One of the consumer staple industries that can be considered as recession-proof is the home care industry. Manufacturers in this sector produce a wide variety of goods for various categories including laundry care, air care, surface care, toilet care, insecticides, dishwashing, polishes and bleaches.

According to a report by Euromonitor International, laundry alone accounts for five out of $10 spent on home care globally and it dominated the home care market for the period from 2005 to 2010. As a non-food staple, sales of laundry detergents and fabric softeners are booming in emerging markets since washing machines are becoming one of the must-have household appliance of the rising middle-class.

The five growing market for washing machines and dishwashers are Brazil, Russia, China, India and Mexico. However these countries accounted for only 2% of the unit sales of dishwashers compared to 42% of the unit sales of home laundry appliances. Dishwashing machines sales are lower in emerging markets because it is easier and cheaper to get domestic service. Between 2005 and 2010, home care growth in emerging markets was 55% relative to only 6.1% in the developed markets.

Sales of air care products, dishwashing machines, surface care products, polishes tend to be much higher in developed countries due to the health and hygiene consumption culture more prevalent in these countries. Consumption of these products in emerging countries may also increase as the standard of living increases.

How to profit from the strong growth in the home care industry?

Major multinational companies dominate the home care market. Hence investors can consider investing in these firms directly to profit from their exposure to both developed and emerging markets.

A brief overview of the Top Five Multinational Home Care Manufacturers follows:

1.Procter & Gamble (PG)
Cincinnati, USA-based P&G is the world’s largest manufacturer of home care products. In addition to the US market, P&G has a strong presence in most emerging markets. Some of the brands owned by P&G include Tide, Febreze, Downy, Dawn, Ariel, etc. With a market capitalization of $181.0 billion, P&G’s stock is trading closer to its 52-week high of about $68. The current dividend yield is 3.19%.

2.Reckitt Benckiser (RBGPY)
UK-based Reckirr Benckiser has operations in more than 20 countries and sales in 200 countries. Reckitt is the owner of 19 global brands including Lysol, Calgon, Woolite, Finish, Dettol, etc. The company is also part of the FTSE 100 Index. The OTC traded ADR closed at $10.19 last Friday and the dividend yield is 3.76%.

3.Henkel (HENKY)
Founded in 1876, Düsseldorf, Germany-based Henkel derives the majority of its revenues from western Europe and has a weak but growing presence in emerging markets. Some of the Henkel-owned brands are Purex, Mir, Soft Scrub, Bref, etc. Henkel (HENKY) has a $12.0 billion market cap and closed at $47.12.

4.Unilever (UN, UL)
Anglo-Dutch company Unilever operates in more than 100 countries and has sales in 180. Unilever is well established in many emerging countries with many popular brands such as Sunlight, Surf, Comfort, etc. The Netherlands-based division trades with the ticker UN on the NYSE and the UK-based division trades with the ticker UL. The current yields of UN and UL are 3.87% and 3.94% respectively.

5. SC Johnson
US-based SC Johnson is a family owned private company and owns many powerful brands including Windex, Shout, Drano, Glade, Oust, etc.

Sources: The Euro Crisis and its Impact on Home Care and Home Care Review: The Strategic Implications of a Recessionary Global Market, Euromonitor International

Disclosure: Long HENKY