SIC 3851 Ophthalmic Goods
SIC 3851
This classification includes establishments primarily engaged in manufacturing ophthalmic frames, lenses, contact lenses, and sunglass lenses. Establishments involved in manufacturing molded glass blanks are included in SIC 3229: Pressed and Blown Glass and Glassware, Not Elsewhere Classified; and businesses engaged in grinding lenses and fitting glasses to prescriptions are classified in SIC 5995: Optical Goods Stores.
339115
Ophthalmic Goods Manufacturing
In 2003, shipment values for the ophthalmic goods industry totaled approximately $4.55 billion. This figure represented an aggregate value of shipments largely derived from the production of four primary products: contact lenses; prescription ophthalmic lenses; frames; and other prescription and nonprescription eyewear, including safety glasses, reading glasses, and sunglasses.
Contact lenses dominated the ophthalmic goods market in the mid-2000s, accounting for almost 48 percent of the total shipments delivered by the industry, with soft contact lenses representing 98 percent of the contact lens product share. Glass and plastic ophthalmic focus lenses accounted for approximately 14 percent of the industry's shipments, with plastic lenses accounting for nearly 90 percent of the lens market. Ophthalmic frames accounted for 2 percent of the product share. Among the other ophthalmic products, reading glasses and sunglasses accounted for approximately 13 percent of the market value, and safety eyewear accounted for about 4 percent. Other products within the ophthalmic goods industry include underwater goggles, reading and simple magnifiers, and ophthalmic lens coating.
In 1990 shipments of ophthalmic goods totaled $2.27 billion, having risen from $1.28 billion in 1982, though with a slight downturn in the mid-1980s. Through the 1990s, sales continuously improved, attributable in part to the increasing popularity of designer sunglasses and to technological innovations in the development of contact lenses. Especially in the late 1990s, growth-hungry U.S. manufacturers sought markets overseas with less penetration than mature U.S. markets—in which rising consumer prosperity was reaching levels attractive to U.S. manufacturers. The industry fell off slightly during the early 2000s due primarily to low consumer confidence caused by a recessive economy. By the mid-2000s the industry was once again poised to grow, with single-digit increases in revenues expected.
The ophthalmic goods industry was predominantly populated by relatively small manufacturing operations. About 480 U.S. companies with 21,376 employees (of which 14,190 were production workers) were involved in manufacturing ophthalmic goods in 2003. Of the more than 550 manufacturing establishments involved in producing ophthalmic goods, nearly 70 percent employed fewer than 20 people and nearly 44 percent had less than five employees. The top 3 percent of the largest establishments (more than 250 employees) accounted for the majority of all revenues. Typically, the larger companies do not solely manufacture ophthalmic goods but manufacture a diverse line of products to generate sales. For example, a leading company in the industry, Bausch & Lomb Inc., garnered only one-third of its sales in 2004 from contact lenses. The majority of the company's revenues are generated from lens care and pharmaceuticals.
According to the Vision Council of America, in the mid-2000s approximately 187 million Americans (86 percent of the population) wore corrective or noncorrective lenses. Approximately 135 million wore prescription eyewear—about 62 percent of the population. Independent vision centers held 44 percent of the market; chain stores, 27 percent; discount stores, 21 percent; and other, 7 percent.
Until the 1960s, growth in the ophthalmic goods industry had occurred at a steady, predictable rate, largely dictated by the rate of population growth in the United States. During the 1960s, however, an increased demand for ophthalmic products elevated the production and sales levels of manufacturers to an unprecedented high. A combination of several factors prompted this remarkable surge in growth, including a dramatic rise in the nation's population and an increase in the availability of eye examinations. The advent of contact lenses in the 1950s as a genuine alternative to conventional corrective eyewear, however, contributed most significantly to the growth of the ophthalmic goods industry.
Although extraordinary gains were achieved by contact lens manufacturers and retailers during the first years of quantifiable production in the 1950s, certain difficulties associated with the early development of contact lenses slowed the public's acceptance of the new product. On average, a pair of contact lenses sold for $200, an exceedingly high price to pay for many consumers, and the discomfort caused by wearing the hard, hydrophobic lenses, which initially covered most of the exposed eyeball, dissuaded a considerable percentage of consumers from making a long-term conversion to contact lenses. According to industry estimates, roughly half of the people who began fittings for contact lenses reverted back to conventional corrective eyewear, a rate of attrition that continued to plague contact lens manufacturers into the 1970s.
Despite the high cost of these lenses and the discomfort they often caused, consumers purchased enough contact lenses to push annual sales from $2 million in 1950 to $60 million by 1959. The number of contact lens manufacturers, the majority of which were small, privately owned companies, also increased at a commensurate rate during the decade, climbing from 20 in 1950 to more than 400 by 1960. This proliferation of contact lens manufacturers led to a rash of deceptive advertising complaints issued by the Federal Trade Commission (FTC) and sparked several fiercely contested patent disputes, as the excitement generated by the creation of a new, potentially lucrative market within the ophthalmic goods industry attracted increased competition. Complaints filed by the FTC, 15 of which were recorded in 1961 compared to only four prior to 1960, and patent disputes, along with issues such as whether only ophthalmologists and oculists should be allowed to prescribe and fit contact lenses, caused the sales of contact lenses to stagnate at the close of the decade. But these were problems generally associated with the nascence of the market and, as such, inflicted only a temporary setback on the burgeoning industry.
By the mid-1960s, improvements had been made in contact lenses, although their cost still hovered around $200 a pair. The thickness of the plastic used to manufacture the lenses had been reduced, alleviating some of the irritation experienced when a contact lens wearer's eyelid passed over the lens, and the diameter of the lenses had also been reduced so that they only covered the iris and the pupil, rather than the entire exposed eyeball. Shortly before these improvements were made, however, a discovery of lasting importance for the future of the contact lens market overshadowed the technological strides made by the industry in hard contact lens design—although it would be years before...
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