Laura Mahecha, Kline08.31.22
Ed note: The industrial & institutional (I&I) cleaning market has been on a wild ride for the past several years and it’s taking wipes along with it. According to Kline Group, the U.S. I&I cleaning market grew about 7.7% to more than $8 billion. At the World of Wipes Conference in June, Laura Mahecha, director, I&I Cleaning, Kline, detailed recent wipe trends in this crucial cleaning sector.
Prior to the pandemic, in 2019, the I&I wipes market was characterized by slow-and-steady growth of 3-5% a year. Wipes were used primarily by cleaning staff and employees. Users purchased wipes from a variety of channels including distributors, retailers, e-commerce and direct sourcing.
Sector Growth
But by March 2020, the covid-19 pandemic had shut down businesses in the U.S. and around the world causing supply chain and logistics issues, panic buying and stockpiling. During the pandemic, end-user trends varied greatly depending on lockdown protocols. For example, hospitals, nursing homes and assisted-living facilities remained open and used wipes to maintain clean and safe facilities. Fast-food and fast-casual restaurants were less impacted by the pandemic than full-service establishments, given their propensity toward takeout service. Fitness facilities and recreational facilities suffered sharp declines due to closures and fewer staff members and guests. The segment began to rebound by 2021. Schools, colleges and universities started to welcome students back to campuses in 2021 and wipes were a key tool made available to students and staff to keep them safe. In contrast, lodging establishments suffered from less business and leisure travel; and as a result, saw sharp declines in wipes usage.Last year was marked by a gradual reopening of the economy. The majority of businesses adopted new cleaning and disinfection protocols. These moves were made to comply with local and national guidance, as well as to provide a boost in customer confidence. Wipes were offered at multiple locations throughout facilities for use of patrons, students, staffs and guests.
As a result, sales of I&I wipes soared driven by unprecedented sales of disinfectant and sanitizing wipes. Between 2019 and 2021, sales of wipes posted a compound annual growth rate of 25.2%. Demand soared in 2020, when wipes sales jumped 55.1%.
What End-Users Say…and Do
In our study, we surveyed 638 end-users in healthcare, food service, retail, education and others (including building service contractors, industrial facilities and office buildings, lodging establishments, and fitness/recreational facilities. We asked them about the impact that the covid-19 pandemic had on their business in 2021. More than 4 in 10 (42.4%) told us it had a negative impact on business, just behind the 45% who said there was neutral impact on business. The remainder, 12.6%, told us the pandemic had a positive impact on business. Importantly, 76.5% of those surveyed told us that they changed cleaning procedures due to covid-19.How did procedures change?
- 63% sanitize and disinfect surfaces more frequently;
- 61% use more disposable wipes;
- 58% increased frequency of cleaning procedures;
- 56% increased the number of locations that hand sanitizer is available; and
- 51% increased the use of antibacterial hand soaps.
- We have already gone back to pre-pandemic cleaning and operations (7%);
- By mid-2022 (9.4%);
- By end of 2022 (12.2%);
- Into 2023 (18.3%)
- Until the CDC or other agency deems it safe (37.1%).
- It is the new stand/we will continue this way (27.3%);
- Safety/To be safe (15.9%);
- Importance/awareness of cleanliness (15.9%)
- Very important usage in healthcare environment (13.6%);
- Covid-19/positive cases/viruses (13.6%);
- Cleaning wipes are efficient/work well (11.4%);
Trends & Opportunities
According to our survey results, more than 60% of respondents said that they are sanitizing and disinfecting surfaces more frequently. More than 70% of the respondents also said that they are spending more because of more frequent cleaning in their facilities.Even as the pandemic subsides, there is a continued sense of fear around cross-contamination, particularly in healthcare settings, where there is a huge risk of healthcare-associated infections (HAIs). As per the CDC, on any given day, about one in 31 hospital patients has at least one HAI. Therefore, healthcare facilities will continue to be vigilant in their cleaning practices, and disposable disinfecting and sanitizer wipes are a key tool to help accomplish these goals.
Just like 2020, 2021 has also been an unusual year for the I&I wipes market. For the first two quarters of 2021, most facilities were sitting on at least three to four months of inventory. However, the second half of the year, as businesses reopened, these stockpiles were replenished, and moderate sales growth was experienced. About half of end users surveyed said that they will spend the same on wipes in 2022 compared to 2021, which will result in relatively flat market performance in 2022.
ISSA Show North America will take place Oct. 10-13, 2022, at McCormick Place Convention Center. The event opens Monday, October 10 with an education program. The exposition runs Tuesday through Thursday. At press time, nearly 500 suppliers were expected to exhibit at ISSA Show, which attracts thousands of attendees from the U.S. and around the world.
ISSA Show North America is the largest tradeshow of its kind in the U.S. But in addition to the exhibition, there are dozens of education seminars led by industry experts. Networking opportunities include a spotlight luncheon, welcome reception, Hygieia Networking event and Canada Night. ISSA Show North America concludes with the Innovation Awards and show floor Happy Hour on Thursday, October 13.
www.issashow.com
Sustainability Issues
Sustainability trends are creating more opportunities for market leaders. We’ve noted growing interest in wipes made from more sustainable substrates such as bamboo and cotton. Reckitt and Clorox have both introduced wipes that are marketed as “compostable” and “biodegradable.”At the same time, demand is increasing for wipes with active ingredients that are plant-based or botanical such as citric acid, lavender and thymol. Nearly 30% of end users use wipes that contain citric acid, lavender, or other botanical/plant-based ingredients. And 14% said they have switched from chemical-based wipes to more environment-friendly/green/plant-based products since the pandemic began. However, demand for environmentally-friendly products varies by vertical and market. Hospitality, healthcare, education and foodservice have strong interest in sustainable and environmentally-friendly wipes.
Regulators are impacting the category, too. More than 20 states have laws banning single-use plastics (SUPs). One of the most ambitious is the California Circular Economy and Plastic Reduction Act, which seeks to significantly reduce the use of SUPs in packaging and products by 2030.
The Impact of E-Commerce
Like so many other fast-moving consumer goods categories, the pandemic led to dramatic changes in purchase channels for I&I cleaning products. The most significant growth was observed for e-commerce platforms, which recorded a 200% increase in sales. Also noteworthy is the dramatic increase in sales direct from chemical manufacturers as large facilities struggle to get reliable stock elsewhere. This increase in purchases direct from manufacturers, as well as online, reduced sales through distributors and retailers.Before covid-19, nearly 60.9% of cleaning products were being sold through distributors and 8.5% were being sold direct by manufacturers. However, this changed dramatically as large facilities opted for direct sales, as well as longer-term contracts direct with cleaning chemical suppliers, in order to ensure reliable supply. In 2020, just 47.9% of cleaning products were being sold through distributors, while 18.3% were being sold direct by manufacturers.
Furthermore, before the pandemic, 18.4% of cleaning products were being purchased through retailers. In 2020, the share of sales through retailers decreased to 11.6% as a result of fear of in-person shopping in stores and frequent out-of-stocks due to panic buying and supply chain issues.
During the pandemic, sales of cleaning products through independent online sources, such as Amazon, increased by 189.5%. Prior to this, only about 4% of the cleaning chemicals used to be sold through this channel.
Many cleaning professionals and business owners were not comfortable shopping in stores during the lockdowns and preferred to source cleaning supplies from websites offering contact-less delivery.
In closing, our research predicts that I&I cleaning wipes will see healthy growth from 2023 onward as wipe stockpiles are reduced. Leading the way will be healthcare, industrial, BSCs, foodservice and education segments. Healthy growth will continue for hard surface and hand care wipes. And there will be increased interest in sustainable wipes. n
About the Author
Laura Mahecha is director, agrochemicals and I&I cleaning products, at Kline Group. Email: Laura.Mahecha@klinegroup.com
This article is based on data from Kline’s Industrial and Institutional Cleaning Wipes USA report. It was originally presented during INDA’s World of Wipes (WOW) International Conference, Chicago, June 27-30. The 2023 WOW International Conference will be held at the Atlanta Marriott Marquis, Atlanta, GA, July 17-20, 2023.
