Household Cleaners Contract Manufacturing Procurement Intelligence Report, 2023 - 2030 (Revenue Forecast, Supplier Ranking & Matrix, Emerging Technologies, Pricing Models, Cost Structure, Engagement & Operating Model, Competitive Landscape)

Category Overview

“High demand for household cleaners driven by the rising focus on sanitization in the post-pandemic era is fueling the category’s growth.”

The global household cleaners contract manufacturing category is anticipated to grow at a CAGR of 11.0% from 2023 to 2030. This growth is attributed to be driven by high demand for household cleaners due to increasing apprehensions about sanitization and well-being in the post-pandemic era, growth of international supply chains, continuous development in manufacturing technology, and a growing amount of private equity funding for contract manufacturing. In addition, the industry for household cleaners is witnessing higher demand for environment-friendly and natural products, which is further fueling the demand for contract manufacturing of the products. However, challenges faced by a contract manufacturing service provider such as high investment costs, low margins, quality control, and managing compliance with regulations are the key factors that may hinder the growth of this category.

In the current hypercompetitive and dynamically altering business landscape, the need for contract manufacturing looks to be a true game-changer, an irreplaceable stimulant pushing enterprises to the pinnacle of success. The manufacturers of household cleaners have witnessed significant growth since the outbreak of the COVID-19 pandemic. The demand for high-quality cleaning products / cleaners is currently rising rapidly, with previously unidentified markets recording a significant rise in demand. Contract manufacturing has also benefited from this boom. If a company is producing its own goods, it is likely to require multiple production sites across the nation. This means that goods must be carried from the manufacturing facility to distant locations for sale, which raises the costs of both transportation and the final product. Companies can tackle this situation and expand the market for their goods by entering into contracts with various service providers in each location.

The global household cleaners contract manufacturing category was valued at USD 27.6 billion in 2022. Global supply chains are witnessing expansion, which is offering numerous benefits, such as reduced production costs, expedited lead times, and increased market accessibility. Service providers in the category strategically position their facilities to benefit from geographical advantages, create strong supplier networks, and generate profit from economies of scale. This global expansion allows businesses to increase operational efficiency while maintaining a competitive advantage in the market. Contract manufacturing firms provide growing prospects for the public and private domains. Organizations in these sectors are severely hampered by labor-intensive manufacturing, inefficient production of various goods, and poor management. They are also crucial for tackling complicated situations since a single organization is less effective in bringing about change.

Key technologies driving the growth of this category include robotics & automation, digitalization & industry 4.0, artificial intelligence (AI), blockchain, 3D printing, and big data & analytics. Smart manufacturing has been greatly aided by robotic process automation, which uses robots to do hazardous and/or repetitive jobs including material handling, and assembling. Repetitive operations can be completed by robotics technology far more quickly and precisely than by human labor, increasing product quality and lowering faults. The category has been greatly impacted by digitalization (supported by Industry 4.0), which has allowed companies to streamline operations, raise standards, and cut expenses.Industry 4.0 provides contract manufacturers with the ability to gather and analyze massive volumes of data in real-time, giving them insightful information about the status of their operations.

Asia Pacific dominates the global category, accounting for a substantial market share. A rise in demand for the products such as surface cleaners and laundry detergents, particularly after the outbreak of the COVID-19 pandemic, in emerging nations such as China and India is attributed to drive the growth of the regional market during the forecast timeframe. The rapid growth rate in the household cleaners sector can also be explained by the fact that most international firms are shifting their manufacturing bases to India and China in order to reduce the cost of their products. The governments in this region have also taken steps to provide low labor costs and an advanced technological infrastructure for manufacturing facilities, which has enabled the growth of contract manufacturing in this area. Europe is also witnessing moderate growth in the global category, owing to increased focus on hygiene and sanitation, especially in nations such as the UK, Spain, France, Italy, and Germany. 

Supplier Intelligence

“What best describes the nature of the household cleaners contract manufacturing category? Who are some of the main participants?”

The global household cleaners contract manufacturing category is fragmented, exhibiting intense competition among the service providers present in the industry. The key players have established a niche for themselves by leveraging their unique capabilities and skills.They are influencing the direction of household cleaners production with an emphasis on quality, cutting-edge technologies, and a customer-centric approach. In addition, the services offered by the players provide opportunities for the public and private domains. The players are pushed toward strategic initiatives by the growing need for contract manufacturing with more precision and reduced time constraints.

By eliminating the overhead costs associated with purchasing equipment, supplies, and additional labor, owning contract manufacturing streamlines the supply chain and expedites production while also cutting costs overall. Buyers (businesses who want to outsource their manufacturing activities) in the category possess moderate to high negotiating capability due to the presence of a significant number of service providers who possess the required capabilities, covering everything from manufacturing to packaging. This creates pressure on the service providers to offer the best available options at the most economical prices, without compromising on the product quality.

Key suppliers covered in the category:

• Abdos

• Advance Research Chemicals, Inc.

• CleanPak Products, LLC

• Colep Consumer Products

• Formula Corp.

• Guy & O'Neill, Inc.

• McBride plc

• Megamorph Marketing Pvt. Ltd.

• Nicols S.A

• PLZ Corp.

• Premier Care Industries

• Rockline Industries

Pricing and Cost Intelligence

“What is the cost structure for household cleaners contract manufacturing? What variables affect the prices?”

Raw materials, labor, equipment & machinery, rent & utilities, packaging & transportation, and other costs constitute the cost structure of the global household cleaners contract manufacturing category. The other costs include research & development (R&D), administrative expenses, taxes & insurance, maintenance & repairs, depreciation, and interests. Raw material costs constitute a major chunk of the cost structure for the services offered in the category.

The cost of employing a service provider (contract manufacturer) is influenced by numerous factors. A number of direct and overhead costs are associated with manufacturing these products such as raw materials, labor costs (including pay and benefits), production equipment, and other operational expenses. If the production requires customized setup or tools, the service provider may charge extra, in addition to the cost of shipping and packaging the completed goods to their intended locations.

Service providers may also impose additional costs related to facility and equipment upkeep. These costs may vary depending on the availability and state of manufacturing facilities and equipment. To put this into perspective, new and well-equipped facilities could cost more than the obsolete or under-equipped ones. The nature of a product a business intends to produce may affect the price. Costs may increase due to more complex designs, the need for specialist equipment, the kind and caliber of materials, or particular manufacturing techniques.

The price charged by a service provider might differ based on a number of variables, including the complexity of the project, the amount of output and inputs, location, raw material pricing, and more. Business enterprises (brand owners) need to assess what they expect while entering into a business relationship with a contract manufacturer. For instance, service providers in this category source raw materials and ingredients from several nations. Supply chain disruptions and inflation may result in an upsurge in raw material prices and sourcing challenges.

The charges may vary depending on the region or nation due to differences in labor prices, tax laws, regulatory frameworks, and logistical challenges. The average hourly rate for the companies offering contract manufacturing services in different countries is USD 99.9 to 148.9 (in the U.S.), USD 24.9 to 48.9 (in India), USD 49.9 to USD 98.9 (in the UK), USD 25.9 to USD 49.9 (in Canada), USD 49.9 to USD 98.9 (in Australia), and USD 24.9 to USD 48.9 (in Mexico, Poland, and Spain).

The cost structure is broken down in the accompanying chart. Other costs can depend on multiple cost components as illustrated below:

The report provides a detailed analysis of the cost structure and the pricing models adopted by prominent suppliers in this category.

Sourcing Intelligence

“How do household cleaners contract manufacturing manufacturers engage? What is the type of engagement model?”

In terms of global household cleaners contract manufacturing category sourcing intelligence, businesses (brand owners) commonly follow a full-service outsourcing model to engage with their suppliers wherein the service provider (contract manufacturer) does an end-to-end manufacturing process i.e. sourcing raw materials to producing finished goods to packaging. Outsourcing the entire manufacturing process enables the business to save time from the sophisticated process of production and focus on other important activities such as research & development to formulate new products, branding, and marketing. In addition, the business gets relieved from the challenging task of managing labor, adherence to government regulations, and management of the production supply chain and can just focus on the sales aspect.

“In the full services outsourcing model, the client outsources the complete operation/manufacturing to single or multiple companies.”

While selecting the service providers (contract manufacturers), the businesses (brand owners) typically go for an approved provider operating model where a service provider is selected based on criteria such as prior proven performance, quality standards, and meeting a predefined set of qualifications. The operating models of approved providers minimize risks and enhance opportunities for profit creation. As a result, it is anticipated that providers will eventually switch from providing generic services to proprietary services. Outsourcing enables businesses minimize high setup costs in the nations where they lack production facilities. They focus on ingredients used by the service provider and the certifications a service provider possesses, as a key criterion for selection. They would rather collaborate with service providers who employ organic materials in their manufacturing process.

India is the preferred low-cost / best-cost country for sourcing household cleaners contract manufacturing service providers. The nation is a great place for businesses aiming to service the Middle East and Southeast Asian markets because of its good geographic position. It has been making efforts to enhance the ease of doing business and the business climate. Companies looking for a more efficient manufacturing experience may find it more appealing if reforms are implemented to streamline procedures and lower red tape. In addition, the Indian government has launched programs like "Make in India" with an objective to boost manufacturing and draw in outside capital. Support from the government and advantageous policies may be attractive to businesses wishing to start manufacturing operations.

The report also provides details regarding day one, quick wins, portfolio analysis, key negotiation strategies of key suppliers, and low-cost/best-cost sourcing analysis.

Household Cleaners Contract Manufacturing Category Procurement Intelligence Report Scope