For 15 years, Jim Stone Jr.’s small retail store,
Sunshine Pool Co. in Pembroke, Mass., sold the same brand of
chemicals. Then two years ago, the manufacturer with whom he did
business approached him and said that prices would be increasing by
“They said it was going to be across the board for
everyone from Wal-Mart to us. But people were holding out at the
lower levels, so we did as well. It hurt our business,” says
Stone, who took over ownership of the 35-year-old company from his
parents four years ago.
Last year, the manufacturer again boosted prices 30 percent.
“At that point, we started looking elsewhere,” Stone
says. “It was a difficult, gut-wrenching decision for us. We
were loyal to our suppliers, and they were dedicated to us, but we
couldn’t shake our nose at a $25,000 difference in chemical
Stone’s situation is not uncommon. As chemical prices
increase and big-box retailers continue to dominate sales, pool and
spa industry professionals find themselves entering uncharted
waters. Today’s chemical sector is fraught with challenges,
but it is equally blessed with a number of opportunities.
Here’s a look at six forces shaping the market.
1 Steady, organic growth continues.
Manufacturers say pool chemicals experience an annual growth
rate similar to that of new pool and spa installations. SRI
Consulting, a Menlo Park, Calif.-based research and consulting
firm, forecasts that sales of pool chemicals will grow at a rate of
3.5 percent per year from 2005 to 2010.
“Increases in the number of swimming pools, along with
weather patterns, tend to impact chemical sales,” says
Charlie Schobel, vice president of global affairs for
Lawrenceville, Ga.-based BioLab Inc.
He predicts the next few years will see an extra jump in sales.
“The effects of Hurricane Katrina are still impacting sales
of pool chemicals,” Schobel says. “Because of the time
it will take to restore all the pools in that area, the
consequences of Katrina are expected to last for several seasons to
Others believe the single greatest influence on increasing
chemical sales is the retailer. In fact, pool and spa retailers
generate about 15 percent of their revenues from chemical sales,
according to a 2005Pool & Spa News
Those retailers report that trichlor is the No. 1 chlorine
sanitizer nationwide. It’s followed closely by sodium
hypochlorite, which is used heavily in the West, and calcium
hypochlorite, which is a Southern favorite.
“The consumer is visiting the specialty retail store
looking for direction and advice,” says Michael Moore, vice
president of marketing at Advantis Technologies in Alpharetta, Ga.
“The specialty retailer has credibility that exists from the
moment the customer walks through the door.”
Skyrocketing prices are squeezing retailers.
Despite the growth, a number of retailers and service
technicians are concerned about the steady spikes in chemical
“Pricing of various disinfectants has risen dramatically
over the past two years, following the price of oil, which has an
impact on raw material and energy costs,” says Jim Glauser, a
senior consultant at SRI Consulting, citing a recent report on
Jeffrey Sloan agrees. “It’s been a tough market.
The cost of products has definitely gone up, the biggest reason
being the high input costs,” says the director of the
disinfection program at the Chlorine Chemistry Council, a division
of the Arlington, Va.-based American Chemistry
“There’s also some competition from overseas
importers — China, in particular,” Sloan adds.
“It makes it challenging to be in the pool
According to manufacturers, anti-dumping duties imposed on
trichlor and dichlor in summer 2005 have increased the price of
many sanitizers. Yet they say those hikes were necessary to sustain
In the meantime, many seek to mitigate end-of-the-line costs
for family-owned retailers or one-person service
For those companies, the price increases have required advance
planning. “We have to buy in bulk to save on shipping,”
Stone says. “We’ve had to spend time forecasting how
much we’ll sell this month or next. It’s been difficult
making the adjustment. We must store more in our warehouse now,
too, so we had to find additional warehouse
Bob Fowler isn’t convinced that buying large quantities
early in the season is the best bet. “I did an early buy of
$20,000 worth of tablets in January 2006, and the cost of those
tablets just went below what I bought them for,” says the
president of Fowler Pool Service & Supply Inc. in San Diego.
“My wholesalers haven’t given me any good reason why.
The only tip I’ve gotten is that 2007 may be a good year not
to do an early buy.”
That frustration has companies such as Classic Pool & Spa
searching for new suppliers. “Our costs increased 40 percent
in the last two years,” says Suzanne Heim, marketing director
of the Gladstone, Ore.-based firm. “We were told the imports
from China and all the regulations are costing more. We had to
eventually change chemical lines to get a better
Loyalty almost always comes first.
situations such as Heim’s or Stone’s are rare. It takes
a lot for a small, family-owned operation to switch product lines.
That’s because for most professionals in the pool and spa
industry, loyalty is nearly as important as price when it comes to
“Even though brands are national these days, it’s
about what dealers grow up with,” Moore says. “You find
some who are loyal to a brand, some who are loyal to a certain type
of chemical, such as trichlor or dichlor. You still find many in
this industry who are loyal to their individual
For instance, throughout the ’70s, bromine sanitation
prevailed in the Midwest, while liquid chlorine was popular in the
Sunbelt. Most folks say that hasn’t changed much in the past
50 years. Advantis’ GLB brand, which was developed in
Milwaukee, continues to have a strong following in the Midwest,
while Atlanta-area manufacturer BioLab has a high concentration of
The same level of loyalty exists at the consumer level,
retailers say. “I’d say 80 percent of our business is
from 20 percent of our customers,” Heim says. “You see
them year after year. They buy their chemicals from us and, if they
move, they’ll make a point of still coming to us for their
new patio furniture or hot tub.”
Fowler says that many of his best clients are those who once
attempted do-it-yourself chemical care using products purchased at
big-box stores. “We get a lot of frustrated people who come
in with bags of unnecessary products,” he says. “Unless
you’re on site and able to analyze the whole backyard,
it’s difficult to do.”
Alternative systems drive innovation.
part by the price increases of traditional sanitizers, a number of
builders and retailers opt to promote the benefits of alternative
systems to their customers.
Ozone is particularly popular with hot tubs, while mineral-,
ion- and enzyme-based products draw some clients as well, according
to the Pool & Spa News survey. Sloan of the Chlorine Chemistry
Council believes UV disinfection systems are becoming popular in
the commercial pool segment.
The increase in attention to these products has led to an
abundance of other ones that enhance their qualities. For instance,
a number of manufacturers have introduced “saltwater
kits,” which bundle together the products needed to
supplement a salt-chlorine generator at start-up.
“Innovations are always driven by the needs of the
consumer, which usually come down to a desire for
simplicity,” Schobel says. “The developments of
alternatives in technology are driven by those same factors. As
companies gain an understanding of how to satisfy those consumer
needs and align their products accordingly, that will drive future
innovation in our industry.”
Multiuse specialty chemicals are more popular than
adds that multiuse products are a growing category. Also called
multiaction or multifunction, these are specialty chemicals that
treat a variety of water conditions with a single
Examples of these multiuse products include combination shocks
and algaecides, or solutions that clarify and introduce enzymes.
Some all-in-one products can even shock, buffer, clarify and kill
algae in a few hours.
More than 95 percent of retailers use at least one specialty
chemical. “With the multiaction products, as we educate
people and they use it more, it will become more prevalent,”
Heim says. “Each year, they grow in
Moore agrees. “It’s about value and time,” he
says. “They’ve always been available, but their
effectiveness and popularity has increased over the past three to
Still, Fowler is skeptical. “I have little interaction
with the multiaction products,” he says. “I like to
leave the expertise to the service tech in the field. What if the
customer doesn’t need a lot of clarifier? When they’re
bundled together in a single product, I may be getting more
clarifier than algaecide, and that may not be as
chemicals will be safe and environmentally
chemicals industry continues to evolve, manufacturers say products
will become more user-friendly, safer to handle and better for the
health of the environment and swimmer.
“There’s been a move from Class 3 chemicals to less
volatile products,” Moore says. “That’s coming
from retailers. They don’t want to store or handle these
Stone and Fowler agree. Fowler avoids the risk associated with
storing cal hypo altogether by not offering it to his clients.
Meanwhile, Stone is bracing himself for stricter storage safety
codes that his distributors are already taking on.
Part of the push for such products is the public’s
perception of chlorine. “There’s negative marketing
about the potential concerns with chlorine, and that’s a
challenge,” Sloan says. “There’s a perception
that chlorine can be an irritant — the smell, the burning
eyes, the itchy skin — which is more related to improper pool
maintenance than the chemical itself. But that’s pushing
companies to switch to something else.”
Heim hopes that a line is drawn at some point. “There is
so much to choose from out there,” she says. “I’d
like to see fewer, more effective chemical choices. Let’s get
one product on the market that can do it all. I think it’s
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