Pest Control Services
Industry Profile Report
Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters
Industry Overview Industry Structure, How Firms Opertate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.
Call Preparation Quarterly Insight, Call Prep Questions, Industry Terms, and Weblinks.
Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.
Industry Profile Excerpts
Industry Overview
The 12,600 pest control services in the US exterminate and control the presence of unwanted creatures, such as insects, rodents, or other small animals. Companies may specialize in residential or non-residential services. Over 70% of industry revenue comes from residential services. Providers may also specialize in a particular industry, such as food manufacturing or health care.
Hazardous Substances
Pest control often involves the application of toxic chemicals that have the potential to harm humans, pets, plants, or the environment.
Government Regulation
Because pest control involves toxic substances, the EPA and state governments regulate various elements of operations, including licensing, record keeping, standards of application, training, and product registration.
Industry size & Structure
The average pest control services provider operates out of a single location, employs 10 workers, and generates over $1 million annually.
- The pest control services industry consists of about 12,600 companies that employ about 129,300 workers and generate about $16 billion annually.
- The industry is concentrated at the top and fragmented at the bottom; the top four firms account for about 27% of industry sales. The majority of pest control service providers are small, independent companies or franchises.
- Large companies include Rollins (Orkin) and divisions of ServiceMaster (Terminix).
Industry Forecast
Pest Control Services Industry Growth
Coronavirus Update
May 19, 2022 - Commercial Demand Recovers to Pre-Pandemic Levels
- Pest control demand continues to improve. The US pest control index increased 13% in March 2022 compared to the same month in 2021, according to the William Blair/PCO M&A Specialists Pest Index, which tracks the monthly performance of nearly 150 privately held US pest control firms. Growth in March was driven by improvement in the residential market, which was up 16% year over year. Commercial pest control has recovered from the shut-downs of 2020, and the two-year compound annual growth rate of 15% indicates commercial revenues are outpacing 2019 levels. The termite segment was up 7% in March over year-earlier levels. The bed bug segment increased 16% year-over-year but remains volatile, and demand is well below 2019 levels.
- The pandemic allowed some pest control firms to reevaluate their roach-control customer bases and focus on the most profitable accounts. As restaurants and bars closed, some pest control firms realized a degree of food and beverage business loss was a benefit. Restaurants can become a drag on profitability if roach retreatments recur too often because of poor restaurant sanitation. Some firms found that revenues increased when they focused on other types of commercial accounts and residential services. Increased demand for perimeter treatments and multi-family housing helped offset weak demand from the restaurant and hospitality sector.
- Online training and webinars helped pest control companies remain competitive during the pandemic by enabling staff to receive continuing education about the latest industry trends, according to Pest Control Technology Online. Many pest control firms report that the remote learning strategies they adopted at the height of the pandemic have become best practices moving forward. Companies found that testing capabilities built into online learning interfaces improved engagement with the training materials. Allowing workers to do online training and view webinars when convenient for them is more efficient than scheduling in-person training when all employees can attend.
- Some pest control firms that offer bed bug treatment services saw demand drop during the pandemic. Reduced travel and remote work and schooling likely kept bedbugs from hitching rides into consumers’ homes. To address customer concerns, some pest control firms offer disinfection treatments after treating for bedbugs and before clients return to the premises. Some firms may also disinfect before bedbug treatment to protect technicians.
- Whether or not employees are vaccinated is a key issue for the pest control industry because several types of commercial accounts – including food processing plants, hospitals, and assisted living facilities – require all technicians who enter the property to be vaccinated. Some pest control executives said residential clients also request that technicians servicing their homes be vaccinated. Some executives are wary of requiring vaccinations because they could lose workers when they are already grappling with labor shortages.
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