Dental Business is Big Business
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- Published: Friday, 10 November 2023 10:47
- Written by Peter Ingle
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Many GDPs and their teams are too busy to spend long looking upstream at the businesses that supply them with the equipment and materials that they rely on. The colossal size of many of these companies compared to a typical practice can make them seem remote, but they depend on those same practices to stay in business.
To give an idea of the size of this market, recent research estimates the global dental equipment market at over $17 billion by 2030.
Verified Market Research also predicted that the market would grow at 12% annually between now and 2030. Their report provides a useful insight into how others see the dental care industry, from a different to perspective to that of most dental team members.
The report emphasizes key drivers propelling the global Dental Equipment Market. These include an ageing global population that is facing escalating dental issues as they live longer with complex maintenance and restorative needs, as well as higher expectations.
Globally there is reported to be “a surge” in dental caries and periodontal diseases, and in response market demand has increased. A further factor is the rising demand for cosmetic dentistry, facilitated by technological advancements in imaging techniques.
There are other factors such as poor oral hygiene, lifestyle choices, medications, and stress adding to dental problems, and creating a steady market demand.
Despite this impressive growth trajectory, the Dental Equipment Market faces challenges, including the high costs associated with advanced procedures. The report gives the example of laser treatments. With the cost of dental lasers ranging from USD 6,700 to USD 78,000, they represent a substantial investment. The system of payment will influence adoption of new technology. In the USA in the case of dental lasers, the absence of reimbursement schemes for dental treatments and limited insurance coverage, are affecting uptake.
The path to this growth may not be smooth, as the recent performance of Align group shows. Dow Jones’ Market Watch reported recent drops in the company’s value with the headline, “Consumers are cutting back on dental visits, and that’s hammering this stock.” Align, whose brands include invisalign, iTero and exocad, had reported a net income of $121 million. While this was up from $73 million the previous year, this fell short of expectations and was not enough for the markets. As a result the share price fell by 20% immediately after the announcement.
Align Chief Executive, Joe Hogan said, "Our third-quarter results reflect lower than expected demand and a more difficult macro environment than we experienced in the first half of 2023,"
Dental practices and industry research firms have reported deteriorating trends, including decreased patient visits and increased patient appointment cancellations, along with fewer orthodontic case starts overall, especially among adult patients."
The company said that it expected revenue to drop sequentially in the fourth quarter.
"As we navigate one of the most challenging operating environments in recent history, with increasing macro-economic pressure on doctors and their patients, we have an enormous opportunity to continue driving adoption of digital orthodontics and restorative dentistry, and a responsibility to optimize our investments for the current environment," Hogan said.
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Readers might also be interested in other large listed dental companies including Dentsply, ticker XRAY valued at almost $6n with a 2.2% yield, and Henry Schein, ticker HSIC which has a higher value of over $8bn and their earnings announcement is Monday November 13th 2023.
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