Out with the old, in with the new? Not in the case of writing instruments. With the exception of one small blip in 2009, when fallout from the financial crisis was at its peak, sales of fountain pens have shown year-on-year growth, at fixed US dollar values, for the past two decades.
It is a remarkable achievement when you consider that e-mail and social media has become the dominant channel for written communication, both at home and at work. It is even more impressive when you factor in competition from low-priced ballpoint pens, ie the fast fashion of the writing instruments industry.
It all begs the question, how has this seemingly old-fashioned product managed to defy the winds of change? Compare the resilience of fountain pens, for example, with the once ubiquitous typewriter (or some would argue, even the fax machine), which has long since died a death. The fountain pen is no longer a working tool, after all. So why are so many of us keen to own one, and to pay top dollar to boot?
Global Fountain Pen Sales: 2005/2010/2015/2020
Note: F = Forecast
From writing tool to luxury personal accessory
China is the biggest market in the world for fountain pens, fuelled in large part by the strong gifting culture and the discreet luxury image of the leading brands. Sales climbed to US$341 million last year, up 7% on 2014. The market weakened slightly after the Chinese government clamped down on state officials receiving gifts, but it has picked up quickly. In fact, there is evidence that brands such as Montblanc (Richemont) and Parker (Newell Rubbermaid) have benefitted from a shift toward less ostentatious gifts in China since 2012 (people are ‘gifting’ luxury pens instead of luxury watches, for example).
Brazil is another important fountain pen market. Value sales there are now higher than in the US, despite tougher economic operating conditions over the recent period. The cachet of fountain pens as a personal accessory is key to demand in Brazil, especially in business circles. Montblanc, in particular, is widely regarded as a prestigious brand to own, and accounts for around 10% of value sales. There are no shortage of Montblanc ‘fakes’ sold at street markets in Brazil (and across Latin America), which itself is a measure of the brand’s prestige status.
Indeed, perhaps the greatest achievement of the fountain pen – and ultimately the key to its endurance – has been its transformation from a workhorse of classrooms and offices into a luxury personal accessory. Rather like a watch, a fountain pen has become a popular graduation or coming-of-age gift – or indeed a retirement present. Without necessarily trying to re-invent themselves, the top selling brands have become symbols of old-school refinement and craftsmanship.
Top 5 Markets by Value Sales of Fountain Pens: 2015
Value is up, but volume is down
The shift toward a more luxurious image for fountain pens runs in tandem with an uptick in average prices. Indeed, although global retail value grew by 37% (at fixed US dollar values) over the past 10 years, retail volume actually contracted by 7% over the same period.
North America and Western Europe registered big slumps, with unit sales (between 2005 and 2015) falling 28% and 23%, respectively. This is evidence that fountain pens have been more adversely affected by the growth of digital communication platforms than their value performance would suggest.
The bottom line is that less people, not more, are buying fountain pens than they were a decade ago. Crucially, though, those that are buying fountain pens are prepared to pay more for them. And that goes to the heart of their cachet.
The demographic mix could become less favourable
People the world over are living longer and the bulkiness of the over 65-year-old population has played out well for fountain pens. After all, this is the generation that responds most positively to a nostalgic narrative. Has an older demographic been propping up demand for fountain pens? It is perhaps too early to say.
But, going forward, as the generation that grew up with fountain pens gradually dies off, and gets replaced by a generation that has grown up with the internet and all things digital, will fountain pens continue to wield the same treasured appeal?
Over the next five years, according to data from Euromonitor International, volume sales in North America and Western Europe will contract by 11% and 7%, respectively (and by as much as 17% in the UK). At the same time, volume sales are forecast to grow strongly in China and a host of smaller emerging markets such as the UAE and Turkey.
Forecast Growth in Volume Sales of Fountain Pens by Key Markets: 2015-2020
The mixed geographical picture is indicative of a product that is hard to fathom. Two decades ago, few would have predicted that fountain pens would survive the onslaught of digital technology on one side and low price ballpoint pens on the other. Yet, the big-name brands have done much more than survive. They have prospered.
Operating conditions could get tougher over the next two decades, but who now would bet against fountain pens continuing to defy the odds?