II Update

November 14, 2005

Marketers are seeing green. They hope for a boost in sales as environmentally-friendly products proliferate.

Ecolab’s new Phazer mobile floor care system is the latest weapon in the war to win the floor.
Two big issues, environmentally-preferable products and lackluster sales, have executives in the industrial and institutional (I&I) cleaning market looking at issues through green-colored glasses these days. After a couple of tough years, industry executives insist business is beginning to pick up as travel rebounds and corporations begin reporting better results. At the same time, marketers of products are tackling the issue of environmentally-preferable products head on by introducing Green Seal-certified cleaning systems.

All the activity comes at a time when annual sales growth in the I&I sector has been slashed from 4% to 2%. The slowdown is attributed to the effects of a U.S. recession and concerns that followed the terroristic attacks of Sept. 11, 2001 in the U.S.

According to Kline & Co., Fairfield, NJ, the U.S. market for I&I products exceeds $8 billion. Globally, sales total about $19 billion. According to industry observers, economic uncertainty has led end-users to re-evaluate their methods of keeping buildings clean. For example, in lean times, a building maintenance manager may opt to skip stripping and refinishing a floor in favor of more frequent, but less expensive cleaning routines. Companies that can successfully rejigger their product portfolio to reflect this change in demand can survive and even thrive.

“In a challenging economic climate, adroit suppliers and distributors survive the leaner times,” observed Bruce Boynick, a senior analyst with Kline. “The I&I market is consolidating at each level of the distribution chain and the smaller players are becoming more and more marginalized. When the rebound comes, there will be 25 to 50 suppliers well positioned to grow.”

According to a recent study by the International Sanitary Supply Association (ISSA) and Sanitary Maintenance magazine, last year resilient and hard floor chemicals accounted for 22.1% of chemical sales last year, followed by cleaners and degreasers (15.2%), hand cleaners (11.8%) and disinfectants and sanitizers (10.1%).

Win the War on the Floor
Floor care accounts for the biggest portion in an I&I cleaning budget, and marketers are well aware that if they can convince a building service contractor or building maintenance executive to purchase their floor care chemicals, it becomes much easier to sell them the products they need to maintain the rest of the building.

“Floor care is the key to success,” observed David Green, marketing manager, within the professional products division of Ecolab. “We always say, ‘win the floor and you win the war,’” To help win the war, Ecolab has assembled a floor care innovation team that includes 14 chemists on both sides of the Atlantic. According to Mr. Green, the team is committed to developing novel products that revolutionize floor care.

One of the first products developed by the group is the Phazer mobile floor care system. According to Ecolab, one coat of Phazer Monostar ultra high solids floor finish does the job of three coats of 20-22% solids finish or four coats of a 16% finish. By applying the product with a unique backpack and dispenser system, an employee can finish a 5000 square foot floor in just two hours, compared to 12 hours using conventional methods.

Carroll Co., too, has expanded its floor care offerings with the introduction of two UHS floor finishes with advanced SPT (Synergistic Polymer Technology). Polaris Ultra provides ultra gloss and ultra durability and is said to be an ideal addition to ultra high speed maintenance programs. The company insists it is the finish of choice when ultimate gloss and durability are preferred.

LightSpeed is billed as a premium value floor finish designed to provide optimal performance in a frequent maintenance program.

“Floor finishes are hot right now with building service contractors (BSC),” observed Greg Kerley, vice president, marketing, Carroll Co. “They want a floor finish that provides a high gloss for a longer period of time to cut down on maintenance costs.”

Keeping BSCs happy is a key objective for a lot of I&I cleaning product manufacturers these days—and with good reason. According to a recent study by the Freedonia Group, Cleveland, the $36 billion U.S. contract cleaning industry will grow 7% a year through 2007, driven by continued gains in outsourcing of noncore corporate, institutional and government operations. Cleaning services will outpace supplies based on double-digit gains for maid services. Office buildings and institutions will remain the top segments.

Two new floor care formulas are available from Spartan Chemical: I-Shine with 25% solids and White Sun with 18% solids. According to Spartan, both formulas keep floors looking better longer due to a high level of optical brighteners.

Keeping It Green
In addition to rolling out new products, Spartan Chemical has been committed to expanding its line of environmentally-preferable products. In fact, three of Spartan’s Green Solutions cleaners (restroom, industrial and all-purpose), have received Green Seal certification. Green Seal is a Washington D.C.-based nonprofit organization. Products that earn the Green Seal logo demonstrate that they have minimal impact on building occupants and the outdoor environment while delivering high performance.

“Green Solutions is all about creating a healthy building environment,” explained Marygrace Miller, advertising and marketing manager, Spartan Chemical. “Buildings are closed systems these days. The bacteria get recycled so nothing is coming in fresh. Ten years ago, nobody heard about Sick Building Syndrome, now people are serious about it.”

Armed with this knowledge, more customers are demanding cleaning products that have little or no impact on the indoor air environment. At the same time, there’s growing concern about how products affect the environment too. The Green Seal certification indicates that the three products in Spartan’s Green Solutions line meet Green Seal’s environmental standard for industrial and institutional cleaners based on their reduced human and aquatic toxicity and reduced smog production potential.

Last month JohnsonDiversey announced several products sold under its Johnson Wax Professional and Butcher’s line earned Green Seal certifications. Johnson Wax Professional products that bear the Green Seal include Stride citrus and floral neutral cleaners, Glance non-ammoniated glass cleaner, Crew bathroom cleaner and scale remover and General Purpose cleaner. Butcher products that earned the same honor are G-Force all-purpose and glass cleaner and G-Force washroom cleaner.

The Green Seal certifications are just the latest news from Johnson- Diversey in regard to environmentally-preferable products. Along with several other companies, JohnsonDiversey has prepared a LEED-EB (Leadership in Energy and Environmental Design for Existing Buildings) document for the U.S. Green Building Council. LEED-EB provides standards that will help building owners systematically reduce the environmental impact of their facilities.

“We’re working toward continuous improvement,” explained Robert J. Israel, director of corporate product responsibility at JohnsonDiversey. “We’ll study an issue because even if we improve just one element in a product, such as developing a non-corrosive floor stripper, that can improve the environment.”

On it’s own, a non-corrosive floor stripper may not qualify for a Green Seal, but it does represent an environmental improvement on an existing formula. Right now, JohnsonDiversey is committed to removing alkyl phenol ethoxylates from its formulas. “They’re suspected of being endocrine disruptors,” explained Mr. Israel. “We won’t develop any new products with APEs and we want to remove APEs in every product.”

JohnsonDiversey’s RTD System is designed to provide optimal customer solutions to many of the issues that surround dilution control.

JohnsonDiversey’s commitment to the environment extends beyond formulations. At the ISSA/Interclean show in Chicago last month, the company rolled out RTD, which it calls the industry’s first maintenance-free dilution control dispenser. Every RTD container features a dispensing head that mixes the concentrated product and tap water at precise dilution ratios. Several JohnsonDiversey brands are available in the RTD system including Glance, Speedball 2000, Stride, G-Force and GP Forward. The RTD system offers two key financial advantages, according to the company. First, RTD never has to be serviced—there’s no equipment involved, so nothing can break down. Plus, the container is made of recycled material. Second, there’s immediate return on investment. Unlike wall-mounted dispensers, which involve upfront equipment and installation expenses, RTD’s self-contained system in a bottle requires no financing.

Hands Off Hand Hygiene
According to the ISSA, hand cleaners represent the third largest chemical category within the I&I industry. One of the best-known brands in the segment is Purell, which is credited with creating the waterless hand sanitizing concept. Now, Gojo Industries, which manufactures the Purell brand of waterless hand cleaners, has introduced the iNXT TouchFree Dispenser.

“The germ-free, touch-free restroom environment is the trend in the industry right now and the iNXT TouchFree dispenser is one piece of that environment,” explained a Gojo spokesperson.

The iNXT includes Placement Navigation technology to help companies locate ideal dispenser placement. The At-A-Glance Service lets you know when the system needs a refill or a new battery. The system also has a latch release that gives you the option of locking the dispenser cabinet and the Anti-Vandal Override system even suspends operation when vandalism attempts are detected.

Within the hard surface cleaning segment, Clorox has introduced a glass and surface cleaner in a 1:20 concentrate, as well as a neutral floor cleaner. All of them are marketed under the well-known 409 brand name. Earlier this year, Clorox rolled out its Bathroom Cleaner with Teflon to the I&I cleaning market, a similar product debuted in the consumer market a year ago.

“We’ve had a good year,” said Bill Bauernfeind, customer marketing manager, Clorox. “Now we’re showing distributors how Clorox bleach can be a big profit center for them.”
The Clorox distribution network is superior to regional players, he insisted. The well-established Clorox system results in fewer broken bottles of bleach which translates into higher profits for distributors.

The well-known Clorox name is another selling point, especially when so many building maintenance employees are turning to “Big Box” retailers such as Home Depot and Wal-Mart for their cleaning supplies.

To help stem the tide, more marketers are introducing I&I lines that more closely resemble consumer products. Intercon’s new Clearly Better line, for example, is billed as the perfect alternative for a distributor’s customers who might buy cleaning products from discount retailers.

The Clearly Better product line includes glass cleaner, multi-surface cleaner, disinfectant spray, shower & bath cleaner, no-rinse sanitizer and heavy duty spray degreaser. All products are packaged in clear, contoured bottles decorated with attractive labels that incorporate pictures related to the product fragrance or function.

The industrial and institutional cleaning market is facing a variety of challenges these days. Customers are demanding products that are more effective, less labor-intensive and environmentally-friendly. At the same time, manufacturers must keep costs down and provide attractive alternatives to retail brands.

Despite all these requirements, the industry is responding with effective cleaning products and systems. If the economy and consumer sentiment cooperates, I&I marketers may soon be able to enjoy the 4% annual growth rate that was the industry norm prior to Sept. 11, 2001.