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 occured at fairly predictable rates in human populations. Residents of affluent countries were more likely to seek corrective lenses or surgeries when compared to people who lived 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. The number of macular degeneration cases was expected to double during 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. Thus, the low-end sunglasses trade was a commodity market.
In order to increase sales for their spectacles and sunglasses, designers sought to make their creations stand out in special ways. Some stuck with innovative applications of their own logo. Others, however, tapped into house motifs to gain new customers from the ranks of people who wanted to show off their brand loyalty. Instead of choosing to wear easily-distingushable Christian Dior glasses, a fashionable consumer might select glasses with Tom Ford's discreet metal T set flush to the temple. The 2007 Coach collection included glasses designed to complement popular handbags. Eyewear designer Alain Mikli reportedly used shapes, colors and distinctive materials to establish brand recognition for his line.
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 spectacles market experienced a short-term increase in sales with an estimated 8.9 million units in 2006. That reflected an increase by 4 percent from March 2005 to March 2006. Prescribed spectacle lenses and frames continued to be the most popular accounting for 90 percent of the total value share of the market.
Eye glass wearers were faced with a sometimes controversial choice other than traditional sales outlets. Several online contact lenses suppliers were prepared to sell the product without checking to see whether consumers had valid prescriptions. This was the major finding when Optician conducted a mystery shopping exercise in 2007. There were 65 calls made to an assortment of online suppliers. The caller expressed an interest in ordering daily disposable lenses based on details read during the conversation. A small number of companies agreed to do this and four orders for contact lenses were made and completed to double check that no valid prescription was required during any phase of the ordering process. Companies willing to do this were located in the U.S. and UK.
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 (far-sightedness), contact lenses had yet to supplant standard eyeglasses. As Ilene Springer pointed out in Cosmopolitan, "only about 50 percent of would-be wearers do well the first time lens meets eye. 'Dry eyes,' allergies, unusually shaped corneas, recurring infections, and hypersensitivity can make fittings difficult...
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