Steady at the helm

Reminiscent of the iconic shots of riverboats navigating the Rhine, the German laundry and drycleaning sector is making steady progress and is now seeing steady growth thanks to increased customer demand and improvement of economic situation in the country, compared with 2022.

Last year was generally tough for the German economy in general and its laundry and drycleaning sector in particular. That was mainly due to a significant rise in costs, caused by the Russian invasion in Ukraine and the consequences of Covid-19. While costs still remain high this year, most of the major players interviewed here said they expect better results this year.

Many have prepared for more active expansion in the local market, already in the second half of the year, with the aim to remain competitive in Germany’s highly competitive market. One such is Kannegiesser. Joachim Rauschmaier, director of sales at Kannegiesser comments: “The year 2022 was one of our most successful years regarding the investments that were made in new equipment in Germany. That includes investments in complete new laundries, but also in many individual projects.

“At the moment we see a high focus on automisation in German laundries, especially towel feeding by robots, for example the consisting order intake of complete systems like the RFT-XMFs- Vecetura solutions. The need for CO2- footprint reduction creates high interest in investing in modern press- and PowerDry-technology. We also see an increasing demand for efficient washer extractor technology, especially due to our unique Active Process Control technology, which has a quick ROI.”

Challenges

According to Rauschmaier, despite significant successes, the company still faces a number of problems in the domestic market. “Right now, we are all facing the same challenges on either side of the fence, no matter if you are a supplier of machines or the operator of a laundry business. The demand for hygienically clean linen is growing, but the costs to produce this linen are also growing tremendously, whether it is the cost of energy and labour or the investment in modern machinery. However, we have no choice but to invest in modern manufacturing methods. This applies for the machine manufacturers, as well as for the laundries.”

In the meantime, many German textile care market paraticipnts remain less optimistic, regarding the future prospects of the market.

Andreas Schumacher, managing director of the German Textile Cleaning Association (DTV) told LCNi that most German textile service providers, laundries and drycleaners, have experienced three years of crisis, which in some aspects is still ongoing.

According to Schumacher: “First of all, turnover in the years 2020 to 2022 had plummeted due to Corona pandemic measures, especially in hotel laundries and dry cleaners in the private customer business. During this time, some businesses had to close despite Corona aid schemes. The Ukraine war and its consequences then hit an already struggling sector, especially due to the extreme increase in gas and electricity prices. As a result, more companies had to close down, so that in the meantime the industry is hardly able to process orders and there is a lack of capacity.

“In addition, there is an increasing shortage of staff - both skilled and unskilled workers, as well as trainees. With the increase of the minimum wage by 20 per cent in 2022 alone and with delays in energy subsidies, politics has done its bit to put undue strain on the sector. In October 2022, according to an association survey, one third of the companies in the sector feared having to close their business due to the cost increases. As a result, the industry’s prospects at the beginning of the year were subdued. However, our most recent business climate survey from March is a bit more optimistic. It shows that 39% of respondents expect growing turnover in 2023 compared to 2022. 19% expect decreasing turnover».

As Schumacher adds: “In general, the industry sees a growing market for textile services – not least because the overall political and societal climate supports a circular business model like ours.” There are some obstacles, according to DTV, which prevent more active development of the industry:

• A development that has already been apparent for several years is the lack of staff, which is now having a massive impact on the turnover of companies. Turnover could be significantly higher with sufficient staff.
• Overall, the companies have to cope with cost increases in all areas: Wages, energy, textiles, chemicals. Companies could not completely pass these on to their customers. DTV cost index for textile services increased from 112 points at the end of 2021 to 131 points at the end of 2022. The 17% increase in costs represents the highest increase since the cost index was introduced.
• Apart from that, the bureaucratic burden on companies continues to increase (Supply Chain Due Diligence Act, Packaging Act, Energy Efficiency Act, and so on), as do ancillary wage costs.

Frederick Ahrens, sales director at DACH - Alliance Laundry Systems has also said that despite all the existing problems, the company achieved generally good results in the German market in 2022 and the beginning of 2023.

Ahrens comments: “Alliance Laundry Germany had a very successful year 2022 and a very good start in 2023. The reason for that is our dealer strategy we started in 2016 and which we did not change. We have a huge base of different dealer which focus on different market segments (ie. facility management, commercial laundries, nursing homes, and so on). Therefore, we are able to offer our wide range of products. Doing business with different market segments means also being independent in terms of business results if a specific segment is doing less or no business. Besides that, we have an extraordinary team mind set. Every team member is willing to do extra miles – the passion and engagement often is the key to success. At the end we grew by over 14% in Germany compared to 2021.”

Modernising

Ahrens considers the current demand of laundry equipment is still strong in 2023 in German market, saying: “The reason for that we see huge investments in modernising old machine fleets. Also new laundries come to existence. Corona slowed down completely new investments. Because of the insecurity in these times, some investments very postponed . Now we see these investments and therefore the demand on equipment raising. The main topic regarding new business is energyefficiency, connectivity, small machine footprints, but also new technologies like using ozone in washer extractors and heat pump booster (minimise drying time of first cycles of heat pump dryers) is inquired. In future being sustainable as a company will be more and more important to fulfil market needs. Especially in Germany we face that almost every day if it comes to tender business for example. Doing better with given resources is very important.”

Most of operators approached. LCNi believe the launch of innovative products could be considered as one of the recipes of success in such a highly competitive and mature market as Germany. For example, Kreussler in recent months has significantly expanded its range by the launch of OTTALIN OptiBleach bleach activator, OptiCare 50° GREEN, a modular system of five products for laundries, as dosing system for tunnel washers, the EASY T 2.0

According to Thomas Zeck, commercial director of Kreussler Textile Care, the company expect sa further growth especially in the laundry market this year. “The end of most restrictions connected with the Corona pandemic already shows in rising numbers of travelers, both business and pleasure, so the market of washing hotel and r1estaurant textiles is bouncing back successfully,: he says>

“Wetcleaning is still going very strongly in Germany, the many me too-products being one indicator of its popularity, although they usually just put a different label on classic washing instead of real wet cleaning. In general, our portfolio matches the steadily growing demands in terms of both quality and sustainability, as all our detergents – most of them biodegradable – are free from phosphates, borates or perborates, APEO, EDTA or NTA. As we specialise in extremely concentrated detergents and washing auxillaries that are as much concentrated as is chemically and technically possible, we optimise cost efficiency, minimise necessary resources, transport, and storage space, reducing not just costs, but the use of energy and fuel. The drycleaning market in Germany tends rather to shrink, but at the same time the demands on quality rise.”

According to Zeck, the war in Ukraine still affects the market, and not just in Germany. According to him, the costs for many important raw materials continue to rise. “As well as energy costs remain very high, and energy security is weakened due to necessary changes in the supply chain, while any new solutions must be harmonised with climate policy goals. The forecast inflation rate continues to be high, which impacts economical development. Laundries and cleaners don’t find qualified personnel, although this is at least partly buffered by process optimisation and automatisation. So, all in all, we definitely have a positive lookout, but there are enough challenges in the future to keep us as well as the whole market busy steadily looking for the best ways to maximise beneficial factors while keeping the others as low-impact as possible.”

Meanwhile, Martin Sukop, sales manager at Jensen Germany speaks of the positive dynamics for growth in the German market. “The setbacks in the hospitality sector are history, as also Germany’s hospitality segment is in full bloom. To cope with the growing demands, Jensen expanded its sales team, strengthened the key account management and has worked on achieving synergy effects: The service team at Jensen Germany now also supports customers in Austria, Liechtenstein, and Switzerland. Thankfully, live events and conventions are back on the agenda, and face-to-face meetings with customers are no longer a hassle. The interest in AI and robotics in the German laundry industry is huge, and hygiene has raised in importance».

According to Sukop, the company has successfully launched its SL tunnel washer, which allows 100% water recovery without tanks. As he adds, robotics have gained the same self-evidence as tunnel washers and integrated finishing lines.

Automated solutions

“Automated solutions improve the total sustainability of laundries, as they prolong the life of textiles and machines and guarantee the highest health and safety levels, notably in the soil sort. Laundries benefit in many aspects from automation, also when it comes to energy savings: State-of-the art machines with the latest features and technologies to save energy will maximize their productivity level when a constant flow is guaranteed without micro-stops.”

The company believes that the ongoing robotisation contributes to solution of the most important problems of the industry, particularly increased hygiene requirements and the lack of laundry staff. Thanks to collaboration with Inwatec, the partners have recently presented the new BLIZZ, automating the feeding of terry towels into a folding machine.

Finally, Michael Arendes, manager laundry technology for the DACH region at Miele also confirms successful 2022 year for Miele in Germany. “In Germany, Miele achieved significant growth overall in its 2022 business year compared to the previous year - and specifically the Professional business unit. Globally, sales of the Professional BU increased by 10.3% compared to the previous year. With its product areas of laundry technology, commercial dishwashing and medical and laboratory technology, Miele Professional contributed around 14% to total turnover. The year 2022 was characterised by further pronounced investment restraint among important target groups, but also by various product innovations. We are currently presenting the new entry-level class of commercial washing machines for 9 and 11 kg fill weight at the spring trade fairs.

“We will also be presenting a new SlimLine dryer with a unit width of only 711 millimetres and a new control system, which will be available both as an exhaust air and as a heat pump version. Initial discussions with customers have already shown lively interest. For comprehensive mobile control and documentation of the unit processes as well as the necessary software updates, the new MOVE networking platform is available, the application areas and functions of which are constantly being expanded.”

Arendes, however, does not believe that demand in this area will increase, saying: “After all, the pandemic has changed many things in private and business life. In addition, there is the trend that many companies are now offering their employees the option of working partly from home in the future - just as Miele is currently offering its employees. In all cases, the wardrobe is the problematic criterion. If not so many textiles are worn that require professional cleaning, there are also fewer to be processed in cleaning companies.

“In individual businesses, however, we are again observing an increase in the number of products to be cleaned. Therefore, we expect that the trough has been passed and that new volumes will now arise in laundries and dry cleaners. “Another positive aspect is that the hotel industry is also picking up speed again and asking for textile services,” concludes Arendes.