Cleaning Products in Canada - CHHMA



Content:The fight for world dominanceMajor Players: Proctor& Gamble, Henkel & UnileverOpportunities - Environmentally safe productsBrands & Market ConcentrationCosts and Quantities 2017-2018OverviewMarkets are dominated by giant consumer product companies. Cleaning products are a massive market in terms of dollars and quantities with millions of kilos of cleaning products coming across the Canadian border every year. Small environmentally focused manufacturers have struggled for decades to gain access to major distributors. Many of them are Canadian.With increased transportation costs, environmentally focused consumers, a growing sense of nationalism and a general distrust of big business “will these global companies be the first fatality of a healthier planet?” Companies Mentioned:Proctor & GambleHenkel/ Dial/ Sun ProductsUnilever/ Seventh GenerationColgate-PalmoliveChurch & Dwight/ Arm & HammerCloroxWalmartAmazonBiovertPrismSwishLawrason’sSafeblendSimply CleanCleaning Products in Canada Other reports in this series:Small Appliances In CanadaWriting Instruments In CanadaTrade Data In Canada 2018 (6 months) (Values, Quantities, Unit Costs for 31 Product Groups, covering over 3,000 products)Using DataCosts Increase as Sales DropMeasuring Performance in the Canadian MarketSellers from Around the WorldShould Cost ModelingStay in your LaneWhat’s NextWorking on:Trade Data 2018 (complete)Salaries & EmploymentCleaning Products in CanadaDeveloped for CHHMA/COPA Author: Bob SmithApril, 2019The Stories behind the numbersCleaning products are simple in today’s technological world - mix a few liquid or dry chemicals together, put them in containers and sell them. Unless you are a chemist, laundry and dishwashing detergents, surface cleaners, and soap all appear to be pretty much the same. Simple ends with the product.The fight for world dominance Cleaning products are a huge global business dominated by a very few big companies and “big” starts at billions of dollars; billions in sales and billions in marketing and distribution.In 2017,?Procter & Gamble?spent about $7.12 billion (USD) on?advertising. The top 7 importers into Canada are also the top 7 companies in the world. (See Major Importers)Laundry Detergent?In 2008, Proctor & Gamble found themselves alone in the premium segment of the market when Unilever and Colgate-Palmolive exited both the Canadian and US laundry detergent market by selling off their laundry detergent businesses. These exits were not due to weakening demand. In 2017, Canada imported 245 million kilos of retail packaged laundry detergent at a cost of $476 million. These Imports are not from China. 99% of the volumes come from the United States.Perspective:This volume averages out to 13.2 kilos a year for every Canadian. (man, woman & child)Logistically, it is comparable to moving the Empire State Building (332 million kilos) from the US to Canada. The import cost of detergents is more than the cost of all types, brands and sizes of washing machines ($455 million in 2017)Retail giants like Walmart and Amazon, have tried to launch private label laundry products but with limited success. Even the mighty Walmart or Amazon do not want to spend a billion dollars for advertising just one product category. With hundred of millions of dollars at stake there was bound to be a challenger. In 2009, Henkel launched their premium European laundry detergent, Persil, in both Canada and the United States. Persil was first offered in Walmart, followed by Target. Persil moved to the broader market after Henkel acquired Sun Products for $3.6 billion in 2005. Note: Sun Products was previously a subsidiary of Unilever. To add more complexity, Unilever now sells Henkel’s laundry products in many Asian countries. Asia is the fastest growing global market for cleaning products.Proctor & GambleWith many of todays manufacturers selling direct to consumers through retail websites, the manufacturers of cleaning products appear to utilize the old school approach of using a network of wholesalers but if you look closely the majority of these secondary distributors are redistributors not independent wholesalers.Note: P&G brands are sold on Amazon by P&G, not Amazon. This means that P&G not Amazon sets the price. It is not unreasonable that when you spend over a billion dollars on advertising you can not leave pricing to the whims of the market place. Proctor & Gamble (website)You must meet a minimum $1 million/year purchase requirement with all full truck orders in order to buy direct from P&G.If you meet a minimum $100,000/year purchase requirement or a minimum of 250 cases/order you can contact: Kohl & Frisch or McKesson Canada (a)otherwise, It is suggested that you contact: R3 Canada(c), Fordis Canada(d), Plus 2 Sanitation(c), Essendant Canada(b) or Jan Mar Industries(c)McKesson Canada recently purchased more than 400 Rexall pharmacies. (cbc.ca)Essendant was acquired by an affiliate of Staples’ owner, Sycamore Partners in January 2019.Jan Mar Redistribution is owned by R3 and both Plus 2 Sanitation and R3 are Bunzl companiesFordis, Division of Unisource, a Veritiv companyNote: The above companies are classified as redistributors not wholesalers.Retailers do not have much choice. Customers want these heavily advertised products regardless of price differentials but there is a problem. The problem is that these products have been slow to shift online as products such as laundry detergent and diapers are bulky and expensive to ship. At an estimated shipping cost of $5.00, free shipping is a margin killer.Henkel with 2017 sales of $22 billion (USD) have the resources to be a major player in North America (N.A.) Henkel’s entry into the North American market with Persil, Purex and Sun Products such as Sunlight and Snuggle will provide competition but Henkel will have to fight through the wall of advertising and solve the delivery challenges. “Who will win?” may not be the right question. Opportunities The question going forward is who will deliver environmentally safe, biodegradable and allergy free products. While major producers are continually adjusting their formulation with eco-friendly additives, smaller companies who have been focused on the environment for years are getting more and more attention and press.If you can’t beat them then buy them. Seventh Generation was a Burlington, Vermont company focused on sustainability and the conservation of natural resources, using recycled and post-consumer materials in its packaging, and biodegradable, and plant-based phosphate- and chlorine-free ingredients in its products. In 1993 Seventh Generation went public raising $7 million USD.In September?2016, Unilever Plc.,?purchased Seventh Generation for an estimated $700 million. Can a large multi-national assume the mantle of a much smaller acquisition? Can large multi-nationals, who have been selling products we now know are harmful to the planet for over a 100 years, be trusted with the future? Trust is key to the environmental generation.Canadian companies to watch:Biovert, is a family-owned company based in Laval (Quebec) that has been developing and marketing low environmental impact household cleaning products since 1984. Prism Care Corporation, is the Canadian owned manufacturer of Eco-Max, BioFactor and Prism Environmental cleaning products. We are safe and non-toxic.Swish a family-owned Canadian company- presently manufacturing and distributing proven innovative cleaning products from 15 locations across Canada and the Northeastern United States.Lawrason's in operation since 1875 in Oakville, Ontario, manufactures a wide range of specialty cleaning chemicals for the wholesale distribution trade across?Canada. Safeblend, is produced by Chemotec PM Inc., a Quebec-based company manufacturing advanced cleaning solutions that are safe for people and for our planet.Simply Clean, Guelph, Ontario offers a complete range of cleaning products that are safe, effective and easy on the environment. Their website even provides recipes to create your own natural cleaning products at home.Reputation Why did Unilever buy Seventh Generation? Unilever and others could easily make and market identical products. In 2008, Seventh Generation was the first home care company to voluntarily disclose full ingredients on their label. What Unilever and other major consumer brands cannot duplicate is a 25-year old reputation for making the world better.Safe products are about consumer trust. Most Canadian companies have an environmental policy coupled with annual reporting requirements and a senior executive with the role and responsibility to champion environmental issues. Most families have an environmental champion. They are usually under 30 years of age. As a reseller can you help environmental champions meet their targets? Start building relationship of trust between your suppliers and your customers. Become part of your customer’s contribution to a better world.The Numbers The major players offer a range of brands at different price points. It is some what confusing as many products are advertised as excellent cleaning products and environmentally safe.Major PlayersProduct BrandsMajor Importers by ProductStatistics Canada protects the privacy of individuals and businesses. When 3 or fewer major importer constitutes more than 80% of total imports; company names are not reported.A number of products are labelled confidential. This mean that these categories are highly concentrated as 3 or fewer companies make up 80% or more of the total importers. In the Appendix: Major Importers, we have provided a higher level list of major importers which includes Dishwasher and Laundry detergents. As stated earlier these 7 companies are also the world leaders in cleaning productsProduct are also described as “Put up for Retail Sale”. “Put up for Retail Sale” is significant. It means that packaging is complete; products are ready for the retail shelf with Canadian language and all warning requirements. (i.e. no printing or packaging in Canada)Costs & QuantitiesHuge imports that will only grow as manufacturing moves to the states.Procter & Gamble announced in 2017 that it is closing down its Brockville plant in 2020.?The Brockville plant employs 480 people and makes?Swiffer products, Bounce, and Tide to Go pens.?This will leave Belleville as the only manufacturing plant in Canada. The Belleville plant makes Always, Always Infinity and Always Discreet.?() Cleaning EquipmentVacuums, dishwashers and washing machines are all imports. More shocking is that Canada even imports “Cleaning Cloths” which for the most part are hemmed rags.Managing ImportsMost Canadian consumer products including cleaning products are imports. Understanding global manufacturing and distribution; understanding the imbedded costs and the risks associated is critical.Costs Increase as Sales DropMeasuring Performance in the Canadian MarketSellers from Around the WorldShould Cost ModelingStay in your LaneWhat’s NextTrade Data: 14 minute webinar Trade Data Webinar.Working on:Trade Data 2018 (complete)Salaries & EmploymentContact Bob Smith rsmith17@cogeco.ca Appendixes:If you prefer an excel format, please contact us. Values Quantities Unit Cost For ManufacturingMajor ImportersValue: C $ FOBQuantity (UOM)Unit CostFXFor ManufacturingValues and quantities are also available for these products. ($423 million, 134 million kilos in 2017).Major ImportersMajor Importers' comprise companies who collectively account for up to 80% of all imports. (in terms of $ value)For confidentiality reason Industry Canada does not report individual companies when there are 3 or fewer companies that make up 80% of the total importersOn a consolidated level 3 companies account for 63% of imports.The 7 companies that account for more than $1 billion in imports are as follows: ................
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