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Top 10 Trends in Home Care for 2017

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2016 was another year of solid value growth for the home care industry, with global value sales growing 5% to reach US$ 143 billion. From powder to tablet, from spray cleaners to wipes, there has been a clear shift in the way people purchase cleaning products. In this article, we will discuss the top global trends in home care.

  1. Latin America drives sales of home care products in 2016

As some areas of the globe reach home care maturity, others rise to prominence on account of their unexploited potential. Rapid urbanisation and growing disposable incomes have led to a shift from traditional to modern retailing in Asia Pacific and Middle East and Africa for example, allowing international brands to easier penetrate fast-growing markets. Hygiene concerns have also triggered home care sales, thus positioning their products and sponsoring government’s hygiene awareness campaigns allow global home care manufacturers asserting their spot in consumer’s minds, becoming a first choice-brand when consumers come to afford higher value products.

Home Care – Sales Growth by Region

Market Sizes | Historical | Retail Value RSP | US$ mn | Current Prices | Year-on-Year Growth (%)
Categories Geographies 2015-16
Home Care Latin America 13,10
Home Care Middle East and Africa 9,10
Home Care Asia Pacific 5,70
Home Care Eastern Europe 3,90
me Care Australasia 1,80
Home Care North America 1,80
Home Care Western Europe 1,10

Source: Euromonitor International

  1. Private Label Expands To Emerging Markets

While Western Europe remains the home of private label, the shift towards modern retailing in emerging markets, along with the increasing level of retail concentration, is expected to support the development and expansion of private label home care products. Retailers have increasingly taken on a brand-orientated approach to their private label offer, creating products of similar or even arguably superior quality to their branded equivalents, as well as segmenting and "premiumising" their offer.

Home Care – Private Label Sales Growth

Brand Shares (Global - Historical Owner) | Historical | Retail Value RSP | % breakdown
Categories Geographies Growth 2011-16
Home Care Eastern Europe 122%
Home Care Australasia 20%
Home Care Latin America 13%
Home Care North America 4%
Home Care Middle East and Africa 0%
Home Care Western Europe 0%
Home Care Asia Pacific -30%

Source: Euromonitor International

  1. Shopping Reinvented

With a growing number of connected consumers around the world, a variety of online grocery business models are gaining in popularity. In this respect, consumers are redefining shopping as they expect brands to satisfy their needs and values by offering unique, convenient, and technologically-advanced experiences. Although home care internet retailing share remains low compared to other fast-moving consumer goods industries, online sales grew by 142% over 2012-2016 to reach US$4 billion in 2016. This growth has been dominated by grocery retailers expanding their online offering and improving their delivery options from click-and-collect points to extensive range of home delivery slots.

Internet Retailing Growth by Industry

Distribution | Historical/Forecast | Retail Value RSP | % breakdown
Geographies Categories Outlets Growth 2012-16
World Tissue and Hygiene   Internet Retailing 205%
World Home Care   Internet Retailing 142%
World Packaged Food   Internet Retailing 110%

Source: Euromonitor International

  1. Healthy lifestyle becomes a normal way of life

A continued focus on health and wellbeing seen across FMCG from packaged food, personal hygiene to home cleaning entails a wider lifestyle shift and evolving attitudes towards home care. This has translated into hygiene-focused product development and targeted advertising and marketing. Consumers are now provided with an array of surface care products but are interested in products going beyond cleaning. Hygiene terms that would only be used in professional environments before such as “sanitizing” and “disinfecting” are now widely used, indicating household cleaning became a duty and an obligation.

Growth of Global Sales of Surface Care Products by Category

Source: Euromonitor International

  1. From Visual To Sensory

In the most mature markets, air care has grown a significant share in the home care per household expenditure. Consumer priorities in laundry are also changing; it is not about the whitest white anymore, consumer preference is shifting towards fragrance more than colour- orientated shift from visual enhancement of the washing towards enhancement of sensory features. Fragrance has become a purchasing driver across a wide range of home care products and consumers are seeking experiential and sophisticated scents enhancing the indoor living space. Consumers already associate fragrance to cleanliness in beauty and personal care and in a similar manner in home care, perceptual cleanliness and hygiene are increasingly correlated to fragrance.

Scented Products is Among the Top 10 Most Desired Product Features

Source: Euromonitor International’s Consumer Survey 2016

  1. Men in cleaning

The traditional gender roles of men and women have changed significantly and has led men to fend more for themselves at home and take on a greater share of housework. Young men are more likely than ever to live alone as they delay marriage, which means they have higher levels of disposable income to spend on their image and wellbeing. An increase in the number of males in the home caregiver role has implications in terms of widening the range of products that men regard as acceptable, and targeting more household goods at the male market. Following the shift in balance between the sexes, manufacturers are taking gender differences into account and will increasingly look for ways to segment their markets and target consumers more effectively.

Forecast 2030 Growth of Male Population By Region

 Source: Euromonitor International

  1. Modern Lifestyle Drives Convenience

Time has become a rapidly appreciating commodity. This puts the focus on convenient and flexible products and solutions that enable consumers to either save time through outsourcing of tasks or multi-task through more flexible packaging options. In emerging markets, detergent tablets are competing with liquid or powder detergents packed in single-dose sachets. More affordable than tablets more associated with developed markets, these products target households with lower incomes and allow global manufacturers to position their brands into consumers’ minds.

Sales Growth of Detergents by Type

Growth 2011-16 | Historical | Retail Value RSP | US$ mn | Current Prices
Geographies Categories 2011-16 % 2011-16 CAGR % 2011-16 Absolute
World Detergent Tablets 179,00 22,80 1.959,70
World Liquid Detergents 9,10 1,80 1.502,90
World Powder Detergents -17,40 -3,80 -5.147,40

Source: Euromonitor International

  1. Shift in format

The most significant structural change within the laundry care and dishwashing markets has been the continuous shift in format and formula concentration, this is exemplified by the rise of liquid tablets or pods in laundry care. Rapid format migration from automatic powders to liquids has been a key feature of laundry care development over the medium term with strong evidence that this trend is also becoming well entrenched in developing markets with sales progressing in China and a number of Latin American countries.  The switch in format has become a clear indicator of market development and income growth and the transition has been pushed by manufacturers to offer added-value format allowing more flexibility and ease of use to consumers.

Growth of Automatic Dishwashing by Region

Growth 2011-16 | Historical | Retail Value RSP | US$ mn | Current Prices
Automatic Dishwashing Powders Automatic Dishwashing Liquids
Eastern Europe -29% 38%
Western Europe -31% 7%
Middle East and Africa 19% 5%
Asia Pacific -5% -10%
Latin America -13% -11%
North America -17% -14%
Australasia -42% -23%

Source: Euromonitor International

  1. Drive for compaction

The ongoing concentration in laundry detergents - and other home care categories - has implications that echo across auxiliary home care industries and services such as packaging, ingredients, and retailing. Going concentrated faces an array of complex barriers such as environmental footprint, complex formulations, diminishing cost-optimisation, and changing retailing environment while consumer gain can be seen as somewhat marginal or even non-existent. Comparing format consumption between developed and developing/emerging markets, the difference lies in both the format and concentration of products. The reasoning behind this has often been the successful regulatory initiatives between government and industry in pushing for concentrated formula SKUs in developed markets, especially in Western Europe.

Growth of Standard vs Concentrated Detergents

Growth 2011-16 | Historical | Retail Value RSP | US$ mn | Current Prices
Standard Detergents Concentrated Detergents
Latin America -22% 183%
Middle East and Africa -15% 77%
Western Europe -79% 11%
Asia Pacific 42% 8%
Eastern Europe -42% 1%
North America 14% -2%
Australasia -59% -27%

Source: Euromonitor International

  1. Environmental care drives cold washing

The laundry Cold Wash trend polarises consumers and the industry, with a lot of rational evidence and passionate emotional perceptions that support or attack the principle.  There are clear environmental and economic gains from washing in cool temperatures, but also valid hygiene concerns and a potential compromise of the fundamental Laundry cleaning mission. While lower washing temperatures are most associated with lower-income markets, this is not always the case with both the US and Japan demonstrating lower average temperatures than in both Western and Eastern Europe.

The home care industry is expected to continue growing in 2017. Unlike other markets that will be affected by geopolitical and economic instability, home care will continue performing well both in developed as well as in developing and emerging markets. Home care is not only driven by necessity and income growth but also because it is so closely tied (leading in some cases) on global trends which cut across industries and have tendency to drive added value accruement.

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