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Growth Potential: Tapping into Promising Laundry Markets (Part 1)

CHICAGO — Whether it’s obvious or not, opportunities are beginning to blossom after the long dry spell experienced by the U.S. economy. Don’t let lamentations on the state of “today’s economy” fool you: Steve Kallenbach, director of market solutions at textile supplier ADI American Dawn, says that phrase more often than not keeps people from looking more closely at the economy to try to identify emerging opportunity.

In a recent Textile Rental Services Association (TRSA) webinar titled Untapped Market and Product Opportunities, Kallenbach expanded on his thoughts on the economy, and how commercial launderers can tap into the multitude of business opportunities in burgeoning industries in the coming years.

It can be tempting, he says, to look at unemployment rates to determine the health of the economy, but that can be misleading. If you’ve followed the gross domestic product (GDP) lately, you’ll notice that in 2014 it was back up to where it had been in 2005, before the recession hit—when things were steadily climbing upward.

“Right now, the economy is actually growing at that same speed,” says Kallenbach. “Our economic outlook is mostly clear and sunny.”

So where are the sweet spots that operators should be trying to locate and build on?

To find them, you’ll need to look at the growth related to the industries that commercial and industrial laundries serve. To better define the opportunities in various segments, Kallenbach lists four main areas of interest: industrial (manufacturing, automotive and food/pharmaceutical manufacturing), hospitality (lodging, hotels, spas and health clubs), food and beverage aka F&B (restaurants, catering, etc.), and healthcare (acute, non-acute, sub-acute).

OPPORTUNITIES IN INDUSTRIAL

Kallenbach pinpoints several areas of growth for the industrial segment. Occupying one of the biggest is flame-resistant and reflective wear, allowed through an increase in post-recession construction.

“Flame-resistant and high-visibility [apparel] have probably never been a bigger opportunity for you,” says Kallenbach. And while high-visibility apparel is a given for workers at airports and in low-light situations, even daytime workers are finding benefits in it and driving demand in segments that employ roadside workers, parking attendants and even electrical workers. There’s also demand for the combination of flame-resistant and high-visibility, though it will require some investment to enter that market.

“It’s expensive to get into because these are $100 wholesale items,” says Kallenbach. “But it’s not a commodity product. There are very few people who have entered that market, so if you’re so inclined and you have the capital to do it, that’s a great spot to be in where you have a lot [fewer] competitors.”

Consider outfitting workers in the non-dealership automotive segment, too, such as those who work in body shops or specialty car shops. Why this segment, specifically? It comes down to changes caused by the recession.

“When you have an economic decline, typically you have [fewer] car sales. When you have [fewer] car sales, you actually have more car service dollars, because people are keeping their cars and fixing them up.”

He also sees tremendous growth in food and pharmaceutical manufacturing within the industrial segment.

“I guess our society will never have enough drugs,” he says, and adds that demand for cover garments such as lab coats in a variety of colors will continue to grow alongside the swelling of the healthcare segment.

But don’t neglect the ladies—Kallenbach says it’s a great time to bring female uniforming capabilities to center stage.

“The purchasing power is really more in the female hands right now,” he says. “I think it would be better for our industry to say [that] we focus on building and supplying comfortable, fitting uniforms for females that are design-friendly as well. And, of course, we can fit all the male workers because we have for many, many years.”

Some regional preferences continue to provide rental opportunities for laundries. Blue jeans, for example, are a hot item in states like Texas.

“The beautiful thing about renting cotton and blue jeans is that as they wear down—people don’t want to turn them in and get new,” says Kallenbach. “They like them.”

One of the newest opportunities available to laundries comes out of the microfiber revolution. Microfiber products have come a long way since they were first introduced, and now, Kallenbach says, “not a human in the U.S. doesn’t know what it is.” That’s because it’s a great overall towel for cleaning, and organic growth can come from the desire to upgrade to a better-performing towel made of this material.

Kallenbach also urges operators to consider giving more thought to direct sales of their typical rental items, since there’s the potential for more growth at a lot lower cost, and since “those markets are looking for those answers.”

Check back Tuesday for Part 2, examining opportunities in hospitality, and food and beverage!

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(Image licensed by Ingram Publishing)

Have a question or comment? E-mail our editor Matt Poe at [email protected].