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Glasses & Contact Lens Manufacturing in the US Industry Market Research Report from IBISWorld Has Been Updated

04/11/2013

 

 

The Glasses and Contact Lens Manufacturing industry receives a steady stream of revenue from the 75.0% of adults who use some form of vision correction, according to the Vision Council of America. This industry produces eyeglass lenses and frames, contact lenses and protective eyewear. Prescription lenses are essential to the visually impaired, insulating this product segment from economic downturns. However, consumers waited for a longer period of time to upgrade their glass frames and lenses in order to decrease spending on vision care during the recession. Also, sales of the industry's more discretionary products, such as sunglasses and costume contact lenses, declined significantly during the recession and its aftermath. As a result, revenue for the Glasses and Contact Lens Manufacturing industry dropped 3.4% in 2009 and continued to decline until 2012. Although growth stabilized that year, recessionary declines are expected to cause revenue to decrease at an annualized rate of 1.8% to $5.8 billion over the five years to 2013.

 

According to IBISWorld Industry Analyst Hester Jeon, “The decline in revenue during this period has been counterbalanced by the introduction and subsequent consumer adoption of technologically advanced products that have revolutionized eye care.” For example, silicone hydrogel (Si-H) lenses, which increase the flow of oxygen to the cornea, now allow people to wear contact lenses for extended periods. Despite increased sales of these new, higher-margin products, along with higher per capita disposable income, revenue is still projected to decline 0.1% in 2013. Increasing competition from imports over the past five years also pressured revenue growth. Imports have grown at an annualized rate of 4.0% in the five years to 2013 and currently satisfy 51.4% of domestic demand.

 

As the technological stakes increase, smaller firms are finding it difficult to compete against firms with larger research and development budgets,” says Jeon. As a result, smaller firms have either exited the industry or been acquired by larger firms that sought access to their intellectual property. Consequently, the number of industry enterprises is expected to decline over the five-year period. Moving forward, the industry is well positioned to capitalize on greater demand for lens products as the US population ages and number of people with vision-related health complications increase.

 

The Glasses and Contact Lens Manufacturing industry exhibits a medium level of concentration. Market share concentration has increased over the past five years as firms acquired smaller European and American companies for their lucrative product design patents. Small companies with promising intellectual property make attractive acquisition targets for large firms that wish to leverage significant distribution networks and R&D budgets to release innovative products. Another factor that contributes to this industry's level of concentration is the high level of capital investments that are required to enter the industry. As industry concentration increases, price competition within the industry decreases, aiding profit growth.

 

 

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