The prices of home care commodities remained at an elevated level in 2023, despite falling from their peak in 2022. As a result, economies, manufacturers, and consumers worldwide were affected, with manufacturers further increasing product prices in the first half of the year in response to a continuously high net inflation of raw materials used in product formulations. While some pandemic-induced supply bottlenecks and ongoing economic uncertainties due to geopolitical tensions persist, home care inflationary pressures are likely to ease in 2024 and beyond.
The easing of commodity prices and inflation is expected to provide some breathing room for companies and households. Product price increases in 2023 had reached, and in some instances surpassed, consumers' willingness and ability to pay a premium for home care products. The effect from inflation is also reflected in Euromonitor International’s recently published industry data, which indicates global value growth of 8% for 2023. With the anticipated stabilisation of product prices in 2024, the volume growth of home care is set to rebound from its flat performance in 2022 and 2023.
In this article, Euromonitor International explores two of the most influential industry trends based on its latest research findings and how they are impacting home care expenditure and consumer purchasing behaviour in 2024.
Private label to build on its recent success
High and sustained inflation spilling into 2023 has shifted habits, and private label is performing better than it has previously, even in regions such as Latin America and the Middle East and Africa with historically high brand loyalty
Source: Euromonitor International
Euromonitor International’s Voice of the Consumer: Lifestyles Survey 2023 reveals that fewer consumers in key home care markets across all regions consider purchasing products from strong or well-known brands than was the case in the past.
Beyond low barrier to entry categories, such as bleach or multi-purpose cleaners, private label has proven its ability to compete with brands on quality in more advanced product areas. All natural and sustainable products continue to be in demand, despite a decline in consumer willingness to pay more for such products. In 2024, the availability of private label options in home care is set to increase further, catering for consumers who seek high-quality products with in-demand attributes at lower prices than their branded equivalents.
In Europe, where the penetration of private label products is already high, resulting from a significant expansion following the financial crisis of 2008, over one quarter of consumers intend to increase their frequency of purchasing private label products, which is a significant figure, considering that many of those consumers have already incorporated private label purchases into their shopping routines.
However, the largest habitual change can be observed in Asia Pacific and the Middle East and Africa, where in 2023, private label still only accounted for a fraction of home care sales. The ongoing expansion of discounters in those regions is leading to a growing availability of private label products, which is expected to support further growth of non-branded products in 2024 and beyond.
Self-care at home to provide premiumisation opportunities but tensions remain
The growing self-care trend, which manifested itself during the pandemic, must shape strategy for home care brands, especially around what constitutes “premium”, and provides inspiration for some of the most exciting thinking for new propositions around “mood enhancement”, especially via scent ingredients.
The success of scent boosters in recent years highlights that there are consumers for whom the “more scent the better” dictates their decisions in the pursuit of freshness and perceived cleanliness; this represents an incremental preference. However, while scent constitutes an important aspect for some, the growing self-care trend equally accentuates a growing avoidance of unnatural ingredients, including what typically provides fragrance in product formulation.
There is an evident return of “natural” and “gentle” as popular product claims in home care, as a direct result of elevated hygiene fatigue and heightened levels of chemophobia, an expression of healthy living and self-care having moved into focus as a priority for many consumers
Source: Euromonitor International
According to Euromonitor International’s Voice of the Consumer: Lifestyles Survey, across all regions globally, scent as an influential product feature continues to outperform fragrance-free and hypoallergenic. In Latin America and the Middle East and Africa, more than one third of consumers treat scent as an important product feature, whilst in North America, almost as many consumers look for unscented as they do for scented. The demand for all natural products remains strong in all regions. In Asia Pacific, one quarter of consumers opt for hypoallergenic and all natural options when purchasing their home care products.
The renaissance of “gentle” and “natural” claims in the aftermath of the pandemic, compels brands to reassess the role of fragrances in formulations. In laundry care, for example, fragrance is employed to evoke a sense of task completion for consumers. However, this has led to increasing tensions as consumers now question the potential health implications of excessive exposure to chemicals in their homes. The growing use of air sensors in consumer homes creates a tangible causality between air quality and the use of certain aerosol/spray products, prompting demand for more natural alternatives.
Following Euromonitor International’s recent publication of updated home care industry data in Passport, a global overview, contextualising industry performance, growth areas and key home care trends is due for publication in February 2024.
For further analysis on key trends impacting the industry please read our reports, Self-Care at Home and Affordability, Value, and the Cost of Living.