SIC 2841
SOAP AND OTHER DETERGENTS, EXCEPT SPECIALTY CLEANERS



This category includes establishments primarily engaged in the manufacture of soap and detergents. It includes companies who make crude and refined glycerin products from fats, or synthetic detergents such as laundry detergents, dishwashing compounds, and personal cleansing bars. Establishments primarily involved in the manufacture of specialty cleaning products are classified in SIC 2842: Specialty Cleaning, Polishing, and Sanitation Preparations. Establishments primarily involved in the manufacture of shampoos and shaving products are classified in SIC 2844: Perfumes, Cosmetics, and Other Toilet Preparations.

NAICS Code(s)

325611 (Soap and Other Detergent Manufacturing)

Industry Snapshot

The soap and detergents industry's marketplace in the United States—valued at $15.6 billion in 2001—faced increasing competition during the early 2000s. By the turn of the century, liquid detergents were outpacing powders, capturing nearly three quarters of the overall market by 2003. In addition to environmental and health questions, societal transformation propelled changes in the soap and detergent industry into the 2000s. Among the numerous factors presenting challenges to detergent formulators were: the need for improved sanitation; the increasing numbers of women working outside the home; the development of time-saving appliances; the trend toward using less energy by lowering wash temperatures; the need to conserve water; and changes in textiles and other cleanable surfaces.

Detergent modifications were also spurred by technical innovation, such as bleach additives, better optical brighteners, and improved technologies to release soils. Marketers packaged products differently to meet the needs of specialized users such as households with infants or with men performing tasks traditionally associated with women's roles. To meet the needs of various market segments, the industry saw a proliferation of brands and varieties. For example, a typical large super-market might contain more than 40 varieties of laundry detergents including both liquids and powders.

In the early 2000s, the detergent industry was suffering from the same malaise that was affecting the entire economy. Raw materials prices, coupled with downward price pressure, created a challenging environment. Those companies that continued to post positive numbers did so primarily by cutting costs and consolidating operations.

Background and Development

The soap and detergent industry's origins are obscured in antiquity. Michael C. Crossin, writing for Soap, Cosmetics, Chemical Specialties, stated "the caveman who fell into the river with his fur still on quickly learned that water is an excellent aid in the removal of soils and odors from garments." Crossin calls this find "the single most important discovery in laundry history."

Water alone, however, was not sufficient for all cleaning needs. The next important breakthrough was the development of soap. Different accounts place its invention between 2500 B.C. and 300 B.C. The word "soap" may have been derived from Mt. Sapo, near Rome, a place where burnt offerings were made to the gods. People discovered that the fat and ash residue from the offerings had cleaning properties.

By definition, soap is a cleansing product created through the chemical process of combining a fat or natural oil with an alkali (such as wood ashes or lye) under controlled conditions. Soap-producing factories developed in France and Italy, where olive oil was plentiful and used as the main ingredient, throughout the sixteenth, seventeenth, and eighteenth centuries. In the nineteenth century, palm oil began to replace olive oil in formulations. By the turn of the twentieth century, many people still made soap by boiling fats and lye to produce solid cakes.

In the United States, the soapmaking industry marks 1837 as an important year. In that year, William Procter and James Gamble established a candle and soapmaking business. Their company, Procter and Gamble, went on to become one of the foremost soap and detergent makers in the country. Procter and Gamble's famous "Ivory" soap bar was first introduced in 1882. Lever Brothers, another major soap and detergent company, offered "Lifebouy" and "Sunlight" soap bars in 1895.

Procter and Gamble introduced Oxydol, a flaked laundry soap, in 1924. Oxydol was followed in 1933 by Dreft, the nation's first synthetic household detergent. Instead of soap, Dreft's formula was based on alcohol sulfates. Alcohol sulfates were the first type of surfactants to make a significant impact in the formulation of cleaning products.

The term "surfactant" comes from shortening the phrase "surface active agent." A surfactant is a type of chemical capable of changing the surface properties of a liquid. As a result of their chemical nature, surfactants help wash-water wet the surface to be cleaned quickly and thoroughly. When water and mechanical action combine to remove soils from a surface, surfactants also help keep the soil suspended in the liquid so that it does not redeposit on the item being cleaned. Surfactants are basic ingredients in most products intended for use in washing clothes and dishes.

The first synthetic detergents based on sodium dodecylbenzene sulfonate were developed in 1939. They were followed by detergents based on alkylbenzene sulfonate (ABS), which provided better cleaning and more suds than traditional soaps at lower prices. ABS grew in popularity and its use expanded with the introduction of front-loading drum washing machines.

In addition to surfactant technology, the 1930s brought the introduction of "built" soap powders and detergents. "Builders" were materials used to enhance the efficiency of a cleaner. Although they had several purposes, such as providing alkalinity to aid cleaning, keeping removed soil from redepositing, and helping to emulsify oil and grease, one of their primary functions was to overcome problems associated with water hardness. Water hardness is a measurement of the soluble metal salts (primarily formed from calcium, magnesium, iron, or manganese) in the water supply. According to the U.S. Geological Survey, water is termed "soft" when it is relatively free of soluble metal salts. It is termed "moderately hard," "hard," or "very hard" based on the amount of hardness chemicals present.

When soap products were used in hard water, a substance called "soap curds" or "lime soap" formed. The lime soap precipitate, which would not dissolve, formed in the water and stuck to surfaces causing films and deposits. Builders were used to help counteract these problems. Several types of builders were developed and they worked in different ways. Sodium carbonate, a precipitating builder, caused the water hardness materials to precipitate from the wash solution. Sodium aluminosilicate, another type of builder, inactivated water hardness materials by a chemical process called ion exchange. The most commonly used builders, complex phosphates, worked by holding water hardness materials in the wash solution through a process called sequestration.

By the late 1930s, built soaps and soap in granular form had virtually replaced laundry bar soaps. A decade later, built detergents were becoming popular. The shift from soap to detergent formulations was driven primarily by efforts to overcome problems associated with water hardness.

Detergents, although similar in function to soaps, differed from them chemically. Detergents were made from other raw materials including petroleum products and fatty acids. They often contained additional ingredients such as fluorescent whitening agents, anti-redeposition agents, corrosion inhibitors, suds control agents, nonchlorine bleaches, colorants, fragrances, enzymes, blueing, and processing aids.

Built detergents, like built soaps, also contained builders to help improve cleaning efficiency. The first and most widely used builder was sodium tripolyphosphate (STPP). Formulators found STPP effective and relatively easy to process in granulated detergent. Although most built detergents were designed for laundry use, some were adapted for nonlaundry household chores. Typically these adapted formulas were high sudsing detergents and could be used for tasks such as hand dishwashing or floor care.

In 1946, Procter and Gamble test marketed their new phosphate-built Tide. Tide was launched nationally in 1947 and gained widespread acceptance. Built detergents based on surfactants continued to increase in popularity and by 1953 the poundage of surfactant products sold exceeded that of soaps. The rapid expansion of synthetic detergents, however, led to problems. Reports of foaming in streams and wastewater treatment plants were first heard in the late 1940s, and by the early 1950s scientific evidence identified synthetic detergents as the cause. ABS, the most widely used surfactant, was not biodegradable and led to water contamination.

In 1951, the Association of American Soap and Glycerine Producers, predecessor to the Soap and Detergent Association, began to study the industry's environmental concerns and search for biodegradable surfactants. The federal government also investigated the environmental impact of detergents and began to address national concerns with the Federal Water Pollution Control Act of 1956.

During the early 1960s, chemists developed a new form of ABS with a different molecular structure. The new surfactant, called linear alkylbenzene sulfonate (LAS), possessed the appropriate characteristics necessary for biodegradability. In 1965, U.S. detergent manufacturers switched from ABS to LAS in household laundry detergents. Within a few years the number of foaming incidents had dropped and the amount of surfactants in the nation's waterways had been reduced.

Foaming in waterways and treatment facilities, however, was only one problem with early synthetic detergents. Another was "eutrophication." Eutrophication refers to the process of adding nutrients to bodies of water. Excess nutrients caused excessive algae growth, and when the algae decayed, oxygen levels in the water decreased. With diminished levels of oxygen, water bodies were unable to support their fish populations.

Although eutrophication occurs in nature, it takes place over thousands of years. Accelerated eutrophication of water bodies, sometimes referred to as cultural eutrophication, occurred when wastewater carrying nutrients such as phosphorous and nitrogen was dumped into lakes and streams. The phosphate builders used in synthetic laundry detergents were one source of phosphorous in the nation's wastewater.

How much laundry detergents contributed to cultural eutrophication was a controversial question. Proponents of phosphate bans cited studies indicating that 25 to 30 percent of wastewater phosphorus came from laundry detergents. Those opposing phosphate bans claimed that detergents contributed only three percent of the phosphorus entering the nation's surface water, and that most eutrophication could be attributed to agricultural practices.

In the early 1970s, the United States faced rising concern about environmental issues and the problems associated with phosphates. Initial phosphate bans were enacted during the early 1970s. By 1992, statewide phosphate bans for household laundry products were in effect in Georgia, Indiana, Maryland, Michigan, Minnesota, New York, North Carolina, Pennsylvania, Vermont, Virginia, and Wisconsin. Additionally, the city of Washington, DC and parts of Idaho, Illinois (including Chicago), Montana, New Hampshire, Ohio, Oregon, and Washington had instituted similar bans. The states of Connecticut, Florida, and Maine, while not banning phosphates out-right, limited their use.

Industry analysts differed in their predictions over future demand for phosphate-built products. Some predicted steady or expanded use. They noted that by the early 1990s the rate at which bans overseas were being enacted had dropped, and that in 1991 the United Kingdom refused to institute a ban. They expected domestic demand to remain stable and demand for exports, particularly to Mexico and South America, to increase. Others, however, predicted that phosphates would be completely replaced in laundry products as alternatives were developed. Citing distribution problems associated with meeting varied local regulatory requirements and prevalent consumer perceptions connecting phosphates with environmental jeopardy, they anticipated phosphates would be phased out by the end of the century.

In the United States, phosphate bans helped encourage the development of liquid laundry detergents which were formulated without phosphates. Liquids began to achieve popularity by the mid-1970s and by the close of the 1980s had captured about half the market.

The Early 1990s. The early 1990s also saw a move away from premium pricing for name brands as customers became more value conscious. Although exceptions existed, many soaps and detergents were seen as undifferentiated commodity items. In 1992, reduced value pricing was being used by approximately 40 percent of detergent manufacturers. Typically, a value-priced product cost $1 or more less than a premium-priced product.

A similar trend brought the increased popularity of "value added," multipurpose products. These included items such as detergent with bleach or fabric softener and three-in-one personal cleansing bars. Moisturizing, deodorant, and antibacterial multibenefit synthetic detergent (also called syndet) bars and soap/syndet combination bars became popular following the introduction of Lever 2000 in 1990. Analysts expected multibenefit bars to capture 10 to 20 percent of the soap market by the mid-1990s.

The automatic dishwashing detergent (ADD) market was also undergoing transformations. Although customers had rejected first-generation ADD liquids because they separated and were difficult to get out of their bottles, gels were gaining acceptance. ADD gels, first introduced in 1991, were easier to dispense than their liquid predecessors and maintained product consistency. By the beginning of 1992, gels accounted for 35 percent of the ADD market.

While the ADD market was not as directly impacted by the growing concern over environmental issues as was the laundry detergent market, it was influenced. ADD formulas contained four basic types of ingredients: builders, bleaching agents, surfactants, and fragrances. The builder most often used was sodium tripolyphosphate (STPP). During the early 1990s, an estimated 250 million pounds of STPP were used annually in ADD products.

By 1992, phosphate use in ADD products had not been banned as it had been for laundry detergents, and no acceptable alternative for widespread use in household, institutional, and industrial applications had been discovered. In some jurisdictions, however, phosphate use had been limited, typically to 8.7 percent of the product by weight. Even in areas unaffected by such restrictions, manufacturers often reduced the phosphate content of their products from previous levels of 14 to 16 percent to 8.7 percent for the purpose of simplifying the national distribution of their merchandise.

By the end of 1992, Shaklee Corporation was the only U.S. company having a no-phosphate ADD product on the market. Industry analysts expected consumer demand for environmentally safe products to stimulate other manufacturers in their efforts to develop additional no-phosphate ADD alternatives. Environmental concerns were also expected to move the ADD market toward concentrated formulations. The ability to produce concentrated automatic dishwashing detergents was expected to be more difficult than reformulating laundry detergents had been because ADDs do not have as many inert fillers.

Within the laundry detergent segment of the industry, environmental concerns remained primary. Along with environmental issues came an emphasis on "natural" products because they were perceived by consumers to be better for the environment. Formulations were developed for detergents without added fragrances or colors to reduce the number of chemicals used. Manufacturers also promoted "mildness" because it was seen as less harsh for the environment.

The environmental movement led to the promotion of "green" products, products said to be "earth friendly." In contrast to general trends toward value pricing, U.S. consumers demonstrated a willingness to pay slightly higher prices for environmentally friendly products. U.S. consumers, however, were not willing to accept "green" products that were inconvenient to use or those with diminished performance capabilities.

Concern for the increasing amounts of solid waste in U.S. landfills also factored into the development of concentrated detergents. The nation produced 90 million tons of garbage annually in 1960; by the 1990s that amount had risen to 160 million tons, and some forecasters expected it to reach more than 190 million tons by the year 2000. Manufacturers discussed the nation's growing problems with solid waste management experts and developed responses. Concentrates used smaller volumes of some chemicals, required less packaging, and reduced transportation expenses. The percentage of plastic in the nation's garbage had been less than 3 percent in 1970, but was expected to reach 9 percent by 2000. To emphasize their proactive environmental policies, manufacturers promoted the waste-reduction benefits of cartons made from recycled paper, measuring scoops made from recycled plastics, and containers that were recyclable.

The use of phosphates continued to be controversial. By 1990, phosphate usage in laundry products for household use had been banned in all the Great Lakes states and in many states draining into the Chesapeake Bay. The issue was still politically alive in the Pacific Northwest, and the industry continued its search for cost-effective, high-performance alternatives. Industry watchers expected major manufacturers to turn more heavily to non-phosphate detergents even in areas unaffected by bans because of distribution problems associated with supplying different formulas to different regions.

In addition to environmental questions, another area of concern for manufacturers involved the use of animal testing. During the 1970s and 1980s, animal testing had been widely used as a tool in investigating the safety of detergent ingredients. Animals were used to determine the likelihood of human reactions, the severity of possible injuries, and the time necessary for healing. Rabbits and monkeys were frequently used to discover if certain chemicals or combinations of chemicals would cause eye irritation. Animal rights organizations promoted bans on certain kinds of tests and favored regulations which would require labels to state if animal testing had been used in developing a product. The soap and detergent industry responded with claims that it was working on developing alternatives but some animal tests were still required. One promising alternative was the development of "in vitro" (meaning "in glass") tests.

According to Keith A. Booman, technical director for the Soap and Detergent Association, the use of animal testing was reduced by 64 percent between 1980 and 1988. In 1989, Booman wrote in Soap, Cosmetics, Chemical Specialties, "Further reductions in animal testing by the detergent industry at this time would impair its ability to evaluate the safety of new products for consumers." He predicted, however, that with further research the causes of chemical-induced injuries would be better understood. The results would thus assist researchers in their efforts to develop batteries of nonanimal tests to help further reduce reliance on animal testing.

In 1997, the soap and detergent industry's shipments were valued at $17.8 billion, up 23.6 percent from 1991 shipments of $14.4 billion. The 1997 shipments total represented an increase of 12.7 percent over figures from 1996 but was only 10.6 percent ahead of shipments in 1995. In 1992, U.S. exports of soap and detergent products took just more than 5 percent of total shipments.

The household detergent segment of the market in 1998 totaled $4.4 billion, which was split between liquids ($2.3 billion) and powders ($2.1 billion). The U.S. household market also consumed approximately $522 million worth of automatic dishwasher detergent (ADD) in 1998. Nearly 50 percent of that market was captured by Procter and Gamble's Cascade brand, of which $254.8 million was sold. The second best seller in the ADD market was Electrasol, a product of the United Kingdom's Reckitt Benckiser PLC, which sold $92.5 million. Coming in third was Unilever's Sunlight brand, which sold $83.1 million worth of ADD in 1998.

The bar soap market, which had grown at an average rate of about 4.1 percent annually in the early 1980s, entered the 1990s with a growth rate of about 4.9 percent. Industry analysts attributed the increase to the introduction of body soaps and multipurpose bar soaps. Beauty bars comprised the fastest growing segment of the bar soap market, with sales increasing at a rate of about 7 percent per year. Later in the decade, however, bar soap began to lose some ground to shower gels. In 1998, bar soap sales grew only 1.5 percent in value and slipped 4.5 percent in unit terms, while shower gel sales increased dramatically. However, even with their 18.1 sales gain in 1998, the shower gel market, with total sales of $450 million, remained slightly less than a third the size of the bar soap market, which totaled $1.4 billion in value in 1998.

One of the most significant challenges facing the soap and detergent industry during the early 1990s was a growing concern over environmental issues. Consumer demand and government regulations combined to push producers toward reformulating products with an emphasis toward "earth friendly" materials. As a result, manufacturers intensified their efforts to develop detergent formulas capable of meeting environmental concerns without sacrificing product performance or convenience.

The development of concentrated and super-concentrated formulas was an important step in these efforts. Concentrates and super-concentrates required fewer filler materials and chemicals than standard formulations. Their smaller size reduced transportation costs and decreased the volume of packaging materials required. Producers highlighted their environmental emphasis by offering many of the new formulations in recyclable packages made of recycled materials containing postconsumer waste. Despite the heavy emphasis on advertising environmental benefits, some industry watchers reported that consumers placed safety, cost, and performance ahead of environmental issues. Melinda Sweet, director of environmental affairs at Lever Brothers, told Soap, Cosmetics, Chemical Specialties that confusion about recycling caused some people to think that recycled products were used products. As a result, some customers thought that products in recycled packages ought to be cheaper.

American consumers in the late 1990s were very demanding and value minded. They weighed many factors before buying any products. According to Soap, Cosmetics, Chemical Specialties, aging baby-boomers were looking for milder, less irritating products. Soaps using vegetable-based fats, with no animal fats or animal testing, were also in demand. Other popular items included loofahs, oatmeal products, and chamomile leaves. In general, customers demanded performance and value in all their soap, shampoo, and detergent products, which were the driving factors behind the soap and detergents industry at the turn of the century. Sales of shower gels made dramatic gains in the latter half of the 1990s, rising more than 18 percent in 1998. Although the market for bar soap remained large at about $1.4 billion, sales in this area showed an increase in value of only 1.5 percent and were off nearly 5 percent in unit terms.

For the first time ever, liquid laundry detergent sales outpaced powder sales in 1998. Liquids, typically priced higher than powders, took 52 percent of the total market. Sales of liquids totaled $2.35 billion, up 9.5 percent over 1997 levels, while powder sales dropped 4.5 percent to about $2.1 billion. Overall, the laundry detergent market grew 2.4 percent in 1998, compared with growth of 4.1 percent in 1997.

The U.S. automatic dishwashing detergent market totaled $522 million in 1998 and was dominated by Procter and Gamble's Cascade brand, which took more than 48 percent of total sales. Runners-up were Reckitt Benckiser's Electrasol, which took 17.7 percent of the market, and Unilever's Sunlight brand, which captured 15.9 percent of the ADD market.

Current Conditions

Results were mixed for soap and detergent companies during the early 2000s. Those that posted gains in 2002, including Church & Dwight, Dial, Henkel, and P&G, did so by cutting costs, focusing on marketing, and launching new products. In the liquid soap category in 2002, P&G's Tide dominated with 36.6 percent of the market share and sales of $915 million, a year-on-year increase of 4.6 percent. Number-two liquid detergent, Dial's Purex, garnered a 9.5 percent share of the market and $237 million in sales. Purex posted 12.6 percent increase from the previous year. Lever products All and Wisk held positions three and four, with 8.8 percent and 7.1 percent of the market, respectively. Both, however, posted year-on-year losses of 6.2 percent and 8.1 percent, respectively.

Tide also dominated the powder detergent soap market, with 45.4 percent of all sales, totaling $530 million. P&G also held the second and third positions with Gain and Cheer, with market shares of 12.7 percent and 7.2 percent, respectively. Reflective of the movement toward liquid, every top 10 powder detergent brand lost ground during 2002. Lever was the biggest loser with steeply declining sales of Surf (down 21.1 percent), All (down 20.5 percent), and Wisk (down 18.6 percent).

In the dish detergent category, P&G took honors with $317.6 million in dish detergent sales in 2002. Colgate-Palmolive was runner up with $235.7 million in dish soap sales, and Lever Brothers came in a distant third with $35.9 million. Several brands vied for sales in the liquid soap category, which generated $475 million in total sales in 2002. Unilever's Dove took 8.6 percent of sales; P&G's Olay Complete and Clairol Herbal Essence held 7.3 percent and 6.9 percent, respectively.

Although the detergent and soap industry is looking for growth through targeted marketing strategies and new product introduction, the primary focus is on cost control. The big firms are coming under increasing cost pressure from private label brands belonging to big discounters, including Wal-Mart and Costco.

Industry Leaders

One of the oldest and largest companies in this industry is Procter and Gamble (P&G). Headquartered in Cincinnati, Ohio, P&G reported fiscal 2002 (ended June 30, 2002) sales of more than $40 billion and employed a workforce of 102,000. Founded in 1837 by two brothersin-law, the company originally made soap and candles. As of the late 1990s, P&G provided some 300 brands to more than 140 countries. Its product list included laundry and cleaning products (Tide, Mr. Clean, Downy, Spic and Span), health and beauty aids (Noxzema, Clearasil, Head & Shoulders, Secret, Ivory), paper products (Charmin), and even foods and beverages. In the worldwide market, P&G's laundry detergents held the largest share and overseas trade represented P&G's fastest growing market. Slightly more than half its revenue was generated outside the United States in fiscal 1999.

One of P&G's biggest competitors in the United States and abroad, and the second largest player in this industry, was the London-based Unilever conglomerate. Widely diversified, Unilever reported 2002 sales of $50.7 billion. Worldwide, the company employed a workforce of 265,000 as of late 1998. The rivalry between Unilever and Procter and Gamble goes back nearly 50 years. Although P&G had entered the European continental market in 1954, Unilever had already begun marketing a synthetic detergent, OMO, in Italy in 1951. In the United States, Lever Brothers (a Unilever unit) and P&G faced off in several areas. One market in which they both competed was automatic dishwashing detergents. Between them for several years, they held the top two leading automatic dishwashing detergents. P&G's Cascade was the nation's best seller; Lever's Sunlight was number two. However, by the end of the decade, Unilever's Sunlight had fallen into third place in the ADD market, being succeeded in second place by Electrasol, which is marketed by another U.K.-based company, Reckitt Benckiser PLC. P&G's Cascade held on to the number one spot in the ADD market, capturing nearly 50 percent of the market.

Another area in which the two companies competed was the bar soap market. In 1990, Lever Brothers introduced a new three-in-one moisturizing, deodorant, and antibacterial cleansing bar called Lever 2000. Lever 2000 competed with several P&G products such as Safeguard, Coast, and Zest. As of 1998, another Lever product, Dove, climbed to the top selling position among bar soaps, supplanting Dial, which had been the historic market leader in this market. Dove accounted for 19.2 percent of bar soap sales in 1998, compared with 13.6 percent for Dial. Lever 2000 took third place among bar soaps with 9.7 percent of the market. Dial continued to hold its top position, however, in the liquid soap category.

Following Unilever, holding third place among soap manufacturers, was Colgate-Palmolive, with 2002 sales of $9.3 billion and 37,700 employees. In an attempt to be more competitive, Colgate-Palmolive replaced its original Palmolive soap with Palmolive Gentle Skin Bar. In liquid soaps, the company's SoftSoap made gains but still lagged behind Dial Liquid in market share. Colgate-Palmolive's total assets and net sales, however, exceeded those of Dial.

In addition to providing products in the soap and detergent industry, Colgate-Palmolive manufactured oral and personal care products such as toothpastes, toothbrushes, oral rinses, and shampoos. The company also operated divisions in specialty fabric care products and in pet dietary care products. Colgate-Palmolive's domestic sales accounted for only about 30 percent of its total revenues in 1998. European sales accounted for 23 percent; sales in Latin America generated 27 percent; and the Asian and African markets combined to total 16 percent.

Dial Corporation, another example of a diverse, global company, reported 2002 revenues of $1.3 billion. Its products included bar soaps (Dial, Tone, Pure & Natural, Mountain Fresh, Spirit, Fels Naptha), Liquid Dial, Purex laundry products, and Brillo scouring pads. The company also produced specialty cleaners, personal care products, and food items, and operated divisions in transportation manufacturing and service companies.

Another foreign-based player in the U.S. soap and detergents market was Reckitt Benckiser PLC, which markets such well-known cleaning products as Electrasol, Calgonite, Lysol, Resolve, Easy-Off, and Lime-A-Way. Based in Windsor, England, Reckitt Benckiser reported 2002 revenue of $5.7 billion. Worldwide, the company employs 22,300.

Workforce

In 1987, soap and detergent establishments employed 31,700 workers, 2 percent less than in 1986 and 10 percent less than in 1982. Ten years later, in 1997, the size of the industry's workforce had slipped still further to a total of 31,158, of whom just over 18,000 were production workers. Still declining, in 2001 the industry employed 23,050. As the industry has increased its level of automation during the 1980s and 1990s, worker productivity has increased. Government officials attributed the ability to keep U.S. products competitive on the overseas market to the industry's high level of automation. States with the highest employment in the industry were California, Texas, Illinois, and Ohio.

America and the World

The soap and detergent industry is an international industry, and during the early 1990s world demand for its products increased 1 to 3 percent per year. Many of its participants competed on a global basis. Analysts, noting a firm correlation between a nation's standard of living and its usage of soap and detergent products, expected the market to continue growing in both industrialized and developing nations.

U.S. companies involved in foreign trade found the markets in western Europe, Japan, and East Asia to be about the same size as the U.S. market. In Japan and Europe, demographic shifts toward older populations and smaller households were similar to the U.S. situation. Forecasters expected the greatest future export opportunities to occur in the developing economies of eastern Europe. Eastern Europe was also considered a good location for new manufacturing plants.

One of the world's largest non-U.S. soap and detergent manufacturers was the Kao Corporation. Kao, an industry leader in Japan, supplied a broad range of products including laundry detergents, dishwashing detergents, cleaners, toilet soaps, and personal care products. In 1988, Kao entered the U.S. market through its acquisition of the Andrew Jergens Company. By the early 1990s, its global network included several Asian and Pacific nations and the company planned to expand into Australia.

Japanese and other foreign marketers, like their U.S. counterparts, struggled with environmental issues. For example, by 1990 superconcentrates had captured 80 percent of Japan's powdered detergent market, and Kao was switching its formulations to natural-based surfactants. In Europe, environmental efforts resulted in regulations stricter than many enacted in the United States. Refillable containers, which were considered innovations in the United States in 1992, were already popular in Holland and Germany. In addition, German consumers were required to return all outside packaging. Issues of water consumption and energy use were also prompting changes in overseas markets faster than in domestic markets. Some industry analysts expected that trends toward washing with room temperature water and with less water would eventually spread to the United States.

The controversy over phosphates affected soap and detergent marketers on virtually every continent. Sodium tripolyphosphate (STPP) use increased in some areas but fell in others. In Canada during the fall of 1990, a brand war emphasizing the environmental benefits of phosphate-free detergents caused phosphate detergents to drop from 90 percent of the market to 40 percent in only six months. In 1991, however, forecasters expected phosphate sales to increase in eastern Europe and Asia. Industry analysts also predicted continued growth in phosphate usage within the industrial and institutional segment of the market and in automatic dishwashing detergents.

Research and Technology

The need to meet environmental regulations both in the United States and abroad drove many of the research efforts undertaken by the soap and detergent industry during the early 1990s. Zeolite, sodium citrate, sodium carbonate, and sodium nitrilotriacetate were under investigation as possible builders to replace phosphates. Other questions being addressed included product safety, water quality, chemical disposal, the ability to wash in unheated water, and indoor air quality.

Although technological developments and an expanding understanding of chemical processes had improved the industry's ability to restore soiled garments and other objects to their presoiled condition, available soaps and detergents still failed to achieve perfect results. Chemical scientists, therefore, continued to work on developing innovative laundry additives such as new enzymes and oxygen bleaches.

Further Reading

Bernard, Sharyn. "Makers of Cleaning Products are Improving their Chemistry." HFN, 13 January 2003, 174.

"Dish Detergents Get Tough." Consumer Reports, May 2001,44.

Hoover's Company Profiles. Hoover's Online, 2003. Available from http://www.hoovers.com .

Houston, Joel. "Detergents Push Ahead in Tough Consumer Markets." Chemical Specialties, November-December 2001, 22-23.

"Liquid Soap." Choice, May 2002, 24-26.

Moore, Samuel K. "Bath Wash Gets Bigger: Market Opportunities Start to Gel." Chemical Week, 27 January 1999.

Neff, Jack. "Product Innovation." Advertising Age, 24 June 2002, 1.

Schmitt, Bill. "Soaps and Detergents: A Tough Balancing Act for Chemical Suppliers." Chemical Week, 29 January 2003, 17-21.

"Shower Gel." Choice, May 2001, 28-31.

Teng, Andy. "Wiping Up Profits." Nonwovens Industry, February 2003, 28-34.

U.S. Department of Commerce. U.S. Industry and Trade Out-look '99. Washington, D.C.: GPO, 1999.

U.S. Department of Commerce. U.S. Census Bureau. 1997 Economic Census. Washington, D.C.: GPO, 1999.

Van Arnum, Patricia. "Consumer Product Majors Soak in a Renewed Outlook." Chemical Market Reporter, FR3-5.

Walden, Geoff. "Rising Tide of New Products to Lift Entire Category." Chain Drug Review, 17 March 2003, 39-40.

Walsh, Kerri. "Soapers Protect Themselves During the Downturn." Chemical Week, 29 January 2003, 24-25.

Walsh, Kerri, and Claudia Hume. "Soaps and Detergents: Sharing the Risks and Rewards." Chemical Week, 27 January 1999.

Zappier, Alicia. "Upscale Bath Products Gain Ground on Good Ol' Soap." DSN Retailing Today, 7 January 2002, 17.



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