Category Analysis: MRO & Safety

The MRO & Safety market has provided an opportunity for diversification that some resellers have been quick to exploit and it's looking like their foresight may be paying off.


AS traditional OP suppliers look to broaden their scope and diversify into new markets, the maintenance, repair and operations(MRO) and safety sectors have caught the eye of many, particularly with businesses now increasingly looking to buy a complete range of products from one supplier. Banner, part of UK contract stationer office2office (o2o), is a prime example and has been expanding its MRO & Safety portfolio over the last two years.

Richard Costin, Managing Director of Banner Business Services, says: “We’re no longer an office supplier, we’re a workplace provider, with our range extending far beyond traditional office stationery – it now includes everything needed to run business premises, from office, warehouse and kitchen to washroom, mailroom and canteen.” He adds that this is in direct response to customer needs: “They told us they wanted to be able to buy everything from one place and we’ve been quick to respond to that.” In the antipodes, Australian reseller Officeworks also spotted the opportunity and has expanded its business in this direction.

Scott Clarke, Officeworks Buyer for Safety, says: “We’ve worked hard to develop our safety category as a direct result of legislative workplace changes and the increasing costs of workplace injury. A key focus is assisting our customers with the achievement of safety compliance.” Overall, the sector seems buoyant too. Companies specialising in MRO have weathered the economic storm and are posting impressive sales figures. Keeping your workforce safe can never be taken lightly, of course, but now that businesses have more resources at their disposal again, they are refreshing and updating their safety equipment and companies that can supply these products are benefitting.

Sector bellwether

US-based WW Grainger is a massive player in the global distribution of over 900,000 MRO and safety products and must be viewed as an important bellwether for this sector. It’s reported strong US sales in the first quarter of this year and CEO Jim Ryan said at the time: “We are particularly encouraged by the performance of our US business and online sales in both Japan and the United States continue to be strong. Despite near-term economic headwinds in Canada, we are very optimistic here also.” Banner’s Costin is also pleased: “Site and premises management is a new category we’ve invested in this year and we’re seeing strong sales growth here.” He also views the company’s catering offering as an important new area: “We recognised that every workplace needs catering supplies and equipment; we’ve got everything from kitchen to front-of-house products and initial sales have been really successful. But kitchens can be really hazardous places, so health and safety are vital and that’s an essential part of our new offering.”

Safety as well as MRO is also an area where German adhesives manufacturer tesa is seeing good results through OP channels with its specialist range of products, particularly marking, security, anti-slip and repair tapes. The opportunities within the MRO & Safety sectors are clearly there for the taking, and those that have made the step already are beginning to see the benefits.

Batteries form a crucial part of the MRO market. Any portable electrical device needs a battery, plus they’re also used for temporary power back-up in case of mains failure. Duracell is the market leader for batteries, with around 37% market share by value and it’s seeing steady global growth of 2-3% per year.

Kenyatte Nelson, EMEA External Relations at Procter & Gamble (manufacturers of the Duracell brand), sees the latest Duracell Ultra battery and Power Mat, a wireless mobile phone charging system recently launched in the US, as key innovations driving sales in this sector. Despite increasing awareness of green issues, alkaline disposable batteries still represent around 85% of sales in Europe. However, improvements in technology mean rechargeables are more and more seen as a viable option. “Previously batteries would take hours to charge and it you stored them, they’d be flat again when you wanted to use them,” says Nelson. “StayCharged technology means they’ll retain their charge for six months and fast-charging means batteries can now be recharged in the time it takes to have a shower. This makes them so much more convenient.”

Rival manufacturer Rayovac is also seeing sales growth and has recently introduced a range of Portable Power chargers for recharging products such as mobiles and tablets on the go when no mains power is available. Jessica Yurchich, Rayovac Assistant Product Manager, believes this is an important new sales area: “With increased use of portable technology and the need to have devices constantly charged, we expect to see this market growing rapidly as users become aware of these technological advances.”

Yurchich has also spotted a growing clamour for batteries and battery-powered products from OP resellers: “They’re demanding batteries and torches more and more. As they look to emerging markets such as MRO & Safety for growth, they are capitalising on the new business these channels bring them.” She adds: “Many leaders in the industry see OP dealers as a threat. They are poised with the salesforce, infrastructure and products that make them extremely attractive to all end-users.” Duracell’s Nelson agrees: “Our products are sold across a variety of retail and B2B channels and OP resellers are an important sales outlet. With our partners in the office supplies sector we’ve been able to develop the business model and create new sources of income for our customers.”

Safety First

OPI talks to Walter Johnsen, CEO of Acme United, about the global market for first aid kits – a key component in the safety category – and its recent acquisition of First Aid Only.

OPI: How is the first aid market doing and what’s currently fuelling demand?

Walter Johnsen: The market is looking great and the main reason for that is concern from businesses for the safety and well-being of their employees. If an accident happens, they want the equipment on hand to deal with it. Also, as the global economy picks up, so does industrial output – more houses get built, petroleum production increases, etc. Sadly, this can mean more people get injured.

OPI: How do different working environments affect the type of first aid kits required?

WJ: The requirements for first aid in, say, a school vary considerably from those needed on an offshore oil rig. We sell tailored kits for every type of situation. For example, we supply Saudi Airlines with their own kit to deal with airborne accidents, be that burns from spilled coffee or cuts and bruises. But a kit for a restaurant, with the probability of more severe burns and deeper knife injuries. plus the need to quickly clean up blood spills, will be quite different. A first aid kit for a fracking site, meanwhile, will contain specialist equipment that you just wouldn’t need in a standard office environment.

OPI: How do regulatory requirements for first aid kits differ around the world?

WJ: They vary enormously. The requirements in Germany, for example, will be quite different to those across the border in France. In North America it’s the same – US school kits can contain medication, but in Canada they can’t. Having that specialist knowledge of different regulatory environments worldwide and the ability to tailor the product is key to selling into those different markets.

OPI: So how is the market for selling via OP channels changing?

WJ: Overall, we’ve seen growth in the sale of first aid kits of about 20%, but it’s substantially higher in office channels. OP suppliers are already in contact with all the industries of the world and they’re diversifying and deepening their range of first aid products, with bespoke kits designed to suit each industry’s requirements. They all need something different. There’s also a tremendous opportunity for supplying refills. For every dollar of kits we sell we see an additional dollar in revenue from refills as items are used, expire or require upgrading due to technological advances. Wound dressings, for example, have improved greatly as they’re now employing advances originally developed for the military.

OPI: You recently acquired the assets of First Aid Only. What were the main reasons behind that purchase?

WJ: First Aid Only was the expert at ‘consultative selling’. The company wouldn’t simply sell a first aid product, but would also provide the training on how to use it. We’ve now got access to that expertise and the knowledge to sell tailored ‘smart compliance kits’ that not only meet, but exceed the required regulations – be that kits for the medics in soccer stadiums or those needed for survival in harsh environments. We’ll also be moving more production to First Aid Only’s facilities on the West Coast of the US, giving us better access to markets there and across the border in Canada.