Industry
OverviewThe soap and detergent industry
includes companies that are primarily engaged in manufacturing soap,
synthetic organic detergents, inorganic alkaline detergents, and crude and
refined glycerin from vegetable oils and animal fats. It is an international
industry, and during the early years of 1990, world demand for its products
has increased 1 to 3 percent every year. Many of the participants in the
industry competed on a global basis. According to analysts, there is a firm
correlation the standard of living of a nation and its usage of soap and
detergent products. The analysts are expecting the industry to continue to
grow in both the industrialized as well as developing nations.
According to recent trends, liquid cleansing products are outpacing the
traditional bar soap and powder cleaning products. In addition to
environmental and health considerations, societal transformation has
propelled the changes in the soap and detergent industry.
Size
The industry includes about 700 companies with combined annual revenue of
about $17 billion. Major companies in the consumer sector include divisions
of P&G, Unilever, and Dial. Major companies in the commercial sector
include US Chemical and divisions of Ecolab. The industry is highly
concentrated with the top 50 companies holding almost 90 percent of the
market.
The market size of global soap and detergent market size was estimated to
be around 31M tonne in 2004, which is estimated to grow to 33M tonne by
2008. Toilet soaps account for more than 10% of the total market of soap and
detergents. In Asia, even though the countries like China and India are
showing rapid growth in the toilet soap section, the Japanese toilet soap
industry is showing signs of decline due to the preference of consumers for
liquid soaps. This trend is also observed in other developed markets like
the US and Europe, which is adversely affecting the toilet soap industry.
Market share of body wash was estimated to be around 2% in 2004 and is
showing signs of healthy growth in these markets.
Major products of soap and detergent industry include soaps, laundry
detergents, dishwashing detergents, household-cleaning products, hair
cleaning products, and toothpaste. Laundry detergents account for 40 % of
the overall market, while soaps for 20 % and dishwashing detergent for 15 %.
Laundry detergents come in powder as well as liquid form, and may contain
also contain bleach additives or color brighteners. Dishwashing detergents
come in powder, liquid, gel and tablet forms. Soap comes in bars or liquid
forms and may have several properties, such as moisturizing, antibacterial,
or deodorant benefits. The following figure gives an idea about the domestic
detergent market of UK in the year 2002.
Competitive Landscape
Population growth, especially households with children, drives demand in
the consumer sector, while growth in economy drives demand in the commercial
sector. The profitability of individual companies depends on several
factors, such as efficient operations and effective sales and marketing.
Large companies have scale advantages in domains like buying, manufacturing,
distribution, and marketing. Small companies can effectively compete with
large companies by formulating specialized products, offering superior
customer service, or catering a local market. The industry is
capital-intensive with average annual revenue per worker more than $700,000.
The industry is evenly split between the commercial and consumer sectors,
both being highly competitive with large companies spending millions to
maintain market share.
The modifications in the cleaning products were also spurred by technical
innovation, availability of improved ingredients, such as bleach additives,
better optical brighteners, and improved technologies to improve the
performance of soap and detergent products. Marketers packaged products
differently to meet the needs and requirements of specialized users like
households with infants or with men performing tasks that are traditionally
associated with women. To meet the requirements of different market
segments, the industry saw a development of brands and varieties. For
example, a specific large super-market might contain more than 40 different
varieties of soaps and detergent detergents including both liquids and
powders.
The manufacturing of soaps and detergents is highly automated, which
involves substantial capital investment in plants and equipment. Computers
are used to control production equipment and manage inventory. Many
companies use sophisticated techniques, such as electronic data interchange
(EDI) to optimize the purchasing process. Due to the high level of
automation, the average plant has fewer numbers of employees.
Research & Technology
The need to meet environmental regulations across the globe various
research efforts was undertaken by the soap and detergent industry during
the early 1990s. Sodium carbonate, Zeolite, sodium citrate, and sodium
nitrilotriacetate were under investigation as possible builders to replace
phosphates. Other questions that were being addressed, include - water
quality, product safety, chemical disposal, the ability to wash and clean in
unheated water, and indoor air quality.
Although several technological developments and an increasing expanding
understanding of the chemical processes had improved the ability of industry
to restore soiled garments and other objects to their presoiled condition,
available soaps and detergents still failed to achieve the desired results.
Chemical scientists, therefore, continued to work on developing and
formulating innovative cleaning and laundry additives like new enzymes and
oxygen bleaches.
