The II Market

November 9, 2005

Industrial and institutional product manufacturers have provided a raft of cleaning formulas and dispensing systems to clean and maintain floors, walls and other hard surfaces. But educating workers about the proper way to clean reamins an issue

At first glance, the booming U.S. economy would seem like a good thing for the industrial and institutional market. After all, with more money in their pockets, consumers are more likely to eat out with greater frequency, which, in turn, should create greater demand for things like dishwashing detergent and glass cleaners. At the same time, the record economic expansion has led to a construction boom in office space, where demand is great for effective floor polishes and other maintenance supplies. Finally, as the U.S. population ages, people are heading off into adult communities at a brisk pace, and these sites require a healthy dose of sanitizers and cleaners.

Yet a strong economic picture wreaks havoc on employment statistics which ultimately impacts I&I marketers and their customers. With unemployment figures hovering near 30-year lows, companies are having a hard time retaining maintenance workers and fast food or kitchen help. With a host of opportunities to choose from, fewer entry-level workers are opting to work in janitorial positions and those who do often leave the job after only a few months. This rapid turnover can have a major impact on marketers of I&I products, who already have their hands full trying to teach janitors and other cleaning personnel the correct way to clean. Other concerns facing the industry are familar to I&I veterans: sanitary issues, tougher environmental regulations and consolidation.

The U.S. market for industrial and institutional cleaning chemicals should grow to $8.1 billion by 2004, according to the results of a recent study by The Freedonia Group, Cleveland. Continuing demand for cost effective and regulatory-compliant biodegradable products will create a modest growth of 4.4% a year. But Freedonia researchers noted that cleaners based on chlorinated and hydrocarbon solvents will continue to lose ground while multifunctional and value-added offerings with benefits such as sanitizing will propel the market.

Sales of general purpose cleaners, which make up the bulk of the I&I market, are expected to reach $2.2 billion in 2004. Floor care chemicals will total $1.4 billion. The industry’s highest growth, at 5.4-6.4%, will be enjoyed by the dishwashing segment, as American consumers continue to dine out and travel more frequently (see box, p. 76). This segment will top $1.2 billion in 2004, driven by products that contain antibacterial ingredients, according to Freedonia.

Concerns about the transmission of diseases will lead to a market for disinfectants and sanitizers worth $940 million in 2004. Growth will be highest in healthcare and food services. But demand may be weakened if antibacterials are implicated in the development of bacteria resistant to them, according to Freedonia. Despite modest growth, the consultancy foresees little relief from the industry’s slim margins. Manufacturers will continue to be pressured by rising raw material costs and customers’ demands for inexpensive products, according to Freedonia.

Teaching Workers A Lesson
Yet even as manufacturers and suppliers face pressure from rising raw material costs, they’re feeling pressure from the rising economy too, as economic growth has led to a shortage of personnel.

“Customers are looking for systems that are easier to use and therefore, easier to train new employees,” noted Mike Miner, marketing manager in Ecolab’s professional products division. To help their customers teach new employees the best way to clean, many I&I product manufacturers have developed training programs of their own. One of the newest from Ecolab is called Quick Steps Plus, an end-user and distributor program that brings a new focus on fundamental techniques and procedures that are very much needed, according to Mr. Miner.

“Other programs focus on what a user is supposed to clean. But our video also includes information for the entry level trainee on how to clean a toilet, damp mop a floor and restock supplies,” noted Mr. Miner.

According to the Ecolab executive, cleaning management must begin at the entry-level position if trainees are to become effective employees. “The supervisor may have done the work before, but the manufacturer never focused on techniques closely enough,” emphasized Mr. Miner. “People walking in off the street don’t come prepackaged with that kind of knowledge.”

Brenda Fried, vice president of sales and marketing, food services, for Gojo Industries, noted that food safety is a major concern for the industry because many new employees are unaware of proper hygiene procedures.

“People need to wash and sanitize their hands with products that meet the needs of the food service industry,” said Ms. Fried. “But the real issue is compliance.”

According to the National Restaurant Association, in 1999 there was a 100% turnover among hourly employees in quick service restaurants. Low-priced (under $10) full service restaurants didn’t do a much better job of retaining hourly employees; according to NRA data, turnover was 96% in these eating establishments in 1999. Turnover was 67% in restaurants with checks over $10.

To help get the word out on hygiene and food safety, Gojo Industries has created a training program called Hand Hygiene is Priority (HIP). It includes videos, signage and handouts to get the word out.

HIP works four ways:

• Analyzing employees’ work processes and indentifying wellness control points;

• Identifying and promoting a regimen of the best products;

• Educating and motivating employees to comply with handwashing, hand sanitizing and hand moisturizing guidelines and

• Using in-store signage to help remind workers when to wash and sanitize.

What’s New in I&I?
Sometimes, though, signage and education aren’t enough to ensure proper hygiene. That’s why Gojo introduced Signol, an electronic handwash counter with an audible wash timer. The device has been available for five years, but Gojo began marketing it aggressively in 1999. Signol can be installed into any Gojo food service dispenser to enable managers to count and record the number of handwashes actually performed by employees. The latest Signol model also has a timer to ensure that employees wash their hands for at least 20 seconds.

“The NRA recommends that the employee sing ‘Happy Birthday’ to himself twice while washing his hands to make sure he washes his hands for the correct amount of time,” noted Ms. Fried. “The problem is that most employees don’t want to sing ‘Happy Birthday’ to themselves. Signol takes the guesswork out of handwashing.”

To help keep hands clean, in June Gojo launched a new dispensing system called Gojo NXT for the food service industry. It dispenses a variety of Gojo cleansers including Purell instant hand sanitizer, Micrell antibacterial lotion soap, Aquell moisturizing lotion with aloe and vitamins and Gojo Deluxe lotion soap with moisturizers. There are two models to choose from: Gojo NXT Side-by-Side (recommended for employee handwash sinks and customer restrooms) and Gojo NXT Space Saver (recommended for drive-through windows, dishwashing areas, kitchen prep areas, bar/lounge, cash-out area, host/hostess stations and customer restrooms). The NXT Space Saver is about half the size of traditional 1000ml dispensers.

“It’s a regimented approach to washing and sanitizing,” said Ms. Fried. “Some customers won’t put expensive sanitizers in the restroom—they’ll just install soap. We offer a platform that lets the customer choose what he needs.”

Dispensing Made Easy
I&I market leader Ecolab continues to develop innovative dilution control systems. The latest, called QC, combines the best of dilution control with unique packaging and chemistry to take dispensing systems to the next level, according to Mr. Miner. “We’ve developed a full line of more concentrated product formulas so end-users can get better results using less product that takes up less space and lowers total cost,” he explained.

According to Mr. Miner, the reformulation process involved more than just reducing water content. “Taking water out is a big part of the equation, but that’s been done before,” he noted. “We reformulated the products so that they foam even less.”

Another key feature to the QC system is the the easy way the delivery system is loaded. QC boasts a quick-click cartridge system that enables the user to remove the cartridge from the box and click it into place without touching chemicals. “It’s fool-proof and safer to use because you don’t come in contact with the chemistry.”

Mr. Miner told Happi that I&I customers are searching for dispensing systems that employees can be trained on quickly and easily.

Also new from Ecolab is Revitalize Carpet Care. The line includes the Miracle Spotter, a unique, dual-chamber sprayer that enables the user to apply activated product directly on a stain. “If you were to mix the actives together during the manufacturing process, they would no longer be active by the time of application,” said Mr. Miner. “Our specialized packaging format activates the product at the time of application. I haven’t seen anything remotely like it on the market.”

The launch of successful new products continues to boost Ecolab’s results. For the third quarter ended Sept. 30, Ecolab’s consolidated sales increased 8% to a record $601 million in the third quarter. Net income rose 10% to a record $60 million.

Superior dispensing was also the idea beind the launch of Chase Products’ Sure-Grip shaped aerosol can. Ron DeSimone, director of corporate marketing, Chase Products, explained that the can’s grooved grip makes it easier for women (who usually have smaller hands than men) to hold. “About 62% of the purchases are initiated by women,” noted Mr. DeSimone. “We think the whole industry will go for it. It’s just common sense, and it’s no more expensive than other cans.”

Chase also recently introduced Fabric Fresh and Carpet Fresh refreshers. Both products are based on patented technology from Belle Aire Fragrances. The products microencapsulate the odor, trap it and dissolve it. “It’s our aerosol version of Febreze,” said Mr. DeSimone. “It’s a cross-over product that will appeal to consumers as well as maintenance workers who have to clean hotels and office buildings with a lot of fabric on the walls and, of course, plenty of carpeting.”

What’s Ahead?
With everyone trying to do more with less, Mr. DeSimone predicted that demand for multipurpose products that have a range of applications will continue to rise. “Ten years ago companies added line extensions whether the customers need them or not, but that idea is dead,” he told Happi. Mr. DeSimone also said demand is growing for an environmentally-friendly universal cleaner that can be diluted to various cleaning strengths. “Simple Green is a good product for that,” he added.

Mr. DeSimone explained that the acquisitions which have played such an important role in reshaping the I&I landscape will no longer be a major issue for the simple reason that there are so few independents left.

“Most of the smaller guys have been depleted,” he noted. “Now people are wrestling with e-commerce and how to interface brick-and mortar operations with brick-and-click.”

He predicted that the ability to conduct business online will become even more important during the next five years. “Companies need supply chain management to respond online. Companies must be able to track demand in real time so that products can be shipped before the customer even knows it.”

Mr. Miner noted that the infection-control community has not reached a consensus on the best chemicals to use. “People are still asking themselves, should I use a quat or phenolic?” noted Mr. Miner. “But everybody would really like to have a multipurpose cleaner that does it all.”