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Strategy Briefing

Home Care: Quarterly Statement Q3 2016 Sunshine or Sunburn?

37 pages, Sep 2016

US$1,325

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About This Report

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The Home Care Q3 update sees further downward revision versus the Passport Baseline. This report focuses on developments in North America and the US specifically; how the key laundry care category is set to develop and how Henkel’s purchase of Sun Products might fit into this challenging environment. This major acquisition will see Henkel gain much opportunity in the world’s largest laundry care market but also exposes it to Sun’s declining product portfolio. Can Henkel right a listing ship?

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Overview

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Gain competitive intelligence about market leaders. Track key industry trends, opportunities and threats. Inform your marketing, brand, strategy and market development, sales and supply functions.

Further Downward Revision in Q3

Q3 sees the outlook for home care worsen slightly over what was seen in Q2, with a US$800 million downward revision softening to a US$1.1 billion downward revision, with Brazil and the US alone accounting for 50% of this figure.

All about North America

While the Q2 Quarterly Statement covered the problems associated with Latin America, with a focus on Brazil, Mexico and Argentina, this Q3 Quarterly Statement focuses on North America, and the US in particular.

Focus on the US

The US economy does not appear to be in the worst shape, but the home care industry does not seem to getting much joy here, even though the US population is forecast to expand by 1% annually over 2015-2020, which should be good news for volume and unit sales, but is not expected to translate into value growth.

All washed up?

Value sales in the key US laundry care category are forecast to decline by just over US$800 million as set out by the Passport Baseline, with the Q3 update seeing a further US$80 million downward revision. This highlights the increasingly commodity nature of the US laundry category, liquid detergents in particular.

Give me sunshine

Into this somewhat unusual environment came one of the biggest recent acquisitions, with Henkel purchasing Sun Products in a US$3.6 billion deal in June 2016. As a result of the acquisition, Henkel will become the second largest laundry care manufacturer in retail value terms in North America. It will benefit from scale, but will also inherit a raft of somewhat underperforming brands.

The road ahead

While there are many positives for Henkel, the medium term options for the company will be interesting to observe, particularly regarding how the company will use its new scale to ramp up expansion of its Persil brand and insulate itself from a category which continues to exhibit declining unit prices, driven by US retailers’ penchant for discounting.

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Key findings

Overview

Executive summary

GDP forecasts: Revisions over last quarter

Forecast Update

Global home care: A further downward revision for Q3

Americas remain weak

Nightmare future?

North America and “s oft d rivers ”

A bad bunch

Laundry care in a lather

Sliding share

Sunshine or Sunburn?

The Henkel situation

Big deal

Category development

North America

Geographical development in home care

Henkel: US performance 2008-2015

Sun Products: US performance 2008-2015

US Passport baseline laundry market structure

Concentrated Liquid Detergent

Passport baseline

Average unit prices decline

Liquid Tablet Detergents (Pods)

A key growth category

Unit prices stable but for how long?

Safety concerns linger

Prospects for liquid tablets

Concentrated Powder Detergents

Powder a relative recovery?

Liquid Fabric Softeners

Major softener gain

So Why Do It?

Positives 1

Positives 2

And the negatives

Why buy this report?

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Megatrends

Strategy Briefing

Home Care: Quarterly Statement Q3 2016 Sunshine or Sunburn?

New Report Guarantee

About This Report

New Report Guarantee

Overview

Why buy this report?

Further Downward Revision in Q3

All about North America

Focus on the US

All washed up?

Give me sunshine

The road ahead

Want to find out more about this report?

Table of Contents

Key findings

Overview

Executive summary

GDP forecasts: Revisions over last quarter

Forecast Update

Global home care: A further downward revision for Q3

Americas remain weak

Nightmare future?

North America and “s oft d rivers ”

A bad bunch

Laundry care in a lather

Sliding share

Sunshine or Sunburn?

The Henkel situation

Big deal

Category development

North America

Geographical development in home care

Henkel: US performance 2008-2015

Sun Products: US performance 2008-2015

US Passport baseline laundry market structure

Concentrated Liquid Detergent

Passport baseline

Average unit prices decline

Liquid Tablet Detergents (Pods)

A key growth category

Unit prices stable but for how long?

Safety concerns linger

Prospects for liquid tablets

Concentrated Powder Detergents

Powder a relative recovery?

Liquid Fabric Softeners

Major softener gain

So Why Do It?

Positives 1

Positives 2

And the negatives

Why buy this report?

Want to find out more about this report?

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