Ecolab Inc. executives are studying baby boomers and like what they see.
Of the nation's 76 million baby boomers, 10,000 turn age 65 every day and will continue to do so until 2029. Thousands are retiring, selling houses and opting for upscale senior housing with hotel-like amenities.
They're also making a mess, which is a big opportunity for the St. Paul-based maker of sanitizers, detergents and disinfectants.
The senior citizen arena is "where we see future growth for us. The long-term care industry is one we have served for a long time, but the industry is growing," said Leah Larson, Ecolab's long-term care marketing director.
The U.S. market for cleaning and sanitizing in U.S. long-term care centers is roughly $600 million today. "We expect this market will be more than $1 billion by 2025," she said. "The future is tied to the aging population."
The sector is already a sweet spot for Ecolab's $4.2 billion institutional division. It has supply contracts with half of the country's 30,000 senior living communities. The niche includes a wide range of structures — from independent-living apartments, to assisted-living, memory care and rehab centers and even hospice units — all of which have to be vigilantly cleaned and sterilized several times a day, especially where food is prepared and served.
U.S. senior housing occupancy rates reached 90 percent during the second quarter. That's the highest level since 2008, according to the National Investment Center for the Seniors Housing and Care Industry (NIC).
Separately, construction of senior independent-living apartments and assisted-living centers has bolted since hitting a trough in 2010. Mild declines occurred in 2013, but construction is rising again in 2014. Specifically, NIC found construction booming in Miami, New York, Dallas, Houston, San Antonio, Atlanta, Chicago and Denver.
National players such as Ecolab customers Holiday Retirement; Sunrise Senior Living; Life Care Services, and newly merged behemoths Brookdale Senior Living and Emeritus Corp., all report renewed demand for senior housing.
Ditto in Minnesota and Wisconsin. The Waters of Plymouth opened a year ago. This spring, Presbyterian Homes and Services opened a large senior complex in Wayzata. In August it broke ground on a senior living complex in Menomonee Falls, Wis. In the spring, Shoreview-based Ecumen will break ground on a five-story senior complex in Minneapolis's riverfront neighborhood.
Jim Janicki, marketing director for Ecolab customer Hillcrest Health Services in Nebraska and Iowa, said, "We are seeing intense growth just because of the number of people who are turning 65 every day."
In 2008, Hillcrest housed 450 seniors. Now it houses 1,000 seniors and that will go beyond 1,200 next spring when construction finishes for its new Grand Lodge in Papillion, Neb. The lodge will offer 102 independent living apartments for active seniors, "cottages" for 62 memory care patients and a short-term rehab residence for up 22 seniors who are recuperating after a hospital stay.
The Grand Lodge will also have a fine dining restaurant, a bistro, a pub, a movie theater, a pool and spa — all facilities Ecolab serves. "With our population, germ control is very important to us. So we use Ecolab for both our culinary and our laundry chemicals," Janicki said. "You can imagine how fast an illness could spread with the number of people we feed daily and in the nursing care environment … if we didn't wipe down all the surfaces."
Ecolab wants to add more services and products, such as pest elimination and its line of environmentally safe cleaners.
"We are positioned to offer a complete range of services," Larson said. "We want to make sure that food is safe and served on clean dishes. We also want to make sure that linens are clean and compatible with residents' skin."
If Ecolab gobbles up more market share it will need to hire more workers. Right now, 3,000 service workers cater to Ecolab's industrial division that caters to hotels, restaurants and nursing homes. If the seniors segment continues to grow as expected, "we will expand the size of our field team," said spokesman Roman Blahoski.
Some observers suggest Ecolab shouldn't expect instant growth.
"What people don't realize necessarily is that the average age of our community is 85 years old and the baby boomers aren't there yet," said Maribeth Bersani, senior vice president of public policy for the Assisted Living Federation of America (ALFA).
The oldest baby boomer is just 68 years old. ALFA research found 5.7 million 85-year-olds resided in U.S. assisted living centers in 2010.
"By 2050, there will be 19 million such people," Bersani said. "So there will be growth, but it will take awhile."
Dee DePass • 612-673-7725
