If you’re not a healthcare provider or a worker exposed to hazardous conditions, chances are you didn’t pay much attention to personal protective equipment (PPE). That all changed with COVID-19. Frost & Sullivan recently hosted a webinar on the almost $60-billion PPE industry, highlighting how the outbreak has changed the business going forward. As always, there will be winners and losers within this industry that includes such major players as 3M, DuPont, Honeywell, Moldex, and Cardinal Health. Sanjiv Bhaskar, Vice President, Global PPE Practice, offered his informed perspectives. Here are some key takeaways.
- Industrial PPE markets will experience a decline in revenue, but healthcare PPE will benefit from unprecedented growth. Rising unemployment and the overall economic impact of COVID-19 will result in a 3 to 6% drop in the industrial PPE sector, said Bhaskar. Healthcare PPE, however, will surge: In 2019, it had an 18 to 20% market share; that is projected to rise to 30 to 32% in 2020. Frost & Sullivan estimates 2020 revenue for healthcare PPE to be somewhere between $17 and $19 billion, compared with estimated 2019 revenue between $9 and $11 billion. Not surprisingly, given those numbers, Bhaskar expects to see industrial PPE companies to become more active in healthcare applications. Companies with a local manufacturing footprint (more on that below) and regulatory approval from FDA and other bodies will be best positioned to succeed.
- The consumer PPE segment is a potentially huge, untapped market to watch, according to Frost & Sullivan. Local and federal mandates to wear face masks will boost consumer demand, noted Bhaskar. Look for fashion houses to produce designer PPEs in the days ahead, he added. Creativity already has flowered in this regard—there are countless examples of whimsical face mask designs all over the internet.
- Interest in so-called smart PPE technologies, which had been languishing, may experience a revival. Health concerns and social distancing requirements may speed up their acceptance by employers and employees alike, according to Bhaskar. Think wearables that sound alerts when social-distancing guidelines are not respected or “disinfection tunnels in food plants, malls and so forth,” suggested Bhaskar.
- New alliances will be forged between OEMs and materials suppliers, and all manufacturers must consider domestic capacity, stressed Bhaskar. They will be under renewed pressure to shore up domestic production and surge capacities, stressed Bhaskar. “Find contract manufacturers within the country you are supplying,” he added. A poll taken among webinar attendees reinforced this message. When asked if the pandemic will force companies to repatriate more of their production of critical PPE products, 54% said yes and 36% responded maybe. Only 9% said no. One of the lessons learned from the pandemic is that the PPE industry must diversify its supply chains and reduce its dependence on a few countries, added Bhaskar.
- “We have experienced pandemics before,” noted Bhaskar, “but we didn’t learn from them. This time is different: The promise to build national stockpiles globally must — and will — be kept.” In that regard, companies that increase domestic production and build surge capacity for critical products will have a competitive advantage.
Lead image: AA+W/Adobe Stock