Who's Cleaning Up In Chemical Specialties?

November 14, 2005

With more consumers opting out of the cleaning process, marketers launch innovative products to make all those household chores easier than ever.

Make it fast. Keep it simple. That’s the order of the day when it comes to developing household cleaning products. With two-income families, single-parent households and an older population base, fewer consumers are willing to devote a full day to household cleaning chores. When they do opt to clean, they’re purchasing products that get the job done quickly and provide long-lasting benefits. As a result, some of the most successful product launches during the past year promise a long-lasting clean, an easier way to clean or both. The good news for chemical specialties manufacturers is that in many instances, consumers are willing to pay more for products that are truly innovative.

But no matter what they’re buying to keep their countertops sparkling or their toilet bowls gleaming, more consumers than ever before are purchasing their household cleaning products at Wal-Mart. In fact, the latest data from ACNielsen, Schaumburg, IL, illustrates the dichotomy between Wal-Mart and other retail channels. While sales of household cleaners in traditional food, drug and mass merchandisers rose less than 1% last year, sales of these products at Wal-Mart jumped 8.6% (see charts). Clearly, the world’s largest retailer is having a profound effect on the household and personal products industry. Wal-Mart has tipped trade terms to its advantage even as it has rolled out private label products that compete head to head with their suppliers. To stay ahead of these low-cost products, marketers are constantly under pressure to develop novel products.

A Slight Rise in Household Cleaner Sales
Sales of household cleaners in food, drug and mass merchandisers rose a bit in the U.S. last year, according to ACNielsen, Schaumburg, IL. These results exclude
Wal-Mart data.
Brand $ Sales % Change Unit Sales % Change
Abrasive Cleansers 117,801,157 (3.2) 94,734,209 (7.7)
Ammonia 19,827,017 (10.9) 16,695,510 (14.5)
Bathroom Cleaners 219,478,591 (7.3) 80,276,626 (11.2)
Disinfectants 146,683,141 (3.6) 41,744,990 (2.4)
Liquid Cleaners 589,656,608 (0.3) 230,860,264 0.0
Oven Cleaners 41,898,358 2.0 11,662,514 0.6
Powdered Cleaners 4,882,312 (5.9) 1,443,011 (9.6)
Remaining Household Cleaners* 296,234,100 23.9 85,827,108 28.0
Rug Cleaners 167,380,034 (9.9) 25,228,402 (13.9)
Toilet Bowl Cleaners 291,459,841 6.4 127.402,240 3.7
Window Cleaners 125,649,796 (6.5) 45,071,934 (9.7)
Category totals: 2,020,950,955 0.9 760,946,808 (1.0)
*-including septic tank cleaners, rust removers, metal cleaners, paste and jelly cleaners, humidifier and vaporizer cleaners, premoistened towels, upholstery cleaners, floor care cleaners, household area allergen control. Source: ACNielsen, Schaumburg, IL.

“Customers are pretty happy with what’s available, how it works and what they pay,” noted Robert Passikoff, president of Brand Keys, a New York, NY-based consulting firm. “There’s not a whole lot of difference between one household cleaning product brand and another.”

As a result, marketers are in a desperate fight for differentiation, according to Dr. Passikoff. “Consumers are not dissatisified with these products, so if one cleaner isn’t there, they don’t go without, they buy something else,” he noted. “Plus, the consumer isn’t controlled by the information she receives from the advertiser anymore. She has 24/7 access to everything—I could even find a chat room on household cleaners! So the consumer has been released from certain marketing shackles.”

The Wal-Mart Effect Impacts Household Cleaner Sales
Like nearly every other consumer product category, Wal-Mart has had a huge impact on household cleaner sales. While sales in traditional food, drug and mass merchandisers rose less than 1% last year, sales of these products in Wal-Mart zoomed more than 8%. Is it any wonder why Wal-Mart has become the 800-lb. gorilla in the industry?
Brand $ Sales % Change Unit Sales % Change
Abrasive Cleansers 27,202,566 3.3 23,488,132 4.0
Ammonia 5,319,112 1.3 4,795,386 3.5
Bathroom Cleaners 80,783,186 0.6 37,225,771 8.5
Disinfectants 59,785,545 (0.8) 19,541,064 (2.1)
Liquid Cleaners 220,759,278 8.9 87,308,296 11.9
Oven Cleaners 14,100,366 50.0 4,351,050 52.1
Powdered Cleaners 1,060,518 (17.7) 388,188 (27.7)
Remaining Household Cleaners* 122,315,830 34.1 33,656,306 28.6
Rug Cleaners 67,771,186 0.2 12,983,509 (8.9)
Toilet Bowl Cleaners 111,489,551 7.8 52,862,519 5.8
Window Cleaners 34,417,169 (10.2) 14,662,464 (9.0)
Category totals: 745,004,308 8.6 291,262,685 8.1
*-including septic tank cleaners, rust removers, metal cleaners, paste and jelly cleaners, humidifier and vaporizer cleaners, premoistened towels, upholstery cleaners, floor care cleaners, household area allergen control. Source: ACNielsen, Schaumburg, IL.

New Saran Disposable Cutting Sheets make kitchen duty fast and easy.

A Refocused Clorox
At the same time that the information revolution was taking place, several key household cleaning product companies were going through difficult re-engineering processes. One of the most well known, of course, was Clorox. But G. Craig Sullivan, the company’s chairman, recently noted that Clorox has refocused on its core businesses. At a recent CAGNY investor conference, Mr. Sullivan, who is stepping down as chairman at the end of the year, admitted that the acquisition of First Brands in 2000 caused Clorox to abandon the successful business model that had worked so well for the company throughout the 1990s.

Now, however, the company is rolling out a wide range of products across all of its core businesses. For instance, Mr. Sullivan called Clorox Ready Mop, a real innovation and insisted that there is plenty of growth potential through Tilex, Pine Sol and Liquid Plumr line extensions.

“Clorox equity has expanded to bleach, disinfecting wipes, Ready Mop and detergent,” noted Mr. Sullivan. “We leverage technology across our portfolio.”

For example, after the rollout of Clorox Wipe-Ups, the company quickly introduced Armor All wipes that were ahead of the competition by nine months. And just two months ago, Armor All introduced car wash wipes that eliminate the mess associated with a bucket and hose.

Clorox is also looking outside its organization in an effort to uncover innovation. The company worked with DuPont to develop a line of cleaners that contain Teflon to help repel dirt and stains. The partnership has been a fruitful one. Just last month the company introduced Clorox Bathroom Cleaner with Teflon Surface Protector (a 24-oz. bottle retails for $3.29) and Clorox Toilet Bowl Cleaner with Teflon Surface Protector (a 23-oz. bottle retails for $2.19).

“Teflon non-stick coatings gave us the non-stick frying pan, now Clorox products with Teflon Surface Protector are giving us a non-stick bathroom,” said Rowena Singer, Clorox marketing manager in a statement. “With Teflon Surface Protector, the dirt, grime, stains and soap scum that make cleaning the bathroom such a frustrating, thankless job will have a harder time sticking around.”

According to Clorox, Teflon creates an invisible barrier that protects bathroom surfaces from buildup without leaving a residue, so tough bathroom grime won't stick. As a result, the bathroom stays cleaner longer and new dirt is easier to remove.

An upscale clean is possible with Primal Elements’ new line of cleaning products.

The Role of Innovation
Reckitt Benckiser has been re-engineered too, and like Clorox, it expects new product innovation to play a major role in future growth.

In a recent presentation to industry analysts, Bart Becht, the company’s chief executive officer, noted that 32% of Reckitt Benckiser’s net revenues in 2002 came from products launched since January of 2000. The company expects 40% of net revenues from new products launched in the prior three years by the end of 2004.

The company expects to reach this goal by focusing on power brands such as Airwick, Calgonit and Lysol. “Focusing on fewer brands will simplify our lives and drive innovation,” Mr. Becht told analysts last month. “(The strategy) will pay off in top and bottom line growth.”

Reckitt Benckiser expects power brands to account for 50% of net revenues by 2005. Among the new products expected to boost share this year are Lysol Neutra Air air treatment. The product is billed as a breakthrough in odor elimination, containing patented odor-eliminating technology that provides triple-action benefit:

• Removes odors in the air from odor-causing bacteria;
• Helps reduce inanimate airborne contaminants and
• Refreshes the air by leaving a crisp, clean fragrance behind.

Clorox added Teflon to its cleaners to boost efficacy.

Neutra Air air treatment is available in fresh, citrus and floral scents.

Also under the Lysol banner is new Lysol Power-On gel. The gel contains disinfecting particles that are suspended in a liquid to deliver greater cleaning power.

Mr. Becht noted that air care and autodish are key categories for his company. At the same time, however, he noted that S.C. Johnson remains the No. 1 player in the air care segment, although recent launches under the Airwick banner should help Reckitt Benckiser move closer to its rival.

What’s New at S.C. Johnson?
While Reckitt Benckiser focuses on air care and autodish, S. C. Johnson has launched three new products of its own in three different categories. New Grab-It Go Mop enables consumers to clean floors in just half the time as traditional mopping. Its powerized foaming cleanser starts working immediately to dissolve dirt and grime.

The Shout franchise has been expanded with the introduction of Shout OxyPower multi-purpose stain remover. It is said to remove the most challenging stains, whether on household surfaces like carpets, tile, stainless steel or porcelain or on clothing. The consumer just mixes Shout OxyPower with water to achieve the desired level of strength.

To make kitchen cleanup easy and sanitary, S.C. Johnson has introduced Saran disposable cutting sheets. The sheets protect countertops from potentially harmful germs and the dirty, juicy mess that can result from food preparation.

Scrubbing Bubbles Hold the Top Spot
S.C. Johnson’s Scrubbing Bubbles is the leader in the $265 million nonabrasive tub and tile cleaner category, according to Information Resources Inc. During the period segment sales declined 4%, while unit sales dropped 8.5% to just under 94 million units. Results are for U.S. food, drug and mass merchandisers for the year ended Feb. 23, 2003. Results exclude Wal-Mart sales.
$ Sales
Scrubbing Bubbles
Tilex Fresh Shower
Clean Shower
Scrub Free
Private Label
Lysol Mist Away
Category totals:
Source: Information Resources Inc., Chicago.

Picking Up After the Joneses
A new wrinkle has been added to that age-old suburbia ritual of keeping up with the Joneses. If you really want to make your neighbors green with envy, don’t park a Jag in the driveway—let ‘em see a household cleaning crew pull up to your front door. Back in the 1980s, Faith Popcorn coined the term “cocooning” to reflect the consumer’s tendency to focus on the home. Now, however, affluent consumers seek to reconnect with their world and are spending more time out of their homes, according to a new study by Unity Marketing, New York, NY.

It all makes sense, when you realize that the baby boomers are reaching the empty nest stage of their lives. They’ve raised their kids, fixed up their homes and are ready to get reacquainted with their world. Unity’s president Pam Danziger insists that as these consumers re-emerge from their homes, they’re more likely to hire a cleaning service than do the dirty work themselves.

“It’s not enough to create a cleaning product that’s easy to use. All the convenience in the world won’t attract the butterflies (as she calls these affluent consumers),” noted Ms. Danziger. “The most convenient way to clean is to call your housecleaner. Marketers must think about how they can service the servicing people.”

But not every affluent American is willing to call for help when it comes to cleaning—in fact, according to a recent survey by the Soap and Detergent Association, 78% of Americans plan on spring cleaning this year—up 11% from 2002. According to SDA’s research, the favorite characteristics of a clean house include:

• The clean, fresh smell (37% of respondents),
• Knowing dirt and grime are gone (31%);
• The shiny, dust-free look (14%) and
• Taking good care of furnishings (11%).

The desire for a clean home may even be a part of our DNA.

“The urge we have to clean may be a trait that is biologically programmed into us,” said Carol Nemeroff, Ph.D., associate professor of psychology at Arizona State University. “And because we know that good hygiene leads to good health, cleaning may ultimately be related to a basic survival instinct.”

Pine-Sol Leads in All-Purpose Cleaners
Clorox’s Pine-Sol is the No. 1 all-purpose cleaner in U.S. food, drug and mass merchandisers for the year ended Feb. 23, 2003. During the period, category sales declined 1%, while unit sales dropped 1.5% to 183.2 million units. Results exclude Wal-Mart sales.
$ Sales
Pine Sol
Formula 409
Mr. Clean
Clorox Clean Up
Murphy’s Oil Soap
Orange Clean
Private Label
Spic & Span
Category totals:
Source: Information Resources Inc., Chicago.

Obviously, then, the need for clean has no socio-economic boundaries. For consumers who are willing to spend a bit more for their household cleaning supplies, Primal Elements, Garden Grove, CA, has introduced a line of upscale home cleaning products including Home Spa glass cleaner ($8), All-Purpose cleaner ($9.50) and Dish- washing liquid ($8). The entire line is available in Nordstrom, as well as a wide range of independent retailers.

Primal Elements is best known for its collection of fragranced personal care products and candles. But as company president Faith Freeman noted, great smelling products can make even a mundane experience such as cleaning chores “a wonderful process.”

The line features three unique fragrances: sweet lavender, lemongrass sage and blue grass. Although the fragrances aren’t promoted for their aromatherapy benefits, the scents create a wonderful ambiance, according to Ms. Freeman. “If the consumer can’t afford to have someone else clean her home, she’ll want to clean with products that smell wonderful and make the experience as positive as possible.”

Today’s household cleaning products are effective, easy to use and more often than not these days, smell great too. As a result, everyday cleaning tasks don’t seem a chore anymore!