The second part of this three-part article looks at the market segments and product categories at that growing.

In 2014, educational customers represented the largest market segment of distributors’ sales at 15 percent or $3.69 billion. Compared to 2012, educational sales increased by $396.7 million. This segment has begun to spring back to pre-recession numbers, distributors say, by bringing cleaning in-house.

“We have seen spending in education free up during the last few years,” says Chris Martini, vice president of sales and marketing, Central Sanitary Supply, Modesto, California. “We saw spending in education tighten during the Great Recession and now that they have improved budgets they are playing catch up in replacing older product systems and equipment.”

The healthcare market ranks second overall in sales volume at 14.5 percent or $3.56 billion. Cleanable square footage grew in this market in large part to the aging generation of Baby Boomers.

“Baby Boomers represent an enormous part of our population,” says Frank. “So there’s a greater need for long-term care, greater need for nursing homes, in-home care and acute care.”

As square footage grows in this segment, so does the need to clean more. Hospital-acquired infections and cross-contamination risks have also increased cleaning efforts.

The contract cleaning market ranks third overall, representing 14 percent of distributors sales in 2014 or $3.44 billion. In 2010, contract cleaners represented the largest percentage of distributors’ sales, but sales have been decreasing ever since. Distributors say business lost with contract cleaners is being made up elsewhere, however. Facilities that were once cleaned by contract cleaners are now being cleaned in-house.

“We’re seeing some people actually starting to bring their cleaning back in-house,” says Charles Moody, president of Solutex Inc., Sterling, Virginia.

Although industrial customers rank fourth at 13.9 percent or $3.42 billion, figures continue to drop for this sector. Sales are down $90.3 million from 2012 and $197 million from 2010. The continued slide in sales is a result of manufacturers either shutting down their operations or moving their operations overseas for cheaper labor.

“Manufacturing facilities just aren’t around anymore,” says Josephs. “As more and more facilities close and move overseas, they aren’t being replaced.”

The commercial market has seen a tremendous increase in sales since 2012. Fueled by job growth, the U.S. office vacancy rate fell to 16.6 percent in the first quarter of 2015, the lowest since the third quarter of 2009, according to Reis, a commercial real estate analytics firm.

Popular Products

In the business of selling commodities, it should come as no surprise that paper and plastic products still make up the leading product category by sales volume ($13.2 billion, 53.8 percent of total distributor sales in 2014). Paper towels, facial tissue and toilet tissue were the leading seller in this category, where distributors saw an increase in sales of $26.5 million since 2012 and an impressive $865.1 million more than reported in 2010.

The chemicals product category ranked second in sales with $7 billion in sales in 2014, an increase of $578.3 million since 2012, but still down $35.9 million from 2010.

“The floor care category has decreased,” says Josephs. “While some of it can be attributed to manufacturers creating better, longer-lasting finishes, the reality is customers aren’t maintaining their floors like they used.”

Resilient and hard-floor chemicals, and cleaners and degreasers continue to be the most popular products.
One product that saw a huge increase in sales was ice melts. Consecutive harsh winters in the United States helped distributors register a $62.6 million increase in sales in 2014 compared to 2012.

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Janitorial Sales Continue Slow Climb Despite Market Competition
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What Lies Ahead For Janitorial Distributors