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This report is an overview of the industrial, institutional and commercial
cleaners business. Because this industry is so fragmented (thousands of suppliers
of cleaning chemicals and over a million customers for them), the report focuses
only on the major suppliers, especially those with broad participation on the
basis of both functional type and geographic area. Indeed, several companies
operate not only on a broad continental basis, but internationally as well.
The report also presents more detailed market information within the three major
world areas (North America, Western Europe and Japan) on the basis of products
for six broad product/market classes (janitorial products, kitchen products,
laundry products, dairy/food processing cleaners, metal cleaning chemicals,
and vehicle washing products). Consumption within these product categories is
further broken down in most cases by customer type (e.g., restaurants, nursing
homes), and in some cases by subclasses of products.
The vast majority of these cleaners are formulated products, and large companies
may offer over a thousand individual products. The report provides an overview
of the general nature of these products and shows some examples of specific
formulations, often those recommended by suppliers. Thousands of regional or
local companies participate in this business. Some of these companies formulate
their own products, based on chemicals supplied by distributors or purchased
from the chemical industry. However, most obtain formulated products from distributors.
There are no reliable or published government statistics covering these products,
and industry estimates of total demand—by product or end-use market—vary.
No two suppliers of I&I cleaner products look at this marketplace in exactly
the same way.
The industrial and institutional (I&I) cleaners business in North America,
Western Europe and Japan amounted to nearly $14 billion in 2001. This estimate
is based on the dollar value of end-user sales.
The janitorial products segment of the I&I market is the largest in all
three world areas (about 42% of the total market in both North America and Western
Europe); the share of the other market segments varies considerably within the
major world regions. The kitchen/warewashing products segment is the second-largest
segment in North America and is far larger than in Western Europe, partly because
North Americans eat out more often. Similarly, North Americans own more vehicles
per capita, and, thus, the vehicle wash segment in that region is also much
larger than in Europe or Japan. In contrast, the laundry detergents market segment
is much larger in Western Europe than in North America or Japan, as Europeans
more often live in apartments and use commercial laundries, whereas North Americans
more often own homes and use their own laundry facilities.
As a result of two large acquisitions in 2001 and 2002, two giants (Ecolab
Inc. and Johnson Diversey, Inc.) have emerged with a large share of an otherwise
highly fragmented worldwide market. Both of these companies are major participants
in all the major geographical regions and in five of the six market segments
described in this report. Thus, these two companies and perhaps two or three
regional companies account for about 40% of the market in the three major world
region markets. However, the balance of the market in each region is accounted
for by hundreds or even thousands of small local or national companies having
less (and in most cases, far less) than $50 million in annual I&I cleaner
sales. Thus, over half the market remains very fragmented.
Compared with chemical manufacturers, most large I&I cleaning companies
have very large sales forces (Ecolab Inc. has over 6,000). Many are technically
trained and can do on-site testing or perform other services, including instructing
customers’ employees. Large companies must also be able to provide extensive
call-in assistance for their customers. Suppliers must also have an awareness
of environmental, regulatory and safety issues and an appreciation of their
customers’ desire for convenience and trouble-free use, as well as for
what is aesthetically appealing to them. Finally, formulators must have good
access to the distribution channels through which most products are sold.
As in many other businesses, there has been increasing consolidation at both
the supplier and customer level. At the customer level, this has led to more
large national accounts that the major I&I cleaning companies compete for.
The two largest North American suppliers have also increased their international
presence via acquisitions or joint ventures.
The dollar value of the North American I&I cleaners market at the end-user
level in 2001 amounted to about $7.8 billion. Growth for the industry as a whole
is expected to average 2.4% per year during 2001–2006. In 2006, North American
demand is forecast to reach $8.8 billion (assuming no significant price changes).
Because of the great number of products, suppliers, and applications for I&I
cleaners, as well as the complexity of the distribution network, all figures
should be viewed as very rough approximations, rather than as accurate estimates.
The Western European market for I&I cleaners, as defined in this report,
amounted to an estimated 5,341 million euros, equivalent to $4,727 million in
2001, and is expected to reach an estimated 5,883 million euros ($5,207 million)
in 2006. Estimates made by the major market participants often diverge, particularly
for specific markets, since they use different classifications and market segmentations
depending on their main activities, product segmentation, and marketing approach.
The value of the Japanese market for I&I cleaners in 2001 was $1,436 million.
Janitorial products was the largest segment, followed by warewashing detergents.
The market is forecast to grow minimally, at a rate of about 0.4% per year to
2006.
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