June 6, 2005

with new scented products hitting the shelves, femcare producers are hoping to enjoy the sweet smell of success

In the still relatively flat feminine hygiene market, everything may not be coming up roses, but scented product innovations are breathing new life (or at least a fragrant aroma) into a generally stable category. Now that the major brands have achieved proven performance, the next frontier in product evolution seems to be appealing to customers by establishing emotions and moods (such as femininity, relaxation, discretion and trust) through details such as embossed designs, colored cores, upscale packaging and scents.

Leading the way in this new trend is market giant Kimberly-Clark, which recently launched Kotex Lightdays with light herbal scents (pictured above). The liners come in premium packaging and are offered in an unscented version as well as light scents such as aloe whisper, chamomile dreams and lavender blossom. “Though the category has been relatively flat, there continue to be opportunities to launch innovative new products,” explained David Dickson, director of corporate communications for K-C. “This is why Lightdays with light herbal scents have been successful, as these are the only liners in the category to offer scents.”

Private label and smaller manufacturers around the globe are planning to follow suit, offering products with added fragrance and odor-killing benefits. One such company is Mexican producer Indelpa, S.A. de C.V., which is currently taking steps to include fragrance in its pads, according to the company’s Antonio Angel, senior manager, international markets. For its part, Polish manufacturer Hygienika S.A. is focusing recent R&D efforts on creating products with scents and odor-control solutions.

Jean Fleury, vice president and general manager for Canadian feminine hygiene manufacturer Fempro, commented on the move toward scented and other specialized products. “This year, again, we witnessed the launch of many products adapted to specific needs: plus and petite size products, pantyliners with innovative new fragrances and thong products,” he said. “Even the aesthetics of the product itself are more sophisticated. Now that they have conquered the ‘performance’ field, national brands play a lot on the visual aspects, entering a world of perception and femininity.” In addition to its incognito tango thong pantyshield, Fempro has rolled out the new incognito to go odor control pantyliner, which features a feminine design and unique packaging.

“The current market continues to experience cosmetic improvements in product characteristics,” opined Derek Dafoe, president of Van Wert, OH-based Tendasoft. “The national brands have been able to convince the consumer that small cosmetic improvements like ‘a channel’ are material improvements,” he said. Mr. Dafoe added that Tendasoft is currently undergoing a major expansion initiative that will allow it to better position itself with its larger customers. Details on the expansion are expected to be announced shortly.

Pointing to a “tweaking” of traditional product forms was Teri Hirschfeld, vice president and director of marketing for Instead, manufacturer of the Softcup, a polyethylene-based san pro alternative that can be worn for twice as long as a pad or tampon. “In a generally flat category, the past two years have seen a lot of advertising and promotional spending with relatively little business benefit. Other than the Instead Softcup, innovation today and in the near future appears to be primarily cosmetic, likely due to a single-minded focus on delivering benefits via absorbency and eliminating the inherent TSS risk posed by higher absorbency in tampons,” said Ms. Hirschfeld.

She added that growth in this sector has related to the wider selections appearing on the shelves. “While most innovation is cosmetic, we’re also seeing companies offering new packaging and assortments. Women are no longer confined to just tampons or pads, today they have a variety of products, brands and methods to choose from.”
Canadian Fempro is one company working hard to appeal to customers’ softer, ultra-feminine side by marketing its line of femcare products as stylish, youthful, fun and sexy.

What Else Is New?
When it comes to other product innovations, market leader P&G has rolled out a variety of recent upgrades to its Tampax and Always brands. One new development that is just now hitting store shelves is the soft Always Cotton-Like Dri-Weave topsheet. The patented topsheet is made up of one-way, cone-shaped holes that quickly pull wetness into the absorbent core, away from the body. “It’s a difference you can really feel against your skin,” explained Michelle Vaeth, communications director for P&G’s femcare business. “This new topsheet will soon be on all of our Always products. While the new Always may be softer, it still offers the same excellent protection as before,” she said.

Ms. Vaeth characterized P&G’s femcare business as doing very well. Last fiscal year, the Always product line saw double-digit global volume growth and Tampax Pearl helped the Tampax brand exceed a 46% marketshare in the U.S. tampon market.

Improving softness has also been a prime focus for Taiwanese producer KNH Enterprises, which offers a range of pantyliners, sanitary napkins and maternity pads. “This year we have upgraded several feminine products with a cloth-like surface to give a softer, fluffier feel,” explained Kirk Hwang, vice president. Mr. Hwang also mentioned raw material innovations that allow unique spunlace/nonwoven combinations or fine denier spunbond to replace nonwovens conventionally used in feminine hygiene products.

For K-C, cloth-like characteristics go beyond actual products and into the realm of packaging. The company has introduced the improved Kotex ultrathin with wings, which is now offered in a new “whisper-quiet, cloth-like pouch.” The pouch promises less crinkling and crackling and is designed to be less embarrassing and more discrete to carry, according to the company.

Beyond a softer feel, improved absorbency continues to be an essential goal for manufacturers. For K-C, evidence of this continuing trend comes in the form of a patent, issued this summer, for an improved feminine napkin with a composite absorbent airlaid structure. The patent discloses a new and improved absorbent core that is designed to offer superior performance, not only in feminine napkins but also in other similar absorbent products. The absorbent composite must have at least two layers and is preferably made using the airlaid process, according to the patent.

Another producer taking advantage of airlaid nonwovens is Polish Hygienika S.A., which offers both airlaid and fluff-based pads and pantyshields. While its main focus is daily care products, a light incontinence offering is expected early next year. Hygienika also plans to introduce its first premium biodegradable products in the near future. With an annual growth rate of approximately 8-10%, the Polish femcare market is seeing a rise in the use of airlaid products, particularly in the ultrathin pantyshield segment, according to Hygienika president and CEO Hubert Stepniewicz. He added that a large portion of the Eastern European market is still represented by fluff products. “Demand for ultrathin products resulted in the introduction of new products, where absorption and distribution functions are performed by a new breed of nonwovens. We find this innovation very interesting. Simultaneously, market leaders have repeated efforts with odor-control and scented products,” said Mr. Stepniewicz.

“The latest innovations in airlaid (low-bonding, composites) have stimulated a reassessment of products’ construction, which should lead to better performance, fit and ease of use,” he continued. “Market-wise, I expect growth in airlaid products, which still account for some 40% of the market. Distribution-wise, I predict an increase of private label offerings, which currently represent a mere 8-10% of the market. Private label products will follow the general trend in product quality improvement,” he predicted.

K-C’s Kotex Security tampons feature a plastic applicator and the company’s Comfort-Flex Blend.

In other product improvements, leading tampon maker Playtex has been busy making upgrades to its line of tampons and personal cleansing cloths with Vitamin E and aloe. The company’s line-up includes deodorizing products as well as all-natural, odor-absorbing tampons. The company touts its Playtex Gentle Glide odor-absorbing tampons as the first and only unscented tampons that eliminate odors naturally. Also being featured by Playtex are Playtex Portables tampons in a discreet, convenient carry size and Beyond tampons, offering insertion comfort and flushability. The company refers to Beyond tampons as the only tampons that are color-coded to meet different absorbency needs.

Bye, Bye Boomers
As the overall population ages, the line is blurring between light incontinence products and pantyliners/pads. Manufacturers see this shift as an opportunity for multi-purpose products that can serve both functions and increase overall sales. As the baby boom generation reaches menopause, sales of sanitary products are falling, so it follows that products meeting light incontinence as well as sanitary protection needs are becoming more prevalent. “There is a lot of movement in the pantyliner category. New scents, new designs, new looks. The goal of this diversification is to increase the use to a daily basis,” offered Fempro’s Mr. Fleury.

Hyga S.A., a Swiss producer of feminine hygiene products with embossed fluff cores and “cookies,” has also taken note of this trend. “We just launched an overnight, long napkin, available with or without wings. What is of special interest for us are products that could be used as napkins or as light incontinence products,” said Lorenz Gilomen, Hyga’s CFO.

In the incontinence area, Tendasoft introduced a bladder incontinence pad in Spring 2004. The product incorporates increased absorbency and improved re-wet characteristics consistent with bladder incontinence. Initial product sales have exceeded projections, according to Tendasoft’s Mr. Dafoe. The company manufactures a full line of external feminine hygiene products including traditional pads, night pads, thin pads, ultrathin pads, winged pads, pantyliners and pantyshields.

One company making news in the ultra size category is Swedish manufacturer Kronosept AB, which is in the process of upgrading its range of ultra sanitary pads. “The new design will have anatomically shaped cores. The new range, which will be launched before the end of the year, will also include the ultra super/night size,” said Henry Emond, marketing manager for Kronosept. The company supplies a line of pads and pantyliners in various sizes as well as maternity pads and ultrathin incontinence pads.

Tampons Take The Lead
Among the three major product forms in fem care—tampons, pads and liners—tampons are, slowly but surely, beginning to take the lead. “The feminine care market has been relatively flat for several years now but is experiencing a slow shift of tampon share increasing with pad share decreasing,” offered K-C’s Mr. Dickson. Innovations such as plastic applicators, flushable and biodegradable tampons and junior products (now known as light, thanks to a recent FDA ruling) have helped fuel growth in this sector, pushing the U.S. tampon market to $586 million. Just the same, tampon sales have dropped 2.3% during the past three years when the figures are adjusted for inflation, and that decline is expected continue, according to Mintel Group Ltd., a global market research firm.

Israeli private label tampon manufacturer Rostam Ltd. is making its niche in the crowded tampon arena. In a development that could launch a new generation of tampon products, Rostam has won clearance from FDA to market a tampon that releases a natural supplement intended to help ward off vaginal infections. The Ela tampon functions as a regular tampon that absorbs menstrual fluid, but also releases lactic and citric acids. Some research suggests that maintaining higher acidity levels during menstruation may help women avoid common vaginal infections. The acids are contained in a natural fiber strip woven into the tampon. The Ela’s health benefits have yet to be proven. The FDA categorized the tampon as a medical device, not a new drug.

The key ingredient in the Ela tampon is a natural supplement, a category that isn’t tightly regulated. Rostam plans to position the tampon as a “wellness product,” since FDA rules bar the company from making specific health claims without additional studies.

Rostam, which aims to have the product in U.S. stores in about a year, hopes the Ela tampon will be the first in a line of medicated tampons. The company has patented its tampon design and intends to develop other products that use the same technology to deliver medications. It currently is exploring other products, including a tampon with painkillers to ease menstrual cramps and one that contains antifungal medication. The products are in the early stages of development.

Around The World
In terms of geographic markets, many manufacturers pointed to Asia as a sector ripe for potential growth. “The femcare market in Asia is picking up this year. In large part, new demand is coming from the improvement in life quality in China and South East Asia,” said KNH’s Mr. Hwang. “As long as the Asian economy continues to improve and more women enter the job market, the femcare market will continue to grow at a high single digit rate,” he added.

Shown here, counterclockwise: Fempro’s incognito line includes tango thong shaped panyshields and to go odor control pantyliners; K-C’s Kotex ultrathins are now available in a new cloth-like, quieter package; Hygienix offers a full array of feminine hygiene products, including its elle et elle brand; Kotex Lightdays are among K-C’s deodorizing femcare products.

Tendasoft’s Mr. Dafoe also commented on the Asian region, but from a U.S. perspective. “The most intriguing aspect of major change comes from all three national brand companies having products manufactured by off-shore suppliers. All three have introduced pantyliners in recent months that are not manufactured in North America. I believe that more manufacturers will begin to outsource production to Asian offshore facilities in an attempt to lower overall costs. The feminine hygiene industry will experience continued pressure from these suppliers as quality issues are reduced and prices are identified as significant savings opportunities,” he said.

Describing the situation in Europe was Janko Velkavrh, CEO of Tosama d.d., based in Slovenia, which supplies digital tampons, traditional and ultrathin napkins and pantyshields. “It is relatively simple to produce hygienic napkins in Europe,” said Mr. Velkavrh. “For this reason there is overcapacity in Europe and the margins decline, particularly for small producers, who pay higher raw material prices than big producers. There are big differences between the markets, based on habits and purchasing power. The potential for growth in Russia or China is huge,” he said.

One relatively new player on the global scene is Eurl Hygienix, an Algerian producer of the elle et elle brand of sanitary napkins. “We entered the feminine hygiene market in 2002,” explained company executive Badidi Bouda Madjid. “Since our introduction, we have improved our raw materials as well as our superabsorbent and diversified our product line,” he said.

The company also produces three baby diaper brands. “In Algeria, there is a huge demand for feminine hygiene products and we see major growth in this market. We plan to extend our production network in the future.”

Commenting on the Polish market was Mr. Stepniewicz of Hygienika, who predicted consolidation as a trend in the coming year, as dispersed private label suppliers from Central and Eastern Europe (CEE) lose competitive advantages to centralized modern trade operators. “EU accession of CEE countries resulted in moving decision centers of multinational hyper- and supermarkets from CEE to Western European (WE) head offices. Thus local suppliers are challenged with direct competition from much stronger and experienced WE suppliers,” he said.

Mr. Stepniewicz added that in the private label sector, hyper- and supermarket operators have switched their interests from economy products to premium ones. “This push to improve quality is an additional burden to be overcome by private label suppliers,” he said.

Despite such market conditions, Hygienika, which bought its first pantyliner machine in 2003, has plans to expand its role in the fem care market from a brand new 10,000-square meter facility in Warsaw. This summer the company initiated a more than $5 million public offering to finance rapid growth in this sector. This year Hygienika ordered a new feminine napkin line and is reportedly negotiating for a pantyliner machine. By the end of the year, the company plans to start an ultrathin napkin line. According to the company, Hygienika is moving into the feminine hygiene market because it offers a better profit margin than baby diapers, its original line of products. The company recorded sales last year of $14 million; this year’s sales are projected to reach $17 million and 2005 sales are expected to hit $24 million. Currently 85% of its products are sold under private labels in Poland, the Czech Republic, Croatia, Lithuania, Belarus, Slovenia and the Slovak Republic. During the next two to three years, Hygienika plans to enter the adult incontinence and wipes markets.

Two alternative femcare offerings: (above) the Instead Softcup, which collects, rather than absorbs, menstrual fluid; (below) Hygienics Industries’ washable, lace/cotton sanitary pants.

What’s Next?
Looking ahead, one company hoping to see a more open approach to issues such as menstruation, contraception and pregnancy is Instead. “As women become more comfortable with their bodies, they will be more likely to try products like the Softcup. On the shelves, in the media and in entertainment, feminine topics are finally being addressed, though not nearly to the extent they should be, which promotes a greater awareness and acceptability of new alternatives,” said Mr. Hirschfeld. “Retailers are seeking to understand consumers’ needs to incorporate truly innovative products into their offering. They’re creating areas in their stores where women can obtain both products and information relative to all of their feminine health needs. It’s no longer a two-product system.”

Another company hoping to take advantage of future market diversification is Miami-based Hygienics Industries. “The market is very slow and the industry worldwide is known as one that is owned by the giants. Smaller players may have a niche, but it’s difficult to get out of that niche and achieve mainstream status,” explained Hygienics owner Michael Brier. “In this business, you are either big or little. Opportunities for growth are limited.” One such opportunity, according to Mr. Brier, is for domestic manufacturers of proprietary products. “The hope is that a larger player will notice you and want to initiate a co-venture program,” he offered.

As a manufacturer of sanitary pads and disposable pants, Hygienics Industries is also hoping for a more open approach to alternative sanitary protection products. “We offer a great product that offers a lot of benefit to customers, but these types of [non-traditional] products have a minimized, almost non-existent presence in the marketplace. Retailers carry the pads and that’s really all they are interested in.”

What would it take to achieve market acceptance for unconventional products? According to Mr. Brier, the answer is simple: “A major player would need to come in and launch a marketing campaign that would break this taboo,” he said.