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Home Care: Quarterly Statement Q2 2018

July 2018

In this quarterly briefing, we take a look at developments in the global home care industry. The main story is a strong upgrade for the home care market in the US, which managed to counterbalance poor development in other regions. This reports looks at factors leading to a more positive outlook for the US but also why the home care industry still faces challenges in the country. Furthermore, we look into the impact of a potential Trump Trade War scenario.

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The US comes to the rescue

The latest quarterly revision (Q2 2018) of the global home care industry forecast model shows slightly negative, almost stagnant, growth development. The global Passport baseline value CAGR for 2016-2022 has been revised by 0.003 percentage point -which equates to USD22.5 million. While the US witnessed a strong upswing, it is MEA, Asia Pacific and Latin America seeing a downgrade in home care value sales. Without the USD205 million contribution by the US, the global home care industry would have seen a stronger decline during the Q2 2018 revision.

Tax cuts and population growth in the US

The US market benefits from a tax cut, signed into law by President Trump in December 2017. Increased disposable income for US consumers is expected to result in consumers trading up to non-essentials and more premium, higher quality products. The positive trend is further supported by an increase in the total population, naturally boosting demand for home care products in the country.

All that glitters is not gold

While economic indicators suggest rosy conditions in the US, there are factors inhibiting growth potential of home care in the country. Increasing price pressure on manufacturers is leading to a decline in average unit prices. And with Amazon developing new concepts of frictionless shopping, a real threat is posed to brand loyalty as the call for convenience and time-saving creates passive shopping.

Potential future scenario

In this report, we turn our attention to the US, which despite seeing an upgrade in our quarterly revision, remains showing negative value growth development. Aside from growth-inhibiting factors that can already be observed, we take a further look at the potential scenario of a Trump Trade War and how any decision by Donald Trump to impose further tariffs on other nations would impact home care in the US.

Introduction

Scope

Q2 Macroeconomic Update

Executive summary
GDP forecasts: revisions over last quarter
Global risk scenarios
Major macro risks for the home care industry

Q2 Home Care Industry Update

Key Findings
Global home care: stagnant development
The US is pulling the rest out of the tailspin

Focus Market: US – Status QUO

US: A difficult market for home care
Home care: up and down trading based on disposable Income
Tax cut and an increase in population driving growth in the US
US: growth of internet retailing opens window of opportunity
The Amazon Dash button: epitome of instant consumerism
“Alexa, how do I maintain my customers’ loyalty?”
Switch in power: diminishing brand loyalty plays into retailers' hands
Private label fuels competition in a challenging market environment
Amazon’s foray into private label puts further pressure on brands
Fighting for shelf space: acquisition over diversification
Brands need to adjust: moving to direct-to-consumer
Ideally it is eco-friendly, but it has to be effective
Acquiring: has SC Johnson found the right Method?
What else is out there?: Procter & Gamble’s Tide Spin
Conclusion: the drivers of home care growth in the US
Conclusion: still some way to go for the US and home care

Focus Market: US – Trump Trade War Scenario

Trump Trade War: not an empty promise after all?
Macroeconomic outlook
US: Trump Trade War – an economic own goal?

About Our Industry Forecast Models

About Euromonitor International’s Industry Forecast Model
Soft drivers and the Industry Forecast Model
Growth decomposition explained
Significance and applications for growth decomposition
Key applications for Industry Forecast Model
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