The Mean Season

February 6, 2009

For the past several years, the period from late January to early March has been a time of much back-slapping in household and personal products industry boardrooms, as marketers and suppliers alike not only made their fourth quarter and year-end numbers, in many cases, they surpassed them. Suppliers and marketers increased prices as consumers—flush with cash and brimming with optimism—devoured the latest easy-to-use household cleaner and highpriced anti-aging product.

But sometime around mid-October, the party ended as consumers tightened their purse strings and reined in their freespending ways. The effect has had an impact on the usually stalwart household and personal products industry with deals souring, business stalling and everyone searching for some reason to remain optimistic.

Just how hard are these hard times? Late last month, HSBC analysts lowered their fourth quarter estimates for all the chemical companies they cover. Meanwhile, Procter & Gamble’s sales fell 3% in the most recently concluded quarter, representing the first time that P&G missed its goal of delivering 5% growth year-on-year. In December, P&G warned that its sales gains in the quarter would be weaker than expected. And that’s on top of warnings that have already been reported by companies like Estée Lauder and Elizabeth Arden.

Yet, marketers and suppliers both agree that while the economy has slowed, the pace of innovation has not. Even in downtimes, formulators are searching for the latest innovation that will give them an advantage over their competitors.

The search for innovation continues in areas as diverse as cosmetics, hair care, hard surface cleaning, laundry products and industrial and institutional cleaners.

Where can you find innovative suppliers for your household or personal product? A good start is the annual Buyer’s Guide, which is now online at http://www.happi.com/bg. It includes a list of more than 500 companies and hundreds of raw material and packaging component listings. This year, we’ve expanded our Buyer’s Guide with dozens of new categories and have divided the chemical listing into active and functional sections to make your search easier than ever.

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