4/22/2011 Bedbugs Boosting Sales At United Industries: Outbreak Lead To Company Developing More Products
A pest in the bedroom has been a boon for United Industries.
Uttering the word “bedbug” is enough to send shivers through the spines for many people at the thought of the minuscule blood-sucking insect living in mattresses, behind baseboards and under carpets. While bedbugs are not known to transmit diseases, the insects are a nuisance Americans don’t want in homes or businesses.
When bedbugs began to mount a resurgence nationally in late 2007, United got to work developing a product to combat the tiny reddish-brown insect that spans between 1 and 7 millimeters.
United, a local division of Madison, Wis.-based Spectrum Brands Holdings, drew on its portfolio of 260 registered products with the U.S. Environmental Protection Agency — more than any other consumer pesticide company, United touts. It quickly settled on the chemical compound pyrethroid to kill both bedbugs and fleas and launched an aerosol spray under the Hot Shot brand name in January 2009.
“Our portfolio … gave us access to a quick entrance in the market, and we were able to go from product concepts to a launch in six months,” said Randy Lewis, United’s vice president and general manager. He’s based in the division’s operational headquarters in St. Louis County.
Because of increasing demand, United’s Hot Shot bedbug line has expanded to five products, including a portable 3-ounce spray introduced this year for bedbug encounters at hotels or wherever bedbugs bite.
United’s bedbug line is the company’s fastest growing product under the 56-year-old Hot Shot brand, which also includes products that kill ants, wasps and roaches.
“There’s something about an insect in your bed, while you’re sleeping, that’s feasting on your blood,” Lewis said, describing the deeply negative emotional response people have to bedbugs, which in turn drives sales.
United’s bedbug products’ revenue tripled last year compared with 2009, and the company is developing two new products that will be available at Lowe’s, Wal-Mart and Home Depot stores next year.
United does not disclose revenue by brands, but the division’s net sales increased 6 percent in its 2010 fiscal year to $341 million, compared to 2009.
United first had to overcome embarrassment some consumers had buying the product.
“There was a reluctance at first from consumers who didn’t want to put it in their cart, ” Lewis said. “We’ve gotten past that stigma.”
United’s products, which sell for between $3 and $10, are designed for those looking for a cheaper option than calling an exterminator, said John Pailthorp, United’s division vice president of marketing.
To help these do-it-yourselfers, United invests the bulk of its marketing dollars on in-store displays and what it calls “product knowledge sessions” at retail locations to show consumers how the products work, he said.
United faces competition in the bedbug category, with more than 300 products registered by the EPA to kill bedbugs. United estimates its market share exceeds 70 percent, based on Nielson data and internal management estimates. Its major competitors include Ortho, which is owned by The Scotts Co., and Homax’s Black Flag brands.
FEEDING ROACHES
In an office building with windows overlooking the Earth City Expressway, a nearly empty laboratory room was filled with a fog-like substance earlier this week. United research chemist Christy Van Preter peered through a window to observe the height of a plume from the company’s bedbug fogger product, which is designed to reach crevices that are difficult to reach with liquid sprays.
Chemists and research biologists test the products at the new research and development center that United Industries moved to this month from a smaller location a mile away in Bridgeton.
United spent about $1 million on the R&D, marketing and sales operations center in Earth City over the past year as well as about $7 million to increase capacity and other manufacturing upgrades at its 330,000-square-foot manufacturing complex near Page Avenue and I-170 in Vinita Park, where all of the bedbug products sold nationally are made. United’s other brands include Spectracide, Repel and Cutter, which also are produced locally.
United has been bulking up its workforce, adding 47 jobs at its St. Louis facilities in 2010, and an additional 18 jobs in 2011, bringing its total St. Louis area workforce to 286. The increase is because of increasing sales of its bedbug and other products.
United doesn’t use live bedbugs in the product testing at its R&D lab. It leaves that work to a third-party contractor that specializes in insects, such as fire ants and bedbugs, that pose high contamination risks.
But the division does have lab rooms stocked with roaches, spiders and mosquitoes for testing purposes. On one wall of a lab room, a rack of shelves are stacked with nearly a dozen 2-feet-high orange plastic containers filled with hundreds of roaches. This week, Travis Wood, a research biologist at United Industries, placed more than a dozen cockroaches in glasses affixed with lids. “Time to feed the roaches,” he said, describing his plans for the afternoon.
No silver bullet
The EPA is in the midst of collecting data nationally on bedbug infestations, but Kris Lancaster, an EPA spokesman, said St. Louis isn’t among the top 10 infested cities in the U.S.
Based on sales of its bedbug products nationally, United says St. Louis ranks in the middle of the top 200 metropolitan markets for bedbug product sales.
Bedbugs have been staging a comeback ever since the pesticide DDT — which killed mosquitoes and bedbugs — was banned in the U.S. in 1972. The increase of people traveling internationally in recent years also is a contributing factor in the re-emergence of bedbugs, particularly in urban areas, said Mark Lesher, environmental scientist with the EPA’s Kansas City office.
“It started at large travel hubs such as New York, Philadelphia and Washington, D.C., and has been moving west to Chicago, and places like Denver,” Lesher said.
In 2009, government agencies including the EPA, the U.S. Department of Housing and Urban Development and the Centers for Disease Control and Prevention convened a bedbug summit to study the problem and look for solutions. The second summit was held in February.
So far, no single solution has been identified to eradicate bedbugs.
“There’s no magic bullet right now that can solve the problem,” Lesher said.
The EPA recommends first using non-chemical methods to try to kill bedbugs, including washing and drying bedding and clothing in high temperatures, and turning up the heat in infested rooms to 120 degrees for up to six hours.
If an insecticide is used, Lesher said consumers should look for products that list bedbugs on the label. Lesher also recommended visiting the EPA’s website, cfpub.epa.gov/oppref/bedbug/, to search for the appropriate EPA-registered product.
Still, some bedbugs have become resistant to chemicals in bedbug products.
“You might find a population in Springfield, Mo., that is resistant to the chemical that works fairly well in other areas,” Lesher said.
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