New York, NY (PRWEB) March 20, 2014
During the past five years, the Soap and Cleaning Compound Manufacturing industry contended with steep competition. According to IBISWorld Industry Analyst Sarah Turk, “Globally based soap manufacturers inundated the market with low-cost soap products as less stringent environmental regulations translated to low operational costs.” Nevertheless, soap and cleaning compound manufacturers used ecofriendly chemicals and products to appeal to environmentally conscious consumers, stimulating revenue. However, as per capita disposable income declined in 2009, many consumers demanded low-cost, privately labeled soap and cleaning products, constraining revenue growth. Despite this trend, revenue is anticipated to grow at an annualized rate of 3.0% to $57.1 billion during the five years to 2014, including a 1.5% increase in 2014, propped up by strong, need-based demand for cleaning products from downstream markets, such as janitorial services.
As population growth slows, domestic demand for cleaning products stagnates, inciting industry operators to expand in emerging economies. Furthermore, although the dollar appreciated during the past five years, which curbed global consumer demand for US exports, the dollar still remained low compared with prerecession exchange rates. As a result, industry operators benefited from global consumer demand as high population growth translated to more households requiring industry products, bolstering industry revenue. Meanwhile, raw material prices were volatile (e.g. the price of oil, which produces petrochemical feedstock, a vital input commodity for soap manufacturers). While operators can markup soap prices to pass high input commodity costs to consumers, strong competition prevented operators from raising prices. Nevertheless, industry revenue is anticipated to grow at an annualized rate of 3.0% to $57.1 billion during the five years to 2014 due to consolidation, which lowers operational costs. Profit is expected to rise as well, driven by demand for cleaning products in bulk from downstream markets, such as janitorial services.
As per capita disposable income rises, consumers will slowly shift to relatively high-cost, brand-name soaps and cleaning products. “As a result, downstream markets, such as restaurants, will require more cleaning products due to a rise in foot traffic,” says Turk. Over the five years to 2019, industry revenue is forecast to grow.
The Soap and Cleaning Compound Manufacturing exhibits a low level of market share concentration; however, the industry 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.
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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.
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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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