This is a part of the 2013 Distribution Trends Report. The annual report was researched and written by MDM editors based on interviews with dozens of wholesaler-distributors, as well as industry experts and manufacturers. MDM also conducted a survey of its readers to uncover the trends outlined in this report.
2013 Distribution Trends Report
Market conditions improve. In a recent survey for AFFLINK (June 2013) by AlturaSolutions Communications, nearly 57 percent of jan-san distributors believe the second half of 2013 will be better than the first half. The strongest market segment in the survey this year was private offices, followed by hotel/hospitality and health care. Education markets were reported to have declined this year compared with 2012. The survey also found that 40 percent of distributors were seeing more end-users purchasing new equipment rather than repairing.
Distributors go green. Jan-san distributors are offering green products and services to their customers, including consultation and training around transitioning to environmentally friendly cleaning products and equipment.
Specialists are challenged by ongoing channel convergence. Just as with safety, distributors in selling janitorial supplies are finding more competition these days with distributors in other segments adding jan-san supplies and equipment to their repertoire in an effort to grow spend with existing customers. With that, the largest distributors, including Grainger and Interline Brands, continue to grow their presence in janitorial supplies. Interline in particular has grown rapidly in the space with acquisitions of regional distributors AmSan and JanPak in recent years. Retailer Staples has also been a big challenger with its increasingly aggressive push into the B-to-B space and expansion beyond office products into jan-san.
Industry fights government proposal to reduce jan-san vendors. If a current FSSI request for quotation proposal goes ahead, the ISSA, a trade association for the cleaning industry, says there may be negative repercussions for the industry. It would reduce the number of jan-san vendors on the GSA schedule to just 15, compared to the more than 1,000 now.
Customers demand more services. In the same AFFLINK survey, distributors said the main add-on service they were being asked to help end-customers with was floor care, followed by workloading, which allows facility managers to more accurately determine staffing levels, costs and cleaning needs to maintain a facility.ISSA now includes workloading as part of its Cleaning Industry Management Standard (CIMS) program. More distributors in this sector are offering training, as well, including how to use the cleaning supplies and equipment they sell.
Interline Brands acquired JanPak for $82.5 million, adding more than $200 million to jan-san sales for the MRO distributor.
In April 2013, it was announced that International Paper has agreed to explore a proposed merger between its distribution business, xpedx, and Unisource Worldwide Inc. Both sell facility supplies.
Average sales growth for the top 5 jan-san distributors: 1%