SPC Releases Market Analysis of Pest Control Market — 2006 Season

MENDHAM, N.J. –  Specialty Products Consultants (SPC) has completed its seventh syndicated market analysis of the United States professional pest management industry.

This past year was unusually challenging for pest control operators, manufacturers, and distributors alike. The structural pest control industry generated an estimated $6.73 billion in total service revenue in 2006, virtually unchanged from the prior year. Moderate revenue growth from residential and commercial pest services could not offset a sluggish pre- and post-construction termite market. The weak housing market, coupled with an unusually weak termite swarm season across much of the country, resulted in a 2.0 percent decline in the total number of post-construction termite treatments preformed this past year. The pre-construction termite treatment market was especially hard hit by the more than 17 percent decline in sales of new homes in 2006 compared with 2005.

For the first time in recent history, total manufacturer level revenue declined from the prior year as well. The weak termite season, in combination with the expansion of generic product offerings, resulted in a ‘one-two punch’ for pesticide manufacturers and distributors. Although generic pesticide products accounted for just 5.4 percent of the total manufacturer level sales this past year, they forced considerable downward pressure on the price of compounds like bifenthrin and imidacloprid. “Given the tough year we just experienced, and the outlook for 2007 and beyond, we believe that a consolidation of the market is needed across all channels,” said SPC President Gary Curl.

In addition to providing a quantitative assessment of service revenue and pesticide product usage, the study measured key attributes of leading suppliers to the industry. The impact of the weak housing market, a disappointing termite swarm season, new active ingredients, generic product introductions, and changes in distribution are just a few of the competitive forces analyzed in this report. More than 800 owners or managers of pest control companies were personally interviewed for this study.

Founded in 2000, Specialty Products Consultants, LLC, headquartered in Mendham, New Jersey, is a market research and business development consultancy dedicated exclusively to the specialty products industry.