A recovery for downstream clients is driving demand growth for grease trap cleaning services
Los Angeles, CA (PRWEB) April 03, 2012
Revenue for the Grease Trap Cleaning industry has declined at an annualized rate of 0.6% to $389.8 million in the five years to 2012. In spite of this decline, the demand for grease trap cleaning is relatively stable. Most municipalities require grease traps for commercial establishments to be cleaned regularly to prevent the buildup of fats, oils and grease (FOG), which can cause raw sewage leaks and otherwise costly maintenance of sewer systems. Nevertheless, industry demand remains closely linked with the demand for food service establishments, including fast-food restaurants and chain restaurants.
Unfortunately for industry operators, a decline in per capita disposable income during the recession caused many consumers to eat at home rather than choose a night on the town. Similarly, a decline in profit at many food service establishments caused restaurants to forgo scheduled cleaning more often. These factors reduced demand for grease trap cleaning during the recession, causing industry profit margins to decline and the number of industry enterprises to decline to 456 in the five years to 2012. However, recent economic recovery is helping drive industry growth once again, and industry revenue is expected to increase in 2012. According to IBISWorld industry analyst Kevin Culbert, the Grease Trap Cleaning industry has a low level of market share concentration. This is largely due to the fact that the majority of the industry's operators services local restaurants, hotels, schools and businesses within a limited geographic scope to contain transportation expenses. Consequently, industry operators typically confine their operations on a local or regional basis, limiting the overall market share concentration of the industry. The majority of companies in the industry operates from a single facility and employs fewer than nine full-time employees.
In the five years to 2017, industry revenue is forecast to increase. Rising disposable income will lead more consumers to visit restaurants, which will ultimately cause food service establishments to invest in regular maintenance and cleaning of grease traps. Furthermore, stricter financial penalties are expected against businesses that do not properly dispose of FOGs, especially as more emphasis is placed on recycling, says Culbert. Over the next five years, more research will be put into capturing and separating FOGs from liquid waste. This will particularly be the case for brown grease, the majority of which currently ends up in landfills. However, new technology is being explored that allows brown grease to be transformed into a variety of products, including oil and organic solids. As such, grease is expected to become more commoditized, helping to boost industry profit margins in the process. For more information, visit IBISWorld’s Grease Trap Cleaning report in the US industry page.
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IBISWorld industry Report Key Topics
This industry cleans and maintains grease traps to avoid unnecessary backup in sewage systems. Grease traps are plumbing tools that are used to intercept greases before they enter a wastewater system.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalization & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
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