[2004 State of the Industry Report] Public Health: An Emerging Market

All signs indicate that the public health sector of pest control is one of its top growth areas. PCT’s survey indicates that more than one-third of respondents (36 percent) said that their company’s revenue from public health-related pest control — i.e., mosquitoes, ticks and fire ants — has increased compared to three years ago. Meanwhile, about 57 percent said revenue in this category remained the same and only about 7 percent said revenue in this area has decreased.

A number of factors may be at work to account for this growth. Where fire ants are concerned, many PCOs say newer, more effective products have helped tremendously. Michael Warren, branch manager with Arrow Exterminators in Boca Raton, Fla., is one such PCO. He uses a two-fold approach to control them. "We bait the property and we chemically treat and rod the deep anthills," said Warren, noting that a thorough initial service, followed up with a regular program, is the key to success with fire ants.

Frank Meek, technical director, Orkin Pest Control, Atlanta, said the fire ant market is slowly growing. "My gut feeling is this insect will continue to move into other parts of the U.S. and it will slowly make its way North-west," he said. "I think that’s going to be a long, long process though."

THE MOSQUITO MARKET. In terms of mosquito control, the widespread concern of West Nile virus is likely the main driver for this pest’s growth. Last year, close to 10,000 cases of the mosquito-transmitted West Nile virus were reported to the Centers for Disease Control and Prevention. Mosquitoes are also blamed for cases of malaria and Eastern equine encephalitis. And the National Pest Management Association has reported that more members are responding to customer requests for mosquito services. According to research conducted by the independent research firm Specialty Products Consultants, there has been an 85 percent increase in the number of PCOs offering mosquito control since 2000. According to NPMA, as of 2003, almost one in three companies offered mosquito control services.

Along with this is the development of new products geared toward consumers, which are making it easier for many PCOs to get into this line of work. "It’s one of the first truly new pest revenue opportunities we’ve had in a long time," points out Dr. Michael Potter, professor and urban extension entomologist with the University of Kentucky, Lexington, Ky. "There’s a growing number of companies that have jumped into offering backyard mosquito control," he observed. The service typically includes the treatment of standing water to eliminate larvae, as well as treating adult mosquito resting sites such as dense vegetation around homes with pyrethroid sprays, Potter said. This month, Potter and his colleagues are expected to release the results of an extensive study analyzing the effects of pyrethroid sprays on mosquito populations around homes.

While mosquito work offers lots of market potential to the industry, Potter said companies that enter this line of work must be careful what they promise to customers. Specifically, he notes companies must not state or imply that consumers will be less likely to contract diseases, such as West Nile virus, due to their services. He said residential treatments may be helpful in reducing the numbers of biting mosquitoes around a home, but they may not necessarily reduce a person’s risk of contracting West Nile virus. And research has yet to show whether that’s the case.

Many companies approach mosquito control work with the idea of helping customers drastically cut populations in advance of parties or other outdoor events at their homes. Marcel Deshaies, owner of Advantage Termite & Pest Control in Lebanon, Tenn., said he’s seen good growth in add-on mosquito services. Deshaies just started offering the service this year, which includes locating and treating harborage areas, fogging and using IGRs. The company also treats bushes and shrubs around the perimeter of the house. Deshaies’ company serves customers in the central Tennessee area, and he notes mosquito control has been increasingly requested by customers. "It’s something that the customers have shown definite concern with so we’ve pretty much had to start offering it," he said.

Mosquito control is one of this year’s top services for Atlanta-based Arrow Exterminators, said Billy Blasingame Jr., vice president of pest control operations. Last year the company implemented a new mosquito control program that’s in full swing this year. Customers can request a one-time treatment for mosquitoes, usually in advance of an upcoming outdoor event. They can also opt for the company’s monthly "Liquid Mosquito Management Program." Or they can purchase a mosquito misting system from Arrow that’s designed specifically for their needs. "In every case so far customers have been thrilled with the result," Blasingame said of the specially installed systems.

Meek agrees that mosquito control has the most economic potential for the industry. Whereas fire ants are focused in their distribution and bed bugs are hit-and-miss throughout the country, he notes, mosquitoes have the advantage of being everywhere and everyone knows about them. "I don’t know a state in the U.S. that doesn’t have mosquitoes," he said. Meek noted the mosquito market has grown quite a bit for Orkin and is expected to continue. The company began testing mosquito control services in a limited area last year with great success and has this year rolled out a three-pronged mosquito control service in more than 80 cities. The program includes regular inspections, larvicides applied to standing water and insecticidal applications on leaves and shrubbery where adult mosquitoes rest.

Ned Ewart, owner and president of Bug Master Exterminating in Austin, Texas, also has found mosquito control to be a good growth area. He said selling customers historically high-ticket items such as misting systems for mosquitoes also has broader appeal these days. "A decade ago I don’t think many pest control companies would have tried to sell an item like that into the residential market," he said. "Now they feel very comfortable with the demand for the market to make that type of purchase."

THE BED BUG CHALLENGE. Bed bugs are another growth pest that have been on the rise in the last year. Meek said Orkin is seeing tremendous activity in bed bug calls, with as many as 40 states reporting activity. He believes this increase in calls is due to the recent publicity about bed bugs. "The insect has gotten a lot of press and more pest management professionals are recognizing the insect," Meek said. Furthermore, he added, more consumers are realizing that this insect does exist.

Richard Cooper, technical director of Cooper Pest Solutions in Lawrenceville, N.J., surveyed three companies around the country on their bed bug calls and found a substantial increase in calls in just the last few years. His survey indicated that in 2000, all three companies had a combined number of 41 bed bug calls. But during the 15-month period from January 2003 to April 2004, the three companies received a combined 525 bed bug calls. What’s more, Cooper said, those numbers may be underestimated since each call may involve multiple apartments or units of a facility requiring treatment.

"[Bed bugs] are not evenly distributed throughout the United States but they are rapidly spreading," Cooper said. "Regions that haven’t seen them are starting to see them."

This pest also presents an opportunity for the industry, said Potter, but at the same time it brings many questions, challenges and potential problems. "It’s a double-edged sword," Potter said of the re-emergence of bed bug work. "It’s good from the standpoint that it will make people aware of our value as protectors of public health," he said, "but it’s going to be extremely challenging for us."

Bed bugs can be difficult to control, Potter notes and they may present a potential liability for some companies. "There will be revenue generated," he said, "but there will be costs associated [with bed bug work] due to the challenges this pest poses." As with mosquitoes, companies have to be careful in what they promise to customers, Potter notes. He said any company that goes into an account and guarantees bed bug elimination is setting themselves up for potential problems. "I think the more bed bug jobs you do, the more you realize that with the products we have and with the complexity of eliminating them, you’re not going to get them all the first time," Potter said. And companies that believe they’ve eliminated bed bugs after one visit, he added, will likely find themselves receiving callbacks months later.

While there’s no evidence that bed bugs can transmit any human pathogens, Potter said, bed bugs naturally stir up strong emotional reactions from customers that have them. And because most of today’s general pest contracts probably don’t exclude bed bugs per se, pest control companies may find themselves in a sticky situation when bed bugs turn up in contracted accounts, especially multi-dwelling facilities such as apartments and hotels. "If all of a sudden you’ve got bed bugs in 14 rooms," said Potter, "you’ve got a major, major job on your hands to try and de-infest that facility."

Fifty years ago, when bed bugs were last a problem, the industry had DDT to control them. But with today’s more environmentally friendly products and people’s increased concern about the use of pesticides, bed bug control is more challenging. And there’s a learning curve for the industry, Potter said, since many PCOs haven’t dealt with them at all. "It’s like the perfect storm of problems," he said. "You’ve got a cryptic, blood-sucking parasite, that’s hard to control without liberal use of pesticides, it bites people at night, our products aren’t as effective as in the past, and much of the industry has little if any experience in managing them."

When apartment tenants or hotel guests are bitten, litigation often isn’t far behind. "There will be misunderstandings about what is covered and what level of management is realistic," said Potter. "I think that it’s almost a certainty that pest control companies will be pulled into litigation."

Potter is as surprised as anyone by the rise of this pest in the past few years. Prior to one call last summer and several in recent months, Potter hadn’t received any bed bug calls in his 13-year tenure at the University of Kentucky. International travel and immigration of people from countries where bed bugs are prevalent are two of the major explanations cited for the recent rise in bed bug infestations, Potter notes. But, he adds, international travel and immigration are not new occurrences. "It’s a phenomenon that began around two or three years ago and now we’re seeing this huge spike in bed bug infestations," he said. "We’ve got 25- and 30-year veterans that did their first bed bug job three months ago."

Meanwhile, Meek subscribes to the belief that bed bugs never went away. When the industry began using more pest specific and targeted applications, he said, "that’s when we stopped actually suppressing a lot of the insects that were still there."

Potter believes the bed bug problem will only increase, especially in apartments and hotels. What makes control difficult is that bed bugs and their eggs can live in tiny cracks and crevices and the pests readily move between rooms in all directions. Eggs, nymphs and adults have been found in such insidious places as the tiny seams and folds of upholstery and on personal items such as books and stuffed animals. Potter also has found nymphs and egg clusters beneath the protrusions of textured ceilings and in recessed screws under furniture. The eggs themselves are so small they resemble dust specks, Potter said.

The potential exists for PCOs to make money in bed bug control, Potter said, but the work will have to be priced accordingly and clients must understand that it’s not a one-shot deal. "It takes a lot of work, a lot of turning over furniture, a lot of throwing out infested stuff," he said. "It’s going to take more thoroughness than we have had to do for bugs in a long, long time."

The author is a contributing editor to PCT magazine.