Home Care: Half-Year Update H1 2023

Delivery

This report comes in PPT.

Key Findings

Consistent outlook for the first quarter of 2023, with modest downgrades relative to initial baseline

Euromonitor International’s Forecast Model expects an improved low single-digit value growth for home care across 54 markets over 2022-2027, with a marginal downgrade of volume sales. The outlook in North America has been revised upwards, due to improving economic indicators in the US, where sustained product price increases and a lack of downtrading opportunities are behind a higher-than-expected value growth in H1 2023.

Value outpaces volume across global home care, as consumers absorb price rises (for now)

The industry is seeing substantial increases in value sales in current terms. The disparity between value and volume performance will not be sustainable over the medium term, with both retailers and consumers likely to take action against further increases, driving higher private label share and growth of hard discounters and other value-based channels.

Commodity price pressures ease in some areas, fuelling a possible upside scenario in the second half of the year

Commodity price pressures have eased somewhat, particularly in the area of energy and packaging inputs. However, contractual obligations and wage inflation are delaying an immediate effect on net material inflation. Brighter GDP forecasts in the US and improving consumer mobility in China provide cause for optimism, with inflation expected to moderate over the second half of the year.

A growing price differential between private label and brands

Many of the major suppliers in the home care industry reported strong revenue growth at the expense of declining volume sales in the first quarter of the year. In a bid to keep downtrading among consumers in developed markets to a minimum, brand manufacturers will continue to invest in widespread marketing campaigns and high-value functional innovations in the second half of the year, with an emphasis on product superiority in performance.