Ophthalmic Goods
SIC 3851
NAICS 339115
Optical goods manufacturers produce a variety of corrective eyewear, implants, and eye-care supplies. Common examples of industry output include eyeglasses, spectacles, contact lenses, sunglasses, and lens cleaning solutions.
The global optical goods industry was characterized by steady net demand for most of its products and frequent upgrades to the materials and technologies used in production. Vision impairment occurs at fairly predictable rates in human populations, although residents of affluent countries are more likely to seek corrective lenses or surgeries than persons in developing countries. In the United States, macular degeneration, a condition in which part of the retina becomes scarred, was the number one cause of eyesight loss, and the number of cases was expected to double over the next 25 years. Two important factors led industry experts to predict increased demand for ophthalmic goods and services in the future: the continual rise of diagnosed cases of diabetes and the aging of the baby boomer generation.
Demand for particular products within the world's optical goods markets was not always even, however. Both eyeglasses and contacts were subject to fashion trends and enhancements in comfort or other features that rendered older eyewear less appealing to some consumers. For example, in the United States and Western Europe there was a pronounced trend toward disposable contacts, which were considered more comfortable, convenient, and sometimes cheaper than longer-lasting rigid lenses. In most markets, eyeglasses changed substantially so that newer models were lighter weight, thinner, more durable, and more varied in frame styles.
Other industry products were subject to greater fluctuations. Sunglasses, in particular, faced more volatile demand because they are not as essential to vision as corrective lenses. Also, the underlying technology in most sunglasses was much less sophisticated than that of prescription eyewear, making the low-end sunglasses trade a commodity market. Similarly, solutions used to clean contact lenses could be easily interchanged among different brands and, in some cases, different formulations. Coinciding with the rise of disposable lenses, the trend in Europe and the United States was toward multipurpose solutions that perform all necessary sanitizing actions on lenses rather than using separate solutions for each task.
The ophthalmic goods industry was thoroughly internationalized, particularly among the developed nations. World market leaders in various product categories included France, Italy, Switzerland, and the United States. In the mid-2000s, nearly 100 million people wore contact lenses, and an estimated 1.5 billion people wore corrective lenses in 2005. As documented in Ellisor's 2004 Annual Report, by 2025 almost one-third of the world's total population will be over the age of 45, most of whom will need corrective lenses as a natural result of aging. The best growth was being realized in the markets for plastic, polycarbonate, and high-index lenses.
The ophthalmic goods industry was a labor-intensive industry populated by numerous smaller, specialized companies churning out everything from sunglasses and safety goggles to shooting glasses and lorgnettes. In 1989, 68 percent of U.S. companies in this industry had fewer than 20 employees. In Canada, the figure was closer to 75 percent. While these smaller companies were engaged exclusively in the production of ophthalmic goods, industry giants such as Bausch & Lomb, typically manufactured a wider array of goods including medicines, dental products, and optical goods.
The labor-intensive nature of the ophthalmic goods industry attracted countries with large pools of low-wage labor such as China and Taiwan. By 1992 East Asia had become a leading supplier of low-end sunglasses and vanity glasses, accounting for 32.8 percent of total ophthalmic goods imported by the United States—just a few points shy of the 35.3 percent share held by the European Union. The EU—besides being a major producer of glasses and contact lenses—dominated the market for designer frames. Japan was another leading producer of ophthalmic goods, and was the world's largest exporter of optical equipment throughout the 1990s. Other leading exporters included, in descending order, the United States, Italy, Germany, France, and China.
Products manufactured by the ophthalmic goods industry ranged from low-cost nonprescription sunglasses to highly sophisticated prescription contact lenses. Some products could be purchased from street vendors; others were only available from qualified optometrists and ophthalmologists. Frames and sunglasses accounted for the bulk of world production of ophthalmic goods. Sunglasses, in particular, attracted a broad spectrum of users and were available in both prescription and nonprescription forms. Technically, sunglasses were supposed to block a portion of sunlight from entering the eyes and protect them from ultraviolet (UV) radiation, which can damage the lens and the retina. The amount of protection sunglasses actually afford depends on the color and the depth of the tint. In practice, however, many sunglasses were little more than fashion accessories, affording little or no protection to the eyes. Growing consumer awareness prompted competition among high-end sunglasses manufacturers to produce more effective UV protection and resulted in the introduction of a new labeling system on some sunglasses telling consumers what percentage of ultraviolet light was blocked. Other types of glasses popular among prescription users included photochromic glasses; these contained tinted lenses that became darker in bright sunlight and lighter in a dark room.
Beginning in the 1980s, manufacturers of ophthalmic goods sought to broaden the market by encouraging consumers to treat eyewear both as medical devices and jewelry. Industry advertising heavily promoted both sunglasses and prescription glasses as fashion accessories. Ads such as Bausch & Lomb's "Take a good look" for its line of Ray-Ban sunglasses and L.A. Eyeworks' "A face is like a work of art. It deserves a great frame." spurred new growth in the market. People who might once have owned only one pair of glasses now needed a different pair for every occasion. Discount vendors sprang up in North America, Japan, and Europe offering consumers a huge variety of frames from which to choose. Growth in this area was substantial throughout the 1980s, with an estimated five out of six vision-impaired Americans still preferring eyeglasses to contact lenses.
In spite of the fact that contact lenses were much less commonly used worldwide than glasses, they were a tremendous source of revenue for the ophthalmic goods industry and a primary source of income for companies such as Bausch & Lomb, Allergan, and CIBA-Vision. Much of the value of contact lenses was derived from the need to replace them more frequently than glasses and from secondary products such as cleaning solutions. The U.S. market for contact lenses was estimated at US$2 billion in 1994 with an estimated 25 million contact lens wearers—76 percent of whom used soft lenses. Though effective in correcting most common vision problems such as myopia (near-sightedness) and hyperopia...
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