Companies are developing eco-friendly processes, generating new demand
Los Angeles, CA (PRWEB) October 09, 2013
During the past five years, the Soap and Cleaning Compound Manufacturing industry faced steep competition. According to IBISWorld Industry Analyst Sarah Turk, “The industry responded by consolidating, developing new products and expanding into emerging markets.” Industry operators developed eco-friendly chemicals and manufacturing processes to generate demand from environmentally conscious consumers. Also, hospitals and businesses used public health campaigns to raise awareness about hand sanitization. As a result, consumers purchased soap and cleaning products to lower their risk of infection and illness, bolstering revenue. However, per capita disposable income declined, inciting consumers to demand low-cost soap and cleaning products, which limited revenue growth. Nevertheless, revenue is anticipated to grow at an annualized rate of 3.9% to $56.2 billion during the five years to 2013, including growth of 2.6% in 2013, propped up by demand for cleaning products from the janitorial services and hospitality sector.
US population growth is slowing, which has hampered domestic demand growth and caused industry operators to seek out new markets in emerging economies. Although the dollar appreciated during the past five years, which has curbed demand for US exports, it has not reached prerecessionary levels. This has allowed industry operators to still benefit from global consumers, as population growth in emerging markets translated to more households that require soap and cleaning products. Meanwhile, raw material prices were volatile. Despite rising input costs, industry operators were unable to hike prices, because the industry is highly price competitive. As a result, many industry operators consolidated during the period; the number of firms is anticipated to decline at an annualized rate of 1.4% to 1,245. Nevertheless, profit slightly increased in 2013, driven by demand for bulk cleaning products from downstream markets, such as janitorial services.
As the economy recovers and per capita disposable income rises, consumers will slowly shift to relatively high-cost, brand-name soaps and cleaning products. “Additionally, an increase in consumers' discretionary spending will boost revenue for downstream industries, such as the hospitality sector,” says Turk. As a result, downstream markets will require cleaning products for the increase in foot traffic. Consequently, industry revenue is forecast to grow over the five years to 2018.
The level of market share concentration in the Soap and Cleaning Compound Manufacturing industry is low. The major companies are The Proctor & Gamble Company, S.C Johnson & Son Inc. and Colgate-Palmolive Company. Although the industry demonstrates a low level of concentration, it is approaching moderate concentration. This trend is consistent with the industry's maturity. Soap manufacturing is a long-standing industry, and sales rely on replacement purchases because most households and commercial establishments already use soap. As a result, major companies have increasingly focused on acquiring other players to achieve growth.
For more information, visit IBISWorld’s Soap and Cleaning Compound Manufacturing in the US industry report page.
Follow IBISWorld on Twitter: https://twitter.com/#!/IBISWorld
Friend IBISWorld on Facebook: http://www.facebook.com/pages/IBISWorld/121347533189
IBISWorld industry Report Key Topics
The Soap and Cleaning Compound Manufacturing industry produces substances that loosen and remove soil from a surface for personal hygiene, sanitization or cleaning clothes, linens and furnishings. The industry does not include manufacturers of synthetic glycerin, industrial bleaches or shampoos.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalization & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
About IBISWorld Inc.
Recognized as the nation’s most trusted independent source of industry and market research, IBISWorld offers a comprehensive database of unique information and analysis on every US industry. With an extensive online portfolio, valued for its depth and scope, the company equips clients with the insight necessary to make better business decisions. Headquartered in Los Angeles, IBISWorld serves a range of business, professional service and government organizations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.com or call 1-800-330-3772.