In early February, I attended the ever-popular  American Cleaning Institute (ACI) Annual Conference. This week, I am sharing with you all some insights that I’ve learned from that conference. There are valuable insights coming from companies across the cleaning value chain. It’s everything from ingredient suppliers, surfactants, enzymes, and fragrances to formulators and industrial consumer product companies. 

Topics discussed this week: 

  • Sustainability is a topic in every industry. Partnering is critical to creating innovation and helping support the sustainability journey. 
  • The importance of transparency. How to create transparency around products, their impacts, and what they do and what they don’t do.
  • Economic headwinds – As we enter 2023, a concern about the duration and impact of these headwinds on demand and profitability. 
  • Growth and innovation across the cleaning products industry. 
  • Being green and buggy – The impact of green and bio-based raw materials and formulations.

Tune in as Victoria shares all of the interesting key themes for the cleaning industry in 2023 from the ACI Annual Conference and a lot more juicy pieces of information that you need to know about this industry. 

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Five Key Themes for Cleaning Industry in 2023 from ACI Annual Conference

Welcome to The Chemical Show. This week, I am sharing with you some insights from the Annual Conference of the American Cleaning Institute, also known as ACI, which occurred at the beginning of February. It’s always a hotbed of insights from companies across the cleaning value chain. It’s everything from ingredient suppliers, surfactants, enzymes, and fragrances, to formulators to industrial consumer product companies. Many of them are big household names that we all recognize. 

ACI’s Annual Meeting sets the tone for the year, both literally and figuratively, as hundreds of companies come together and have thousands of meetings, plus panel discussions, industry discussions, networking events, and more. I have always loved attending this event, from my time leading global marketing at Shell to my days at Clariant to where I am today leading Progressio Global, which is a B2B consultancy focused on helping chemical companies get truly customer-centric in their marketing. A lot of the companies that I work with, and clients are part of the cleaning industry, especially the raw material side of the business. And, of course The Chemical Show podcast. 

Today, what I really want to talk about is the key themes that I heard through multiple conversations at ACI, which I think really sets the tone both for the cleaning industry, as well as the chemical industry more broadly. We’re going to talk about those themes and we’re gonna talk a little bit about how you and your company and other companies are responding. Those five themes are sustainability, transparency, economic headwinds, innovation and growth, and green and buggy.

Sustainability is the topic at every industry meeting I attend. ACI is no different. When you think about ACI and the products that its member companies produce, the entire value chain interacts very closely with the consumer, with individuals, and with you and me. Whether it be consumer products, laundry detergents, home cleaners, industrial cleaners, and other products, there’s a multitude of things that ACI and its member companies produce. These products all have close contact with people, pets, and pests. 

So sustainability has always been a core part of this being very consumer-centric, being safe, and recognizing the benefits of the products in the industry have always been critical. It’s still true today. Sustainability was a hot topic. And as I converse with different people and listen to different things that were talked about at the conference, there are different approaches but at the heart of this. It’s all about number one data and measurement, understanding the data, understanding the life cycle impact, having measurements and metrics around the energy impact, the sustainability impact, and the environmental impacts of the products, the processes, etc. It’s very science-based.

There is a clear recognition at multiple parts of the value chain that is really important to help customers and consumers. Share on X

Then, the third piece is partnering. This is something that we’ve been talking about a lot as I’ve talked with different folks on the podcast. Many of these are partnering to create innovation to help support their sustainability journey. Partnering is critical. Finding the right partner for you is such a critical thing. Then, when we look at the data and the measurement, the science, and how companies are approaching sustainability, a lot of it is getting really clear and transparent in what sustainability is and the sustainability, the profile, the impact of their company, their products, and that value chain. 

As somebody I talked to recently, it’s about telling the story, and owning your story before somebody makes one up for you. There are lots of conversations and topics on sustainability. One of the other things I really want to highlight is a consideration of the decisions that companies are making about where to insert sustainability, circularity, and green in the value chain. BASF spoke about this during the conference about, in their perspective, the most logical and impactful spot is at the front of the value chain. 

The feedstock is bringing in renewable feedstocks and sustainable feedstocks, and circular feedstocks, depending on what product we’re really talking about, and then allowing it to proliferate throughout the value chain. I think we’re seeing this in a number of different places, both from new entrants, and established entrants.  One of the big news items just prior to the conference was the deal that Shell struck with Henkel to provide tuner kilotons of raw material, a renewable feedstock that will go into Henkel’s North American laundry products. It’s a very significant deal. And that team was super excited. 

Cleaning Industry: People are attributing it to different places when 
we think about this economic impact, both inflation, and the effects 
of the Russia-Ukraine war. Then, there are inventory adjustments 
in many places, especially as the supply chain starts to stabilize.

 

The other piece that this segues into is transparency. Transparency has been really critical. And something that everybody talks about, even ACI itself and other companies talk about, is how to create transparency around the products, their impacts, and what they do and what they don’t do. One aspect of this is just the sustainability metrics and the framework, storytelling consistency being science-based. 

There is a clear recognition at multiple parts of the value chain that is really important to help customers and consumers and that customers in this case will be the formulators and then the consumers really align on clarity of the metrics, the sustainability, the life cycle impacts, etc, of the products in that value chain. We’re recognizing that formulas at the end of the day are pretty complex. We’re figuring out how to bring those different components in, which is critical. Univar is doing some work around this space. And Kelly Gilroy, who you guys have heard on the podcast before talked about this about the framework that they’re applying to help their wide variety of products and a wide variety of partners and customers bring their data together. 

The other interesting piece is around ingredient labeling, which has been a real focus for ACI for several years. And this year, they are rolling out their new database – what cleaning ingredients do. There’s real information that can be applied the same across companies, no matter where you are in the value chain, about what these ingredients do, how they’re used, what it means in their formulation, and what it means to the individual who at the end of the day may be interacting with it. 

The third piece that was a clear topic of conversation is economic headwinds. As we entered the conference, Dow had just announced low earnings and that it was making significant cuts to its workforce. Everyone was concerned about demand. Certainly, what we’ve seen is that there was a significant slowing in Q3 and Q4. And January started to seem to be a little bit sluggish.  I think people are attributing it to different places when we think about this economic impact, both inflation, and the effects of the Russia-Ukraine war. Then really inventory adjustments in many places, especially as the supply chain starts to stabilize. 

So we’ve gone through a period of really volatile supply chains. People felt like they had to hold a lot more inventory than we jumped into high inflation and the inventory is high or low, and we’re seeing product prices move around. There’s a certain perception that some of these buying habits are going to stabilize, as the supply chain stabilizes, as the economic environment stabilizes, etc. Nonetheless, people were tempered in their view of the economics in the supply-demand picture for 2023. Certainly, it’s in the first part of the year. There’s also positivity coming in. I think participants are seeing what I’m seeing. Are we reshaping in terms of what those demand profiles look like, and in terms of stabilization? 

There's a lot of positivity about growth, and innovation in the industry. Share on X

I think people are feeling pretty positive as we go towards mid-year that we’re going to see a strengthening of the economic environment, particularly for the cleaning products industry in the chemical industry. I see some strengthening in that. Certainly, as we see the earnings reports coming out from the end of 2023, some are low and then some people are reporting pretty good economic earnings. So I think we’ve got a mixed bag, concerned about these economic headwinds. It is something that people are going to be watching, I’m going to be watching my company’s watch as we go forward into the mid-year and towards the end of the year. 

The critical with this is that companies can and should be doing the whole aspect of looking ahead, planning for that next milestone, and looking for those early indicators that are going to indicate the forward plan versus focusing only on current business. Companies that are doing this, and we’re seeing this happening are gonna ride through this natural bumpiness. That happens regularly, whether we recognize it or not. We are going to move through this bumpiness pretty well, facing those headwinds as well, making it happen.

There were concerns about the economics. What we’re still seeing is growth, a lot of positivity, about growth, and innovation in the industry. That’s my fourth thing. Growth is clear. We are seeing significant investments across the industry. Talk to several people. This stuff tends to be public. So Exxon is making investments and they’re bringing some new products to market. Shell is making some investments. Many other companies are investing in feedstocks, surfactants, raw materials, intermediate parts, etc. People are only investing because they see the demand. As the economic environment improves, as you just look at our long-term picture for the chemical industry and for the cleaning products industry, growth is clear. 

The other piece that goes along with this is innovation. Product innovation is starting again after a couple of years of COVID-related challenges when innovation didn’t happen so much. I think that’s really interesting because innovation has been a hot topic. Certainly, we’ve talked a lot about this across The Chemical Show podcast as I’ve interviewed various guests, but to a certain degree, it has been harder to innovate. We’ve changed our work patterns. We’ve had tremendously different stressors and different concerns over the past couple of years. 

Cleaning Industry: Sustainability is the topic at every industry meeting I attend. 
ACI is no different. When you think about ACI and the products that its member 
companies produce, the entire value chain interacts very closely with the consumer, 
with individuals, and with you and me. Whether it be consumer products, 
laundry detergents, home cleaners, industrial cleaners, and other products, 
there's a multitude of things that ACI and its member companies produce.

 

What we’re seeing and what I was hearing coming out of the conference, from a number of different companies that hit different parts of the value chain is that innovation is really critical. They’re feeling really positive about it. We’ve seen a lot of innovation, but where we’re starting to get to is more formulated innovation and across that entire value chain, there are new products, new formulations, and new ways of working, supported by digitization as people are getting a grasp on it really supporting this. But growth and innovation are absolutely key themes for this industry going for 2023 and going forward. 

My fifth key theme that came out of it is green and buggy. So we have been talking about green and bio-based raw materials and formulations for several years. You guys have heard some of these folks on the podcast, like the Locus performance ingredients, Integrity Biochem, etc. They’ve been innovative. So it ties back to that prior theme of innovation, but also really positive advances in the green and renewable feedstock. Both from people that are new entrants, relatively new entrants coming in, as well as some established entrants. And then we’re seeing a lot of partnerships. This all kind of ties together from a fermentation perspective. 

We’ve got Locus. We’ve got Hala firm, which is partnering with Sasol, again, just prior to ACI, they announced an expansion of their collaboration, which is, frankly, a positive sign for the industry, IBC. Then, Novozymes was there. They have been biobased for most of their history. Sometimes, we want to think that this biobased is new. It’s not new. It is certainly a focus and it supports my first key theme of sustainability and transparency. If we look at this innovation across the value chain, it all ties together, green and bio were there. 

The other thing is buggy. At the end of a conversation when people were talking about sustainable innovations, and it was all about bugs, and the bugs in their products. I don’t really know. We’re gonna have to go take that out and if I find it. I’m gonna link it to the blog post that goes with this article or goes with this podcast. Again, it is also part of this green, natural, and renewable innovation that we are seeing and going to continue to see particularly in this part of the industry. When we think about the cleaning industry, green, renewable, and buggy have been important. 

So those are my themes. Sustainability and transparency go together very well. Economic headwinds tempered by growth and innovation, and then green and buggy. We’ll see where this goes. I appreciate you guys listening today. Tell me if you were there, what stood out for you as you engage with your customers, suppliers, and other counterparts at ACI this year? Shoot me an email, or leave a comment on LinkedIn or Instagram. We’d love to hear from you. Thanks for listening today.

 

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