Price causes contention in cleaning products

Sao Paulo-the competition in the segment of cleaning products is more fierce this year, with the fight for gaining space. Although demand for these products remains stable, the large industries have pressed more smaller companies.
According to Euromonitor International Consulting survey, sales in the segment had high in value and volume in the passage from 2014 to 2015. Last year, the market for home care products (cleaning products) amounted to 19.6 billion R$.
"This was especially positive considering the macroeconomic environment in Brazil", according to Euromonitor, team analysis in report.
Until 2020, the consultancy estimates that sales of this category of products reach the R$ mark 21.1 billion.
The AudaxCo, São Paulo, bet on the resiliency of the thread to keep the gains this year. "I believe that our market will be the one that least impacts of the economic crisis in the country. Why are products of basic necessity, people are buying, "said the company''s marketing director, Diego Velasquez.
The volume produced by AudaxCo advanced about 5% from last year, with sales registering more than twice that percentage. For 2016, the goal is to expand to 10% the volume produced and 18%.
He says that the company''s focus is the professional line, responsible for 90% of the company''s revenue. The domestic line must also have some increment in 2016, due to the advancement in the demand for private label brands.
"We hope to grow with the production for own brand, both in professional and domestic line. In the latter, the demand for large retail chains by suppliers is great, but the profit margin in this business is much tighter, "said he.
The margin more pressed is the result of the strategy of these retailers, who have opted for the fight over price with the established manufacturers in the market. "The dispute over price is very strong in the domestic segment, one of the reasons that have led the AudaxCo to concentrate efforts on professional lines and own brands because our brand is not strong in retail," revealed viriathus.
Market sources say that the giants of the sector are adopting more aggressive actions of the retail price to advance on smaller companies. Reckitt Benckiser (RB) would have reduced by up to 30% the price of one of the line items see segment leader-recently.
The pernambucan Raymundo company, manufacturer of the brand Home Tips, also noted the change in the strategy of big business in recent months. According to the company''s marketing executive, Daniel Vasquez, price competition has intensified. Not to lose participation, Gathered has sought to reduce production costs.
"The high cost of production is making enough competition for sales. We invested also to expand distribution in regions where we are already present, to offset the possible drop in orders and optimize shipping costs ", he explained.
Focused
Vieira cited investments in concentrated cleaning products as another strategy of Assembled to reduce expenses. "The concentrated items require less water in manufacturing and packaging and freight costs are also lower, further reducing our expenses."
The acceptance of these products by retailers, however, is still small. The Executive told the company Gathered has worked with prices on average 10% lower for the focused, traditional products to stimulate demand.
With concentrated distribution in the North, Northeast and in the State of Rio de Janeiro, the owner of the mark home has Tips on cleaning 50% of the total turnover. "The crisis is over but we have market affecting seen stable demand. Grew up in the last year and we expect high in 2016 "quoted him. The company does not reveal values.
The AudaxCo also hopes to reduce manufacturing costs with the advancement of concentrated on line portfolio. The Director of marketing for manufacturer recalled that in addition to the reduction in spending on water, packaging and shipping, the expenditure on the disposal of waste is less. "Today one of my biggest expenses is with the cleaning and disposal of waste from regular production", explained he.
Unilever said the performance of the concentrated softener Comfort line in sales for the first quarter of 2016. "After the success of Omo pretreatment and stain removers in Brazil, we are expanding in Latin America", said the company in a report last week.
Ever the competitor Procter & Gamble (P&G) wants to increase sales of concentrated softeners with higher added value. "It''s still a big bet for the P&G. The Downy brand won 15% stake in 2015 and now owns a slice of 12.2% of the total market of softeners ", reported the company, in a statement sent to the DCI.