Specialty Cleaning, Polishing, and Sanitation Preparations

SIC 2842

Companies in this industry

Industry report:

This category includes companies that primarily make specialty cleaning products designed for specific surfaces such as bathrooms, ovens, drains, carpets, and upholstery; polishes and waxes, such as for furniture, metal, flooring, and glass; and other sanitation preparations, including disinfectants and deodorizers. This category also includes companies making products such as household bleaches and ammonia, laundry starches, and fabric softeners. Companies that primarily make industrial bleaches are in SIC 2819: Industrial Inorganic Chemicals, Not Elsewhere Classified. Companies that primarily make household pesticides are in SIC 2879: Pesticides and Agricultural Chemicals, Not Elsewhere Classified.

Industry Snapshot

Goods in the specialty cleaning, polishing, and sanitation preparations category were often classified as commodity cleaners or specialty cleaners. Commodity cleaners were usually sold in bulk at lower prices. Specialty cleaners were sold in smaller quantities at higher prices. About 65 percent of the products produced by the industry were sold to the industrial and institutional market, which included contract cleaning firms, office buildings, restaurants, hospitals, schools, hotels, and nursing homes.

In 2008, an estimated 2,463 polish and sanitation product manufacturers employed 35,599 workers in this $16.5 billion industry. An estimated 522 manufacturers of polishes and sanitation goods garnered 21.2 percent in market share, shipping $703.9 million in products. The 517 manufacturers of the specialty cleaning sector followed with 21 percent in market share and $1.39 billion in industry sales. While the cleaning or polishing preparations, not elsewhere classified sector may have been responsible for the smaller 13.8 percent in market share, these companies shipped $7.18 billion in goods, the highest of all the industry sectors. The laundry cleaning preparations sector accounted for $5.31 billion in laundry care products with 3.5 percent in market share from 85 plants. The majority of plants in descending order were located in California, Florida, New York, Illinois, and Ohio.

The polish and sanitation goods industry was holding steady, partly due to the increased attention to environmentally friendly ingredients and high-performance products that help surfaces stay clean longer. Although rising energy costs continued to plague manufacturers of these products, most companies were able to pass along at least some of the increased costs to the consumer. Although growth in the industry had slowed somewhat by the mid-2000s, product-line extensions and new product introductions continued to drive the market.

Background and Development

The specialty cleaning, polishing, and sanitation preparations industry made hundreds of products, each serving specific cleaning needs of consumers in different markets. Products were developed as a response to changes in technology, consumer need, government regulation, and other factors. This makes it hard to generalize about the industry's development, but the history of fabric softeners serves as an example of how certain factors have affected this category.

Fabric softeners were introduced during the early 1950s after synthetic laundry detergents became popular. Because detergents stripped natural oils out of fabrics as they cleaned, clothes came out scratchy and often developed negative ionic charges (static cling) in the dryer. The first fabric softeners were liquids that were added to the laundry during the rinse cycle. In the 1970s fabric softeners for use in the dryer were developed. Some were porous foam sheets doused with softener, while others were sprays and dispensing bars. All-in-one detergents with fabric softeners for use during the wash cycle were introduced in the 1980s.

Because the coating action of softeners caused fabric to appear dingy, manufacturers invented optical brighteners, also called fluorescent whitening agents (FWAs). FWAs were chemical compounds that made fabrics appear brighter by converting ultraviolet light into visible blue light.

Fabric softeners made fabrics fluffy by coating fibers with fatty compounds. They eliminated static cling by using "cationic surfactants," chemicals added to liquids to allow the wetting, foaming, dispersing, emulsifying, or penetrating actions of the solution to work on a fabric while adding positive charges to offset the negative ionic charges from static electricity. In addition to cationic surfactants, which did not clean effectively when used alone, the industry developed other surfactants. Anionic surfactants carried negative charges and were typically high sudsing. Nonionic surfactants carried no functional ionic charges but worked against oily soils. Amphoteric surfactants might be either positively or negatively charged depending on water conditions.

A national trend toward mild, natural, and environmentally safe products affected fabric softener development through the mid-2000s. Historically, customers wanted softeners to add fragrance, but an emphasis on using fewer chemicals led to new formulas. For example, Procter & Gamble introduced Bounce Free, which had no perfumes, inks, or extra additives. The environmental movement's campaign to reduce packaging waste led to the development of concentrates and refills. In 1990, Procter & Gamble introduced Downy Refill, which customers mixed with water to make full strength. It required 75 percent less packaging than the original 64-ounce bottle. By mid-1991, refills made up 40 percent of Downy's sales.

The liquid fabric softener market experienced consistent growth in the 1990s, and most of the products were concentrated, which meant less product was required to do the job. However, in 2001, manufacturers shifted focus to nonconcentrated softeners, which stalled growth in the concentrated market. Because nonconcentrated products were packaged in larger containers and cost less than concentrated products, consumers, partly because of the "bigger equals better" mindset, mistakenly thought nonconcentrates were the better deal. In fact, concentrated fabric softeners can save consumers 25 percent in laundry expenses compared to nonconcentrated, even when factoring in the higher initial cost. Downy's reaction to the decrease in concentrate sales was to introduce new concentrated products in the mid-2000s that appealed to consumers, such as Downy Simple Pleasures, which featured naturally inspired scents. This product alone added an estimated $8 million in profit to the concentrates category. Downy also launched an in-store education program to show consumers the benefits of concentrates.

Environmental concerns that surfaced in the 1990s also affected polishes and waxes. Few ingredients and industry by-products were biodegradable. The Clean Water Act challenged floor wax makers to meet product disposal requirements. Regulations concerning volatile organic compounds led some makers to phase out solvent-based products in favor of water-based systems. Zinc was also regulated, since it harmed sewage treatment facilities.

During the early 1990s, the market for household polishes and waxes declined. The popularity of no-wax floors and a desire for more convenient products lowered demand for floor wax. Within the industrial and institutional market, improvements in maintenance technology, such as high-speed floor buffers, reduced the need for floor wax. New acrylic floor materials also required less maintenance.

Demand for other floor care products increased, however. The growing popularity of mineral surfaces, such as marble, terrazzo, quarry tile, and ceramics, brought a need for new types of cleaners. In addition, old asbestos flooring required constant care to keep it sealed and polished.

Carpet cleaner sales grew as manufacturers introduced products with deodorizers. The carpet care industry also reacted to environmental concerns about indoor air quality. Formulas that were less harsh, nontoxic, and pleasant smelling were emphasized, while some companies promoted all-natural formulas. Many aerosol cans were replaced by plastic spray-pump bottles. More communities were able to recycle plastic than steel, so plastic was perceived as a better choice for the environment. In addition, aerosols were considered to be dangerous to the environment, even though CFCs (chlorofluorocarbons) had been banned since 1978.

Within the household bleach market, environmental concerns had less effect. Although perborate bleaches (the most widely used type of non-chlorine bleach) seemed safer for the environment and more gentle on clothes than chlorine-based bleaches, consumer acceptance of perborates was not as strong as analysts anticipated because these bleaches performed poorly at the low wash temperatures preferred by many Americans. In Europe, where higher wash temperatures were popular, perborates captured 80 percent of the bleach market. By the mid-2000s, companies were creating safe and effective alternatives to chlorine-based products, such as Natural Choices Oxy-Boost destainer and deodorizer oxygen bleach.

Another trend during the early 1990s was an interest in disinfectants to control the spread of infectious diseases, especially HIV, which leads to AIDS. Disinfectants were widely used by hospitals, clinics, schools, building service contractors, and hotels. Developing countries also began buying more disinfectants. For example, disinfectants were used in South America to fight cholera.

One problem involved products for stopping the spread of HIV and hepatitis. Occupational Safety and Health Association (OSHA) regulations required health care employees to do their work assuming all body fluids were infected with HIV or hepatitis. Disinfectant makers complained that the EPA measured disinfectant strength according to its ability to kill bacteria responsible for tuberculosis. According to the industry, the efficacy tests were not comparable because tuberculoides were airborne and most disinfectants used against HIV and hepatitis were designed for surface use.

Environmentalists also criticized dry cleaning chemicals, which were often improperly discarded or leaked from faulty equipment and seeped into the ground, contaminating wells and aquifers. One of the biggest offenders was perchlorethylene (PCE, also called perc). More than 80 percent of U.S. dry cleaners used perc, and approximately 500 million pounds of perc were produced in the United States annually. The Clean Air Act of 1990 listed perc as a hazardous pollutant that could cause dizziness and headaches. Some studies also linked perc to miscarriage and cancer.

Some products came under scrutiny in 2005 when a report by the Food and Drug Administration (FDA) stated that soap and water were just as effective for killing germs as antibacterial products. This caused some consumer advocacy groups to lobby for the restriction of the use of the antimicrobial agent triclosan in consumer personal care and cleaning products. Their concerns involved the potential dangers of the agent making bacteria more resistant and eventually harder for consumers to fight off, in addition to environmental concerns. The Soap and Detergent Association (SDA) and the Cosmetic Toiletry and Fragrance Association (CFTA) countered the report, saying antibacterial products are effective in controlling the spread of germs and the proposed effects of triclosan on the environment are exaggerated. They also pointed out that there was no real proof that the agent created highly resistant bacteria.

Because of pressure from the environmental movement, manufacturers looked for ways to reduce volatile organic compounds and make products more biodegradable. In addition, marketers turned to packaging made of recycled post-consumer waste. The market for environmentally safe and natural cleaning products grew dramatically in the early 2000s. Sales of natural household cleaners (including laundry detergents) rose from $140 million in 2000 to $290 million in 2004.

According to the U.S. Census Bureau, industry shipments held steady during the early 2000s. Shipments in 2005 totaled $9.22 billion, up from $9 billion in 2004. In 2005, the industry shipped more than $1.14 billion worth of household bleaches, both chlorine and nonchlorine; $5.12 billion worth of specialty cleaning and sanitation products; and $2.02 billion worth of polishing preparations and related products.

Stagnation and saturation was a problem for the industry in the mid-2000s as manufacturers struggled to come up with new products to remain competitive. The major selling points for household cleaning products in 2005 were consumer convenience, the use of fragrance, products with multifunctional benefits such as antibacterial and disinfecting properties, and environmentally friendly qualities. Gillian Morris, chemical industry manager for Kline & Company, predicted that liquid products would outsell powder products and that the market for tablet products would continue to grow through the mid-2000s.

An increase in demand for disinfectant and antimicrobial chemicals in the early 2000s was spurred by growth in the consumer market for hand cleansers, dishwashing liquids, and other cleaning products that included antibacterial or disinfectant actives. Growth in the institutional and commercial markets were prompted by concerns about E. coli, salmonella, and other food-borne pathogens. In 1999 the industry saw an annual growth rate of 3.8 percent, and in 2004, that figure was 5 percent. Market research firms predicted the growth rate would continue at 5 percent annually until 2009.

Current Conditions

Development of new sanitation products continued to drive the industry, especially when it came to the anti-bacterial products. In fact, the Mintel Global New Products Database (GNPD) reported in the Household & Personal Products Industry magazine in September 2007 that anti-bacterial products grew from fewer than 200 on a global level in 2003 to about 1,610 in 2006; representing a 713 percent growth rate. That trend continued, and increasing consumers demanded organic or natural cleaning products across the board, which manufacturer's delivered.

According to the Soap and Detergent Association, sanitary wipes continued to be a major source of industry output with 77 percent of consumers keeping sanitary wipes in at least two rooms in their household. Other findings revealed no particular brand did better over another, which left the industry wide open for further growth.

By 2008, companies were struggling through the weakened economic downturn. The Clorox Company was experiencing positive results from its Green Works cleaners despite slower sales figures for their other products. The spring 2009 outbreak of the H1N1 flu, also known as the swine flu, had companies stepping up their marketing efforts, "pitching prevention messages starring their products," reported The Wall Street Journal in April 2009. Overall sales of green, environmentally friendly cleaning products were expected to climb 19 percent to $623 million by 2013.

Industry Leaders

Among firms that made products in this category as their primary business, DuPont Performance Coatings (a subsidiary of E.I. duPont de Nemours and Co., based in Troy, Michigan) was one of the largest, with 12,000 employees worldwide in 35 countries. Clorox Company of Oakland, California, had 8,300 employees and 2008 sales of $5.2 billion. Clorox, a former division of Procter & Gamble, became independent in 1969 due to antitrust regulations. In addition to Clorox brand bleaches, the firm's products included Formula 409, Soft Scrub, Liquid Plumr, and Pine-Sol.

Other leaders in the industry were S.C. Johnson and Son Inc. of Racine, Wisconsin, whose products included Glade air freshener, Shout laundry stain remover, Pledge furniture polish, and Windex glass cleaner; Madison BiOnics, a subsidiary of Systems General Inc. based in Tempe, Arizona; and Reckitt and Colman Inc., a subsidiary of the British company Reckitt and Colman PLC based in Wayne, New Jersey. S.C. Johnson and Son Inc. posted $8 billion in 2008 with 12,000 employees.

Several large, diversified companies also competed in this category in the mid-2000s. Procter&Gamble was the world's number one maker of household products. Its brands included billion-dollar sellers Downy/Lenor and Tide. Total sales for Procter&Gamble in all divisions, including beauty, family, and household care, were $83.5 billion in 2008 with 138,000 employees. Dow Chemical Co. of Midland, Michigan, had sales of $57.5 billion in 2008 with 46,102 employees. Colgate-Palmolive Co. of New York, New York, had sales of $15.3 billion in 2008 with 36,600 employees.

Workforce

According to the U.S. Census Bureau, the soap and cleaning compound manufacturing industry had 35,599 employees in 2008, compared to 48,659 in 2002. The industry's 27,904 production workers earned an average hourly wage of $21.58 in 2005.

Research and Technology

Changing regulations and environmental concerns prompted more "earth friendly" technologies and products. One new development was packages made of resin from recycled products. Clorox, for example, increased its use of post-consumer waste in containers. Clorox claimed its efforts saved 8 million pounds of virgin plastic, glass, and corrugated paperboard in one year. Other efforts to reduce packaging materials included making caps and labels smaller and eliminating exterior packaging.

To make safer cleaning products without losing performance or convenience, manufacturers explored ways to reduce volatile organic compounds use in solvent-based formulas, to make products more biodegradable, and to lessen product effects on sewage treatment plants. Some efforts toward making products that would be less harmful to the environment were in response to federal and state regulations, while others were market driven. Some industry analysts predicted innovations in "environmentally friendly" formulas would come from small suppliers.

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