Home Care Contract Manufacturing Industry Procurement Intelligence Report: COVID-19 Induced Demand for Homecare & Sanitation Products To Witness Further Growth | Grand View Research, Inc.

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Dec 15, 2021, 05:35 ET

SAN FRANCISCO, Dec. 15, 2021 /PRNewswire/ -- Home care contract manufacturing market has grown significantly since 2017 and is expected to grow at a CAGR of 11.42% from 2020-2025. Some of the homecare product manufacturers have expanded their business geographically during the lockdown period.

Synergy Home Care announced that it has sold in 35% more territories in 2020 as compared to 2019. Similarly, Best Life Brands awarded 71 new franchise agreements across its brands last year. Other companies like HHCN expect the sales to be boosted even more when the pandemic comes to an end.

A U.K.- based contract manufacturer, McBride, has utilized this opportunity to expand its portfolio. In retail manufacturing alone, McBride has 6000 references manufactured and 1.5 million pallets delivered to over 250 customers. As a contract manufacturer, they have boosted their customer base. As of 2020, they have manufactured over 30 home and laundry care categories, which are active in the market for 150 brands.

The suppliers offering contract manufacturing for homecare products also cater to personal products, which is witnessing a strong growth due to changes in shopping patterns and formulations. The major selection criteria are Certifications and Ingredients used by the contract manufacturer; brands prefer partnering with manufacturers who use organic ingredients in their production process.

Home Care Contract Manufacturing Industry Procurement Intelligence report, by Grand View Research, deep dives into the following insights from the industry:

With the rising demand for homecare cleaning products, a sizable part of the manufacturing is being outsourced to contract manufacturers – Household fabric cleaners are expected to witness the highest growth rate of 11.42% over the forecast period owing to the rise in disposable income and improvements in lifestyle in regions, such as APAC. Other key factors for the market growth include:

Growing awareness about the benefits of fabric cleaning products to maintain the quality of clothes
Efforts by market players to launch less water-dependent fabric cleaning products to cater to the demands of countries, such as India, China, and Indonesia, which have a scarcity of water

Raw materials take up three-fourth of the overall cost of manufacturing. Chelating agents are the largest cost head under raw materials – Raw materials cost about 75% of the overall cost of manufacturing. In terms of a liquid concentrate of the cleaner, water accounted for the highest percentage in terms of weight, covering around 40-50% of the solution, followed by surfactants covering 10%. In 2018, surfactant prices declined despite higher crude oil prices, but are expected to become stable over the forecast period.
The U.S. is the highest exporter of surface-active agents, one of the key materials required to manufacture homecare cleaning products – The U.S. has been a key exporter of surface-active agents over the last five years. In 2019, it accounted for 10% of the overall exports globally. From a cost perspective, China and India are the leading countries in APAC.

Home care Contract Manufacturing Market – Cost Intelligence Highlights:

Grand View Research has identified the following key cost components for Home care Contract Manufacturing:

Raw Material Costs

Water
Surfactants
Chelating Agent
Buffer Solution
Alkalinity

Operational Cost

Labor and Manual Overheads
Depreciation
R&D
Tax
SG&A
Profit

Raw materials are the major cost component of home care contract manufacturing and account for 75% of the total cost of production.

Home Care Contract Manufacturing Industry – Supplier Intelligence – Capability based ranking & selection criteria with weightage:

Operational Capabilities –

Years in Service – 15%
Geographical Service Presence – 25%
Employee Strength – 5%
Revenue Generated – 34%
Key Clients – 5%
Certifications – 9%

Functional Capabilities –

Product Type – 30

Liquid Conceterate
Solid Concenterate
Sourcing Pads
Others

Use Type - 70%

Kitchen Cleaning
Bathroom Cleaning
Glass and Metal Cleaners
Floor Cleaners
Upholstery Cleaners
Others

List of Key Suppliers in the Home care Contract Manufacturing industry:

PCC
McBride
Fareva
Unified Solutions for Cleaning
Access Business Group
The Korex Companies
Formula Corp
N.G. Electro Products
STPP Group
AAYKAY Detergents and Chemicals

Addon Services offered by Grand View Research:

Should Cost Analysis – In the homecare contract manufacturing market procurement intelligence report, we have estimated and forecasted pricing for the key cost components while availing services from contract manufacturers. Raw material cost is the largest cost component of homecare contract manufacturing services. It accounted for more than 75% share in overall manufacturing cost. Among raw materials, chelating agents is the largest cost component with ~24% share followed by surfactants and buffer solution. The price of surfactants is majorly determined by crude oil prices. However, in 2018, surfactants' prices declined, irrespective of higher crude oil prices. As the demand for personal care and home care products increases, the prices for buffer solutions and others are expected to stabilize over the forecasted period.
Rate Benchmarking – As chelating agents are the most important cost component for cleaning product manufacturing, the type of chelating agents is one of the most important aspects while analyzing the rate benchmarking of homecare contract manufacturing services. In our research, we have analyzed the rates of citric acid, nitrilotriacetic acid (NTA), and phosphonates. These three are the most common types of chelating agents used to produce cleaning products. By using rate benchmarking analysis, we found that using NTA as chelating agents is 15%-20% cost-efficient than using citric acid and phosphonates as chelating agents. Moreover, due to their toxicity phosphonates are banned in the EU, Canada, and Australia. Hence, using NTS and citric acid is the most preferable chelating agent for homecare contract manufacturers.
Salary Benchmarking – Labor is one of the key cost components incurred while offering a product or service. Understanding the pricing structure of salary is important for organizations in selecting the appropriate supplier and to build a good negotiation strategy. It is also an important factor in determining whether the category under focus should be outsourced or built in-house.
Supplier Newsletter – It is cumbersome for any organization to continuously track the latest developments in their supplier landscape. Our newsletter service helps them remain updated, to avoid any supply chain disruption which they may face and keep a track of the latest innovations from the suppliers. Outsourcing such activities help clients focus on their core offerings.

A smart and effective supply chain is essential for growth in any organization. Pipeline division at Grand View Research provides detailed insights on every aspect of supply chain which helps in efficient procurement decisions.

Our services include (not limited to):

Market Intelligence involving – market size and forecast, growth factors, and driving trends
Price and Cost Intelligence – pricing models adopted for the category, total cost of ownerships
Supplier Intelligence – rich insight on supplier landscape, and identifies suppliers who are dominating, emerging, lounging, and specializing
Sourcing / Procurement Intelligence – best practices followed in the industry, identifying standard KPIs and SLAs, peer analysis, negotiation strategies to be utilized with the suppliers, and best suited countries for sourcing to minimize supply chain disruptions

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About Grand View Research

Grand View Research, U.S.-based market research and consulting company, provides syndicated as well as customized research reports and consulting services. Registered in California and headquartered in San Francisco, the company comprises over 425 analysts and consultants, adding more than 1200 market research reports to its vast database each year. These reports offer in-depth analysis on 46 industries across 25 major countries worldwide. With the help of an interactive market intelligence platform, Grand View Research helps Fortune 500 companies and renowned academic institutes understand the global and regional business environment and gauge the opportunities that lie ahead.

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