Macro forces shape the industry

By Staff -- Industrial Distribution, 7/1/2000

The janitorial supply industry has expanded along with the economy for about 10 years and analysts predict the growth trajectory will continue for at least another three.

Bruce Boynick, a senior associate at Kline & Co., a Little Falls, N.J.-based business consulting company, tracks the $2.6 billion U.S. market for janitorial supply cleaners. The five product subcategories in this market are floor care, carpet care, odor control, hard surface cleaners and sanitizers, and hand soaps.

A 1998 Kline & Co. study of janitorial and housekeeping cleaning products showed an average annual growth rate of more than four percent during the past decade and forecasts similar gains until at least 2003.

"The industry is tied to macroeconomic trends," Boynick says. "This market doesn't command premium pricing, but it has managed to avoid price wars."

The experience of Kimberly-Clark Corp., a leading U.S. manufacturer of paper products, is similar. Ralph Solarski, the company's manufacturing market manager, says sales of Kimberly-Clark's categories of wipers, skin care and washroom products are increasing at a rate consistent with the gross domestic product growth of three to four percent.

Janitorial supply purchasers are also asking for products that increase productivity and safety, because the nation's tight labor market is squeezing the service economy.

"There's a real incentive for makers to provide products to enhance productivity and safety," Boynick says. "Contractors are being asked to clean with fewer workers. The chemical cost is really a low component of the overall cost dollar. What they're paying for labor is the major component."

Grant Watkins, president of Coastwide Laboratories in Portland, Oreg., says sales of chemical blending systems that safely combine cleaning products with water in one step have surged recently. Other products experiencing phenomenal sales growth are ergonomic mop handles and ride-on floor scrubbers, Watkins says.

"They're much less fatiguing and much more productive [than traditional mops]," Watkins says.

Another trend is the strong growth of building service contractors, Boynick says, because companies are interested in outsourcing labor and cleaning. Boynick says it's imperative for distributors to have a strong building service contracting program to secure a long-term competitive advantage.