Home Care in Mexico

Slow and steady growth of home care products during 2011

Home care products registered healthy growth during 2011 in retail value terms compared to the previous year. Given that 2011 was only the second year of recovery after the worst economic crisis in eight decades, the growth in sales of home care products was notable. Nonetheless, market growth in the year prior to the crisis was 6%, a level to which the market has yet to return. Nonetheless, even during the worst year of the financial crisis, market growth had never been negative as many home care products are considered necessities and therefore enjoy ongoing high demand.

Players employ promotions to stimulate sales

Many categories of home care products were promoted in order to stimulate sales. These promotions were varied and included additional product, buy-one-get-one-free and product bundling, among others. The most popular categories of home care products, such as laundry products, surface cleaners and dishwashing, were the most active in using promotions, with little or no activity in the categories with the least demand such as polishes, air care or toilet cleaners. The numerous activities around promotions are a clear sign of the fierce competitive environment in which the leading home care companies are present.

Innovation remains an important differentiation driver

Innovation remained important and a key differentiator between products. The launch of new brands and important product improvements continued to be important tools for companies to protect their market share. One of the most important launches during 2011 was that of the Persil laundry detergent brand (powder and liquid) as this brand, owned by Henkel, competes directly with the leader Ariel, owned by Procter & Gamble. Significantly, laundry care and surface care witnessed the largest number of innovations and launches during 2011.

Expansion of discount and convenience stores influences packaging

The recent expansion of discount stores has had a direct impact on home products in terms of reducing packaging sizes within many categories and also by promoting the distribution of private label. All five major chained grocery retailers have private label in most categories within home care as do the two largest major convenience stores. While the expansion of discount stores is a very recent phenomenon that dates back to 2009, the number of convenience stores has been on the rise for over a decade. Discount stores also tend to distribute economy brands or standard products in smaller packaging.

Rise in number of households will help boost healthy forecast market growth

For more than a decade Mexico has undergone a series of demographic shifts that have shaped a number of consumer industries. One of these includes a lower number of individuals per household but simultaneously healthy growth in the number of households, all of which will lead to growing demand for home care products. Furthermore, this increase will be further helped by changes in consumer lifestyles in which households are more easily formed and maintained than they had been in past decades where the nuclear family constituted the vast majority of households