Soap & Cleaning Compound Manufacturing in The US Industry Report

Soap & Cleaning Compound Manufacturing in the US September 2011 1
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Cleaning up: Emerging markets and strict

regulations will facilitate industry growth
IBISWorld Industry Report 32561
Soap & Cleaning Compound

Manufacturing in the US
September 2011
Sophia Snyder
2 About this Industry
18 International Trade
42 Revenue Volatility
Industry Definition
20 Business Locations
43 Regulation & Policy
Main Activities
Similar Industries
22 Competitive Landscape
Additional Resources
22 Market Share Concentration
45 Key Statistics
22 Key Success Factors
45 Industry Data
23 Cost Structure Benchmarks
45 Annual Change
24 Basis of Competition
45 Key Ratios
3 Industry at a Glance
44 Industry Assistance
4 Industry Performance
25 Barriers to Entry
Executive Summary
26 Industry Globalization
Key External Drivers
Current Performance
28 Major Companies
Industry Outlook
28 The Procter & Gamble Company
11 Industry Life Cycle
46 Jargon & Glossary
30 S.C. Johnson & SonInc.

32 Ecolab Inc.
13 Products & Markets
34 Colgate-Palmolive Company
13 Supply Chain
13 Products & Services
40 Operating Conditions
15 Demand Determinants
40 Capital Intensity
16 Major Markets
41 Technology & Systems
www.ibisworld.com | 1-800-330-3772 | info @ibisworld.com
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About this Industry

Industry Definition
Companies in the Soap and Cleaning

Compound Manufacturing industry
produce substances that loosen and
remove soil from a surface for
purposes including personal hygiene,
Main Activities
The primary activities of this industry are
sanitization or cleaning clothes, linens

and furnishings. The industry does
not include manufacturers of
synthetic glycerin, industrial bleaches
or shampoos.
Cleaning compound preparation, manufacturing and packaging

Soap manufacturing and packaging
The major products and services in this industry are

Commercial soap and other detergents
Household soap and other detergents
Miscellaneous soap and other detergents
Polish and other sanitation goods
Surface active agents
Similar Industries
32518 Inorganic Chemical Manufacturing in the US

This industry is made up of companies primarily engaged in manufacturing basic inorganic chemicals. This
includes the manufacturing of industrial bleaches.
32519 Organic Chemical Manufacturing in the US
Organic chemical manufacturers primarily produce basic organic chemicals. This includes the manufacture
of synthetic glycerin.
32562 Cosmetic & Beauty Products Manufacturing in the US
This industry is involved in preparing, blending, compounding, and packaging toilet preparations, such as
perfumes, shampoo, body care and other cosmetic preparations.
Additional Resources
For additional information on this industry

www.soap-wire.com
Soap Wire
www.cleaninginstitute.org
The American Cleaning Institute
www.bls.gov
US Bureau of Labor Statistics
www.census.gov
US Census Bureau
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Soap & Cleaning Compound Manufacturing in the US September 2011
Industry at a Glance
Soap & Cleaning Compound Manufacturing in 2011
Key Statistics
Snapshot
Revenue
Annual Growth 06-11
Annual Growth 11-16
Profit
Exports
Businesses
$52.0bn 2.7%
$5.6bn
$7.1bn
World price of crude oil
Revenue vs. employment growth
Market Share
The Procter &

Gamble Company
19.6%
10
140
120
Ecolab Inc. 6.4%
$ per barrel
% change
S.C. Johnson &

Son Inc. 9.8%
0
5
Colgate-Palmolive
Company 5.8%
10
Year 03
3.3%
1,996
100
80
60
40
05
07
Revenue
09
11
13
15
17
20
Year 03
05
07
09
11
13
15
17
Employment
SOURCE: WWW.IBISWORLD.COM
p. 28
Products and services segmentation (2011)
10%
Miscellaneous soap
and other detergents
Per capita disposable

income
26%
Commercial soap
17%
Demand from
accommodation
and food services
Household soap and

other detergents
Demand from
janitorial services
24%
23%
Polish and other

sanitation goods
Surface
active agents
p. 4
SOURCE:
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SOURCE:
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Industry Structure
Life Cycle Stage

Revenue Volatility
Mature
Medium
Regulation Level
Technology Change
Capital Intensity
High
Barriers to Entry
Industry Assistance
Low
Industry Globalization
Concentration Level
Medium
FOR ADDITIONAL STATISTICS AND TIME SERIES SEE THE APPENDIX ON PAGE 45
Competition Level
Medium
Low
Medium
High
Medium
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Industry Performance
Executive Summary | Key External Drivers | Current Performance

Industry Outlook | Life Cycle Stage
Executive
Summary
The mature $52.0 billion Soap and

Cleaning Compound Manufacturing
industry is consolidating, developing new
products and expanding to emerging
markets in response to steep competition
and low demand. In 2011, the industry is
expected to grow by 2.4%, representing
some improvement from 2010. For a long
time, soap manufacturers have modified
their product formulas to stimulate
demand; however, consumer
environmental and health concerns have
heightened in recent years. This trend
Environmental and health concerns are pushing
companies toward eco-friendly processes
has caused industry companies to

concentrate on eco-friendly chemicals
and manufacturing processes.
Because the industry is in the mature
stage of its life cycle, demand is steady
and will not likely increase significantly.
Competition is also intense, particularly
among the top four players. As a result,
raw material costs have been difficult to
pass on to consumers in the form of
higher prices. In the five years to 2011,
industry revenue is expected to increase
by 2.7% on average per year. As the
economy improves in 2011, per capita
Per capita disposable income

The level of disposable income affects
how much and what quality of soap
people can afford. Retailers and
wholesalers adjust their purchases from
manufacturers based on consumer
demand, which is also affected by
population growth. Soaps are staple
goods, but consumers will often trade
down to cheaper products when
household disposable income is low.
This driver is expected to increase
disposable income is forecast to rise.

This trend will contribute to a slight shift
back to brand name soaps that carry
higher price tags. Additionally, the
improving economy will drive better
traffic in restaurants and hotels, which
are key markets for the industry. Despite
these positive factors, IBISWorld
projects that industry revenue will grow
only slightly faster in the five years to
2016 than it did during the previous
five-year period, by 3.3% per year on
average to $61.1 billion. Projected
growth in 2012 of 5.2% will result from
continued improvement in the economy.
The consolidation that has swept the
industry in the five years to 2011 is
beginning to moderate, as companies
restructure to reduce costs and
consolidate product lines. As a result, the
number of companies is estimated to
decline by 1.4% in the five years to 2011
to 1,996 firms; this number is expected to
continue to fall in the coming years.
Employment has also been on the
decline, and restructuring efforts are
expected to further reduce employment
during the five years to 2016. As the
industry restructures, companies will
continue expanding in emerging markets
in search of new demand. Changes to
product formulas that make soaps more
eco- or health-friendly will drive demand.
slowly over 2011, resulting in a potential

opportunity for the industry.
With a number of key raw material
inputs ultimately derived from
petrochemical feedstock, volatility in
the price of oil can affect the industrys
cost structure. As commodity costs
increase, manufacturers may raise
prices, which can decrease the number
of purchases that consumers make.
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continued
Furthermore, volatility and increases in

the price of raw materials may harm
industry profitability. This driver is
expected to increase over 2011, creating
a potential threat for the industry.
preferences for cleanliness. When

hotels and restaurants prosper,
demand for cleaning products
increases. This driver is expected to
increase slowly over 2011.
Demand from accommodation

and food services
Hotels and restaurants are major
commercial markets for the industry,
because these companies use cleaning
products in large quantities to meet
regulation requirements and customer
Demand from janitorial services

Janitorial companies use cleaning
products to provide their services;
therefore, as these companies supply
more services, demand for soaps
increases. This driver is expected to
increase over 2011.
Per capita disposable income

140
3.5
3.0
2.5
100
% change
$ per barrel
120
80
60
Year 03
1.5
1.0
0.5
40
20
2.0
0.0
05
07
09
11
13
15
17
0.5
Year
05
07
09
11
13
15
17
Current
Performance
Despite its maturity, the $52.0 billion US

Soap and Cleaning Compound
Manufacturing industry is expected to
grow at an average annual rate of 2.7%
during the five years to 2011. This
percentage includes an increase of 2.4%
in revenue in 2011, which marks
improvement from 2010 but is relatively
weak for the industry based on historical
growth trends. Continued improvement
in the economy in 2011 is expected to
boost personal disposable income.
Consequently, consumers will be more
willing and able to purchase brand name
products with special features. Similarly,
restaurants and hotels are beginning to
see a return in customer traffic in 2011.
This trend has boosted demand for

cleaning products from manufacturers.
New product development and company
restructurings have also buttressed sales
and profit, while retailer consolidation
and private label products have acted as
head winds to continued revenue growth.
While revenue has generally been on
the rise during the past five years, growth
has been volatile and operating profit has
been taking a hit. Volatility and increases
in the price of raw materials, including
resin, chlor-alkali, sodium hypochlorite,
high-strength bleach, linerboard,
soybean oil, solvent, natural oils,
corrugate and other chemicals and
agricultural commodities have dampened
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New products renew

demand
operating gains within the industry. Oil

and other commodity prices have risen
since 2006, the reasons behind which are
numerous. The rapid industrialization of
China and India has spurred an increase
in demand because their massive
emerging middle-classes are now
demanding cars. In addition, many of the
leading countries in petroleum
production are third world countries, and
the threat of political instability is
constant. Furthermore, all worldwide oil
purchases are conducted using US
dollars, meaning fluctuations in the value
of the dollar versus other currencies
directly affects the price of oil around the
world. The value of the dollar has
weakened in the past several years,
especially following the global financial
crisis, causing oil producers to charge

more for their products in order to
receive the same value.
Innovation is a strength that has enabled

soap and cleaning compound
manufacturers to maintain growth. Slow
growth in the US population, growing
environmental awareness and increasing
regulatory pressure have driven
innovation. Product developments may
entail a novel formula or concept, or
simply improvements in existing products
and packaging. Extending a well-known
brand name to a different product
category has helped companies attract
consumers who already use the core
brand. Procter & Gambles (P&G) Tide
Stain Release and a new line of Dawn dish
soap with Olay moisturizers are examples
of formula improvements, while Cloroxs
launch of Green Works laundry detergent
demonstrates brand extension.
New products also help boost profit,
because consumers are enticed to spend
on branded goods rather than private
labels that do not have the same features.
Despite these efforts, profit margins in
the industry have trended downward
during the five years to 2011. Falling
profit is occurring as more companies are
returning to the basics by offering value

products to consumers in response to the
poor economic environment. During the
economic downturn, personal disposable
income declined and caused consumers
to shift to more affordable products. P&G
has increased its offerings in value-priced
segments by introducing products like
Tide Basic, Charmin Basic, Bounty Basic
and Pampers Basic. All of these basics
sell at a substantial discount from the
original products, but they typically offer
fewer features or benefits. In addition,
P&G repositioned its Cheer laundry
detergent to compete more effectively in
the value segment.
On the opposite end of the spectrum,
companies have been able to set higher
prices with green products, which are
environmentally oriented products that
continue to expand in popularity. While
the industry has long toiled with health
and environmental regulations and
consumer demands, companies have
amplified their green efforts in recent
years. The green movement within the
industry broadly includes actions taken
Industry revenue
10
% change
Current Performance
continued
Year 03
05
07
09
11
13
15
17
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New products renew

demand
continued
to reduce harmful effects on the

environment. Such actions include the
use of recycled materials and the
recyclability of new products; the use of
products that can be recovered and are
not harmful to humans, animals and the
environment; and the use of natural or
organic products.
Some companies are strictly natural,
such as Method Products and Seventh
Generation. For the large soap
Retailers bully
products and pricing
Some of the impetus for the industry to

go greener has come from Walmart,
which has pushed manufacturers to
shrink the size of their packaging. In
2008, the company began evaluating its
extensive list of suppliers based on its
ability to develop packaging that
conserves natural resources. In 2007,
when Walmart decided to sell only
concentrated detergents, detergent
manufacturers immediately reacted with
an initiative that completed a nationwide
rollout of new products by summer 2008.
The quick reaction to Walmarts
demand illustrates the rising power of a
handful of large low-priced retailers.
During the five years to 2011, the industry
has endured increasing retailer
consolidation. This trend has resulted in
the increased size and influence of large
consolidated retailers, which have more
leverage to demand lower pricing or
special packaging or impose other
requirements on operators. In addition to
encouraging eco-friendly products, many
retailers have pushed their own highermargin private-label brands in
competition with industry players. Store
brand products often sell at lower price
points and earn higher margins because
retailers can control the cost of their
production. Retailers benefit from
point-of-sale data on consumer behavior,
and they are in a better position to
market their products to shoppers.
manufacturers, moving into this

segment has involved a combination of
acquisitions and product development.
For example, in 2006, Colgate acquired
Toms of Maine, a maker of natural
personal care products that include
toothpaste, mouthwash and soap.
Toms of Maine products are made
without artificial sweeteners,
preservatives or animal products, and
they are not tested on animals.
Manufacturers
are
shrinking the size of their
packaging to conserve
natural resources
Despite private label growth, companies
can maintain some degree of pricing
power through brand loyalty and by
offering unique features.
As retailers gain more power in the US
market, more manufacturers have shifted
their sales focus to emerging markets.
These areas of the world are less exposed
to cleaning products, and product
features that are conventional in the
United States can generate significant
growth in these countries. Over the past
five years, household cleaning products
have grown in emerging markets by
10.8%, which far outpaced growth in
developed markets of 2.1%, according to
data from Euromonitor, a provider of
international market intelligence on
industries, countries and consumers.
Colgate Palmolive, one of the industrys
major players, has the highest exposure
to emerging markets, generating about
51.0% of its sales from these regions of
the world. Meanwhile, Clorox has been
behind its peers, with sales from
emerging markets accounting for about
8.0% of total revenue.
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Companies use
acquisitions to
achieve growth
Given the growth in retailer size and the

low rate of population growth and
household formations in the United
States, it has become more difficult for
consumer products manufacturers to
achieve significant organic sales growth.
In response, soap and cleaning
compound manufacturers are
attempting to stimulate revenue and
profit growth by acquiring and divesting
businesses. Companies are also
undergoing restructuring to cut costs
and boost profit margins.
After facing high commodity costs
during the five years to 2011 and with
retail consolidation forcing players to
focus on their best-selling brands,
many companies are restructuring to
cut costs and reduce product lines.
The number of industry firms is
expected to fall by 1.4% per year on
average to 1,996 in 2011. The benefits
of consolidation include savings from

raw material purchasing and reduced
staff needs. Accordingly, employment
is also estimated to fall by 1.8% per
year on average to 44,801. These cost
savings are expected to help maintain
some profitability, though earnings
before interest and taxes are expected
to decline to 10.7% in 2011 from
10.9% in 2007.
During the past decade, the top US
companies have become global leaders
through a spree of acquisitions. This
large-scale expansion transformed
some manufacturers into unwieldy
organizations composed of
unmanageable numbers of production,
marketing and distribution segments
located throughout the world. While
this global expansion has helped
bolster sales, profitability has been
difficult to maintain.
Industry
Outlook
The industry is forecast to grow at the

sustained pace of 3.3% per year during
the five years to 2016 to reach $61.1
billion. In 2012, revenue is projected to
increase by 5.2% after weak
performance in 2011. The industry will
contend with pressures from retailers,
fluctuating raw material costs,
restrained demand and environmental

requirements in the next five years.
Many of these variables will continue to
constrain revenue growth. At the same
time, demand for new sustainable
products, with higher price tags and
stronger profit margins, will help
stimulate the industry.
Pricing will come

under more pressure
Retailers are expected to progressively

press manufacturers for further price
rollbacks. While IBISWorld does not
expect extensive price cutting to occur
in the five years to 2016, some strategic
price adjustments are forecast to occur
in response to retailer pressure and
private label products. For example,
Procter & Gamble is in the process of
lowering prices on about 10.0% of its
product portfolio.
Lower prices will help increase the
number of items sold, keep products on
Lower
prices will help

manufacturers compete
with private label products
the shelves of major retailers and
compete with lower-priced private-label
goods. The resulting benefit from
improved volume will be countered
somewhat by lower prices per item and
higher oil prices. Most soap
manufacturers have yet to catch up with
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Pricing will come

under more pressure
continued
the three years of above-average

commodity cost increases, and
IBISWorld forecasts that oil prices will
continue to rise during the next five
years. The crude oil price is projected to
trend upward as the world economy
continues to recover and demand
returns. Recovering world economic
conditions are expected to be partly offset
by higher spare capacity, which will limit
fears of supply constraints and may result
in some OPEC members increasing
output beyond official OPEC quotas.
Emerging markets are

the future
Weak sales growth potential in developed

markets over the next five years will be
one of the key issues facing the industry,
causing more companies to look to
emerging markets for growth. Pricing
pressure from US retailers will add to the
issue of a saturated market. Because most
households and businesses already have
soap, manufacturers rely on restocking
purchases and population growth. During
the next five years, IBISWorld forecasts
that the US population will grow at an
average annual rate of 0.9%, which is
insufficient for providing sizeable new
demand. Low growth prospects will cause
manufacturers to shift production and
sales to emerging markets abroad. This
move will contribute to falling industry
employment in the United States, which
is forecast to decline by 0.3% per year on
average through 2016 to 44,089.
While volumes will likely pick up in the
near term as the economy recovers,
growth beyond this temporary upturn
will be more difficult to achieve. The
industry is in the mature stage of its life
cycle: most consumers already own soap
and are not significantly excited by new
IBISWorld forecasts that the world

economy will continue its slow recovery,
and demand for oil will rise accordingly.
Despite the rise in input costs,
profitability is forecast to be resilient
due to companies reducing wage costs.
Automation processes will help the
industry be more efficient and will
contribute to wages declining slightly
to about 5.1% of industry revenue.
Profit margin is forecast to fall
moderately to 10.3% of revenue in
2016, versus 10.6% in 2012.
Firms
will look to emerging

markets for growth due
to weak potential in
developed markets
products. Also, retailers are expected to
decelerate new store openings and
continue consolidating (Walmarts
dominance is a fitting example), and
there may be a long-lasting structural
change in consumer frugality. Continued
consolidation will support top-line
growth from sales in the United States;
the number of firms is projected to drop
by an average of 1.7% annually in the five
years to 2016 to 1,830.
As income rises in developing
countries, consumers in these areas
pose an untapped market that will
demand different products and
advertising. Manufacturers may use
less-expensive ingredients to offer
lower-priced products in developing
countries, and they may also employ
special marketing campaigns.
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More green lies ahead Environmental concerns among
consumers and governmental

regulators are expected to continue.
Increasing emphasis will be placed on
factors such as biodegradability,
aquatic toxicity, renewable feedstock
and environmental footprint regarding
carbon dioxide emissions throughout
the supply chain. Manufacturers that
are not perceived as environmentally
friendly will come under mounting
pressure to use less harmful chemicals,
particularly those containing less
volatile organic compounds.
Retailers are forwarding the consumer
demands for greener products. In 2010,
Walmart announced that it plans to cut
20 million metric tons of greenhouse gas
emissions from its supply operations by
2015. The project will begin with seven
product categories, one of which is soap.
Walmart has a strong influence over the
soap manufacturing process given its
dominance in the retail sector, so
manufacturers will likely respond to
these demands. For example, Unilever
intends to have all of its palm oil certified
sustainable by 2015. As one of the largest
single buyers of palm oil, Unilever has
been targeted by retailers, governmental
bodies and activist groups.
The introduction of more stringent
regulations in the United States that
are similar to those recently introduced
in the European Union may further
Environmental standards
will drive innovation and

technological developments
push manufacturers to reformulate
their standard formulas.
Environmental standards may drive
product innovation and technological
developments, but they may also result
in reformulation costs that can affect
profit. New product developments will
be a growth opportunity to players in
the mature soap industry. For example,
products containing natural
ingredients or special biodegradability
properties can stimulate sales from
environmentally conscious consumers.
High-efficiency (HE) detergents with
low-sudsing properties will increasingly
be required for the growing number of
HE washing machines.
Standards for natural detergents are
expected to be implemented beginning in
2011. As the demand for detergents
made from natural ingredients increases,
the Natural Products Association (NPA)
has developed standards for what is
meant by natural. In order to earn
NPAs seal of approval, detergents must
be made of at least 95.0% natural
ingredients (not including water), and
they can only use nonnatural ingredients
when a natural alternative is unavailable.
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Life Cycle Stage
Revenue growth has slowed and value added

closely resembles overall GDP growth
Price competition has pressured profit margins
Products have become less distinguishable from competitors
Companies are using acquisitions to grow revenue
%Growthofprofit/GDP
Consumers have unqualified acceptance of soap products,

indicating the industrys low level of radical innovation
Maturity
30
QualityGrowth
Company
consolidation;
level of economic
importance stable
25
KeyFeaturesofaMatureIndustry
High growth in economic

importance; weaker companies
close down; developed
technology and markets
Revenue grows at same pace as economy

Company numbers stabilize; M&A stage
Established technology & processes
Total market acceptance of product & brand
Rationalization of low margin products & brands
20
15
QuantityGrowth
Many new companies;

minor growth in economic
importance; substantial
technology change
10
Supermarkets
&GroceryStores
0
Shake-out
Decline
Crash or Grow?
10
10
OrganicChemicalManufacturing
Beauty,Cosmetics&FragranceStores
InorganicChemicalManufacturing
LaminatedPlasticsManufacturing
Shake-out
Soap&Cleaning
CompoundManufacturing
PotentialHiddenGems
TimeWasters
Future Industries
5
10
Hobby Industries
15
20
25
30
%Growthofestablishments
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Industry Life Cycle

This
industry
is Mature
The industry is mature and is

experiencing low revenue growth,
moderate product innovation and
increasing consolidation. As a mature
industry, little change is expected in
the upcoming years. However,
increasing environmental standards
may result in modifications to product
content and packaging.
Revenue growth is expected to average
3.3% annually during the 10 years to
2016. The growth in the industrys
contribution to the economy tracks the
overall rate of growth in the US economy;
during the ten years up to 2016, industry
value added is forecast to increase by
approximately 2.2% on average per year,
which is moderately higher than
projected US gross domestic product
growth based on IBISWorld estimates.
While industry players have been
stimulating purchases by developing new
products with different features,
innovation is not radical enough to create
significant new demand. Soaps and
cleaning compounds have been staples of
households and commercial businesses
for a long period of time, so there is a
widespread acceptance of the products

among the purchases. Regardless of
inventive toothpastes, households only
require a certain amount of this good, so
demand cannot extend far beyond
current levels. That being said, the
intense level of competition among the
major players has been causing increased
emphasis on innovating products and
repositioning brands.
Since most houses and businesses
already have soaps and cleaning
compounds, industry companies must
earn sales from repeat purchases and
grow through acquisition. As a result,
consolidation is increasing, with the
number of companies expected to decline
by 1.7% per year on average for the five
years through 2011 to 1,196. This
consolidation trend is expected to
continue through 2016. Additionally,
more industry companies are expanding
their presence in undeveloped markets,
where soaps are not as pervasive. These
markets provide companies with
opportunities for stronger sales growth
and shift employment and production
facilities abroad.
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Products & Markets
Supply Chain | Products & Services | Demand Determinants

Major Markets | International Trade | Business Locations
Supply Chain
KEY BUYING INDUSTRIES

44511
Supermarkets & Grocery Stores in the US

Involved in the downstream retailing of various soap, dental care and detergent products.
44612
Beauty, Cosmetics & Fragrance Stores in the US

44619
Health Stores in the US

72
Accommodation and Food Services in the US

Tourism related industries are another source of supply for various soap and detergent
products supplied by the industry.
81232
Non-Coin-Operated Laundromats & Dry Cleaners in the US

Laundries and dry cleaners are a key source of demand for various detergent and cleaning
products manufactured by the industry.
KEY SELLING INDUSTRIES
Products & Services
32518
Inorganic Chemical Manufacturing in the US

The Soap and Cleaning Compound Manufacturing industry uses a variety of ingredients from
this industry.
32519
Organic Chemical Manufacturing in the US

The Soap and Cleaning Compound Manufacturing industry uses a variety of ingredients from
this industry.
32613
Laminated Plastics Manufacturing in the US

The Soap and Cleaning Compound Manufacturing industry uses products from this industry to
package its products.
32616
Plastic Bottle & Container Manufacturing in the US

The Soap and Cleaning Compound Manufacturing industry uses products from this industry to
package its products.
Products and services segmentation (2011)
10%
Miscellaneous soap
26%
Commercial soap and

other detergents
17%
Household soap and

other detergents
23%
Total $52.0bn
Surface
active agents
24%
Polish and other

sanitation goods
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Products & Markets
Products & Services

continued
There are three main product segments

within the Soap and Cleaning
Compound Manufacturing industry:
soaps and detergents; polishes and
other sanitation goods; and surfactants
and finishing agents.
Soap and other detergent manufacturing
The soap and other detergents product
segment generates the most revenue
within the industry (around 50.0% of
total sales in 2011) and includes
products such as laundry detergents,
dishwashing compounds, toothpaste and
personal cleansers. Soaps and detergents
that are designed specifically for
household use make up about 25.0% of
total sales versus 17.0% for commercial
purpose soaps. The remainder of this
category is not made specifically for
commercial or household use.
Household goods generate more
consistent sales, because population
growth drives demand in this market,
while growth in the economy drives
demand in the commercial market. The
economic recession caused sales to both
household and commercial users to
decline during the five years up to 2011;
however, commercial demand was more
volatile. The population continued to
expand in the United States, but several
households cut back on expenditures,
including by shifting soap and cleaning
purchases to lower priced goods. This did
not have as significant of an effect on
sales as the lower commercial demand.
Revenue at hotels and restaurants was
significantly impacted by the poor
economy; in turn, these businesses
required less soap. This is in contrast to
the continued growing demand for
household soaps.
Household goods can be further
grouped into four categories: personal
cleansing, laundry, dishwashing and
household cleaning. Major soap and
detergent products include laundry
cleaners, soap, dishwashing detergent,

and toothpaste. Laundry detergent
accounts for nearly 40.0% of industry
revenue, soap for 20.0%, and
dishwashing detergent for 15.0%.
Laundry detergent comes in powder or
liquid form, and may contain bleach
additives or color brighteners.
Dishwashing detergent comes in powder,
liquid, or gel form. Soap comes in bars or
liquids, and may have moisturizing,
antibacterial, or deodorant benefits.
Companies in the commercial sector may
also sell dispensing equipment and
provide related training.
Polish and other sanitation goods
Polishes and other sanitation goods make
up the second major product category,
generating about 24.0% of industry sales
in 2011. The products include polishes
and waxes (for use on furniture, metal,
flooring, and glass) and other sanitation
preparations including disinfectants and
deodorizers. This category also includes
household bleaches and ammonia,
laundry starches, and fabric softeners. If
a good in this category is classified as a
commodity cleaner, it is usually sold in
bulk at lower prices. Specialty cleaners
are typically sold in smaller quantities at
higher prices.
About 65% of the products are sold to
the industrial and institutional markets,
which include contract cleaning firms,
office buildings, restaurants, hospitals,
schools, hotels, and nursing homes. The
heightened focus on food safety
generated valuable opportunities for the
sanitizing products segment; however,
the economic recession highly impacted
the food service, hospitality, travel,
healthcare and food processing
industries, which are sensitive to changes
in travel and dining activities. During the
downturn, these end-users reduced their
purchases of cleaning and sanitizing
products, which is evidenced in the
WWW.IBISWORLD.COM
Products & Markets
Products & Services

continued
decline of this segments share of the

total industry from about 26.0% in 2007
to its current level of about 24.0%. The
market for cleaning and sanitizing
products is led by Ecolab, followed by
other major suppliers like Johnson
Diversey and DeLaval. The industry does
exhibit some segmentation, however,
with niche players and local and regional
suppliers maintaining a noteworthy
presence in the market.
While sanitation products for
commercial users decreased, cleaning
wipes have been working their way
around American households. People
most commonly use wipes to clean or
disinfect kitchen countertops and
appliances, bathroom fixtures, hands and
children, according to the Soap and
Detergent Associations (SDA) 2008
National Cleaning Survey, conducted by
Echo Research. SDAs research shows
that 71.0% of Americans have used a
cleaning, disinfecting or antibacterial
wipe, which is up from 66.0% in 2007.
Surface active agents

Surface active agents make up the
smallest product category. This category
includes raw material ingredients that,
when dissolved in water, help to loosen
soil from a surface. The ingredients are in
turn sold to soap and detergent
manufacturers. Examples of products
include wetting agents, emulsifiers and
sulfonated oils and fats.
New product development in the
surfactants area is being bolstered by the
introduction of a variety of products
based on renewable raw materials.
Pressure to replace less environmentally
friendly products and the development of
some of the newer technologies combine
to provide niche market opportunities,
even in this mature market. This type of
development requires sufficient
resources, not only to provide the
technical expertise but also to engage
with the end-user to understand their
surfactant requirements and co-ordinate
product development.
Demand
Determinants
Above all else, soap consumption in the

consumer market is tied to population
growth, particularly among households
with children, and economic growth
drives demand in the commercial market.
2000. However, the Census Bureau

expects this percentage to grow to 26.0%
by 2015.
With the US population expanding at
slowing rate, the domestic market for
household and commercial cleaning
products is mature. The prospect of
limited population growth means that
consumer goods companies must target
existing markets with specific designs in
order to continue selling their products.
Additionally, manufacturers are finding
more opportunities outside of the
United States, where populations are
growing rapidly and competition is less
intense. According to the US
Department of Commerce, the worlds
developing countries will continue to
grow much more rapidly than
developed countries. In 1950, about
Aging population slows

population growth
Overall demand for cleaning products is
closely linked to population growth. More
people means that there will be more
bodies to bathe and more homes to clean.
However, as the US population ages, the
rate of new household formations
decreases correspondingly. Marketers
study the age range, size and spending
patterns of their various target markets.
For example, based on US Census data,
45- to 64-year-olds made up
approximately 22.0% of the population in
WWW.IBISWORLD.COM
Products & Markets
Demand
Determinants
continued
67.0% of the worlds population lived in

developing countries; by 2025, the
figure is projected to approach 84.0%.
Accordingly, US cleaning products
manufacturers have made rapid
expansions abroad in recent years.
New products on the same shelves
The major determinants of demand for
the Soap and Cleaning Compound
Manufacturing industry are product
development and industry marketing. In
this industry, new products can include a
completely new formula or concept, or
improvements in existing products and
brand extensions. Extending a wellknown brand name to a new product
often lures shoppers who already use the
core brand. Slow growth in the US
population means that the development
of new products and categories remains
important to growth in the industry.
New products also help to maintain
profits, as innovation keeps consumers
from trading down to less-expensive
private label products that do not have
the same features.
In a March 2009 report, Information
Resources said that the sustainability
trend is likely to have the most significant
impact on cleaning product development
over the next several years. While
creating more eco-friendly products,
companies can create excitement for
their products by adding or emphasizing
benefits, such as healthfulness,
convenience, or ease of use. An example
Major Markets
The majority of industry participants

manufacture products for the consumer
market; roughly 57.0% of products are
designed for household use. This segment
is followed by the commercial market
(43.0%). Customers that retail to the
consumer market include supermarket
chains, mass merchandisers, drugstores,
and warehouse clubs. Customers in the
of a new product is the Clorox BathWand,

which mounts a pivoting, abrasive
sponge at the end of an extendible wand.
Clorox cleaning solution is preloaded
inside. The product serves as an
alternative to filling a bucket with cleaner
and water and bending over to clean a
bathtub and shower.
Consumers cut back
Price can also play a role in influencing
purchasing patterns. Although
consumers tend to purchase brands of
soaps and detergents they trust, a poor
economy and significant price increases
can lead to heightened price sensitivity
and falling demand. Although the Soap
and Cleaning Compound Manufacturing
industry manufactures products that
relatively essential items, during
economic downturns households
rationalize the range of products they
purchase, trade down the value chain or
use products more economically. The
major manufacturers offer products that
target a range of price points, from low
to high, in order to address more
customers needs.
Similarly, as households income levels
rise, consumers tend to trade up from
bargain products to premium ones. In
addition, they tend to add certain
products to their shopping baskets that
they might not ordinarily have
purchased, such as a special cleaner for
the bathroom rather than just an allpurpose one.
commercial segment include industrial

and commercial laundries, hotels,
restaurants, and healthcare providers.
The relative importance of a market
segment varies with the product and its
use. For example, the market for
detergents can be distinguished on the
basis of commercial and household use.
The major market segments for soap
WWW.IBISWORLD.COM
Products & Markets
Major Markets
continued
Major market segmentation (2011)
11.6%
1.5%
Convenience
Lodging
stores
establishments
34.4%
14.3%
Supermarkets and
mass merchants
Healthcare
providers
17.4%
Food service
establishments
Total $52.0bn
products are the general household
market and the tourism industry (in
particular hotels and other
accommodation establishments).
Households use these products in many
ways, for example, those that want a
pure soap (for babies), those that want
an anti-bacterial soap (teenagers), those
that want an anti-deodorant soap, those
that want an inexpensive soap (bargain
shoppers), those that want a creamy
soap (women who want soft skin) and
those that want an abrasive soap
(mechanics). Other markets include dry
cleaning, wool scouring and the
pharmaceutical industry.
Consumers purchase more
from large retailers
Within the consumer market, there is a
sweeping demographic change under way
that affects marketing and product
design. Population growth is fastest
among minority groups, Hispanics in
particular. Consequently, industry
products must become more relevant
with US Hispanics to remain competitive
in the marketplace. For instance, Clorox,
one of the industrys major players,
recently commissioned an in-depth
Hispanic consumer segmentation study
for its Pine-Sol brand, which is the leader
20.8%
Independent retailers
in dilutable cleaners in the general

market, but number two with Hispanics.
The results are being used to better shape
Hispanic-targeted marketing
communications moving forward.
Soap manufacturers rely heavily on
large retailers like Walmart, Costco and
Target for a significant portion of sales
to consumers. Walmart can account for
up to 15.0% of total revenue for large
companies. These large retailers have
the power to demand price concessions
and supply chain management services
from manufacturers. For example,
Procter & Gambles sales to Walmart
represent approximately 15.0% of total
revenue. Given that the companys
top10 customers account for
approximately 30.0% of total sales,
Walmart can have substantial influence
on P&Gs performance.
Healthcare facilities represent
opportunity for expansion
Hand hygiene is being promoted in
healthcare with clear objectives,
strategies and governmental support
through policies and resource allocation.
For instance, he main objective of the
First Global Patient Safety Challenge,
launched by the World Health
Organization (WHO), is to achieve an
WWW.IBISWORLD.COM
Products & Markets
improvement in hand hygiene practices

worldwide with the ultimate goal of
promoting a strong patient safety
culture. Healthcare workers hands are
the most common vehicle for the
transmission of healthcare-associated
International Trade
The Soap and Cleaning Compound

Manufacturing industry predominantly
sells to the domestic US market. Exports,
valued at about $7.1 billion based on US
Census Bureau data, represent about
13.7% of industry revenue. A sizable
proportion of industry exports are
soldto US neighbors; exports to
Canadaand Mexico account for 37.0%
and 8.0% of the total, respectively. Other
key markets include China (6.0%) and
Japan (5.0%). Most large companies
have manufacturing facilities abroad,
which reduces the accounted dollar
value of export products from the
UnitedStates.
Level & Trend

xports in the
E
industry are
Medium and
Increasing
Imports
in the
industry are
Medium and
Increasing
Exports To...
5%
China
pathogens from patient to patient and

within the healthcare environment.
Hand hygiene is the leading measure for
preventing the spread of antimicrobial
resistance and reducing healthcareassociated infections.
Industry trade balance

16000
12000
8000
$ million
Major Markets
continued
4000
0
4000
Year 03
05
Exports
07
Imports
09
11
13
15
17
Balance
Imports From...
5%
Japan
44%
8%
Mexico
Others
8%
10%
Germany
29%
China
Others
25%
Mexico
38%
Canada
28%
Canada
Year: 2009
SIZE OF CHARTS DOES NOT REPRESENT ACTUAL DATA
Total $7.1bn
Total $2.6bn
SOURCE: USITC
WWW.IBISWORLD.COM
Products & Markets
International Trade
continued
Imports, valued at $2.6 billion, also

play a small role in the industry. Similar
to export trade, a considerable share of
industry imports is derived from
neighboring countries; imports from
Canada and Mexico account for 26.0%
and 24.0%, respectively. Other key
import markets include China (10.0%),
Germany (9.0%) and Japan (6.0%).
Export and import levels have tended to
rise in recent years with exports growing
by an average 5.6% annually since 2008,
compared with an average growth rate of
1.1% in imports. With mature markets in
the United States, manufacturers are

pursuing growth overseas. For instance,
Procter & Gamble generates about 61.0%
of its sales outside of the United States.
Industry players are investing heavily in
developing and emerging markets in
Central and Eastern Europe, China and
India, where recent trends in economic
and population growth bode well for soap
and cleaning products. In such countries,
increases in gross domestic product,
disposable income, and population are
outpacing those of the United States and
Western Europe.
WWW.IBISWORLD.COM
Products & Markets

Business Locations 2011
West
New
England
AK
0.0
WA
Rocky
Mountains
ID
2.7
West NV
0.0
0.2
SD
0.0
WY
0.0
MN
0.0
0.0
OR
Great
Lakes
ND
MT
0.3
Plains
0.9
UT
CO
1.3
KY
1.0
OK
1.9
NC
1.8
TN
AZ
NM
1.7
0.0
Southwest
TX
3.5
HI
0.0
AdditionalStates(as marked on map)

1 VT
2 NH
3 MA
4 RI
5 CT
6 NJ
7 DE
8 MD
0.5
0.3
0.0
3.9
0.5
1.0
SC
Southeast
0.0
MS
AL
0.0
3.6
GA
4.7
1.6
LA
2.6
FL
0.9
Industryrevenue(%)
1.5
1.7
AR
0.4
0.7
3.6
WV VA
0.2
1.5
10.4
CA
West
14.1
MO
KS
2.6
OH
5.0
1.4
IN
6.2
0.0
PA
5.0
IL
0.2
1 2
3
NY
1.0
5 4
MI
9.4
IA
NE
0.5
WI
ME
MidAtlantic
9 DC
0.0
Lessthan3%
3%tolessthan10%
10%tolessthan20%
20%ormore
WWW.IBISWORLD.COM
Products & Markets
The US Soap and Cleaning Compound

Manufacturing industry is moderately
geographically concentrated, with key
regions in the Southeast, Southwest,
Great Lakes and West. Key states
include California (8.3% of all
establishments), Texas (6.4%), New
Mexico (4.8%), Illinois (4.7%) and Ohio
(4.3%). This geographic pattern reflects
in part the general spread of the
chemicals industry. For example, Illinois
and Ohio are home to large producers of
various organic and inorganic chemicals,
which are key inputs in the production
of soap and detergents. Chemical
Revenue vs. population
production is Ohios third ranking

manufacturing activity; within this, the
state produces soaps, industrial
chemicals and paints and varnishes. The
largest soap factory in the country is
located in Ohio.
The geographic location of
establishments and revenue also reflects
the distribution of economic activity and
population within the United States,
because manufacturers choose to locate
in areas that are well supported by
infrastructure and close to downstream
markets. California and Texas are
heavily populated states.
Revenue
Revenue
Population
Establishments
Southwest
Southeast
West
Southwest
Southeast
Rocky Mountains
Plains
0
New England
0
Mid-Atlantic
10
Great Lakes
10
Rocky Mountains
20
Plains
20
New England
30
Mid-Atlantic
30
40
Great Lakes
Revenue vs. establishments
40
West
Business Locations
WWW.IBISWORLD.COM
22
Competitive Landscape
Market Share Concentration | Key Success Factors | Cost Structure Benchmarks

Basis of Competition | Barriers to Entry | Industry Globalization
Market Share
Concentration
Level
Concentration in this
industry is Medium
Key Success Factors

IBISWorld
identifies
250 Key Success
Factors for a
business. The most
important for this
industry are:

Manufacturing industry is highly
concentrated. IBISWorld estimates
that the top four industry participants
will generate approximately 67.3% of
total industry revenue in 2011, and the
top players control has been increasing
in the five years up to 2010. This trend
is consistent with the maturity of the
industry. Soap manufacturing is a
long-standing industry, and sales are
reliant on replacement purchases
because most households already own
soap. As a result, significant company
growth is produced by acquiring other
players. Based on US Census Bureau
data, about 79.0% of industry
companies have fewer than 20

employees. While there are many small
players in the industry that specialize
in niche products, the major players
make up a dominant portion of
industry revenue.
The degree of concentration also
varies between different product
segments. In the case of the US
detergent product segment, Procter &
Gambles three top brands account for
more than 55.0% of the market, and
brands produced by Unilever, Church &
Dwight and Dial account for 25.0%. In
the household products segment,
Procter & Gamble is the largest player,
followed by SC Johnson & Son.
Access to niche markets

If a company is not a major player,
niche positioning is important for
success in this industry in order
togain market share through
smallerretailers.
manufacturers have more power to

negotiate with large retailers.
Having marketing expertise

In this highly competitive industry with
little product differentiation, marketing
and brand awareness is necessary to sway
consumers towards purchasing a
companys goods.
Ensuring pricing policy is appropriate
Purchase incentives for retailers, such
as bulk discounts, help companies gain
shelf space.
Economies of scale
Expanding the size of a companys
production can help to reduce long run
average costs and thereby boost profit
margin. Additionally, bigger
Generate brand loyalty

Manufacturers that produce household
goods can garner more repeat sales if
consumers are brand loyal. Companies
that supply the commercial segment
strive to become preferred vendors by
offering superior customer service.
Development of new products
Although major innovation of soaps is
limited, companies must continually add
features to attract customers away from
private label products.
Supply contracts in place
for commodity inputs
Raw materials purchased for use in
manufacturing products are generally
purchased on an annual contract
basis to control costs and adjust
pricing accordingly.
WWW.IBISWORLD.COM
23
Cost Structure
Benchmarks
Profitability
Profit margin in the Soap and Cleaning
Compound Manufacturing industry is
expected to be 10.7% in 2011. This
represents a decline from 10.9% in
2007, mainly due to decreased pricing
power. Retailers are growing larger and
enhancing their ability to force prices
downward at the manufacturing level.
Additionally, during the economic
recession, consumers shifted purchases
towards private-label products with
lower price tags and minimal features.
These products carry lower margins
than most brand name goods.
Consequently, although the volume of
sales increased somewhat due to a
growing population, profitability
decreased. During the upcoming five
years, profit margin is forecast to
continue to erode slightly to about 10.5%
of revenue, despite an improving
economic environment. This will be due
to continued consolidation among
retailers, which will further pressure
pricing at the manufacturing level.
compounds are sourced both locally and

from abroad, and large industry players
are increasingly acquiring their own
business units that manufacture key
chemicals. Packaging is about 20.0% of
product costs.
Since the cost of goods is a significant
percentage of revenue, a players ability
to manage its profit can be adversely
affected by movements in raw material
prices. During the five years up to 2011,
COGS has been increasing as the cost of
raw materials has been on the rise. In
contrast, raw material prices are forecast
to begin decreasing in the upcoming
years, which will help the industry
maintain profit margin somewhat.
Wages
Wages are expected to represent roughly
5.2% of sales in 2011. Wages have
gradually fallen since the 1990s, in line
with efforts to achieve higher operating
efficiencies and moves to further
automate the manufacturing process. In
contrast, depreciation, which accounts
for roughly 4.0% of industry revenue, has
been increasing during the same time
period as companies purchase more
equipment. This is typical of a
manufacturing industry that relies on
significant capital investment for
production purposes.
Cost of goods sold

Cost of goods sold (COGS) account for an
estimated 55.0% of sales in 2011. Raw
materials include surfactants, solvents,
phosphates, silicates, alkalis, salts, and
perfumes. Suppliers include major
chemical manufacturers like Shell
Chemical (a division of Royal Dutch
Shell) and Dow. Ingredients used in the
manufacture of soap and cleaning
Profit
Rent
Utilities
Depreciation
Other
Wages
Purchases
Other expenses
Other expenses are primarily made up
of research and development (R&D),
IndustryCostsandAverageSectorCosts
Industry
Costs
(2011)
10.7
4.0
Profit
100%
4.0
19.6
1.5
1.2
9.2 3.3 14.7
AverageCosts
ofallIndustries
Profit
insector(2011)
2.1
5.2
11.2
55.0
58.4
WWW.IBISWORLD.COM
24
Cost Structure
Benchmarks
continued
advertising and restructuring costs.

R&D expenses are estimated to be
around 2.0% of industry revenue.
According to the Soap Association, low
research and development efforts make
up one of the industrys weaknesses.
R&D is particularly important in
discovering brand-name benefits that
can give a company an edge against
private label products. For instance,
technologically advanced compounds
produce color-safe oxygen bleach
alternatives, and R&D supported the
development of anti-bacterial cleaners
and whitening agents in toothpastes.
Companies have long been focused on
developing more environmentally

friendly products.
Advertising by industry
manufacturers can also be a significant
expense. These are included within
selling, general and administration
expenses. Since the industry is mature
and population growth has slowed,
companies are spending increasing
amounts on advertising and marketing
efforts. Product innovation alone is not
sufficient to stimulate new demand. As
a result, profitability has been
moderately declining in the Soap and
Cleaning Compound Manufacturing
industry since 2007.
Basis of Competition

Manufacturing industry is intensely
competitive. There are a wide variety of
well-advertised brands, private label
brands and generic non-branded
products of grocery chains and wholesale
cooperatives in certain categories, which
typically are sold at lower prices. Such a
competitive landscape has caused
industry operators to increase spending
on advertising and promotions or reduce
prices, which places downward pressure
on profits. Competitive risk is ramping up
across the industry as two leading
manufacturers, Procter & Gamble (P&G)
and Unilever, are accelerating marketing
spending and adjusting pricing in order
to gain volume market share. Given P&G
has leading industry share and Unilever
is a large multinational consumer
products company, these companys
efforts to increase marketing is a major
competitive risk factor for other industry
players. This is particularly pronounced
for Colgate given its considerable overlap
with these two companies from a product
category standpoint.
The type and extent of competition
in the industry varies depending on
whether the industry participant
services the household market or the

commercial market. In the household
market, competition is based primarily
on product differentiation and brand
loyalty established through extensive
advertising. The importance of price
varies across sub-markets. On the
other hand, competition in the
commercial market is based on
performance and price.
Level & Trend

ompetition
C
in
this industry is
Medium and the
trend is Increasing
Key methods of competition

Firms often compete on price within
general category products and
consumables such as laundry soap,
bleach and natural glycerin products, as
consumers are more likely to use cheaper
generic items in these categories. The
brand strength and breadth of product
lines is another key basis of competition.
Existing and established companies that
offer a wide range of products gain
greater market presence and product
acceptance. Advertising and promotional
activities also help companies
differentiate products, as do varying
e-commerce strategies. This is
particularly true with new products.
According to Clorox, a newly introduced
product faces intense established
WWW.IBISWORLD.COM
25
Basis of Competition
continued
competition and, as such, requires

substantial advertising and promotional
resources. If a new soap successfully
gains consumer acceptance, it then
requires continuous advertising and
promotional support in order to maintain
its relative market position.
Intense competition in a mature market
Given the mature nature of the industry,
new product innovation plays a
significant role in maintaining sales
growth. Consumers have long been
purchasing soaps, so there is little
incentive to actively seek out different
products from purchase to purchase.
Companies compete on new product
development to be first in the market
with an innovative idea that can
stimulate renewed interest and
sometimes benefit from patent
protection. The ability to continuously
introduce new products or extend
product lines in an otherwise saturated
market has grown in importance in
recent years. At the same time, the ability
to differentiate products by price,
labeling, product placement or
advertising remains essential.
The green movement has created an
opportunity for companies to develop
new products. In recent years, there has
Barriers to Entry
Level & Trend
arriers to Entry
B
in this industry
are Medium and
Increasing
The big stay big

It is relatively easy to launch a small soap
manufacturing company, because the
technological skills and financial
resources required are not substantial.
Additionally, industry products are
considered commodities, and the
ingredients used to produce them are
common. As a result, firms are more
willing to risk entering the industry
because they can easily liquidate their
inventory and assets if the venture fails.
been increased consumer demand for

environmentally friendly products with
natural ingredients. In response,
companies often differentiate their
products on the basis of being natural
and eco-friendly. For example, soap
bottles may advertise botanical extracts
and safe testing methods.
Product quality and performance
are also important factors. Consumers
often purchase quality soaps and other
detergents if the products perform
well and the customer perceives value
in its use. In the United States, where
more and more families have dual
incomes, products that reduce
cleaning time can positively influence
consumer acceptance.
External competition is on the rise
A number of industry participants must
also compete against retail grocery chains
and wholesale cooperatives that are
involved in the manufacture or sale of
private label brands or generic nonbranded products. Additionally, in line
with forces favoring globalization, in
recent years, a highly competitive global
marketplace for various soap and
surfactant products has developed, with a
number of industry participants
producing and competing globally.
Finally, although costs related to

marketing and distribution are
potentially significant, they can be kept
to a minimum if there are enough
retailers within the area where the
products can be sold.
However, given the high costs of
manufacturing, marketing, and
distribution, large corporations dominate
Manufacturing industry. The existence of
strong brands and the advantages
WWW.IBISWORLD.COM
26
Barriers to Entry
continued
associated with the high volume

production facilities prevent the threat of
new entrants from becoming a significant
factor. The amount of capital needed to
build manufacturing facilities can be
prohibitive. Moreover, because brand
loyalty is essential for US consumer
products companies, national firms
spend significant amounts on marketing.
Developing new products is essential
The competitive nature of this industry
requires investment in research and
development (R&D) directed towards
either the development of new,
innovative products, the maintenance
and improvement of existing products or
the extension of an existing product
range. Many of the industrys large global
players began by making one simple
product, and, over the years, evolve into
giant manufacturing powerhouses with
highly developed distribution channels.
Industry
Globalization
Level & Trend
lobalization
G
in
this industry is
High and the trend
is Increasing
BarrierstoEntrychecklist
Competition
Concentration
Life Cycle Stage
Capital Intensity
Technology Change
Regulation & Policy
Industry Assistance
Level
Medium
Medium
Mature
High
Low
Medium
Low
Getting in with the big players

The main distribution channels of soap
products are supermarkets and mass
merchants. Thus, the size of the average
buyer is significant, which enhances
their negotiating position. Furthermore,
the relative concentration of the retail
market leads to even stronger buyer
power. Large retailers for soaps, such as
Walmart, make it difficult for new

companies to enter the distribution
chain. Any particular company does not
represent a significant portion of a
Goliath retailers business. If the
supplier does not depend on a
companys business, that company has
less power to negotiate pricing and shelf
space. As a new company to the
industry, these selling points could be
essential to success.
Cleaning products are usually
differentiated (in terms of color, brand,
strengths and fragrance) but their overall
function is fairly standardized. Such lack
of distinction of products increases the
power of retailers to control pricing and
demand. A form of backward integration
within the market is possible with
retailers able to develop their own brands
of private-label cleaning products.
The level of globalization within the

industry is high and will continue to
increase during the five years up to
2016. The US Soap and Cleaning
Compound Manufacturing industry is
part of the global consumer nondurables industry, which is comprised of
various household and personal care
items. The industry is becoming
increasingly globalized in its focus as the
major players look to developing
markets for growth. A combination of
market saturation and slower population

growth in most industrialized markets
has caused companies to focus on the
development of global brands, led by
dominant players such as Procter &
Gamble and Colgate-Palmolive. In 2010,
Procter & Gamble derived 32.0% of net
sales from developing markets, up from
29.0% two years earlier.
Also, many of the major players
within the US industry tend to be
Fortune 500 global players (with
WWW.IBISWORLD.COM
27
Exports offer growth

opportunities for firms.
However there are legal,
economic and political risks
associated with dealing in
foreign countries.
Import competition can
bring a greater risk for
companies as foreign
producers satisfy domestic
demand that local firms
would otherwise supply.
TradeGlobalization
200
GoingGlobal:Soap&CleaningCompound
Manufacturing1998-2011
Global
Export
150
100
50
Soap&Cleaning
Compound
Manufacturing
0 Local
0
countries and territories and, as such,

has a geographic balance that limits its
exposure to external events in any one
country or region.
Import
40
80
200 Export
Exports/Revenue
International trade is a
major determinant of
an industrys level of
globalization.
overseas subsidiaries spread throughout

the world) who dominate the industry on
a global scale. For example ColgatePalmolive competes in 200-plus
Exports/Revenue
Industry
Globalization
continued
120
Imports/DomesticDemand
160
Global
150
100
50
0
2011
Local 1998
0
40
Import
80
120
160
Imports/DomesticDemand
WWW.IBISWORLD.COM
Major Companies
The Procter & Gamble Company | S.C. Johnson & Son Inc.
Ecolab Inc. | Colgate-Palmolive Company | Other Companies
Major players
(Market share)
Colgate-Palmolive Company 5.8%

S.C. Johnson & Son Inc. 9.8%
58.4%
Other
Ecolab Inc. 6.4%

The Procter & Gamble Company 19.6%
Player Performance
The Procter &
Gamble Company
Market share: 19.6%
Industry Brand Names
Tide
Crest
Oral-B
The Procter & Gamble Company (P&G)

dates back to 1837. Today, it is the
leading manufacturer of household
products in the United States, with 300
brands (including 23 that generate
annual sales exceeding $1.0 billion and
20 that generate at least $500.0 million
in sales) sold in more than 180 countries.
Household brands include Tide, Cascade,
Charmin, Crest and Oral-B. The
companys large scale is important, as it
allows P&G to buy raw materials in bulk,
manufacture more efficiently, leverage
marketing, spend more on research and
development (R&D) and protect some of
its categories from competition.
However, the companys size is one of the
reasons that it is somewhat slower to
bring new products to the market than its
smaller, more nimble competitors. In
2008 and 2009, P&Gs high-end product
portfolio and its slow response to a shift
in consumer demand to value pressured
sales and profitability.
The company has created products
specifically for consumers in developing
nations. Examples include Downy
Single Rinse, low-water volume
detergent, and Naturella, a low-income
feminine protection product. In light of
the global economic downturn, P&G
announced that it will focus its growth
strategy on emerging markets, opening
almost all of its 20 new manufacturing
facilities outside its established markets.
Additionally, like other industry players,
P&G is recognizing the maturity of the
US marketplace, which holds limited
potential for strong growth. Hence,
other companies are also opening

manufacturing plants and selling
product abroad.
Product mix
The groups business model relies on the
continued growth and success of existing
brands and products and the creation of
new products. Its top 43 brands currently
account for 85.0% of sales and 90.0% of
group profits. In 2005, P&G expanded its
portfolio to include razors and blades as
well as batteries with its acquisition of
the Gillette Company. During the five
years up to 2011, the company has been
divesting brands or stopping production
of products that do not fit its long-term
plans for increasing sales and profits. For
instance, in 2008 the company
completed the sold Folgers, its coffee
business, to The J.M. Smucker Company.
Following a number of reorganizations,
the group has three Global Business
Units- Beauty; Health and Wellbeing;
and Household Care with six reportable
segments in total; Beauty (24.0% of
sales); Grooming (9.0%); Health Care
(14.0%); Snacks and Pet Care (4.0%);
Fabric and Home Care (30.0%) and Baby
Care and Family Care (19.0%).
P&Gs fabric and home care operations
are the companys oldest and largest
businesses. They include its fabric care,
air care, dish care and surface care
product categories. The laundry category
alone accounts for 17.0% of sales, the
single highest contribution of any
business. Key brands within this segment
include Tide, Ariel, Downy, Dawn, Gain,
WWW.IBISWORLD.COM
Major Companies
Player Performance
continued
Cascade, Swiffer and Febreze, of which

the first five are members of its billion
dollar brand club. Of particular note is its
Swiffer brand, which the company claims
has created a new $1.2 billion (retail
sales) surface cleaning systems category
both within North America and Western
Europe. Its Febreze product has also
been accredited with creating a new
fabric refresher category.
increases were driven mainly by

initiative activity, including launches of
Gain hand dishwashing liquid and
Febreze Set & Refresh in North America,
and geographic expansion of dish and air
care product lines.
P&Gs profit has been hurt by weak
pricing over the past few years. Going
forward, improved pricing will occur as
promotional spending dissipates. P&G
has made necessary downward price
adjustments, which may erode
profitability in the short term, but are
necessary sacrifices given the companys
portfolio became too premium focused
for the new consumer reality with the
economic downturn. P&Gs premiumpriced portfolio hurt the company
during the recession, but it could benefit
the company going forward in an
improving macro environment. P&G has
a strong track record of premium-driven
innovation over the last decade, but this
left it vulnerable to trade-down during
the recession.
Also, P&G has been increasing its
marketing spending; however,
competitors are also ramping up
marketing spending behind strong new
product pipelines. Although increased
marketing as a percentage of sales is
necessary for the company (particularly
given that the company cut back more
than its peers during the economic
Financial performance
In 2011, P&G is generated $30.5 billion
in sales in the United States, of which,
the companys industry relevant segment
made up about $10.2 billion. US sales
represent roughly 41.0% of worldwide
company revenue. International revenue
is a growing portion of the companys
business; P&G sells at least $1.0 billion
worth of product in 12 countries. The
companys international expansion,
particularly into developing nations, is
representative of a larger industry trend.
P&Gs sales in developing nations have
increased steadily from about 25.0% of
total revenue in 2007 to 41.0% in 2011.
During the five years to 2011, P&Gs
US fabric care and home care revenue
grew 0.9% per year on average. Revenue
increased 4.3% in 2011, mainly due to
higher unit volume combined with
renewed pricing ability attributable to
the recovering economy. Volume
TheProcter&GambleCompany(USfabriccareandhomecaresegment)
financialperformance
Year*
Revenue
($ million)
(% change)
OperatingIncome
($ million)
(% change)
2006-07
9,047.2
-7.0
1,945.1
7.1
2007-08
8,846.2
-2.2
1,813.5
-6.8
2008-09
8,793.2
-0.6
1,831.2
1.0
2009-10
9,760.0
11.0
1,901.2
3.8
2010-11
10,183.2
4.3
2,046.8
7.7
*YearendJune
SOURCE: ANNUAL REPORT AND IBISWORLD
WWW.IBISWORLD.COM
Major Companies
Player Performance
continued
downturn in 2009), IBISWorld expects

that P&Gs sales will only moderately
gain from these efforts, given its
competitors are keeping pace in
marketing spending levels.
On the cost side, the company is
already close to best in class from a
manufacturing perspective, with highly
efficient supply chain a clear competitive
advantage. The company has expanded
operating profit margin (earnings before
interest and tax) during the past five
years. Still, despite industry leading sales
and profit per employee, corporate
overhead costs remain bloated and
represent the best opportunity for margin
expansion in the years ahead.
P&Gs marketing expenses are
particularly high relative to the industry.
To combat higher marketing expenses,
the company has been making significant
efforts to reduce other costs. P&Gs sales,
general and administrative costs are
higher than the industry average, so the
company has a lot of low-hanging fruit in
its efforts to boost profitability. Procter &
Gamble has historically spent a notable
amount on R&D and marketing. The
company spends almost twice as much

on research and development spending
($2.0 billion in 2009) as Unilever in
attempt to maintain its competitive
edgeby focusing on product innovation.
In 2007, the company was the worlds
top advertiser, spending almost $9.4
billion worldwide. The company
outspent Unilever, the second-highest
advertiser, by almost two-to-one
(Unilever spent $5.2 billion).
In 2009, the companys fabric care and
home care division recorded a drop in
sales of 2.0%, with worldwide sales for
the year totaling $23.2 billion. This
reflected lower unit volumes and only
slightly higher prices that were
implemented to offset higher commodity
costs. In comparison, the fabric care and
home care division posted sales growth of
11.0% in 2008, predominantly due to
higher sales volumes and favorable
foreign exchange rates. At the same time,
sales growth was marginally suppressed
by disproportionate growth in developing
regions and a shift towards larger
product sizes in fabric care, both of which
have lower selling prices per unit.
Player Performance
First established in 1886, SC Johnson &

Son Inc. (SC) is a privately owned
manufacturer of household cleaning
products and products for home storage,
air care, personal care and insect control.
The company manufactures well-known
cleaning brands, such as Pledge, Glade,
Windex, Raid and Ziploc. SC has
operations in more than 70 countries and
roughly 12,000 employees. Many of SCs
products have been top sellers; however,
after its Edge and Skintimate shave
preparation brands lost market share to
rival Procter & Gambles Gillette, the
company sold the two brands to
Energizer in 2009, which already
competes with P&G in the razors
business with its Schick-Wilkinson Sword
unit. On 10 occasions, SC has been

ranked as one of Fortune magazines
100 Best Companies to Work For, due
to culture, healthcare coverage and
compensation, among other qualities.
While other industry players have
become more active in manufacturing
goods designed for commercial uses, SC
has remained focused on the household
side. The companys commercial
products division (Johnson Wax
Professional and Johnson Polymer) was
recently spun off as a private company
owned by the Johnson family.
S.C. Johnson &

SonInc.
Market share: 9.8%
Oust
Drano
Pledge
Strategy
SC has a strong focus on its research and
development capability. The company
WWW.IBISWORLD.COM
Major Companies
Player Performance
continued
has dedicated research teams in product

research, process development, and
package development divisions. It has
strong research expertise in its product
categories such as aerosol technology,
insect behavior and control, and
fragrance delivery. The company engages
hundreds of scientists, engineers,
technicians and support staff across the
globe, who are continuously involved in
research and development activities. In
addition, SC was named the fourth most
innovative company in the consumer
products category on Fast Company
magazines annual Most Innovative
Companies list in 2010. The companys
strong R&D capability provides it with a
competitive advantage and helps it to
innovate and launch new products.
Despite a strong brand portfolio and
geographically diversified operations, SC
lacks the size, in terms of revenue, to
compete with the likes of Procter &
Gamble (P&G). P&G, for instance,
markets its brands in more than 180
countries spanning the Americas,
Europe, the Middle East and Africa
(EMEA) and Asia. Size enables large
competitors such as P&G to reduce the
per-unit cost of purchasing, production
and marketing. Lack of size therefore
reduces SCs edge.
In order to keep up with intense
competition, SC launched a new Spanishlanguage website in March 2010 to target
the US Hispanic population. The website

launch will help the company reach out
to more than 35 million Spanishspeaking US consumers. According to the
Centers for Disease Control (CDC),
language barriers is one of the leading
factors that contribute to poor health
outcomes among the US Hispanics and
SC has taken the initiative to reduce the
language barrier gap by providing
information and explanation for most of
its products in Spanish. The website
offers easy-to-access and easy-tounderstand information about the
ingredients in the companys products to
the Spanish speakers in the United
States. SCs initiative to target the US
Hispanic population through the launch
of its Spanish-language website provides
a platform to increase its customer base,
which could positively boost its revenue
in the years ahead.
SC has made a number of acquisitions,
which have helped drive growth
particularly in recent years. Most
recently, the company went up against
P&G in a bid for Sara Lee Corp.s
European air-freshener business. The
deal would have extended the
manufacturers reach abroad and solidify
its presence in the air scents niche.
In 2011, US sales are estimated to be
about $5.1 billion, representing growth of
S.C.Johnson&SonInc.(USsegment)financialperformance
Year
Revenue
($ million)
(% change)
OperatingIncome
($ million)
(% change)
2007
4,475
14.7
495.3
24.3
2008
4,860
8.6
536.3
8.3
2009
4,890
0.6
526.9
-1.8
2010
4,974
1.7
549.1
4.2
2011*
5,074
2.0
588.1
7.1
*Estimate
SOURCE: IBISWORLD
WWW.IBISWORLD.COM
Major Companies
Player Performance
continued
2.0% from 2010 and about 5.4% per year

on average during the past five years.
During the year, positive momentum on
pricing and a growth in consumer
spending are expected to grow sales.
Profit is also forecast to improve as
commodity costs reduce and the
company continues its cost containment
efforts. In recent years, SC has pursued
cost-containment strategies designed to
improve its operating profit margins.
Efforts have also been focused on
increased levels of brand support while
ongoing innovation efforts have been
geared toward successful new product
introductions as well as international
market penetration. SCJ has a strong
focus on its research and development
capability. The company has dedicated
research teams in product research,
process development, and package
development divisions. It has a strong
research expertise in its product
categories such as aerosol technology,
insect behavior and control, and
fragrance delivery. The company
engages hundreds of scientists,

engineers, technicians and support
staff across the globe, who are
continuously involved in research and
development activities. In addition, SC
was named the fourth most innovative
company in the consumer products
category on Fast Company magazines
annual Most Innovative Companies list
in 2010. The companys strong R&D
capability provides it with a
competitive advantage and helps it to
innovate and launch new products.
SCJs operations are geographically
diversified. Sales outside of the United
States account for approximately 60.0%
of the companys total revenue. Its global
manufacturing operation includes
facilities in Argentina, Canada, China,
India, Indonesia, the Netherlands, the
United Kingdom, the United States,
Mexico and other countries. The
companys global focus provides
exposure to more opportunities and the
flexibility to expand operations in
fast-growing regions.
Player Performance
Ecolab Inc. is one of the worlds leading

providers of cleaning, food safety and
health protection products and services.
The company manufactures and provides
cleaning and sanitizing products and
programs, pest elimination, and
maintenance and repair. Ecolab
principally serves the foodservice,
hospitality, healthcare, government and
education, textile care and vehicle wash
industries through three segments: US
cleaning and sanitizing, US other
services, and International.
offerings to hospitals and pharmaceutical

manufacturers. Its healthcare business
has been benefiting from increasing
demand for hand sanitizers during the
past five years due to concerns over the
H1N1 virus as well as health providers
new emphasis on minimizing hospital
acquired infections. Ecolab is only
national supplier to the US healthcare
industry, and ample global growth
opportunities remain. According to the
companys annual report, roughly 25.0%
of the market opportunity is in
sterilization supplies with an additional
20.0% coming from surgical drapes, an
area Ecolab has been able to penetrate.
With its acquisition of Microtek in late
2007, Ecolab gained access to a
partnership with Intuitive Surgical, the
maker of a variety of robotic surgery
Ecolab Inc.
Market share: 6.4%
Strategy
With many opportunities across all
divisions, Ecolab continues to stress the
importance of its healthcare business and
additional opportunities for growth in its
client base, geography and product
WWW.IBISWORLD.COM
Major Companies
Player Performance
continued
equipment. One of Intuitive Surgicals

systems, the da Vinci system, utilizes up
to five sterile Ecolab drapes per system to
cover the robotic arms.
Ecolab continues to focus on new
account growth, primarily through
greater independent (i.e. non-chain)
penetration, driven by greater sales
force focus and additional opportunities
to identify new business through
Ecolabs collaborative partnership with
Sysco. Ecolab has significantly added to
its sales force and focused on the many
growth opportunities at its disposal.
The company began hiring new
salespeople in mid-2009 and expects to
increase the sales force by 3.0% to 4.0%
in 2011, with the bulk of the new hires
already being made early in the year.
The benefit from this strategy is evident
in the companys 2009 results; new
accounts contributed roughly 3.5% to
revenue growth, offsetting the negative
impact from economic pressures and
account closures.
Ecolab has been steadily acquiring
smaller companies in recent years. In
early 2011, it acquired the assets of
privately held O.R. Solutions Inc., a
Virginia-based company that develops
and markets surgical-fluid warming
and cooling systems. In mid 2011, the
company announced that it will buy
Nalco Holding Co., which makes
chemicals used in water treatment,

pollution control and energy
conservation. Ecolab also has a water,
energy and waste division that
includes services for wastewater
management, process filtration and
cooling-water treatment.
Ecolabs wide array of markets, despite
their relative maturity, present longterm growth opportunities. While the
majority of the companys markets
performed well in 2009 and 2010,
restaurants and lodging were negatively
impacted by weak economic conditions
and lowered demand for Ecolabs
products in 2008 and 2009.
In 2011, Ecolab is forecast to generate
$7.2 billion in sales, of which the
companys US Cleaning and Sanitizing
segment is expected make up 41.2%.
During the five years to 2011, sales in the
companys US cleaning segment are
expected to grow 6.6% per year on
average, including 8.9% in 2011. Top line
growth in the year will benefit from the
acquisition of Nalco, but operating profit
is expected to be somewhat stymied.
During the year, operating margin is
projected to be 18.5%, slightly down from
2010; however, this is expected to recover
in 2012 and beyond, when synergies from
the deal are realized.
EcolabInc.(USCleaningandSanitizingsegment)
financialperformance
Year*
Revenue
($ million)
(% change)
NetIncome
($ million)
(% change)
2006-07
2,351.0
NA
394.0
NA
2007-08
2,660.8
13.2
430.2
9.2
2008-09
2,663.3
0.1
495.2
15.1
2009-10
2,721.9
2.2
513.9
3.8
2010-11**
2,963.3
8.9
548.3
6.7
*YearendNovember;**Estimate
WWW.IBISWORLD.COM
Major Companies
Player Performance
continued
Foot traffic at restaurants and room

demand at hotels will continue to be
negatively impacted by the economy, so
volume is not expected to bounce back
entirely to pre-recession levels until
mid-2011. Nonetheless, moderate volume
and price increases will help boost sales.
Lodging in particular has started to
improve, as increased business travel has
driven demand for Ecolabs products and
services. The restaurant industry (20.0%
of revenue) remains pressured as growth
is largely tied to discretionary consumer
spending, which is not expected to

significantly improve near term,
particularly in the United States.
Ecolabs Kay division (which serves
fast food restaurants) is benefiting from
new accounts and new product
introductions. In the five years to 2011,
sales in this segment have been boosted
by E. coli scares at restaurants and
sanitation regulations in hospitals.
Additionally, Ecolab has cut costs and
raised prices, creating better profit
margin despite the tough market.
Player Performance
Colgate-Palmolive (Colgate) is a $15.8

billion consumer products manufacturer
in the oral care (41.0% of sales), home
care (23.0%), personal care (22.0%) and
pet nutrition (14.0%) segments.
Relevant to the Soap and Cleaning
Compound Manufacturing industry, the
company manufactures toothpaste,
mouth rinses, hand soaps, shower gels,
shampoos, laundry and dishwashing
detergents, household cleaners, bleaches
and other similar items. Colgate has a
strong global presence, with roughly
75.0% of its sales derived from sales
outside of the United States.
Colgate first began producing
toothpaste (in jars) in 1873. In 1997, it
displaced Procter & Gamble, becoming
the leader in the US toothpaste market.
Today, Colgate is both the leading US and
world maker of toothpaste, as well as a
world leader in oral care products which
include mouthwashes, dental floss, tooth
whitener, and toothbrushes plus a range
of pharmaceutical products for dentists
and other oral health professionals. In
the US, Colgate Total Plus Whitening is
the number one selling brand of
toothpaste on the market.
In addition, within its personal care
product group, Colgate manufactures
various bar and liquid hand soaps and
shower gels and is the market leader in
liquid soaps in the US. Recent product

launches include Palmolive
Aromatherapy shower gel and bar soap,
Palmolive Thermal Spa shower gels and
Softsoap Vitamins shower gel and liquid
hand soap. Note that Palmolive soap was
first introduced as early on as 1898. It is
also involved in a range of household
surface care products with a host of well
known names including Ajax, Palmolive
and Murphys oil soap. At the same time
in recent years it has sought to exit the
laundry detergents business.
Colgate-Palmolive
Company
Market share: 5.8%
Colgate Toothpaste
Irish Spring
Palmolive
Strategy
Colgate has long been a strategically
focused company, dominating the oral
care category with a worldwide
toothpaste market share of almost 45.0%.
The firms expertise extends beyond
toothpaste, however, as it operates with
some of the most sophisticated
promotional tools in its industry.
Colgate has a long track record of
operating in markets around the world
and has dealt with crises such as massive
currency devaluations, counterfeit
products and significant raw material
cost inflation. Since consumers
worldwide want safe, trusted, effective
products when it comes to oral care, the
firm has been able to build brand loyalty
while keeping private label threats at
WWW.IBISWORLD.COM
Major Companies
Player Performance
continued
bay. All of this experience, coupled with

an extensive global footprint, has helped
the company remain a dominant player
in the industry.
Over the past several years, the firm has
been refining its core Colgate Business
Planning (CBP) tool, giving management
the ability to measure the effect of
promotional investments on volume and
profits and reallocate advertising and
promotional spending to generate better
returns. As Colgate grows its business and
tests new markets and promotions, the
data and capability of this tool have been
improving. The company is using CBP
derived data to allocate more resources to
in-store promotions and to refine the
positioning of its oral care products.
Beingable to calibrate pricing and
promotions, and their impact on sales
volume has notably helped profitability.
Particularly, Colgate holds an advantage
in many of its markets as it can quickly
process sales and consumer data and
discover trends quickly.
Mergers and acquisitions have been a
limited part of Colgates historical growth
strategy, with Toms of Maine (less than
1.0% of 2006 sales when it was
purchased) Colgates only major
acquisition in the last five years.
Consequently, the company is expected
to continue to predominantly allocate
cash flow toward re-investment behind
the business.
After offsetting commodity inflation with
thoughtful pricing and funding higher
advertising spending, Colgate should
start to slowly get its vigor back. Colgates
US sales are expected to increase by 2.9%
in 2011, rising to $3.0 billion. Growth
during the five years to 2011 is similar, at
roughly 3.0% per year on average.
Product pricing moderated in 2010, as
the company tried to spark volume
growth. In 2011, the company will be able
to reduce promotional pricing efforts,
which will be the key driver of sales
growth during the five years up to 2016.
In 2009, Colgate generated US revenue
of $2.95 billion, nearly level with 2008.
During the year, volume growth was
offset somewhat by net selling price
decreases. Although the company has
competed on price, Colgate has been able
to increase its operating profit margin
during the past five years. This is due to
considerable cost cutting efforts.
However, following the conclusion of
Colgates successful 2004 Restructuring
Program in 2008, Colgates cost savings
efforts have slowed along with profit
margin expansion.
Colgates profitability has also been
pressured by growing pension benefit
expenses. The company provides pension
benefits and other post retirement health
and life insurance benefits to employees.
During 2009, Colgate incurred a total of
Colgate-PalmoliveCompany(USsegment)financialperformance
Year
Revenue
($ million)
(% change)
OperatingIncome
($ million)
(% change)
2007
2,720.8
5.0
570.6
4.9
2008
2,850.2
4.8
606.9
6.4
2009
2,950.0
3.5
695.8
14.6
2010
2,967.5
0.6
723.8
4.0
2011*
2,999.0
1.1
875.2
20.9
*Estimate
WWW.IBISWORLD.COM
Major Companies
Player Performance
continued
$165.0 million for the pension and post

retirement benefit expenses. The
company also paid a total of $164.0
million for the pension and post
retirement benefit plans during 2008.
Sizeable unfunded post retirement
benefits would force the company to
make periodic cash contributions
towards bridging the gap, which would
reduce cash available for growth plans.
Colgate has performed particularly
well in the oral care category, which has
been driven by increasing brand
support, Colgates cultivation of
endorsement from professionals (i.e.
dentists), new product innovation and
consumer trade-up (i.e. consumers are
buying more expensive brand-name
goods). Colgate has gained share in
seven of its top ten toothpaste markets
since 2005, based on Euromonitor data.
Colgates best performing products in
oral care include Colgate Total Enamel
Strength, Colgate Sensitive Enamel
Protect and Colgate Max White with
Mini Bright Strips toothpastes, Colgate

360 ActiFlex, Colgate Max Fresh and
Colgate Max White manual toothbrushes
and the new Colgate Wisp mini-brush.
Strong growth products in other
categories include Softsoap NutriSerums, Softsoap Body Butter Coconut
Scrub, Irish Spring Hair and Body and
Cool Relief body washes, and Palmolive
Pure + Caring and Ajax Lime with
Bleach Alternative dish liquids.
Colgates strongest sales growth in
2009 came from Latin America, which
accounts for 30.0% of its business, and
where operating profit rose 27.0%. In
2011, growth from this region is
expected to decelerate as the market
becomes more saturated. The
companys emphasis on low-priced
staple products such as toothpaste and
soap, combined with its strong
international business, boosted sales
volume in 2009. Higher prices and cost
cutting contributed to an increase in
Colgates profit margin.
Other Companies
The Clorox Company
auto-care products. Key products include

disinfecting sprays and wipes, toilet bowl
cleaners, household cleaners, stain
removers, mopping systems, surface
cleaners, carpet cleaners, and reusable
cleaning cloths. The products are
primarily sold under the Clorox, Formula
409, Liquid-Plummer, Pine-Sol, Tilex
and S.O.S brands.
Clorox is a midsized, mostly domestic
company in an industry dominated by
large global players. Strong brand
management, sound innovation and good
relative scale have allowed the company
to carve out a niche as the branded leader
in smaller, less robust categories typically
avoided by its large peers. However,
Cloroxs operating margins are
vulnerable to increases in commodities
prices. Resin accounts for about 70.0% of
Estimated market share: 3.1%

The Clorox Companys origins date back
to 1913 when it was founded to
manufacture industrial strength bleach.
Today, the company is a manufacturer of
cleaning products, bleaches, water filters
and food products. Since its founding, the
companys flagship product, Clorox, has
become synonymous with bleach, and its
other brands are also widely known; 93
of the companys brands hold the number
one or number two spot based on sales in
their respective markets.
The company operates through four
segments: Cleaning; Lifestyle, Household
and International. The companys
cleaning segment manufactures
household cleaning products and laundry
products, professional products and
WWW.IBISWORLD.COM
Major Companies
Other Companies
continued
the companys cost of goods sold in the

Glad segment. This commodity is highly
volatile and sharp cost increases are
difficult to pass through to customers,
given the challenging competitive
landscape. Continued consolidation
among retailers of cleaning and
household products has limited the
extent to which Clorox can pass these
higher costs onto its customers. Rising
costs have been pressuring profit margin
during recent years and pushed operating
profit down in 2011.
The company has been involved in
building on existing lines through
acquisitions that have given it access to
new markets. It has also introduced a
range of new products. At the same time,
Clorox has divested a number of product
lines, including laundry detergents (after
just three years in this category) and,
most recently, its Brazilian business in
light of difficult economic conditions.
R&D expenditure for the company
totaled $115.0 million in 2011, compared
with $99.0 million in 2006. The focus of
the companys R&D efforts is on the
development of new products as well as
the maintenance and improvement of
existing products. Cloroxs Centennial
Strategy was introduced in 2007 to define
areas of focus and targets through 2013
when the company turns 100.
The company has also identified two
global platforms to focus on to accelerate
future growth in sales: Stop the Spread of
Infection (SSI) and natural products.
With SSI, the company aims to make a
significant difference in the fight against
germs that can lead to illness. At the
convergence of consumer desire for
products that promote health and
wellness and sustainability, the
companys Green Works natural cleaning,
Burts Bees natural personal care and
Brita water-filtration products are
growing in popularity.
During the five years to 2011, US
cleaning revenue increased 0.7%
annually on average to $1.6 billion. Sales

declined in 2011 by 0.3%, due to a
limited ability to increase pricing given
the companys low level of innovation
and branding, coupled with high private
label penetration in the companys
product category. Clorox liquid bleach is
expected to make up approximately
13.0% of total company net sales for the
year and 11.0% of net sales within its
North American segment. Sales outside
of the United States account for roughly
21.4% of total sales.
The companys profitability has been
considerably dependent on improving the
efficiency of manufacturing its products.
During the past five years, the company
has undertaken restructuring programs.
For example, beginning in 2008, Clorox
began a supply chain restructuring
involving closing some domestic and
international manufacturing facilities
and redistributing production between
the remaining facilities and third-party
producers to optimize available capacity
and reduce operating costs. Gaining
additional efficiencies is expected to
become increasingly difficult over the
next five years, which may result in
supply chain interruption and decrease
product volume and margins.
Cloroxs key innovation from the last
few years has been the Green Works
brand, which is a line of natural
household cleaners that Clorox has
extended into other categories, including
dishwashing liquid and laundry
detergent. Since 2009, the Green Works
brand has been contributing less to the
companys total revenue. After reaching a
peak in sales in 2009, revenue from this
brand has been declining. This slowdown
is likely caused by several factors,
including the impact of consumers
trading down from higher-priced
products during the economic downturn.
Given a Green Works slowdown,
IBISWorld projects that continued
innovation success will be more difficult
WWW.IBISWORLD.COM
Major Companies
Other Companies
continued
for Clorox going forward. Profit margin

has also been facing downward pressure,
since the company has not been able to
significantly reduce manufacturing
expenses as prices declined. In 2010, the
company initiated a program to increase
operating profit, but the success of this
initiative will be curbed by the growing
acceptance of private-label goods.
Unilever PLC

Unilever PLC is one of the worlds
leading manufacturers of packaged
consumer goods. Operating through two
global divisions, Food (Unilever Best
Foods) and Home and Personal Care,
the group sells more than 400 brands
(down from 1,600 three years ago)
through its operations in 150 countries.
Following Procter & Gambles (P&G)
merger with Gillette in late 2005,
Unilever lost its number-one position as
the worlds biggest consumer goods
business. The companys Home Care &
Other operations make up about 17.0%
of total sales. Within its Home Care
segment, the Unilever manufactures
laundry products under the Omo, Surf,
Comfort, Radiant, Skip and Snuggle
brands, as well as surface cleaners and
bleach under the Cif, Domestos and Sun
brands. Unilever makes an estimated
29.0% of its revenue in the US region,
compared with 32.0% in Europe and
37.0% in the Asia-Pacific region.
Unilevers North American Home and
Personal Care operations (HPCNA) were
formed in 1997 via the integration of the
Lever Brothers Company, Helene Curtis
and Chesebrough-Ponds. Manufacturing
facilities are located across the United
States and Canada. HPCNA comprises
four operating units that compete in both
mass and prestige sales channels. While
laundry products will remain a core
business for Unilever in Europe and
Latin America (where it is market
leader), the company has significantly

pulled back its efforts in the US laundry
market, mainly because P&G has a much
larger presence in the United States.
Along the same lines, the company has
been focused on fewer brands in an
attempt to improve margins; under its
Path to Growth strategy, it has cut the
number of brands managed by the group
from 1,600 to just 400 leading global
brands that are thought to have a broad
base and enduring consumer appeal.
Other elements of the program include
additional marketing support for the
remaining brands and increasing reliance
on e-business platforms including a
global e-procurement system.
Similar to other industry players,
Unilever is focused on growing in
emerging markets. The company has
been allocating all of its incremental
capital to the developing markets and
lower spending in developed markets. As
a result, developing markets will likely
grow at double-digit rates and contribute
the bulk of the companys growth.
Henkel Corporation

A subsidiary of the German consumer
goods giant, Henkel KGaA, Henkel
Corporation entered the laundry and
home care market in 2004 with its $2.9
billion purchase of Dial Corporation. Its
position within the US market was
further strengthened by its 2006
purchase of the Right Guard, Soft & Dri
and Dry Idea brands from Procter &
Gamble and Gillette. Dial operates four
relevant US manufacturing facilities
located in Illinois (bar soaps), Missouri
(dry and liquid laundry detergents),
Pennsylvania (liquid detergents, liquid
soaps and fabric softeners) and California
(liquid detergents and powdered soap).
Products are also manufactured and sold
on an international basis with operations
in Canada and Puerto Rico, and exports
WWW.IBISWORLD.COM
Major Companies
Other Companies
continued
are undertaken to various Asian and

Latin American countries, although
theseare very limited.
Henkels laundry and household
cleaning segment makes up about 30.0%
of the companys revenue and produces a
range of detergents, fabric softeners,
laundry additives, stain removers,
bleaches, and air fresheners. Purex is a
key detergent brand; it is the numbertwo selling laundry detergent brand in

the United States, as well as the leader in
the US value segment. Other products
acquired from Dial include Zout stain
removers, Trend detergents, Borateem
bleach, Sta-Flo starches, Boraxo soap
and 20 Mule Team borax and Fels
Naptha Laundry soaps.
WWW.IBISWORLD.COM
Operating Conditions
Capital Intensity | Technology & Systems | Revenue Volatility

Regulation & Policy | Industry Assistance
Capital Intensity
Level
The level
of capital
intensity is High

Manufacturing industry is highly capital
intensive, and the production process
continues to be more and more
automated. For each $1.00 spent on
wages, about $0.77 is spent on equipment,
technology or buildings. Since soap and
cleaning compound manufacturing is
highly automated, significant capital
investment in plants and equipment is
necessary. Soaps and cleaning compounds
can be produced in large quantity without
much human oversight, so computers
control the majority of production
equipment and inventory management.
Many companies use electronic data
interchange to optimize purchases.
Due to high automation, the majority
of companies have fewer than 20
Capital intensity
Capital units per labor unit

1.0
0.8
0.6
0.4
0.2
0.0
Economy
Manufacturing Soap & Cleaning

Compound
Manufacturing
Dotted line shows a high level of capital intensity

employees. Increased automation during

the five years to 2016 is forecast to cause
employment and wages to decline.
ToolsoftheTrade:GrowthStrategiesforSuccess
NewAgeEconomy
InvestmentEconomy
Recreation,PersonalServices,
HealthandEducation. Firms
benefit from personal wealth so
stable macroeconomic conditions
are imperative. Brand awareness
and niche labor skills are key to
product differentiation.
Information,Communications,
Mining,FinanceandReal
Estate.To increase revenue
firms need superior debt
management, a stable
macroeconomic environment
and a sound investment plan.
LaborIntensive
CapitalIntensive
Supermarkets Inorganic
OrganicChemical
&Grocery Chemical
Stores ManufacturingManufacturing
Beauty,Cosmetics&
TraditionalServiceEconomy
OldEconomy
FragranceStores
Laminated
Soap&Cleaning
Plastics
WholesaleandRetail. Reliant
AgricultureandManufacturing.
Compound
Manufacturing
on labor rather than capital to
Traded goods can be produced
sell goods. Functions cannot
be outsourced therefore firms
must use new technology
or improve staff training to
increase revenue growth.
Manufacturing using cheap labor abroad.
To expand firms must merge

or acquire others to exploit
economies of scale, or specialize
in niche, high-value products.
ChangeinShareoftheEconomy
WWW.IBISWORLD.COM
Technology
& Systems
Level
The level
of
Technology
Change is Low
Product developments
The production of soap dates back to
several centuries ago. Initially, the
manufacture of soap involved a reaction
of tallow with another fat or oil such as
coconut or palm kernel oil and a water
solution of caustic soda (an alkali) in a
process known as saponification.
However, the last century in particular
has witnessed a number of changes in the
properties and production of soap and
other detergent products. Today there is
a wide variety of industry products in
either bar, powder or liquid form.
One of the key developments in the
20th century was the development of
detergents. Created in response to a
shortage of animal and vegetable fats and
oils during WWI and WWII, detergents
contain one or more surfactants and are
made from a variety of petrochemicals or
oleo chemicals (derived from fats and
oils). Surfactants, or surface active
agents, are chemicals that can reduce
surface tension so that water can spread
and wet surfaces.
Soap, an anionic (negative charge)
surfactant, is a water-soluble sodium
or potassium salt of fatty acids.
Detergents came into general use in
the 1950s, and by the 1960s sales of
detergents surpassed those of soap.
Today, detergents have nearly replaced
soap-based products for most
household cleaning, laundry and
dishwashing demands.
Methods of production
change with the times
Products produced by the industry range
from high volume types such as laundry
detergents and liquid soaps that are used
regularly, to lower volume specialty
products for less frequent cleaning needs.
Bar soaps tend to be manufactured using
either a batch or continuous process with
the size and complexity of the operation
varying from small plants employing just
a few workers to larger facilities with
several hundred employees. Neither

process tends to be technologically
sophisticated, and scale and capacity
utilization factors are not as important as
in other chemical operations. Powder
detergents are produced by spray drying,
agglomeration, dry mixing or by a
combination of these methods. Batch and
continuous blending process are also
used to manufacture liquid and gel
cleaning products. Concentrated
liquidproducts rely on new high-energy
mixing processes in combination with
stabilizing agents.
Growing environmental concerns
have caused changes in both the
production process and packaging of
soap and detergent products in recent
years. Today, such products are designed
with the objective of creating minimal
waste and environmental impact. More
concentrated products has resulted in
less packaging materials and decreased
transportation costs. In addition, the
actual packaging products use fewer
materials, and they are also more
compatible with current and future
waste management practices.
More changes in future
Over the next five years, the rate of
technological change in the industry is
not expected to be particularly high.
However, given the intense nature of
competition among the major players,
the continuous introduction of innovative
new products is becoming more
important. A number of consumer
product companies are now turning to
outside suppliers including specialty
chemical manufacturers in their efforts to
develop new innovative products. This in
turn is impacting industry participants
R&D programs and their subsequent
pipelines. For example, Procter &
Gambles R&D strategy revolves around
internal core competencies combined
with external capabilities; its recently
launched Mr. Clean Magic Eraser was
WWW.IBISWORLD.COM
Technology
& Systems
continued
developed in conjunction with BASF,

while its Febreze Scentstories player
launched in August 2004 was developed
in partnership with the Holmes Group.
The use of information technology
management systems is also expected to
grow in the immediate future as is the
reliance on e-commerce platforms. For
example, a number of the major players
have recently introduced integrated SAP
software systems designed to optimize
all aspects of manufacturing, sales,

inventory, distribution and finance.
Others have set up B2B platforms as
well as informative web pages geared
towards the final consumer and these
trends are set to continue. As trends
favoring on-line chemical trading gather
force, this will have a number of
profound implications for chemical
manufacturers and the ways in which
they conduct their operations.
Revenue Volatility

Manufacturing industry does not
experience high variability in revenue
from year to year due to the nature of the
products. During the five years to 2011,
the industrys revenue is expected to vary
by 1.9% per year on average, which is
indicative of a low level of revenue
volatility. Purchases of soaps by
households generally represent a small
percentage of consumers total disposable
income, and hence demand does not
fluctuate much with changes in income.
Additionally, soaps are relatively
necessary purchases, as opposed to more
optional purchases such as new clothing
or electronics. As a result, consumers
tend to maintain soap buying habits
during recessions or economic peaks,

while they may adjust their purchases of
other more unnecessary goods.
The industrys high exposure to
commodity pricing, including resins,
corn and soybeans, adds some inherent
volatility to its profitability. The
industrys profit comes under pressure
when the prices of certain commodities
rise and improve when they fall. Futures
and option contracts are often used to
manage volatility related to anticipate
raw material inventory purchases.
The worldwide Soap and Cleaning
Compound Manufacturing industry has
particular exposure to the emerging
markets as more companies are growing
their presence in these geographies. This
of
Volatility is Medium
A higher level of revenue

volatility implies greater
industry risk. Volatility can
negatively affect long-term
strategic decisions, such as
the time frame for capital
investment.
When a firm makes poor
investment decisions it
may face underutilized
capacity if demand
suddenly falls, or capacity
constraints if it rises
quickly.
VolatilityvsGrowth
1000
Revenuevolatility*(%)
Level
The level
Hazardous
Rollercoaster
100
10
Soap&Cleaning
CompoundManufacturing
1
0.1
Stagnant
30
10
BlueChip
10
30
50
70
Fiveyearannualizedrevenuegrowth(%)
* Axis is in logarithmic scale
WWW.IBISWORLD.COM
Revenue Volatility
continued
creates opportunity for growth as well as

volatility in the industry as companies
manage through a fluctuating currency
environment. This has been evident over
the past year, as adverse currency
movements negatively affected sales
abroad. Many industry players have
historically implemented pricing

increases to offset negative currency
impacts. However, the industry faces the
challenge of maintaining the delicate
balance between passing along the costs
to the local consumer and driving
volume growth.
Regulation & Policy
The US Food and Drug Administration

(FDA) is the major regulating body over
Manufacturing industry. In the United
States, the FDA regulates the
manufacturing and labeling of soaps and
cleaning compounds. The Environmental
Protection Agency (EPA) regulates the
substances used in the manufacturing of
disinfectant products. The Consumer
Product Safety Commission regulates the
labeling of household products. The
Federal Trade Commission (FTC)
regulates the packaging and labeling of
all consumer products and monitors the
advertising practices of consumer
products companies with respect to
claims made about product functionality
and efficacy. Household and personal
care products are also subject to
regulation by various state laws and
various state regulatory agencies, as well
as laws and regulations imposed by
foreign jurisdictions.
A cosmetic is misbranded if its labeling

is false or misleading, if it does not bear
the required labeling information, or if
the container is made or filled in a
deceptive manner.
Level & Trend

he level of
T
Regulation is
Medium and the
trend is Increasing
Adulterated or misbranded cosmetics

The Federal Food, Drug & Cosmetics Act
(FD&C) prohibits the distribution of
cosmetics that are adulterated or
misbranded. A cosmetic is considered
adulterated if it contains a substance
which may make the product harmful to
consumers under customary conditions
of use; if it contains a filthy, putrid, or
decomposed substance; if it is
manufactured or held under unsanitary
conditions whereby it may have become
contaminated with filth, or may have
become harmful to consumers.
Cosmetic labeling
Cosmetics distributed in the United
States must comply with the labeling
regulations published by the FDA under
the authority of the FD&C Act and the
Fair Packaging & Labeling Act. Labeling
comprises all labels and other written,
printed or graphic matter on or
accompanying a product. The label
statements required under the authority
of the FD&C Act must appear on the
inside as well as any outside container or
wrapper. FP&L Act requirements, (i.e.
ingredient labeling and statement of the
net quantity of contents on the principal
display panel) only apply to the label of
the outer container.
Declaration of ingredients
Cosmetics for retail sale to consumers for
their personal care are required to bear
an ingredient declaration. Cosmetics not
customarily distributed for retail sale
areexempt from this requirement
provided these products are not also
soldto consumers at professional
establishments or workplaces for their
consumption at home.
Label warnings
Cosmetics that may be hazardous to
consumers when misused must bear
appropriate label warnings or cautions
WWW.IBISWORLD.COM
Regulation & Policy

continued
and adequate directions for safe use,

and the statements must be prominent
and conspicuous. The FD&C Act
doesnot require that cosmetic
manufacturers or marketers test their
products for safety. However, the FDA
strongly urges cosmetic manufacturers
to conduct whatever toxicological or
other tests that are appropriate to
substantiate the safety of their
cosmetics. If the safety of a cosmetic is
not adequately substantiated, the
product may be considered
misbranded and may be subject to
regulatory action unless the label
bears the following statement:
Warning: The safety of this product
has not been determined.
Tamper-resistant packaging
Liquid oral hygiene products (e.g.
mouthwashes and fresheners) must be
packaged in tamper-resistant packages
when sold at retail outlets. A package is
considered tamper resistant if it has an
indicator or barrier to entry (e.g. shrink
or tape seal, sealed carton, tube or pouch,
Industry Assistance
Level & Trend
he level of
T
Industry Assistance
is Low and the
trend is Steady
The majority of soaps that are in their

finished form are not subject to any
tariffs. However, most surface active
agents, which are used in soap
manufacturing, are subject to tariffs that
range from 3.7% to 4.0%.
The industry also receives assistance
through industry organizations such as
the American Cleaning Institute, the
Handcrafted Soapmakers Guild, the
Consumer Specialty Products Association
(CSPA), and the Grocery Manufacturers
Association (GMA).
aerosol container), which, if breached or

missing, alerts a consumer that
tampering has occurred.
The indicator must be distinctive by
design (breakable cap, blister) or
appearance (logo, vignette, other
illustration) to preclude substitution.
The tamper-resistant feature may
involve the immediate or outer
container or both. The package must
also bear a prominently placed
statement alerting the consumer to the
tamper-resistant feature. This
statement must remain unaffected if
the feature is breached or missing.
Other regulatory bodies include the
Occupational Safety and Health
Administration (OSHA), which is
responsible for the OSHA Hazard
Communication Standard, Laboratory
Safety Regulations and general employee
rights. In addition, industry participants
must also adhere to regulations set by the
EPA (Infectious Waste Laws and
Hazardous Waste Laws) plus Animal
Welfare Compliance Laws as set out by
the US Department of Agriculture.
KeyTariffs
Goods
Organic surface agents
Synthetic detergents
Soap
Scouring pastes and powders
Polishes and cream cleaners
LowRate HighRate
0.4
3.8
0.6
0.0
0.5
6.6
3.8
0.9
0.6
0.5
SOURCE: USITC
WWW.IBISWORLD.COM
Key Statistics
Industry Data
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
Sector Rank
Economy Rank
Revenue
($m)
38,684.9
37,144.2
40,543.6
43,539.3
45,407.6
48,368.2
49,507.9
49,854.5
50,751.9
51,969.9
54,672.3
55,820.5
57,550.9
59,219.9
61,055.7
20/195
146/706
Annual Change
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
Sector Rank
Economy Rank
Revenue
(%)
-4.0
9.2
7.4
4.3
6.5
2.4
0.7
1.8
2.4
5.2
2.1
3.1
2.9
3.1
109/195
380/706
Industry
Value Added
($m)
9,075.3
8,373.9
8,777.2
9,316.9
9,540.6
9,900.9
9,795.0
9,837.1
10,060.2
10,369.5
10,781.4
10,964.7
11,231.8
11,554.7
11,849.3
40/195
234/706
Establishments
2,452
2,310
2,318
2,287
2,279
2,224
2,212
2,148
2,142
2,138
2,123
2,098
2,068
2,032
1,994
39/195
448/705
Industry
Value Added
(%)
-7.7
4.8
6.1
2.4
3.8
-1.1
0.4
2.3
3.1
4.0
1.7
2.4
2.9
2.5
96/195
358/706
Establishments
(%)
-5.8
0.3
-1.3
-0.3
-2.4
-0.5
-2.9
-0.3
-0.2
-0.7
-1.2
-1.4
-1.7
-1.9
96/195
440/705
Key Ratios
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
Sector Rank
Economy Rank
IVA/Revenue
(%)
23.46
22.54
21.65
21.40
21.01
20.47
19.78
19.73
19.82
19.95
19.72
19.64
19.52
19.51
19.41
163/195
558/706
Imports/
Demand
(%)
4.42
5.02
5.25
5.16
5.39
5.15
5.44
4.68
5.23
5.45
5.45
5.63
5.69
5.97
6.14
146/182
170/229
Enterprises Employment
2,290
54,927
2,157
50,973
2,163
49,881
2,149
50,049
2,139
48,990
2,078
47,274
2,067
46,707
2,006
45,072
2,001
44,756
1,996
44,801
1,980
44,712
1,946
44,533
1,905
44,355
1,856
44,177
1,830
44,089
37/195
83/195
419/705
453/706
Exports
($m)
3,414.8
3,714.3
4,231.5
4,409.7
4,932.1
5,238.4
6,044.3
5,680.1
6,446.5
7,135.5
7,829.7
8,598.8
9,305.5
10,310.4
11,326.1
39/182
47/230
Imports
($m)
1,631.5
1,768.1
2,013.3
2,128.4
2,303.9
2,340.3
2,500.8
2,168.1
2,445.9
2,583.8
2,697.7
2,816.1
2,913.1
3,103.7
3,255.3
100/182
112/229
Wages
($m)
3,265.7
2,795.7
2,688.5
2,778.3
2,721.5
2,689.9
2,671.3
2,611.2
2,650.4
2,726.8
2,799.8
2,874.6
2,951.4
3,034.2
3,128.0
72/195
377/706
Domestic
Demand
($m)
36,901.6
35,198.0
38,325.4
41,258.0
42,779.4
45,470.1
45,964.4
46,342.5
46,751.3
47,418.2
49,540.3
50,037.8
51,158.5
52,013.2
52,984.9
29/182
37/229
Per Capita Disposable Income

($)
36,449.1
36,236.1
36,105.6
35,079.4
35,006.7
34,429.7
33,571.2
33,085.0
32,582.0
32,778.0
33,302.0
33,878.0
34,529.0
35,264.0
35,980.0
N/A
N/A
Enterprises Employment
(%)
(%)
-5.8
-7.2
0.3
-2.1
-0.6
0.3
-0.5
-2.1
-2.9
-3.5
-0.5
-1.2
-3.0
-3.5
-0.2
-0.7
-0.2
0.1
-0.8
-0.2
-1.7
-0.4
-2.1
-0.4
-2.6
-0.4
-1.4
-0.2
95/195
138/195
414/705
523/706
Exports
(%)
8.8
13.9
4.2
11.8
6.2
15.4
-6.0
13.5
10.7
9.7
9.8
8.2
10.8
9.9
37/182
46/230
Imports
(%)
8.4
13.9
5.7
8.2
1.6
6.9
-13.3
12.8
5.6
4.4
4.4
3.4
6.5
4.9
78/182
95/229
Wages
(%)
-14.4
-3.8
3.3
-2.0
-1.2
-0.7
-2.2
1.5
2.9
2.7
2.7
2.7
2.8
3.1
75/195
239/706
Domestic
Demand
(%)
-4.6
8.9
7.7
3.7
6.3
1.1
0.8
0.9
1.4
4.5
1.0
2.2
1.7
1.9
137/182
172/229
Per Capita Disposable Income

(%)
-0.6
-0.4
-2.8
-0.2
-1.6
-2.5
-1.4
-1.5
0.6
1.6
1.7
1.9
2.1
2.0
N/A
N/A
Exports/Revenue
(%)
8.83
10.00
10.44
10.13
10.86
10.83
12.21
11.39
12.70
13.73
14.32
15.40
16.17
17.41
18.55
99/182
124/230
Figures are inflation-adjusted 2011 dollars. Rank refers to 2011 data.
Revenue per
Employee
($000)
704.30
728.70
812.81
869.93
926.87
1,023.15
1,059.97
1,106.11
1,133.97
1,160.02
1,222.77
1,253.46
1,297.51
1,340.51
1,384.83
13/195
51/706
Wages/Revenue
(%)
8.44
7.53
6.63
6.38
5.99
5.56
5.40
5.24
5.22
5.25
5.12
5.15
5.13
5.12
5.12
181/195
646/706
Employees
per Est.
22.40
22.07
21.52
21.88
21.50
21.26
21.12
20.98
20.89
20.95
21.06
21.23
21.45
21.74
22.11
168/195
280/705
Average Wage
($)
59,455.28
54,846.68
53,898.28
55,511.60
55,552.15
56,900.20
57,192.71
57,933.97
59,218.88
60,864.71
62,618.54
64,549.88
66,540.41
68,682.80
70,947.40
40/195
165/706
Share of the
Economy
(%)
0.08
0.07
0.07
0.07
0.07
0.07
0.07
0.08
0.08
0.08
0.08
0.08
0.08
0.08
0.08
40/195
234/706
WWW.IBISWORLD.COM
Jargon & Glossary
Industry Jargon
ANIONIC A surfactant with a negative charge; soap is

an anionic surfactant.
BLEACH A combination of chlorine and oxygen that
whitens fabrics and helps remove stains. Bleaches
convert soils into colorless, soluble particles that can be
removed by detergents.
DETERGENT A synthetic cleaning agent containing
surfactants that do not precipitate in hard water and
have the ability to emulsify oil and suspend dirt.
SAPONIFICATION The reaction of a metallic alkali
(base) with a fat or oil to form soap; saponifiable
substances are those that can be converted into soap.
IBISWorld Glossary
BARRIERS TO ENTRY Barriers to entry can be High,

Medium or Low. High means new companies struggle to
enter an industry, while Low means it is easy for a firm
to enter an industry.
CAPITAL/LABOR INTENSITY An indicator of how much
capital is used in production as opposed to labor. Level is
stated as High, Medium or Low. High is a ratio of less
than $3 of wage costs for every $1 of depreciation;
Medium is $3 $8 of wage costs to $1 of depreciation;
Low is greater than $8 of wage costs for every $1 of
depreciation.
CONSTANT PRICES The dollar figures in the Key
Statistics table, including forecasts, are adjusted for
inflation using 2011 as the base year. This removes the
impact of changes in the purchasing power of the dollar,
leaving only the real growth or decline in industry
metrics. The inflation adjustments in IBISWorlds
reports are made using the US Bureau of Economic
Analysis implicit GDP price deflator.
DOMESTIC DEMAND The use of goods and services
within the US; the sum of imports and domestic
production minus exports.
EARNINGS BEFORE INTEREST AND TAX (EBIT)
IBISWorld uses EBIT as an indicator of a companys
profitability. It is calculated as revenue minus expenses,
excluding tax and interest.
EMPLOYMENT The number of working proprietors,
partners, permanent, part-time, temporary and casual
employees, and managerial and executive employees.
ENTERPRISE A division that is separately managed and
keeps management accounts. The most relevant
measure of the number of firms in an industry.
ESTABLISHMENT The smallest type of accounting unit
within an Enterprise; usually consists of one or more
locations in a state or territory of the country in which it
operates.
EXPORTS The total sales and transfers of goods
produced by an industry that are exported.
IMPORTS The value of goods and services imported
with the amount payable to non-residents.
SOAP An anionic surfactant used in conjunction with

water for washing and cleaning. Soaps are produced
from the hydrolysis of fats in a chemical reaction called
saponification.
SULFONATED OIL Mineral or vegetable oil treated with
sulfuric acid to make a water-soluble form and used as
lubricants, emulsifiers, defoamers and softeners.
SURFACTANT A wetting agent that lowers the surface
tension of a liquid, thereby allowing easier spreading;
the actual word is a blend of surface active agent.
INDUSTRY CONCENTRATION IBISWorld bases

concentration on the top four firms. Concentration is
identified as High, Medium or Low. High means the top
four players account for over 70% of revenue; Medium
is 4070% of revenue; Low is less than 40%.
INDUSTRY REVENUE The total sales revenue of the
industry, including sales (exclusive of excise and sales
tax) of goods and services; plus transfers to other firms
of the same business; plus subsidies on production; plus
all other operating income from outside the firm (such
as commission income, repair and service income, and
rent, leasing and hiring income); plus capital work done
by rental or lease. Receipts from interest royalties,
dividends and the sale of fixed tangible assets are
excluded.
INDUSTRY VALUE ADDED The market value of goods
and services produced by an industry minus the cost of
goods and services used in the production process,
which leaves the gross product of the industry (also
called its Value Added).
INTERNATIONAL TRADE The level is determined by:
Exports/Revenue: Low is 05%; Medium is 520%;
High is over 20%. Imports/Domestic Demand: Low is
05%; Medium is 535%; and High is over 35%.
LIFE CYCLE All industries go through periods of Growth,
Maturity and Decline. An average life cycle lasts 70
years. Maturity is the longest stage at 40 years with
Growth and Decline at 15 years each.
NON-EMPLOYING ESTABLISHMENT Businesses with
no paid employment and payroll are known as
non-employing establishments. These are mostly set-up
by self employed individuals.
VOLATILITY The level of volatility is determined by the
percentage change in revenue over the past five years.
Volatility levels: Very High is greater than 20%; High
Volatility is between 10% and 20%; Moderate
Volatility is between 3% and 10%; and Low Volatility
is less than 3%.
WAGES The gross total wages and salaries of all
employees of the establishment.
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Soap & Cleaning Compound Manufacturing in the US September 2011 1

Cleaning up: Emerging markets and strict

IBISWorld Industry Report 32561

Soap & Cleaning Compound

2 About this Industry

43 Regulation & Policy

22 Market Share Concentration

22 Key Success Factors

23 Cost Structure Benchmarks

Key External Drivers

28 The Procter & Gamble Company

11 Industry Life Cycle

46 Jargon & Glossary

30 S.C. Johnson & SonInc.

13 Products & Markets

41 Technology & Systems

www.ibisworld.com | 1-800-330-3772 | info @ibisworld.com

Soap & Cleaning Compound Manufacturing in the US September 2011 2

About this Industry

Companies in the Soap and Cleaning

The primary activities of this industry are

sanitization or cleaning clothes, linens

Cleaning compound preparation, manufacturing and packaging

The major products and services in this industry are

32518 Inorganic Chemical Manufacturing in the US

For additional information on this industry

Soap & Cleaning Compound Manufacturing in the US September 2011

Annual Growth 06-11

Annual Growth 11-16

World price of crude oil

Revenue vs. employment growth

The Procter &

Ecolab Inc. 6.4%

S.C. Johnson &

Products and services segmentation (2011)

Key External Drivers

Per capita disposable

World price of crude oil

Household soap and

Polish and other

Life Cycle Stage

Soap & Cleaning Compound Manufacturing in the US September 2011 4

Executive Summary | Key External Drivers | Current Performance

The mature $52.0 billion Soap and

Environmental and health concerns are pushing

companies toward eco-friendly processes

has caused industry companies to

Key External Drivers

Per capita disposable income

disposable income is forecast to rise.

slowly over 2011, resulting in a potential

Soap & Cleaning Compound Manufacturing in the US September 2011 5

Key External Drivers

Furthermore, volatility and increases in

preferences for cleanliness. When

Demand from accommodation

Demand from janitorial services

World price of crude oil

Despite its maturity, the $52.0 billion US

This trend has boosted demand for

Soap & Cleaning Compound Manufacturing in the US September 2011 6

New products renew

operating gains within the industry. Oil

Supermarkets & Grocery Stores in the US

Beauty, Cosmetics & Fragrance Stores in the US

Health Stores in the US

Accommodation and Food Services in the US

Non-Coin-Operated Laundromats & Dry Cleaners in the US

Inorganic Chemical Manufacturing in the US

Organic Chemical Manufacturing in the US

Laminated Plastics Manufacturing in the US

Plastic Bottle & Container Manufacturing in the US