REGIONAL OVERVIEW
MARKET OVERVIEW
Executive Summary
Decline in Market Value Slows in 2000
Household cleaning product sales in Latin America in 2000, in US dollar terms, were down
minimally on 1999, arresting the severe slump suffered the previous year, although value sales were
still well down on 1998's high. The effects of the Brazilian currency devaluation ensured that the
market depreciated severely in US dollar terms towards the end of the review period. In local
currency constant value terms, however, household cleaning product sales continued to suffer, with
only Mexico managing positive real value growth in 2000.
Economic Uncertainty and Low Income
Inequality in the distribution of income is a key factor in the Latin American market for household
cleaning products, with a greater number of consumers on low incomes and therefore pricesensitive in their purchasing behaviour. Economic recession was an influential factor during the
latter part of the survey period, with most markets in the region adversely impacted by economic
downturn, which was particularly felt by consumers in lower-income brackets.
Manufacturers Lower Prices, Hitting Growth
Many leading manufacturers were forced to lower prices during the recessionary period initiated by
the Brazilian currency devaluation in order to maintain volume sales and market share, a move
which, at the same time, hindered any significant expansion of cheaper private label products.
Low Penetration of Washing Machines and Dishwashers
In contrast to regions such as North America and Western Europe, the penetration of washing
machines and dishwashers in Latin America is hampered by a combination of low incomes, reliance
on traditional methods of hand-based cleaning and the use of domestic help, as well as a weak
utility infrastructure, resulting in poor or unreliable water and electricity supplies, especially in rural
areas.
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The Market for Household Cleaning Products in Latin America
Regional Overview
Demand for Textile Washing Products Mature
The large textile washing products sector is relatively mature, despite retaining considerable
potential for growth in automatic detergents, as penetration of automatic washing machines grows.
The traditional popularity of hand washing sustains healthy demand for bar soaps. One factor set to
influence growth is the ongoing and intense competition between the two leading players in the
sector, Unilever and Procter & Gamble.
Hand Dishwashing Dominant
Dishwashing products is dominated by hand detergents due to very low levels of dishwasher
penetration in Latin America. Manufacturers spent much of the latter part of the review period
launching added-value formulations and extensions of existing products which offer greater
antibacterial and biodegradable properties, and claim to protect the skin and prevent irritation.
Multi-purpose Surface Cleaners Benefit from Economic Conditions
Economic downturn benefited multi-purpose products in surface cleaners, as consumers sought
value for money products which can be employed on a multitude of surfaces. By contrast,
consumers on higher incomes, who were less affected by recession, showed a greater willingness to
upgrade to specialist, task-specific products, which provided improved convenience and efficacy at
a higher price.
Chlorine Bleach Buoyant
Chlorine bleach is one of the few household cleaning products to have benefited significantly from
the recession in Latin America. This inexpensive and functional product witnessed growth across
the region, as price-conscious consumers took advantage of its versatility. In addition to its germkilling toilet care function, consumers often mix it with other cleaning products such as textile
washing powders to produce alternative surface cleaners. Manufacturers also boosted chlorine
bleach sales by introducing fragranced products, which were well received and helped to sustain
demand.
Toilet Care Products Remain Dormant
Toilet care products is the least valuable sector in the Latin American household cleaning products
market and the products which comprise it are generally perceived as non-essential and generally
superfluous. Chlorine bleach is a cheaper option and preferred by the majority of ordinary
consumers. However, among higher-income groups, ITBs are proving increasingly popular,
although the subsector is developing from a very low base.
Tradition Sustains Sales of Polishes
Tradition and social norms play a large part in determining the performance of polishes. Latin
Americans consider sartorial appearance to be of great importance, and while newly washed
clothing is the daily ideal, brightly-shone leather shoes are of equal importance. As a consequence,
sales of shoe polish are especially significant, especially as floor and furniture polishes fall some
way down the list of household cleaning priorities.
Air Fresheners Underdeveloped
Air freshener sales in Latin America remain low, as the regional climate favours natural ventilation
over artificial fragrancing. This, combined with low incomes and often irregular electricity supply,
continues to hinder the possible expansion of electric air fresheners, for example. However, one
area of potential growth is car air fresheners, given the large number of automobiles in Latin
America.
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The Market for Household Cleaning Products in Latin America
Regional Overview
Weather Impacts Insecticides
Seasonal factors strongly influence demand for insecticides, with the vast bulk of sales occurring
between November and February, the Latin American summer period. Electric formats are not
common due to price considerations, and consumers prefer the cheapness, convenience and
immediate effect of sprays and aerosols. Recent innovation in this sector focused on increasing
product safety, with the introduction of new active ingredients which are less harmful to both
humans and pets.
Concentration in the Leading Positions
The household cleaning products market is characterised by high levels of concentration among the
leading players, with five principal manufacturers – Unilever, Procter & Gamble, ColgatePalmolive, Reckitt Benckiser and SC Johnson – dominant across most sectors in the market.
Unilever enjoyed a comfortable lead over its main rival, Procter & Gamble, in 2000.
Fragmentation Beyond the Multinationals
Outside the leading five manufacturers, the Latin American household cleaning products market is
characterised by fragmentation, reflecting the presence of a large number of small, local
manufacturers operating across a wide range of product categories. The fragmentation of the market
is also reflected in the relative lack of pan-regional brands.
Grocery Formats Increase Penetration
In line with global trends, the distribution of household cleaning products in Latin America is set to
come even more under the control of grocery multiplies, as huge global retailers such as Carrefour
and Wal-Mart increase their penetration of key markets, including Brazil and Mexico.
Economies of scale give these retailers a competitive advantage which independent food retailers
cannot hope to match. Nevertheless, such outlets will retain a certain importance in Latin America,
given the vast areas of land occupied by rural populations.
Improved Performance Forecast
Household cleaning product sales are forecast to grow significantly faster between 2000 and 2005
than they did during the review period. This prediction is based on an expected stabilisation of
macroeconomic conditions, which will allow manufacturers to tentatively recover some of the
ground lost in terms of US dollar value sales during the latter part of the review period.
Brazil, the region's most influential national market, will experience a recovery in sales, a
performance which will exert a significant influence on regional growth patterns during the 20002005 period.
MARKET SIZE BY COUNTRY
Brazil remained the most valuable household cleaning products market in Latin America in 2000
but, despite registering constant value growth (in local currency terms) of 31% over the 5-year
period, value sales of US$4.1 billion in 2000 represented a loss of over five percentage points in
terms of market share over 1996.
External Factors Influence Brazil
The progress of the Brazilian market throughout the review period was closely linked to events in
the broader macro environment. Although the economy demonstrated early signs of recovery from
the 1999 devaluation in 2000, the real remained weak in relation to the US dollar throughout the
last year of the review period, exerting downward pressure on value sales growth. Financially
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The Market for Household Cleaning Products in Latin America
Regional Overview
constrained, consumers traded down to products offering greater value for money, dispensing with
what they perceived as non-essential items.
These purchasing trends were most clearly evident in lower-income households, the segment of the
population which drove market growth at the beginning of the review period. Sectors whose
products were viewed as superfluous, such as polishes, performed poorly, while value sales of
textile washing and dishwashing products also contracted, largely due to previously mentioned
down-trading.
Mexico Buoyant
The strongest performing national market in Latin America in dollar terms during the 1996-2000
period was Mexico, which achieved a compound annual growth rate (CAGR) of over 10% to reach
sales of US$2.2 billion and rank second behind Brazil in 2000. Instead of mirroring the slight
downturn in the macroeconomy in 2000, the Mexican household cleaning products market followed
the growth pattern that had been established during the previous four years of the review period.
Gains made in sectors such as dishwashing products were consolidated by steady demand as
consumers continued to purchase higher-value automatic dishwashing products, enabling the sector
to return a growth rate similar to the previous year. Consumers were assisted in this regard by a
higher level of price-competitiveness among brands and the opportunity of trading down to lowerpriced local alternatives if required.
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The Market for Household Cleaning Products in Latin America
Regional Overview
Argentina Sees Growth
Along with Brazil and Mexico, Argentina was the only other Latin American country to register
positive constant value growth in local currency terms over the review period. The market in
Argentina reached a value of US$1.4 billion in 2000, a rise of some 23% in local currency constant
value terms.
Over the review period, Argentinian consumers began seeking out added-value products, which
included items such as kitchen and bathroom cleaners containing bleach, which decreased the need
to buy two products. Growth, however, was constrained by an uncertain economic environment in
Argentina during 2000.
Although some growth was seen in the dishwashing products and surface cleaners sectors, for the
most part consumers curtailed their spending on big ticket items, such as textile washing detergents,
or stopped buying products they felt they could do without, such as chlorine bleach, which became
a popular additive in the surface cleaners sector.
Poor Performance from Venezuela, Colombia and Chile
Venezuela, Colombia and Chile were characterised by particularly weak constant value growth over
the review period, and this caused the household cleaning products market in all three to decline in
real terms in 2000. A number of factors came into play, most important of which was political and
economic uncertainty, particularly in Colombia and Venezuela.
Political and economic turbulence hampered growth in Venezuela’s household cleaning products
market throughout the review period, precipitating a contraction of over 8% in constant terms in
2000. With the exception of chlorine bleach sales, which grew by a minimal 0.4%, no sector was
immune to declining sales. Despite the market’s lacklustre results in 2000, the performance across
all sectors marked an improvement compared to earlier years of the review period, when rampant
inflation and negative GDP growth exerted a more deleterious effect on consumer purchasing
power than the events of 2000.
Due to Colombia’s continuing economic problems, which manifested themselves most notably in
high unemployment rates, the spending power of Colombian consumers declined between 1996 and
2000. Products not deemed household essentials, and those items easily replaced by multi-use
products, were shunned in favour of products considered necessities.
Although industry sources in Colombia indicate that 2000 represented a general economic
improvement on 1999 – citing lower inflation rates, the stabilisation of the banking system and
increases in construction and development as evidence – consistent unemployment rates of over
20% meant continued low levels of consumer spending power. As a result, seven of the eight
market sectors experienced negative constant value growth, with only chlorine bleach increasing in
constant value terms.
The Chilean market’s more recent downturn followed three years of moderate growth as value sales
increased at least 5% per annum over the 1996-1998 period. Household cleaning products became
an intensely competitive market towards the end of the review period as manufacturers began to
aggressively defend or seek market share. Price-cutting became commonplace, especially in textile
washing products, the largest sector of the Chilean market.
In an environment where one manufacturer (Unilever) holds a near monopoly, price promotions,
buy-one-get-one-free offers and the distribution of bonus packs have become common strategies for
stimulating sales. However, the most influential factor on growth in 2000 was the ongoing problems
initiated by the devaluation of the Brazilian currency. Brazil is Chile's key export market.
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The Market for Household Cleaning Products in Latin America
Regional Overview
Sales of Household Cleaning Products by Country 1996-2000
US$ million, current rsp
Brazil
Mexico
Argentina
Colombia
Chile
Venezuela
Other
TOTAL
Source:
1996
1997
1998
1999
2000
4,598.6
1,519.3
1,135.6
913.2
508.7
412.0
1,150.2
5,167.8
1,617.0
1,232.1
989.9
526.8
436.4
1,177.9
5,440.1
1,827.5
1,328.2
939.7
505.2
438.7
1,174.0
4,086.2
1,999.4
1,409.4
877.4
460.9
419.4
1,156.6
4,115.8
2,241.9
1,388.5
644.3
443.9
400.4
1,143.0
10,237.6 11,148.0 11,653.4 10,409.4 10,377.8
Euromonitor
Sales of Household Cleaning Products by Country: % Analysis 1996-2000
% value
Brazil
Mexico
Argentina
Colombia
Chile
Venezuela
Other
TOTAL
Source:
1996
1997
1998
1999
2000
44.9
14.8
11.1
8.9
5.0
4.0
11.2
46.4
14.5
11.1
8.9
4.7
3.9
10.6
46.7
15.7
11.4
8.1
4.3
3.8
10.1
39.3
19.2
13.5
8.4
4.4
4.0
11.1
39.7
21.6
13.4
6.2
4.3
3.9
11.0
100.0
100.0
100.0
100.0
100.0
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Sales of Household Cleaning Products by Country: % Growth 1996/2000
% local currency constant value growth
Mexico
Argentina
Chile
Brazil
Venezuela
Colombia
Source:
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1999/2000
1996-2000
CAGR
1996/2000
TOTAL
1.3
-0.7
-1.7
-5.5
-8.4
-21.5
0.7
5.3
-1.2
7.0
-14.4
-5.3
2.9
22.9
-4.7
31.0
-46.2
-19.4
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The Market for Household Cleaning Products in Latin America
Regional Overview
MARKET SIZE BY SECTOR
Textile Washing Products – Decline in Market Value Share
During the 5-year review period, textile washing products maintained its position as the most
valuable sector in the Latin American household cleaning products market, albeit with a declining
share of overall sales. It was worth some US$5.4 billion in 2000, equivalent to around 52% of the
regional market, after having taken 56% in 1996.
The three sectors which dominate the household cleaning products market in Latin America and
took over three quarters of total regional value sales in 2000 were textile washing products, surface
cleaners and chlorine bleach, products which are deemed essential and treated by consumers and
retailers alike as virtual commodity items.
For the majority of Latin American consumers, ongoing economic instability and low levels of
disposable income have created demand for cleaning products which are both versatile and
inexpensive. As a consequence, textile washing products, in addition to their conventional function,
are often mixed with water and chlorine bleach and used as surface cleaners, whilst multi-purpose
products are preferred for their wide variety of uses and value for money qualities compared with
more expensive specialist surface cleaners. Finally, the versatility of cheap chlorine bleach has been
of great benefit to price-sensitive consumers who nevertheless desire to maintain clean and hygienic
homes.
Devaluation of Brazilian Currency Affects US Dollar Growth
In absolute dollar value terms, four of the eight sectors – chlorine bleach, surface cleaners,
dishwashing products and air fresheners – registered positive growth over the 1996-2000 review
period, although much of that growth occurred in the period up to 1998, before economic
uncertainty hit the region, creating market instability and a weakening of local currencies against
the US dollar.
The devaluation the Brazilian currency towards the end of the review period hit growth in US dollar
terms. Nevertheless, both chlorine bleach and surface cleaners still managed to record dynamic
growths in absolute US dollar terms.
Textile Washing Product Sales Decline in 2000
Textile washing products performed relatively well in local currency terms over the review period,
despite its large size and relative maturity, but in 2000 the sector continued to decline in US dollar
terms in a number of Latin American markets.
Given its maturity, the textile washing products sector relies on new product launches to spur
growth – for example, tablets and concentrated powders in 1999. With a relative lack of product
launches in 2000, consumers for the most part continued to buy the brands they were used to,
adjusting their buying habits as necessary to recessionary conditions in a number of markets.
Competition Forces Down Prices
Intense competition between the leading producers of textile washing products affected value
growth in 2000, with price wars in Chile between Procter & Gamble and Unilever being just one
example of fierce competition between the two.
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The Market for Household Cleaning Products in Latin America
Regional Overview
Chlorine Bleach Equals Versatility Plus Value-for-money
In Latin America, chlorine bleach has many uses, including as a clothes whitener, spot and stain
remover, bathroom cleaner, disinfectant, multi-purpose cleaner and general detergent. This
versatility was the foundation for its popularity during the various economic crises suffered by
individual national markets during the review period.
In some markets, the weaker performance of the sector in 2000 was due to the fact that, with the
return of a certain degree of economic stability, consumers began to return to the use of more
expensive and task-specific alternatives during that year. Thus it was consumers trading down to
chlorine bleach during the economic crisis that underpinned the increase of over 27% in US dollar
terms demonstrated by the sector over the review period as a whole.
The most salient trend to affect the sector during this period was the introduction of chlorine bleach
products enhanced with a delicate scent, usually lemon, floral, or neutral fragrances associated with
"freshness". These scented bleaches are designed to make household cleaning tasks more pleasant,
while offering the same disinfecting power of the fragrance-free products.
Scented bleaches offer consumers an alternative to multi-purpose cleaners that deodorise as well as
household antiseptics/disinfectants that kill germs. While standard products remain the most
popular mainstay in the majority of households, scented bleaches managed to gain a reasonable
foothold in the sector.
Value-for-money Focus in Surface Cleaners
Across the region as a whole, the positive performance of surface cleaners derived largely again
from their perceived flexibility and low price, as well as some new product developments. Multipurpose products were thus widely substituted for task-specific products with regard to cleaning
windows, tiles, ovens, sinks, kitchens and other surfaces, especially when economic uncertainties
were at their height.
In Brazil and Colombia, this trend was particularly evident. As Colombians tend to favour multipurpose cleaning products for a multitude of surfaces and do not often differentiate between
products designed for specific tasks, there is little demand for specialised products, especially
during times of economic crisis. In addition, the practice of mixing bleach and/or an inexpensive
powder textile detergent with a surface cleaner is also common, further limiting the demand for
specific surface care products.
With this in mind, manufacturers of surface cleaners in Colombia cut prices across the board in
order to maintain volume sales. Added-value products, especially those including bleach, became
particularly popular in a number of Latin American markets, notably Argentina, and especially in
high-income households, where there is a preference for more efficient, easy-to-use products.
Dishwashing Dominated by Hand
Low levels of dishwasher penetration in Latin America mean that the dishwashing products sector
is comprised largely of hand dishwashing detergents. Although there was an increase in the number
of households containing a dishwasher, penetration levels are particularly low and automatic
dishwashing detergents therefore have a very small consumer base. Thus, while some dynamism is
evident in sales of automatic products, the bulk of the growth in sales of dishwashing products has
been spurred by conventional hand dishwashing products.
Added-value Features Prompt Growth
Sales of hand dishwashing products were boosted by added-value formulations, which included
fragrance-free products as well as those with lemon, apple and coconut scents. Other notable
improvements included biodegradable formulations and formulations that claim to protect, and
avoid irritating, the skin.
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The Market for Household Cleaning Products in Latin America
Regional Overview
Cultural Factors
Cultural factors also impact upon the dishwashing products sector. For example, Argentinians tend
to apply dishwashing detergent directly to each item to be washed, as opposed to soaking plates,
glasses, cutlery and cooking utensils in the dishwater. This practice stems from Argentinian kitchen
design. The majority of kitchens have small sinks with a single tub, making it easier to soap and
rinse items individually.
Chile
Chile, on the other hand, has one of the highest per capita expenditures on dishwashing products in
Latin America (US$2.80 per head) just behind Argentina (US$3.50 per head). This is partly due to
the fact that Chilean families place a great emphasis on cleanliness although, at the same time,
Chileans tend to eat at home more often than other Latin Americans.
This specifically relates to the military regime that held power from 1973 to 1988, which regularly
enforced protracted periods of curfew during which local inhabitants were not allowed to venture
outside their homes after a specified hour. This effectively closed the late evening market for
restaurants and people became accustomed to earlier nights and eating meals at home.
Although the abolition of the curfew in the 1980s opened up nightlife, the majority of Chileans still
tend to eat at home more often than they go out to a restaurant. As a result, more dishes are used
and in turn more dishwashing detergent is required to clean them.
Brazil
In Brazil it is commonplace – even in homes with dishwashers – for domestic workers to be
available for most of the week. These workers generally wash dishes by hand, and dishwashing
machine use is therefore limited to weekends or evenings when domestics are unavailable. Given
the low level of dishwasher penetration, the market for dishwashing additives is marginal at best in
Latin America.
Air Fresheners – Potential Curbed by Climate
Air fresheners is one of the smallest sectors in markets throughout the region, with climatic and
economic factors playing a major role in determining the size of the sector. Given the tropical
climate prevalent in most of Brazil, where windows in both homes and cars are left open for a large
part of the year providing natural ventilation, air fresheners obviously have limited potential. A
further barrier to growth in recent years came in the form of increasingly hot summers.
Industry sources indicate that future sales growth is expected to be achieved largely through addedvalue products such as disinfectant sprays and perfumed products that are designed to be used in
specific contexts, such as car air fresheners.
Sprays and aerosols continue to account for the bulk of air freshener sales, given their relative low
cost and ease-of-use. Conversely, electric air fresheners have suffered stagnant demand across the
region due to the perception that they are a luxury product. Mexico was one of the few markets in
which electric air fresheners witnessed dynamic growth over the review period, perhaps influenced
by US trends.
Toilet Care Underdeveloped
Despite considering the toilet a place for basic cleanliness, many Latin Americans do not tend to
include toilet care products in their shopping basket, mainly due to the perception that such
products are a non-essential luxury. Thus products in this sector are mainly targeted at middle- and
upper-income groups.
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The Market for Household Cleaning Products in Latin America
Regional Overview
Most ordinary Latin American consumers use chlorine bleach to disinfect and clean the toilet bowl.
The smell of bleach implies cleanliness, and companies are increasingly marketing bleaches with
more benefits in terms of product formats, as well as in packaging and formulation innovations. As
a result, toilet care products still have a minor presence in the overall market.
A Bad Year in Argentina
Argentina was the only country in Latin America in which toilet care products failed to achieve
positive growth in 2000. According to industry sources, consumers looking to curtail spending
simply stopped buying toilet care products, opting instead for chlorine bleach, a cheap and effective
alternative to products specifically for use in toilets. Both in-cistern devices and ITBs posted losses
in both value and volume terms.
External Factors Influence Insecticide Sales
Weather patterns exert a strong influence on insecticides sales, the majority of which occur during
the summer months which, in the southern hemisphere, extend from October to March. In the
November-February peak vacation season in Brazil, for example, sales often triple compared to
their winter levels.
Hot Summer Boosts Sector in Brazil
In 2000, Brazilian insecticides sales were boosted by a long, hot summer, which extended through
the academic and labour holidays. In addition to weather, innovative new product launches and
extensive marketing in the form of consumer education campaigns served as a second impetus to
growth.
A principal reason for the sector’s positive performance over the review period was a number of
significant technological developments that continued to add value to already sophisticated product
ranges. Many developments were aimed at increasing product safety; for example, the traditionally
predominant cellulose pellets used in electrical devices were replaced in many brands by new
pellets formulated from an active gel ingredient encased with a non-toxic coating.
Polish Sales Depressed
The weakest performing sector in the household cleaning products market in dollar terms was
polishes, a sector which declined at a CAGR of 3% over the 5-year review period. Much of this
decrease occurred in 1999, when the sector contracted by some 19%, affected by the devaluation of
Brazil's currency, a market where polishes are particularly popular.
Social Norms Sustain Shoe Polish Sales
Personal presentation remains extremely important in many parts of Latin America, and just as
clean and ironed clothes are important to self-image, so are well-shined shoes. Most Latin
Americans wear leather shoes that require shining before they leave the house. Training shoes are
used almost exclusively for sports and are not widely seen as an alternative to leather shoes for
everyday use. Shoe polish is therefore an important item in most households. Many Latin
Americans shine their shoes daily and most use shoe polish at least once a week.
Appearances Count in Venezuela
The importance of maintaining the appearance of floors, furniture, household ornaments and shoes
is related in Venezuela to the importance placed on personal appearance with regard to clothing and
laundry. Although the majority of households habitually use polishes in their household cleaning
routines, consumers are very traditional in their habits. Thus shoe polishes remained most in
demand throughout the review period as the quality and appearance of footwear retained its
importance among many consumers. Expectations of formal dress and high standards of
presentation in the workplace also served to bolster value growth.
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The Market for Household Cleaning Products in Latin America
Regional Overview
Polishes Important in Chile
In Chile, polishes was one of the most valuable sectors in the household cleaning products market,
accounting for over 14% of total value sales in 2000. The increased sophistication and greater
purchasing power of Chilean consumers led to growth in sales of products designed for specific
tasks at the end of the review period. Companies invested heavily in research and development of
innovative products in order to generate demand. As a result, products increasingly offered more
added-value elements compared to the mid-1990s. They bring varying benefits, including
convenience, ease of application, efficacy and environmentally-friendly ingredients.
Mexico See Sales Growth
In Mexico, the shoe polish subsector conspicuously outperformed the sector as a whole, both over
the review period, as well as in 2000. This growth resulted largely from a widening consumer base.
Mexicans of virtually every income level place considerable emphasis on keeping their shoes
shined, and during the economic downturn that affected the review period a significant number of
consumers were compelled to extend the useful life of their shoes through regular maintenance,
which boosted sales of shoe polish.
Sales of Household Cleaning Products by Sector 1996-2000
US$ million, current rsp
Textile washing products
Surface cleaners
Chlorine bleach
Polishes
Dishwashing products
Insecticides
Air fresheners
Toilet care products
TOTAL
Source:
1996
1997
1998
1999
2000
19962000
CAGR
5,736.0
1,260.5
691.9
851.6
642.6
719.6
194.2
141.2
6,219.3
1,440.4
759.3
923.5
685.5
751.7
209.2
159.1
6,499.8
1,536.6
810.9
947.8
727.8
753.9
215.5
161.1
5,692.2
1,458.6
816.7
766.2
718.0
625.3
199.9
132.6
5,431.7
1,533.4
879.5
755.1
753.7
677.5
209.5
137.5
-1.4
5.0
6.2
-3.0
4.1
-1.5
1.9
-0.7
10,237.6 11,148.0 11,653.4 10,409.4 10,377.8
0.3
Euromonitor
DISTRIBUTION
Supermarkets/hypermarkets Dominate
Supermarkets and hypermarkets accounted for three quarters of value sales of household cleaning
products in Latin America in 2000. Only in Colombia did the other food stores format garner a
share approaching that of supermarkets and hypermarkets. The dominance of grocery outlets is
most apparent in Brazil, where sales through supermarkets and hypermarkets accounted for more
than 91% of total market value in 2000.
Supermarkets and hypermarkets increased their dominance of sales in Brazil’s household cleaning
products market over 1996-2000 across all sectors, reflecting the country's rapidly developing retail
infrastructure. The share taken by grocery multiplies ranged from a minimum of 87% in textile
washing products to a maximum of 93% in surface cleaners. From a regional standpoint, the most
important markets continue to be the rich and populous São Paulo and Rio de Janeiro in the
southeast of the country.
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The Market for Household Cleaning Products in Latin America
Regional Overview
Colombia Undergoes Shift
The household cleaning products market in Colombia saw a gradual shift in distribution patterns
during the review period, as supermarkets and hypermarkets overtook independent food stores in
terms of value share of household cleaning products. In 2000, more than half of all household
cleaning product sales went through these self-service channels as opposed to only 43% in 1996.
This represented a significant shift in the retail environment as smaller neighbourhood stores lost
out to larger outlets. In 2000, only 47% of household cleaning product sales went through
independent food stores, while in 1996 they accounted for 53%.
Retail distribution in Colombia witnessed considerable transformation over the review period. The
entry of both new national and international players, increased participation of bigger and better
organised distribution companies, higher integration among small retailers and modern and more
efficient management controls were some of the most important changes. Despite progress, the
sector still has some way to go before it reaches the sophistication and concentration of more
mature markets.
Argentina – Average for the Region
Argentina is characterised by more widely spread sales of household cleaning products, with
supermarkets and hypermarkets accounting for just over half of all value sales in 2000. Retail
distribution generally continued to shift towards supermarkets and hypermarkets throughout the
review period, following global trends toward the ongoing concentration. Larger stores such as
supermarkets and hypermarkets have more of a presence within the larger metropolitan areas,
where the majority of Argentina’s retail traffic occurs.
Other food stores and chemists/drugstores have a stronger presence outside of major population
areas, where large supermarkets are rare. Unable to compete with supermarkets and hypermarkets
on the basis of either price or selection, small independent neighbourhood outlets are expected to
experience further declines in future. However, they will remain important as sites for impulse or
distress purchases.
Mexico Follows General Regional Trends
Distribution in Mexico reflected regional distribution trends, as sales of household cleaning
products continued to shift from traditional formats to more modern ones, such as supermarkets and
hypermarkets. The latter type of outlet, which offers a wider selection in terms of product choice
and lower prices due to economies of scale, also offer Mexican consumers the convenience of "onestop" shopping.
 Euromonitor
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The Market for Household Cleaning Products in Latin America
Regional Overview
Although Mexican consumers are still inclined to shop at a variety of outlets for their different
needs – outdoor markets for perishables, corner shops for milk, eggs and carbonated drinks,
speciality stores for tortillas and breads – this is not the case with household cleaning products.
Sales of Household Cleaning Products by Country and Distribution Format: % Analysis 2000
% value
SH
OFS
CD
DI
Others
TOTAL
Argentina
Brazil
Chile
Colombia
Mexico
Venezuela
53.3
91.3
79.4
51.1
64.4
72.6
22.9
4.6
14.1
46.7
29.6
15.3
23.8
0.2
0.0
2.0
2.0
5.2
–
0.9
–
–
–
0.1
–
3.0
6.5
0.2
4.0
6.8
100.0
100.0
100.0
100.0
100.0
100.0
TOTAL
74.9
17.2
4.5
0.4
3.0
100.0
Source:
Key:
Euromonitor
SH=Supermarkets/hypermarkets
OFS=Other food stores
MARKET FORECASTS BY COUNTRY
Brazil Set to Recover Share
Brazil is forecast to consolidate its share of household cleaning product sales in Latin America and
by 2005 value sales are expected to have grown by over 22% in constant terms. A market size of
US$5 billion in 2005 will give Brazil some 43% of total regional value, representing an increase of
three percentage points on 2000. Forecast strong growth is predicted to come from both the
dynamism of the relatively small insecticides sector as well as healthy growth from the far more
valuable textile washing products sector.
A recovery in sales of textile washing detergents will receive a boost from the expansion of demand
for fabric softeners and laundry aids. However, the most dynamic sector is forecast to be
insecticides, with sprays and aerosols maintaining strong sales growth, while electric insecticides
are set to see demand grow beyond the more affluent southeast. This development is likely to be
aided by the recent outbreak of Dengue fever in the Pernambuco region, and subsequent press
coverage of the outbreak and government initiatives to deal with it, which in turn have increased
consumer awareness of the need to use insecticides.
Argentina and Colombia to Post Strong Growth
Both Argentina and Colombia are forecast to register double-digit growth in sales of household
cleaning products over the 2000-2005 period, with constant value growth of 13% and 11%,
respectively. The slight decline in real value sales in Argentina in 2000 pointed to consumers
economising as a result of a poor macroeconomic climate. The projected continuation of this
recession, however, suggests that consumers will spend another year buying products they know
well instead of experimenting with newer, added-value formulations.
However, in the longer term, Argentinian consumers are well known for preferring trusted brand
names over private label, thus unit prices will rise and drive the market up instead of down.
Continued added-value additions to well-known product ranges will give manufacturers scope to
raise prices and boost value growth.
 Euromonitor
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The Market for Household Cleaning Products in Latin America
Regional Overview
Given the Colombian market’s dependence on macro trends, there is likely to be no quick fix to its
current difficult situation. However, help from the IMF, along with a substantial financial aid
package from the US meant for use in both social and political reform, have helped to stabilise
inflation rates and engender optimism that a turnaround is on the horizon. Industry sources indicate
that economic improvement is already evident and cite lower inflation rates, an apparent solution to
the banking crisis, recent public works developments such as public transportation reforms in the
capital city of Bogotá, and increased construction as signs of economic rebirth.
At the time of writing, however, Colombia remains in a severe economic recession, and unless real
reforms are enacted, Colombia will continue to slide still further into the depths of financial
difficulty. Looking ahead to 2004 and 2005, some level of recovery in all sectors should be evident
as general economic growth in Colombia enhances consumer confidence. This upturn should
produce a slow increase in prices throughout the market as consumers will be able to spend more on
household cleaning products. Real growth, however, will derive from increased sales of products
such as laundry aids, air fresheners, toilet care products and specialised polishes and cleaners,
which at present experience marginal demand.
Modest Progress in Mexico
The Mexican household cleaning products market is forecast to post a modest increase in constant
value terms over the 6-year period to 2005. Despite a more stable Mexican economy in recent
years, it is expected that the household cleaning products market will grow only incrementally in
comparison. Such limited growth will result from a combination of the lowering of trade barriers
and subsequent downward pressure on unit prices from the activities of recent US entrants,
increased distribution through larger outlets operating at lower margins, and the growing disparity
between the rich and the poor in Mexico, which will force a larger proportion of the population to
purchase items with lower unit prices.
Difficult Times in Venezuela
The future of the household cleaning products market in Venezuela will most likely be dictated by
the unfolding of events in economic and political spheres, given the influence of these two factors
during the review period. Political influences tend to be negative. Many companies and influential
Venezuelans lack confidence in the current government, which is encouraging capital flight and
deterring foreign investment.
In terms of the outlook for the household cleaning products market, large-scale changes in usage
habits or preferences are not foreseen, and it is unlikely that there will be much innovation in
household cleaning products during the forecast period. The twin themes of economy and
convenience, or low price brands and labour-saving and timesaving products will continue to shape
the market as long as economic conditions remain uncertain.
Manufacturers’ strategies of focusing on economy price points and adding value to existing brands
in the hope of lifting prices without affecting demand may be the best strategy in what is difficult
situation.
Chile Set to Suffer
In Latin America, the weakest performing market over the forecast period is expected to be Chile.
Over the forecast period, the value expansion of the household cleaning products market in Chile is
likely to be hindered by the development of private label products. With regard to products such as
hand dishwashing detergents, where consumers care less about branding, private labels already
account for a significant value share, although they lost share in 2000. Nevertheless, pressure on
prices from retailers is expected to impact on value growth in key areas of the market in Chile.
 Euromonitor
Page 14
The Market for Household Cleaning Products in Latin America
Regional Overview
Industry sources suggest that even though volume sales will rise because of the wider availability of
products to both middle- and low-income households, increased competition from major players
struggling to increase share, as well as the ongoing development of private label, will hold back
price rises below inflation, producing negative real value growth.
Forecast Sales of Household Cleaning Products by Country 2000-2005
US$ million rsp
Brazil
Mexico
Argentina
Colombia
Chile
Venezuela
Other
TOTAL
Source:
2000
2001
2002
2003
2004
2005
4,115.8
2,241.9
1,388.5
644.3
443.9
400.4
1,143.0
4,277.1
2,246.6
1,415.6
632.8
438.3
379.3
1,128.3
4,443.0
2,257.2
1,446.8
633.1
434.2
370.4
1,128.3
4,624.5
2,276.8
1,482.0
649.2
432.8
378.4
1,143.7
4,814.1
2,315.3
1,522.8
675.4
433.0
396.2
1,175.7
5,009.7
2,374.9
1,569.5
713.9
435.1
407.4
1,217.0
10,377.8 10,518.0 10,712.9 10,987.3 11,332.5 11,727.5
Euromonitor
Forecast Sales of Household Cleaning Products by Country: % Analysis 2000-2005
% value
Brazil
Mexico
Argentina
Colombia
Chile
Venezuela
Other
TOTAL
Source:
2000
2001
2002
2003
2004
2005
39.7
21.6
13.4
6.2
4.3
3.9
11.0
40.7
21.4
13.5
6.0
4.2
3.6
10.7
41.5
21.1
13.5
5.9
4.1
3.5
10.5
42.1
20.7
13.5
5.9
3.9
3.4
10.4
42.5
20.4
13.4
6.0
3.8
3.5
10.4
42.7
20.3
13.4
6.1
3.7
3.5
10.4
100.0
100.0
100.0
100.0
100.0
100.0
Euromonitor
Forecast Sales of Household Cleaning Products by Country: % Growth 2000-2005
% constant value growth
Brazil
Argentina
Colombia
Mexico
Venezuela
Chile
TOTAL
Source:
 Euromonitor
2000-2005
CAGR
2000/2005
TOTAL
4.0
2.5
2.1
1.2
0.3
-0.4
21.7
13.0
10.8
5.9
1.8
-2.0
2.5
13.0
Euromonitor (www.euromonitor.com)
Page 15
The Market for Household Cleaning Products in Latin America
 Euromonitor
Regional Overview
Page 16