Magazine article Marketing

Value Proves Hard to Find

Magazine article Marketing

Value Proves Hard to Find

Article excerpt

Household-paper brands are holding firm against own-label, but heavy discounting is an issue when it co mes to value growth, writes Jane Bainbridge.

Toilet tissue, kitchen towels and facial tissues are generally needs-driven products, which means shoppers will buy them even during an economic slump. That said, it is an area in which hard-pressed consumers find it easy to downgrade.

Despite a slump in sales over the downturn, name brands have held their share against own-label by maintaining product innovation and using promotional support.

Price promotions and discounting have become commonplace and so building value growth is difficult for manufacturers. Justifying added-value benefits on items such as toilet tissue when household budgets are being squeezed is an uphill task, not helped by a lack of consumer engagement with this category.

Despite this, the sector is not without strong brands. Andrex leads in toilet tissue, Plenty in kitchen towels and Kleenex in facial tissues.

In 2010, household paper sales reached pounds 1.74bn according to Mintel, but much of the sales growth of the past two years has been a consequence of price rises to account for pulp and energy costs.

Penetration of toilet tissue is high and the increasing number of bathrooms in British homes has lifted sales - 23% of households have more than one bathroom, up from 21% in 2006. Three in 10 shoppers are considered 'heavy users' - they use 13 or more rolls per month, according to TGI. However, levels of use have not changed much over the long term, suggesting that any volume growth is a consequence of population changes.

While price is a major driver in all categories, one in four thinks it is worth paying more for a better-quality product in toilet tissue, according to TNS. This compares with 17% for kitchen roll and 15% for facial tissues.

Toilet tissue is the biggest category in the sector, making up 65% of sales. Kimberly-Clark's Andrex, long-associated with its puppy brand icon, accounts for about a third of sales and continues to innovate with launches such as Shea Butter at the premium end and On the Go, a portable, tubeless product for paperless public toilets.

The second-placed toilet roll manufacturer is SCA, with its Velvet and Cushelle brands. In 2010, Cushelle - formerly named Charmin - was launched with pounds 10m marketing support. SCA bought the brand from Procter & Gamble in 2008 and, as it did with Bounty (now Plenty), renamed the product to re-invigorate the brand.

This year it won an Institute of Promotional Marketing award for the relaunch, which introduced the Cushelle Koala as a brand icon. Julie Orange, brand manager for Cushelle, said: 'In a challenging category, the activity achieved cut-through, both onand offline. Recent sales results show an impressive and consistent increase, with 13.2% for value. Volume has increased by 6.9% in the past year. With signs of an emotionally engaged consumer base, we're planning to build on these results.'

SCA also extended its Velvet brand into facial tissues in 2010, creating some competition for Kimberly-Clark's leading Kleenex brand. Facial tissues were also one of the categories to benefit from the swine flu outbreak in 2009 as the government pushed its 'catch it, bin it, kill it' health advice for containing the infection.

The use of facial tissues has been changing: between 2005 and 2010 it increased to just over three-quarters of adults, so there is still room for greater penetration. …

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