
increasing their spending on household
goods and alternative mattresses, such as
Select Comfort’s, are gaining popularity
with customers.

Select Comfort Corporation (US mattress manufacturing) – financial
performance*
Year

Revenue
($ million)

(% change)

Net Income
($ million)

(% change)

2009

489.8

2010

545.1

-10.6

32.0

129.8

11.3

28.4

-11.3

2011
2012

668.9

22.7

54.4

91.5

841.5

25.8

70.3

29.2

2013

874.8

4.0

63.1

-10.2

2014

945.0

8.0

78.7

24.7

*Estimates
SOURCE: ANNUAL REPORT AND IBISWORLD

Player Performance
Simmons Bedding
Company
Market share: 11.7%
Industry Brand Names
Beautyrest
Beautyrest Black
Nuflex Foundation
ComforPedic
BeautySleep

Founded in 1870 in Kenosha, WI,
Simmons Bedding Company is the
third-largest mattress manufacturer in
the United States. Simmons is currently
headquartered in Atlanta, has 2,800
employees and, along with Serta, is a
subsidiary of AOT Bedding Super
Holdings. Simmons makes mattresses
and accessories under its flagship
Beautyrest brand, as well as under the
Beautyrest Black, Beauty Sleep
ComforPedic and Nuflex Foundation
labels. The company currently operates
15 manufacturing facilities in the United
States and Canada and sells to over
11,000 furniture outlets, department
stores and specialty shops in nearly 100
countries. Simmons also distributes
branded products directly to institutional
users of bedding products, such as the
hospitality industry and certain agencies
of the US government. The company
generates 87.0% of its revenue from its

domestic segment; total revenue in 2014
is estimated to be $1.0 billion.
Simmons mattresses are priced
between $199.0 and $5,000.0. Most
recently, Simmons released the
Beautyrest Recharge mattress model,
which features pocketed coil springs, as
well as AirCool Memory Foam and
TruTemp Gel, which allows air to flow
freely through the mattress to keep the
customer cool.
In November 2009, the company filed
for bankruptcy because it was over $1.0
billion in debt, which was brought on by
lower sales than expected and poor
financial management. In January 2010,
Simmons emerged from bankruptcy after
being purchased by Ares Management
LLC and Ontario Teachers’ Pension Plan.
Ares and Ontario Teachers’ Pension Plan
are also owners of Serta, and combined
Serta and Simmons to form AOT Bedding
Super Holdings. Serta and Simmons have

Mattress Manufacturing in the USJanuary 2014   30

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Major Companies

Player Performance
continued

continued to operate as independent
entities that compete with each other in
order to comply with antitrust laws. In
late 2012, Advent International agreed to
buy a majority stake in AOT Bedding
Super Holdings; Ares and Ontario
Teachers’ Pension Plan will continue to
hold significant stakes.

and 5.2% in 2009 and 2010, respectively,
from which the company has not fully
recovered. Adding to the company’s
troubles, the cost of raw materials rose
during the recession as steel and oil
became more expensive. To offset these
costs, the company lowered some
workforce salaries and closed two
conventional bedding manufacturing
facilities. The International Sleep
Products Association estimates that
Simmons’ revenue grew in 2010, but at a
slower rate than Serta’s revenue.
IBISWorld expects Simmons’ industryspecific revenue to grow to $891.8
million in 2014, as consumers increase
their spending and the company launches
new products.

Financial performance
Since the company’s bankruptcy in
November 2009, financial information
for Simmons Bedding Company has not
been made publicly available. Over the
five years to 2014, IBISWorld estimates
Simmons’ US-specific revenue has
contracted at an annualized rate of 0.8%
due to steep revenue declines of 19.9%

Simmons Company (US mattress manufacturing) – financial
performance*
Year

Revenue
($ million)

(% change)

Net Income
($ million)

(% change)

2009

858.0

N/C

-15.4

-343.2

2010

813.8

-5.2

16.3

N/C

2011

824.5

1.3

29.7

82.2

2012

847.6

2.8

3.4

-88.6

2013

870.0

2.6

39.2

1,052.9

2014

891.8

2.5

23.4

-40.3

*Estimates
SOURCE: IBISWORLD

Player Performance

Tempur Sealy International,
headquartered in Lexington, KY, is a
leading manufacturer and distributor of
high-end mattresses and pillows made
from its patented memory foam.
Tempur-Pedic was founded in 1989.
Tempur-Pedic employed about 1,950
people prior to its acquisition of Sealy in
2014. Tempur Sealy sells its products in
about 80 countries worldwide under the
Tempur and Tempur-Pedic brands

through retail (furniture and bedding
stores, specialty retailers and department
stores), direct (direct order and online),
healthcare (chiropractors, medical
retailers and hospitals) and wholesale
channels. Total revenue for TempurPedic (not including Sealy) is expected to
be $1.5 billion in 2014.
Tempur Sealy operations are divided
into two segments: North America and
International. The domestic segment

Mattress Manufacturing in the USJanuary 2014   31

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Major Companies

Player Performance
continued
Tempur Sealy
International Inc.
Market share: 9.2%
Industry Brand Names
Tempur
Tempur-Pedic
Sealy
Posturepedic
Optimum
Stearns & Foster

consists of two US manufacturing
facilities that supply products to the
Tempur-Pedic distribution subsidiary
and certain third-party distributors in
the Americas. The international
segment includes the company’s
manufacturing facility in Denmark,
which supplies the company’s European
distribution subsidiaries and thirdparty distributors.
In March 2013, Tempur-Pedic
acquired close competitor Sealy
Corporation. The combined company
now has a diversified product portfolio
with a presence in major market
segments internationally and across the
pricing spectrum. Already a leader in
high-end foam mattresses, the
acquisition gives Tempur-Pedic a
foothold in the mid- to lower-end
traditional spring mattress category.
The combined company will benefit
from Sealy’s complementary portfolio
of top products and brands, such as
Sealy Posturepedic and Stearns and
Foster. The combination also
strengthens the company’s global
presence and distribution capabilities
along with potentially delivering cost
savings through combined research and
development and management teams.

Financial performance
IBISWorld estimates that over the five
years to 2014, Tempur-Pedic’s US
industry-specific revenue has grown at
an annualized rate of 15.9% to $703.7
million. The company has benefited from
its leading position in the high-end foam
mattress segment, which was the fastest
growing market over the past five years
in terms of unit sales and dollar volumes.
Despite its favorable market position, its
higher priced products saw significant
declines in demand during the recession.
With limited financing and low consumer
confidence during the recession, US
consumers were less willing to purchase
high-end mattresses and opted for
cheaper standard mattresses. As a result,
domestic revenue declined an estimated
11.0% in 2009, respectively. Revenue
quickly rebounded in 2010 with
improved consumer sentiment, which
was particularly beneficial to Tempur
Sealy; many consumers had grown more
willing to pay for high-quality mattresses
with better body support as a result of
increasing health consciousness. In
2014, IBISWorld anticipates the
company’s growth will continue and be
boosted by the Sealy acquisition with
revenue of $703.7 million.

Tempur Sealy International (US mattress manufacturing) – financial
performance
Year

Revenue
($ million)

2009

336.9

N/C

85.0

N/C

2010

539.2

60.0

157.2

84.9

2011

693.4

28.6

219.6

39.7

2012

666.6

-3.9

106.8

-51.4

2013

679.9

2.0

138.2

29.4

2014*

703.7

3.5

173.7

25.7

(% change)

Net Income
($ million)

(% change)

*Estimates
SOURCE: ANNUAL REPORT AND IBISWORLD

Mattress Manufacturing in the USJanuary 2014   32

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Major Companies

Other Companies

King Koil

Estimated market share: Less than 1.0%
King Koil was founded in 1898 under the
name United States Bedding and is
headquartered in Willowbrook, IL. In the
1930s, US Bedding changed its name to
King Koil. The company offers several
mattress brands, including King Koil,
iMattress, The Dr. Breus Bed, Laura

Ashely and Sleep iD, while currently
working on Natural Response. King Koil
operates retail stores and distributes
products in 80 countries via licensing
agreements. The company has nine
manufacturing facilities in the US and one
in Canada, each of which is responsible for
servicing a particular region. In 2014,
revenue is expected to be $1.0 million.

Mattress Manufacturing in the USJanuary 2014   33

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Operating Conditions

Capital Intensity   |   Technology & Systems   |   Revenue Volatility
Regulation & Policy   |   Industry Assistance
Capital Intensity
Level
The level

of capital
intensity is M
 edium

The Mattress Manufacturing industry
has a moderate level of capital
intensity, which is determined by the
ratio of capital to labor. For every one
dollar spent on labor, industry
operators invest about $0.13, on
average, on capital. The industry has
seen capital intensity increase over the
past several years. This is due to the
increase in equipment purchases as the
industry turns more to automating the
mattress production process.
The need for labor is reflective of the
manual tasks required for the assembly
of mattresses and the need for qualified
personnel to design mattress
components and engineer the
production process. In addition to the

Capital intensity

Capital units per labor unit
0.5
0.4
0.3
0.2
0.1
0.0

Economy

Manufacturing

Mattress
Manufacturing

Dotted line shows a high level of capital intensity
SOURCE: WWW.IBISWORLD.COM

industry’s six major companies, the
industry consists of many small- to

Tools of the Trade: Growth Strategies for Success
Investment Economy

Recreation, Personal Services,
Health and Education. Firms
benefit from personal wealth so
stable macroeconomic conditions
are imperative. Brand awareness
and niche labor skills are key to
product differentiation.

Information, Communications,
Mining, Finance and Real
Estate. To increase revenue
firms need superior debt
management, a stable
macroeconomic environment
and a sound investment plan.

Rubber Product Manufacturing
Department Stores

Traditional Service Economy
Wholesale and Retail. Reliant
on labor rather than capital to
sell goods. Functions cannot
be outsourced therefore firms
must use new technology
or improve staff training to
increase revenue growth.

Warehouse Clubs & Supercenters
Plastic Products Miscellaneous Manufacturing
Textile Mills
Old Economy

Mattress Manufacturing

Change in Share of the Economy

Capital Intensive

Labor Intensive

New Age Economy

Agriculture and Manufacturing.
Traded goods can be produced
using cheap labor abroad.
To expand firms must merge
or acquire others to exploit
economies of scale, or specialize
in niche, high-value products.
SOURCE: WWW.IBISWORLD.COM

Mattress Manufacturing in the USJanuary 2014   34

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Operating Conditions

Capital Intensity
continued

medium-size firms. Generally, smaller
establishments have higher labor
intensity and lower capital intensity, as

these firms may not have large enough
production runs to justify major
expenditures on automating equipment.

Technology
& Systems

Product technology
Technological change and development
within the industry is considered
moderate. Many firms invest heavily in
research and development of new
products such as coil development, foam
technology and adjustable electronic
mattresses. These investments are
common at the premium end of the
market. Recent developments in the
industry include the increasing use of
synthetic products such as viscoelastic
foam (also known as memory foam, which
was first developed by NASA),
polyurethane foam and latex foam. In
addition, mattresses with built-in fans
help prevent the re-breathing of carbon
dioxide. This technology was developed
specifically for the crib-mattress product
line. These fans include a replaceable filter
designed to alleviate asthma and allergies
through the removal of airborne particles.
The mattress itself also focuses on airflow,
with an air-permeable structure built in to
the mattress; this keeps the baby at a
comfortable temperature and also keeps
bacteria from growing inside the mattress.
Additionally, mattress manufacturers
have added features that promote
mattress cleanliness.
Another technological innovation is
that of adjustable mattresses that the
customer has control over. The Sleep
Number line by Select Comfort. The
customer can control the temperature,
angle of both the top half and bottom

half of the mattress and the firmness.
Tempur-Pedic has also introduced this
type of mattress.

Level
The level

of
Technology Change
is M
 edium

Production technology
Recent developments in assembly
technologies and sourcing have helped
maximize production efficiency. For
example, some companies manufacture
conventional bedding to order and have
adopted just-in-time inventory
techniques. These techniques optimize
manufacturers’ sourcing and storage
processes to keep the costs associated with
inventory low. As a result, bedding orders
can be scheduled, produced and shipped
within five days of receipt. Rapid delivery
capability allows a company to minimize
its inventory of finished products and
better satisfy customer demand with
prompt shipments. Companies in the
industry have also implemented a
warehouse management system. This
system provides network-wide scan, bar
code and electronic processing capabilities
for receipt, movement and shipment
transactions for all distribution center
activities. This setup allows regional
centers to juggle demand from high
volume retail customers and second tier
distribution centers. Some players have
retail, direct marketing, customer service
and e-commerce applications interfaced
together to provide a fully integrated view
of their customers and their activities
across sales channels.

Mattress Manufacturing in the USJanuary 2014   35

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Operating Conditions

Level
The level

of
Volatility is M
 edium

Revenue volatility in the Mattress
Manufacturing industry is largely caused
by changes in disposable income, the
strength of the domestic economy and
residential construction levels. These
factors affect consumer demand for
mattresses and can influence the timing
of consumers’ buying decisions. As the
average price of a queen-size mattress
and foundation is about $1,000, any
change in disposable income can cause
consumers to delay their purchases.
Consumers need to feel confident about
their ability to finance the product.
This industry is also sensitive to
changes in the US housing market.
Mattresses are household goods so when
A higher level of revenue
volatility implies greater
industry risk. Volatility can
negatively affect long-term
strategic decisions, such as
the time frame for capital
investment.
When a firm makes poor
investment decisions it
may face underutilized
capacity if demand
suddenly falls, or capacity
constraints if it rises
quickly.

houses are being built or sold, the
demand for new mattresses increases.
The value of residential construction has
surpassed its recessionary level and
housing starts have surpassed their
recessionary level. These dynamics have
contributed to the relatively stable state
of demand compared to 2009.
As such, industry revenue has
displayed a moderate level of volatility
in the five years to 2014, with year-onyear revenue changes averaging 4.8%.
Revenue volatility was enhanced by a
decline of 4.4% in 2009 as well as a
sharp pickup of 9.8% in 2011. It has
been moderated by minor gains in 2012
and 2013.

Volatility vs Growth
1000

Revenue volatility* (%)

Revenue Volatility

Hazardous

Rollercoaster

100
10

Mattress Manufacturing

1
0.1

Stagnant
–30

–10

Blue Chip
10

30

50

70

Five year annualized revenue growth (%)
* Axis is in logarithmic scale
SOURCE: WWW.IBISWORLD.COM

Regulation & Policy
Level & Trend
 he level of
T

Regulation is
Mediumand the
trend is S
 teady

The Mattress Manufacturing industry is
subject to several environmental laws
and regulations. These cover discharges
into the air and waterways, and storage
and disposal of chemicals, waste and
by-products. Specific regulations that
govern these areas include the Federal
Water Pollution Control Act, the
Resource Conservation and Recovery Act,
the Clean Air Act and The Comprehensive
Environmental Response, Compensation
and Liability Act. As with other

industries, mattress manufacturers must
also abide by US patent and trademark
laws that relate to the protection of
intellectual property rights.
Penalties are imposed on mattress
manufacturers that violate US labor and
wage laws. Companies must also adhere
to Occupational Safety and Health
Administration standards for their
employees. Additionally, manufacturers
must properly label bedding merchandise
to comply with regulation standards.

Mattress Manufacturing in the USJanuary 2014   36

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Operating Conditions

Regulation & Policy
continued

Regulators enforce proper labeling of
new and used mattresses to control
hygiene and other aspects of product
handling and sale. These regulations have
been increasingly stressed due to growing
consumer awareness of the hazards of
breathing mold spores, which may reside
in mattresses.
One of the newest regulations for this
sector includes the US Consumer
Product Safety Commission’s new
standard on flame-retardant mattresses

(16 CFR Part 1633). This law became
effective July 1, 2007. It states that all
mattresses must comply with this
standard to reduce the severity of
mattress fires ignited by open flame
sources such as candles, matches and
lighters. The mattress must also be
labeled with the city, state location,
month and year of production.
Mattresses that are treated with a flame
retardant chemical must be labeled with
the letter “T”.

Industry Assistance

Imports of the industry’s products are
subject to relatively low tariff levels.
According to the US International Trade
Commission, the tariff rates for
mattresses made of cotton, rubber or
plastics are 3.0% under Normal Trade
Relations (NTR); those made of other
materials are levied at 6.0%. However,
mattress supports are not subject to any
tariffs under NTR.
With little tariff protection for the
industry, manufacturers receive
assistance from the International
Sleeping Products Association (ISPA) as
part of a membership package. Examples
of assistance made available include a

forum for networking that allows for the
dissemination of industry-specific
knowledge, regulations and other
pertinent information. The association
also acts as a lobbying group to push for
conditions that will benefit the industry
as a whole. Recently, the influence of this
association has been undermined by the
resignation of several large
manufacturers. Sealy is no longer an
ISPA member, nor is Serta. The
resignation of these two players cost the
association about $600,000 in lost dues.
The association has also lost members
through the recent resignation of the
Carolina Mattress Guild.

Level & Trend
 he level of
T

Industry Assistance
is L owand the
trend is S
 teady

Mattress Manufacturing in the USJanuary 2014   37

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Key Statistics
Industry Data
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
Sector Rank
Economy Rank

Revenue
($m)
8,041.3
8,548.7
8,442.3
7,460.6
7,074.7
6,846.7
7,371.4
7,440.1
7,485.8
7,607.6
7,852.1
7,990.6
8,058.8
8,188.5
8,270.4
155/402
666/1308

Annual Change
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
Sector Rank
Economy Rank

Revenue
(%)
6.3
-1.2
-11.6
-5.2
-3.2
7.7
0.9
0.6
1.6
3.2
1.8
0.9
1.6
1.0
283/402
990/1308

Key Ratios
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
Sector Rank
Economy Rank

IVA/Revenue
(%)
18.27
15.86
14.74
14.71
10.72
14.93
7.50
11.08
14.74
12.43
12.05
11.85
11.49
11.75
11.30
382/402
1215/1308

Industry
Value Added
($m)
1,469.2
1,355.4
1,244.4
1,097.1
758.1
1,022.5
552.9
824.0
1,103.5
945.7
946.3
946.9
925.6
961.8
934.2
216/402
907/1308

Establishments
567
562
554
536
495
473
466
457
451
441
432
421
412
407
402
151/402
939/1307

Industry
Value Added
(%)
-7.7
-8.2
-11.8
-30.9
34.9
-45.9
49.0
33.9
-14.3
0.1
0.1
-2.2
3.9
-2.9
394/402
1291/1308

Establishments
(%)
-0.9
-1.4
-3.2
-7.6
-4.4
-1.5
-1.9
-1.3
-2.2
-2.0
-2.5
-2.1
-1.2
-1.2
354/402
1209/1307

Imports/
Demand
(%)
2.72
3.23
2.78
3.19
3.03
4.45
4.55
5.65
5.77
5.38
6.07
6.25
7.25
7.94
8.60
317/372
349/429

Figures are inflation-adjusted 2014 dollars. Rank refers to 2014 data.

Enterprises Employment
466
22,770
462
21,383
456
19,018
441
18,766
410
18,444
398
18,766
403
18,565
402
18,128
402
17,878
401
17,390
400
17,241
398
17,061
396
16,908
398
16,811
399
16,625
145/402
156/402
896/1307
793/1308

Exports
($m)
118.9
128.0
131.4
150.8
119.9
127.4
139.1
139.0
140.7
134.6
141.0
139.1
140.2
145.8
146.0
286/372
329/429

Imports
($m)
221.1
280.8
237.7
241.0
217.5
312.9
345.1
437.0
449.4
424.8
498.0
523.6
618.7
693.8
764.7
236/372
269/430

Wages
($m)
1,035.0
902.3
822.3
798.6
786.4
782.9
762.0
727.3
699.2
660.4
651.9
643.2
635.5
629.3
620.6
183/402
836/1308

Domestic
Demand
8,143.5
8,701.5
8,548.6
7,550.8
7,172.3
7,032.2
7,577.4
7,738.1
7,794.5
7,897.8
8,209.1
8,375.1
8,537.3
8,736.5
8,889.1
155/372
185/429

World price
of steel
($)
159.7
174.2
182.9
220.6
165.2
191.7
216.2
208.0
197.7
192.3
196.8
200.6
205.6
214.8
220.9
N/A
N/A

Enterprises Employment
(%)
(%)
-0.9
-6.1
-1.3
-11.1
-3.3
-1.3
-7.0
-1.7
-2.9
1.7
1.3
-1.1
-0.2
-2.4
0.0
-1.4
-0.2
-2.7
-0.2
-0.9
-0.5
-1.0
-0.5
-0.9
0.5
-0.6
0.3
-1.1
252/402
358/402
919/1307
1232/1308

Exports
(%)
7.7
2.7
14.8
-20.5
6.3
9.2
-0.1
1.2
-4.3
4.8
-1.3
0.8
4.0
0.1
356/372
411/429

Imports
(%)
27.0
-15.3
1.4
-9.8
43.9
10.3
26.6
2.8
-5.5
17.2
5.1
18.2
12.1
10.2
354/372
410/430

Wages
(%)
-12.8
-8.9
-2.9
-1.5
-0.4
-2.7
-4.6
-3.9
-5.5
-1.3
-1.3
-1.2
-1.0
-1.4
385/402
1284/1308

Domestic
Demand
(%)
6.9
-1.8
-11.7
-5.0
-2.0
7.8
2.1
0.7
1.3
3.9
2.0
1.9
2.3
1.7
266/372
303/429

World price
of steel
(%)
9.1
5.0
20.6
-25.1
16.0
12.8
-3.8
-5.0
-2.7
2.3
1.9
2.5
4.5
2.8
N/A
N/A

Exports/
Revenue
(%)
1.48
1.50
1.56
2.02
1.69
1.86
1.89
1.87
1.88
1.77
1.80
1.74
1.74
1.78
1.77
352/372
398/429

Revenue per
Employee
($’000)
353.15
399.79
443.91
397.56
383.58
364.85
397.06
410.42
418.72
437.47
455.43
468.35
476.63
487.09
497.47
176/402
398/1308

Wages/Revenue
(%)
12.87
10.55
9.74
10.70
11.12
11.43
10.34
9.78
9.34
8.68
8.30
8.05
7.89
7.69
7.50
316/402
1073/1308

Employees
per Est.
40.16
38.05
34.33
35.01
37.26
39.67
39.84
39.67
39.64
39.43
39.91
40.52
41.04
41.30
41.36
214/402
309/1307

Average Wage
($)
45,454.55
42,197.07
43,237.99
42,555.69
42,637.17
41,719.07
41,044.98
40,120.26
39,109.52
37,975.85
37,811.03
37,700.02
37,585.76
37,433.82
37,329.32
351/402
896/1308

Share of the
Economy
(%)
0.01
0.01
0.01
0.01
0.01
0.01
0.00
0.01
0.01
0.01
0.01
0.01
0.01
0.01
0.00
216/402
907/1308

SOURCE: WWW.IBISWORLD.COM

Mattress Manufacturing in the USJanuary 2014   38

WWW.IBISWORLD.COM

Jargon & Glossary

Industry Jargon

INNERSPRING MATTRESSA type of mattress that has
internal springs.
LEAN MANUFACTURINGA production strategy that
focuses on low inventory, quick delivery and efficient
supply chain management; also known as just-in-time
production.

VISCOELASTIC FOAMAlso known as memory foam, a
material used in mattresses that molds to the shape of
the body and increases comfort. The material returns to
its original shape once pressure is removed.

MATTRESS TICKINGThe fabric that is used to cover a
mattress, which influences the level of comfort and
quality of the mattress.

IBISWorld Glossary

BARRIERS TO ENTRYHigh barriers to entry mean that
new companies struggle to enter an industry, while low
barriers mean it is easy for new companies to enter an
industry.
CAPITAL INTENSITYCompares the amount of money
spent on capital (plant, machinery and equipment) with
that spent on labor. IBISWorld uses the ratio of
depreciation to wages as a proxy for capital intensity.
High capital intensity is more than $0.333 of capital to
$1 of labor; medium is $0.125 to $0.333 of capital to $1
of labor; low is less than $0.125 of capital for every $1 of
labor.
CONSTANT PRICESThe dollar figures in the Key
Statistics table, including forecasts, are adjusted for
inflation using the current year (i.e. year published) as
the base year. This removes the impact of changes in
the purchasing power of the dollar, leaving only the
“real” growth or decline in industry metrics. The inflation
adjustments in IBISWorld’s reports are made using the
US Bureau of Economic Analysis’ implicit GDP price
deflator.
DOMESTIC DEMANDSpending on industry goods and
services within the United States, regardless of their
country of origin. It is derived by adding imports to
industry revenue, and then subtracting exports.
EMPLOYMENTThe number of permanent, part-time,
temporary and seasonal employees, working proprietors,
partners, managers and executives within the industry.
ENTERPRISEA division that is separately managed and
keeps management accounts. Each enterprise consists
of one or more establishments that are under common
ownership or control.
ESTABLISHMENTThe smallest type of accounting unit
within an enterprise, an establishment is a single
physical location where business is conducted or where
services or industrial operations are performed. Multiple
establishments under common control make up an
enterprise.
EXPORTSTotal value of industry goods and services sold
by US companies to customers abroad.
IMPORTSTotal value of industry goods and services
brought in from foreign countries to be sold in the
United States.

INDUSTRY CONCENTRATIONAn indicator of the
dominance of the top four players in an industry.
Concentration is considered high if the top players
account for more than 70% of industry revenue.
Medium is 40% to 70% of industry revenue. Low is less
than 40%.
INDUSTRY REVENUEThe total sales of industry goods
and services (exclusive of excise and sales tax); subsidies
on production; all other operating income from outside
the firm (such as commission income, repair and service
income, and rent, leasing and hiring income); and
capital work done by rental or lease. Receipts from
interest royalties, dividends and the sale of fixed
tangible assets are excluded.
INDUSTRY VALUE ADDED (IVA)The market value of
goods and services produced by the industry minus the
cost of goods and services used in production. IVA is
also described as the industry’s contribution to GDP, or
profit plus wages and depreciation.
INTERNATIONAL TRADEThe level of international
trade is determined by ratios of exports to revenue and
imports to domestic demand. For exports/revenue: low is
less than 5%, medium is 5% to 20%, and high is more
than 20%. Imports/domestic demand: low is less than
5%, medium is 5% to 35%, and high is more than
35%.
LIFE CYCLEAll industries go through periods of growth,
maturity and decline. IBISWorld determines an
industry’s life cycle by considering its growth rate
(measured by IVA) compared with GDP; the growth rate
of the number of establishments; the amount of change
the industry’s products are undergoing; the rate of
technological change; and the level of customer
acceptance of industry products and services.
NONEMPLOYING ESTABLISHMENTBusinesses with
no paid employment or payroll, also known as
nonemployers. These are mostly set up by self-employed
individuals.
PROFITIBISWorld uses earnings before interest and tax
(EBIT) as an indicator of a company’s profitability. It is
calculated as revenue minus expenses, excluding
interest and tax.

Mattress Manufacturing in the USJanuary 2014   39

WWW.IBISWORLD.COM

Jargon & Glossary

IBISWorld Glossary
continued

VOLATILITYThe level of volatility is determined by
averaging the absolute change in revenue in each of the
past five years. Volatility levels: very high is more than
±20%; high volatility is ±10% to ±20%; moderate
volatility is ±3% to ±10%; and low volatility is less than
±3%.

WAGESThe gross total wages and salaries of all
employees in the industry. The cost of benefits is also
included in this figure.

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