Appliance titan Whirlpool Corp announced the purchase of InSinkErator, a waste disposal and hot water dispenser equipment company, for $3 billion—despite potential issues with expanding to new markets.
Whirlpool is looking to make a mark in the kitchen equipment market as a company that already has an extensive portfolio of washers and dryers. They currently offer refrigerators, washing machines, and dishwashing equipment. And with the acquisition of InSinkErator, they hope to work on their garbage disposal unit and hot water dispenser technologies. InSinkErator has been owned by Emerson since 1968 and has more than a 70% market share in the food waste disposal industry. Their trailing twelve-month revenue topped out at $595 million as of March 2022.
Their primary markets are U.S. housing, where many homes include an in-sink garbage disposal unit, among other appliances. In fact, while InSinkErator's presence in the U.S. is strong, Whirlpool might face problems attempting to expand to new areas. In-sink garbage disposal units were once banned in many states like New York and North Carolina. They are still banned in some areas of New Jersey. In the U.S., city governments were concerned about the effects of garbage disposal on already old sewage systems. However, this notion has since been disproven in the U.S., and most bans (other than in New Jersey) were lifted in 1997.
Globally, Whirlpool could also have trouble expanding its consumer base, as in-sink garbage disposals are prohibited in many European countries. In-sink garbage disposals are banned in the United Kingdom, Italy, Spain, Norway, and Sweden. The ban is due to what some experts consider a negative ecological impact, as it uses more electricity to grind food than it does to separate it at a waste plant. If Whirlpool does choose to expand InSinkErator's products to that market, the focus would need to remain on their hot water dispenser offerings until more hard data on the impact of in-sink garbage disposal units can be found.