Ian Bell, Head of Home Care, Tissue and Hygiene Research, Euromonitor International09.04.12
Across the hygiene industry, where the migration of growth from developed to emerging markets is well established, wipes—alongside incontinence products—are still far from reaching their full potential. The fact that wipes are still in growth (around 2% in developed markets in 2011) testifies to a category that continues to exemplify technological and marketing developments, which have helped propel wipes into something of a mainstay within the worlds of home and personal care. While diapers and san pro items have seen saturation deprive the category of sales growth, wipes have generally performed strongly and continue to offer significant opportunities for further growth.
Economic Castaway
Income levels are important to the development of the global wipes category, with $8,000 per capita considered a prerequisite for consumers’ ability to afford baby wipes, the common entry point for the majority of consumers into the pantheon of wipes. Although $8,000 is easily in reach for the vast majority of consumers through North America, Western Europe or Japan, this entry level is prohibitive across most of the developing world. Only small pockets of sales are detectable in the emerging world, and these are chiefly by a middle class, urban consumer base, found within the vast populations of China or India, for example.
With the developing world effectively cut off from wipes for a decade or more due to income barriers, the industry finds itself restricted to three key territories—Japan, Western Europe and North America. Because none of these are particularly well-endowed economically, the battle is currently on to make wipes of all kinds relevant to consumers who are faced with heavy personal debt, the prospect of unemployment and stagnant incomes, as well as inflationary pressures.
Key Sales Drivers: Health & Hygiene
While economic woe has been inescapable, the industry received a timely boost from the promotion of health and hygiene for personal care (in the aftermath of H1N1, swine flu) as well as around the home—an area where wipes continue to offer clear advantages over more traditional cleaners. While antibacterial preparations continue to be at the front of consumers’ minds when purchasing surface care wipes, kitchen towels present an ongoing threat as a category still in relatively rapid growth in Western Europe (3.5% though 2011), as manufacturers have aligned themselves to hygiene and functionality. There has also been significant new product development activity with the emergence of washable/reusable products such as Sofidel’s Nicky Supreme, which made an appearance on the U.K. market in 2012. Seeing kitchen towels bridging the gap between reusable and disposable has played well with consumers in these times of austerity.
‘Front of House’
Kitchen towels pose a significant barrier to wipes, through a combination of improved design and widespread usage developed over the last decade. The popularity of kitchen towels has no doubt been encouraged by kitchen top dispensers, which make kitchen towels and other tissue products “front of house” items. This means they are rarely hidden in cupboards or under countertops, as is frequently the case with wipes due to their fairly unappealing plastic packaging. While wipes packaging is undoubtedly functional and may well keep the contents safe and stand out in the supermarket, it discourages consumers from displaying these products.
In surveys, consumers typically respond that packaging is a low priority when it comes to making a purchase; more frequently, price, value for money and brand image play a more significant role. The story for wipes may be different with improvements in packaging a prerequisite for greater usage around the home and to establish the kind of usage patterns that will promote repeat purchases on a more regular basis.
The evidence is clear—floor-cleaning systems such as Swiffer Wet Jet have maintained interest and usage among users as the product dovetails with established cleaning routines. While Swiffer set up home in the cupboard where the mop once lived, wipes are not afforded this luxury and need to sharpen up in order stake a claim to countertops.
Italian design emporium Alessi has developed a wide range of popular designer dispensers used for tissue products such as its SG42—Bunny & Carrot kitchen roll holder, but a look though the company’s catalogue reveals nothing for wipes. The company even teamed up with German home care giant Henkel to develop a novel concept for the company’s WC Frisch toilet bowl cleaner. The WC Frisch Fresh Surfer design may be a novelty but it also illustrates that even toilet care—which is arguably even less glamorous to consumers than wipes—have looked to packaging to stand out from the crowd.
Wet Tissue Opportunities
Packaging that encourages usage is essential to growth in developing markets. The same is true for the largely underdeveloped wet toilet tissue category. While Central Europe sees household penetration of anywhere between 10-15%, the figure is just 2% in North America and practically 0% in Japan. A shift in usage to this kind of level could see an additional $700 million added to the U.S. toilet paper market. Evidence from Europe suggests that wet tissue does not lead to a cannibalization of dry tissue sales, nor does it encourage consumers to trade down in terms of quality.
Kimberly-Clark has been promoting its wet and dry Cotonelle tissue brands as complementary, thus informing a somewhat confused public on how to use wet tissue. Additionally, the development of a handy wall hook designed to keep the wet tissue out of the cabinet is the latest in a long line of patents designed to crack what is seemingly an age old problem.
Investment—Key to a Brighter Future
While packaging and display are still barriers for broader wipes usage, progress can only be good for the medium-term future of the industry. Packaging aside, it is refreshing to see the industry branching out, trying new ideas and backing brands with promotion. While household care has benefitted from unprecedented government investment in hygiene campaigns in the wake of H1N1, personal care orientated wipes have not been so lucky, and require just this sort of investment—and consistently—in order to develop sales in an otherwise competitive and economically challenging environment.
Economic Castaway
Income levels are important to the development of the global wipes category, with $8,000 per capita considered a prerequisite for consumers’ ability to afford baby wipes, the common entry point for the majority of consumers into the pantheon of wipes. Although $8,000 is easily in reach for the vast majority of consumers through North America, Western Europe or Japan, this entry level is prohibitive across most of the developing world. Only small pockets of sales are detectable in the emerging world, and these are chiefly by a middle class, urban consumer base, found within the vast populations of China or India, for example.
With the developing world effectively cut off from wipes for a decade or more due to income barriers, the industry finds itself restricted to three key territories—Japan, Western Europe and North America. Because none of these are particularly well-endowed economically, the battle is currently on to make wipes of all kinds relevant to consumers who are faced with heavy personal debt, the prospect of unemployment and stagnant incomes, as well as inflationary pressures.
Key Sales Drivers: Health & Hygiene
While economic woe has been inescapable, the industry received a timely boost from the promotion of health and hygiene for personal care (in the aftermath of H1N1, swine flu) as well as around the home—an area where wipes continue to offer clear advantages over more traditional cleaners. While antibacterial preparations continue to be at the front of consumers’ minds when purchasing surface care wipes, kitchen towels present an ongoing threat as a category still in relatively rapid growth in Western Europe (3.5% though 2011), as manufacturers have aligned themselves to hygiene and functionality. There has also been significant new product development activity with the emergence of washable/reusable products such as Sofidel’s Nicky Supreme, which made an appearance on the U.K. market in 2012. Seeing kitchen towels bridging the gap between reusable and disposable has played well with consumers in these times of austerity.
‘Front of House’
Kitchen towels pose a significant barrier to wipes, through a combination of improved design and widespread usage developed over the last decade. The popularity of kitchen towels has no doubt been encouraged by kitchen top dispensers, which make kitchen towels and other tissue products “front of house” items. This means they are rarely hidden in cupboards or under countertops, as is frequently the case with wipes due to their fairly unappealing plastic packaging. While wipes packaging is undoubtedly functional and may well keep the contents safe and stand out in the supermarket, it discourages consumers from displaying these products.
In surveys, consumers typically respond that packaging is a low priority when it comes to making a purchase; more frequently, price, value for money and brand image play a more significant role. The story for wipes may be different with improvements in packaging a prerequisite for greater usage around the home and to establish the kind of usage patterns that will promote repeat purchases on a more regular basis.
The evidence is clear—floor-cleaning systems such as Swiffer Wet Jet have maintained interest and usage among users as the product dovetails with established cleaning routines. While Swiffer set up home in the cupboard where the mop once lived, wipes are not afforded this luxury and need to sharpen up in order stake a claim to countertops.
Italian design emporium Alessi has developed a wide range of popular designer dispensers used for tissue products such as its SG42—Bunny & Carrot kitchen roll holder, but a look though the company’s catalogue reveals nothing for wipes. The company even teamed up with German home care giant Henkel to develop a novel concept for the company’s WC Frisch toilet bowl cleaner. The WC Frisch Fresh Surfer design may be a novelty but it also illustrates that even toilet care—which is arguably even less glamorous to consumers than wipes—have looked to packaging to stand out from the crowd.
Wet Tissue Opportunities
Packaging that encourages usage is essential to growth in developing markets. The same is true for the largely underdeveloped wet toilet tissue category. While Central Europe sees household penetration of anywhere between 10-15%, the figure is just 2% in North America and practically 0% in Japan. A shift in usage to this kind of level could see an additional $700 million added to the U.S. toilet paper market. Evidence from Europe suggests that wet tissue does not lead to a cannibalization of dry tissue sales, nor does it encourage consumers to trade down in terms of quality.
Kimberly-Clark has been promoting its wet and dry Cotonelle tissue brands as complementary, thus informing a somewhat confused public on how to use wet tissue. Additionally, the development of a handy wall hook designed to keep the wet tissue out of the cabinet is the latest in a long line of patents designed to crack what is seemingly an age old problem.
Investment—Key to a Brighter Future
While packaging and display are still barriers for broader wipes usage, progress can only be good for the medium-term future of the industry. Packaging aside, it is refreshing to see the industry branching out, trying new ideas and backing brands with promotion. While household care has benefitted from unprecedented government investment in hygiene campaigns in the wake of H1N1, personal care orientated wipes have not been so lucky, and require just this sort of investment—and consistently—in order to develop sales in an otherwise competitive and economically challenging environment.
