At first glance, the industrial and institutional (I&I) cleaning market would seem to be hurting. After all, the global economy appears shaky, no major health threats are boosting interest in disinfectants and sanitizers, and the once strong green movement appears to have lost some of its momentum. And yet, most major players in the category are upbeat about 2011 results and 2012 prospects. They are confident that they’ve found the right balance that includes an aggressive sales force, product mix and new product launches to remain ahead of the competition for the foreseeable future.
Kline & Company, the Fairfield, NJ-based research company, puts the global I&I market at $42 billion, with the segment evenly divided between North America, Europe and the Rest of World. More specifically, Bruce Boynick, a senior associate with Kline & Co., estimates the $13.5 billion US I&I market is growing 3% a year. The company recently published a janitorial and housekeeping study that focuses on topics such as floor care, hard surface cleaning, disinfectants, hand care and odor control. In talking to Happi, Boynick acknowledged that the uneven US economy remains challenging.
“People have to clean, and there is some basic level of cleaning, but there are some cleaning processes that are discretionary,” he noted. “In a tin cup economy, you don’t wax and strip as much as you used to. But you still need paper and soap in the washroom; you need air care.”
Searching for Savings
Every I&I end-user is watching his bottom line very carefully these days. According to a recent survey by P&G Professional, six out of 10 respondents indicated that their business has taken a “doing more with less approach” within their organization by “doing more or the same amount of work with fewer employees.”The other four out of 10 respondents indicated they’ve taken this approach when it comes to internal products and services, such as using multiuse cleaning products.
Procter & Gamble Professional’s Comet disinfecting bath cleaner, Spic n Span 3-in1 disinfectant and Mr. Clean Magic Eraser makes cleaning easier for housekeeping staff.
To help its customers achieve more with less, earlier this year, P&G Professional rolled out the P&G ProLine Floor Care System, that features a low-odor floor finish stripper, seven floor finishes and neutral-impact cleaners.
“We’ve had a good response (to the launch). There’s been an uptick in the high-durability, low-polish area,” explained Chris Vuturo, external relations manager, P&G Professional. “Customers want the right product for the right needs and want more durability for less money.”
That’s the reasoning behind P&G Professional’s push to promote Comet disinfecting bath cleaner, Spic n Span 3-in1 disinfectant and Mr. Clean Magic Eraser. With these three items, hotel cleaning personnel can accomplish 95% of their cleaning chores quickly and easily, according to the firm.
“Labor still represents 85-90% of costs, so we can offer solutions that are cost-effective,” maintained Vuturo.
And more frequently, company executives are discovering that they need to find new ways to generate revenue in this uneven economy.
For example, Ecolab made a bold move earlier this year by acquiring Nalco, a purchase that gave the world’s largest I&I player entry into the fast-growing water treatment business. In a conference call with analysts, Ecolab CFO Steve Fritze noted that water is central to Ecolab’s strategy.
“Over 50% of our customers require help with water,” he explained. “Food and beverage is a huge consumer of water, along with hotels, restaurants and health care. “
Fritze told analysts that water scarcity issues have closed food and beverage plants in some countries. It’s no wonder, then, that he said the Nalco acquisition has enabled Ecolab to expand its business opportunity from $57 billion to more than $100 billion.
“We have the wind at our back in terms of macrotrends,” he insisted.
Ecolab has identified five pillars of growth:
• Extend corporate account leadership globally (and) take a disproportionate share in corporate accounts;
• Develop a leadership position in emerging markets. Win in China and Brazil. In fact, Ecolab is already No. 1 in China;
• Become water, energy and waste experts in its market;
• Build healthcare to be a core business; and
• Expand global business centered around Europe.
At the same time, Ecolab is now better positioned to help its existing customers make good on their promises.
“Look at the sustainability pledges made by food and beverage makers—they don’t have all the solutions, but Nalco is a leader there,” Fritze told analysts.
The Deal Is Sealed
Not quite so clear is Sealed Air’s $4.3 billion acquisition of Diversey, which was closed last month. Although company executives maintain that the move gives the bubble wrap maker further opportunities into the area of food safety, some observers say that’s a bit of a stretch. After all, they reason, just how closely allied are Cryovac and hard surface cleaners? Still, the Sealed Air brass is confident that their acquisition will be a boon to the company, shareholders and, of course, end users.
“Today marks the beginning of an exciting new era of opportunity for Sealed Air, our employees, and the customers we serve,” said William V. Hickey, president and chief executive officer of Sealed Air when the deal closed on Oct. 3. “We are now a global leader in protection with inventive solutions in food safety and security, facility hygiene and product packaging that protect what we eat and drink, where we go, and the valuable goods we ship.”
According to Hickey, the company is committed to deliver solutions that improve safety, efficiency and sustainability using its extensive infrastructure, world class manufacturing principles, expanded R&D capabilities and the tremendous expertise of its global team.
“We are excited to bring forward innovative solutions that will create measurable value for our customers, enhance the quality of life for consumers, and provide a cleaner and healthier environment for future generations.”
Although not as celebrated as the acquisitions by Ecolab and Sealed Air, Swisher Hygiene has been making plenty of purchases of its own during the past couple of years, bringing a host of small I&I companies under the its aegis. Last month alone, Swisher announced six acquisitions, including L&F Sales, Santec Services, Guardian Environmental, A.C.M. Services, West Coast Laundry & Warewashing and Gulf Coast Laundry Services of Mississippi.
It’s all part of the Swisher’s objective to be a single source provider of essential hygiene and sanitation services and products to its customers through multiple distribution channels.
To achieve that goal, the company is committed to a rapid expansion of market share through acquisitions and organic growth. The company estimates that in the US there are more than 3,400 chemical service providers, 2,000 linen and facility service providers and 38,000 waste collection companies. According to Swisher, many of these businesses are acquisition opportunities in new markets or tuck-ins for existing markets.
While a few I&I marketers have placed bold bets in 2011, most industry executives say they remain cautiously optimistic about the US economy heading into 2012. At the recent International Sanitary Supply Association’s ISSA/Interclean tradeshow, marketers highlighted an array of new products that ran the gamut from floor care to hand care to hard surface cleaners which executives maintain help their customers get the job done right the first time—and for less cost than traditional products.
For example, Ecolab promoted its Maxx Durable floor finish program. Launched in May, the line contains a patented polymer that offers durability and crosslinking, but remains strippable to reduce down time.
“Customer reaction has been fantastic,” insisted Brian Leafblad, program leader, institutional HHC, research and development. “It’s a true innovation and it saves money in labor and maintenance so that a hospital, for example, doesn’t have to shut down its emergency room to treat the floor.”
According to Leafblad, simplifying cleaning procedures and labor savings, while ensuring better results continue to drive the market.
“Floor care is a commodity business,” he observed. “But we are launching innovations and creating value for the end-use customer.”
Meanwhile, 3M has introduced Trizact Diamond HX discs for refurbishing stone surfaces including concrete, marble and terrazzo. The discs, which debuted last year, last longer because their cut rates remain higher than competitive products, according to 3M.
“You can cut out a lot of maintenance,” insisted Tom Floyd, lab manager, 3M. “Customers are looking for ways to be more efficient. There is interest in anything that does it faster and cheaper.”
Green Keeps Going
Jim Beard, VP-marketing at State Chemical Solutions, told Happi that while the growth hasn’t been dramatic of late, green formulations continue to be the wave of the future. During the past year, State has added a green floor finish, green stripper and green truck and car wash. Most recently, the company introduced a penetrating oil that is bio-based.
“The green trend is intensifying; most conventional formulas are disappearing because the green formulas work so well,” said Beard.
Judy Albazi, president and CEO of Chase Products, certainly agrees with that assessment. Her company launched Green World N, the first full line of green, Design for the Environment (DfE)-certified continuous spray products formulated for the jan/san industry.
“These products are brand new; we have no competition,” she insisted.
Green World N uses nitrogen propellant and DfE-designated “cleangredients.” The line, which includes stainless steel cleaner and polish, dust and mop treatment, glass cleaner, all-purpose cleaner, furniture cleaner and polish and bathroom and tile cleaner, is packaged in a recyclable steel container and is promoted as containing no harsh chemicals, no fumes, no perfumes and no color additives.
Just as important, Green World N provides effective cleaning.
“Green is all about perception and there is a perception that green doesn’t clean,” said Albazi. In contrast, she insisted that Green World N works and exceeds all of California’s clean air requirements.
At ISSA Interclean, Orbio Technologies, a unit of Tennant, rolled out Orbio 5000-Sc, which it maintains transforms water into an effective multi-purpose cleaning solution. Softened tap water and salt flow into a charging cell, where electricity is applied to create separate alkaline and acidic streams. The alkaline solution is stored and the acidic solution is removed. The solution that remains (sodium hydroxide) attacks organic soils during cleaning, according to company executives.
“There are cost-savings and environmental benefits,” said Karla Leis, VP/GM, Orbio Technologies.
“People want cleaning in a proven, sustainable way.”
The company maintains that Orbio 5000-Sc replaces most daily-use conventional cleaners such as all-purpose cleaners, glass cleaners, stainless steel cleaners, daily cleaners and carpet pre-spray cleaners.
Cost-savings and environmental benefits are also the reasons behind Betco’s introduction of the Smart Valve. This lockable urinal flush valve is said to reduce water consumption by up to 40,000 gallons per urinal per year, which results in annual savings of $200 to $600 per urinal. The SmartValve enhances Betco’s existing SmartScreen urinal technology. The SmartScreen concept is simple, involving a fragrance-impregnated screen with a bioactive enzymatic block to control odors and maintain drain lines. According to Betco, the SmartScreen and SmartValve is easier to maintain than water-free urinals because the water source is still available for cleaning.
Saving money on shipping costs, energy and time is the idea behind the launch of concentrated cleaning products from Earth Friendly Products. The nine-item line will begin shipping in January. Also new from Earth Friendly is a plant-based graffiti remover.
Earth Friendly is primarily a retail company, with just 10% of revenues coming from commercial sales. Still the company has posted 20% annual growth for the past five years, according to Luke Bobek, director of industrial and institutional sales.
New Hand Care Options
While worries about the global economy rise and fall, there haven’t been any large scale health scares during the past year that rival the H1N1 or MRSA concerns that made headlines in years past. Still that hasn’t stopped Gojo from launching Purell Advanced instant hand sanitizer. A new, patent-pending formula boosts the performance of the alcohol, while a new humectant helps moisturize skin. Purell Advanced promises to kill 99.99% of a broad range of bacteria.
“This is a step-change,” insisted Randy Bakes, global marketing vice president, Gojo. “Purell is fabulous and hard to improve, but bugs are evolving and we need to get even tougher.”
Meanwhile, Stoko Skin Care launched the Refresh Foam easy-to-install countertop bottle. The design enables cleaning staff to quickly and easily change out product because it fits easily into countertops, is installed under counter fitments once and is refilled from the top forever.
Of course, a company could offer the most effective, labor-saving products, but if its personnel is lacking, it will continue to play catch up to its competitors.
“Our network of distribution is our greatest asset,” insisted Spartan chairman Steve Swigart. “They identify growth opportunities.”
These opportunities for growth have enabled Spartan to thrive for 55 years and expand beyond its jan/san roots. This year, for example, the company is expanding in the warewashing sector. A couple of years ago, it was laundry and five years ago, it was food processing. But no matter what the product category, Swigart insisted that in the end, it all comes down to personnel.
“It’s a people business. It’s about knocking on doors, understanding the customer’s needs and being able to sell,” he told Happi.
Beard of State agrees, explaining that it is critical to differentiate from the competition through service.
“You have to be there for the customer, to make sure that everybody using the product has been trained and coached properly, that all the dispensers are working.”
To maintain a high level of service, State offers several internet components such as online training programs to certify a particular application such as restroom cleaning to office cleaning to more complex procedures.
“It is key to be a learning organization,” he said. “Your people have to be knowledgeable. Our investment is going into employee training.”
Even a company with resources as deep as Ecolab realize that its 14,000 sales and service employees are its biggest asset.
“We are one of the best selling companies to work for,” insisted Fritze. “Everybody’s job is helping sales become more effective with their customers.”
No matter what happens to the global economy, I&I manufacturers remain upbeat about 2012 prospects.
“I don’t think the industry will slow down much more than it already has,” predicted Beard. “Because then you cross the line where you can’t function anymore. If you are going to function, then you need our products.”
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