Rolling out new growth!
The paper market is a highly competitive one in which brand manufacturers must combine quality with added-value properties and a competitive price in order to stave off rivals within the private label sector. Fortunately the leading brands appear to be on something of a roll when it comes to doing just that, writes Gillian Hamill
21 February 2018
AT A GLANCE: PAPER PRODUCTS
- Cushelle is the number one brand in the Irish market over 12 weeks with 17.7%* value share in the toilet tissue category
- Cushelle has the most valuable shoppers in the category spending €8.70 on average per trip*
- Cushelle grew shopper numbers by 79,000 this period versus last
- Over 52 weeks, the Cushelle brand holds 12.4% value share in the toilet tissue category and has value sales of over €15 million**
- Velvet toilet tissue is a must-stock brand in the toilet tissue category with value sales over almost €3 million**
- Plenty is Ireland’s number one household towel brand with value sales of over €6 million**
- In 2017, the Comfort 16 Roll on-pack support for the Marie Keating Foundation generated €25,000 for its Comfort Fund which provides financial support to families affected by cancer all over Ireland
- The Homestead paper range continues to be one of the strongest categories within the Homestead portfolio, with the sales of Homestead tissue continuing year-on-year to be positive
- Recent research has shown that Regina Blitz household towel has the highest level of loyal shoppers of any brand in the marketplace***
- Generally consumers are shifting to larger content pack formats. Regina’s sales data and consumer research shows that consumers understand the benefits of this type of product***
*(Source: Kantar Worldpanel 12 week data to 31 Dec 2017)
** (Source: Kantar Worldpanel 52 week data to 31 Dec 2017)
***(Source: Nielsen Scantrack Total Coverage 156wks Until WE 30.12.2017)
****(Source: Nielsen Homescan 12 WE 07.07.17)
In a market facing intense competition from private-label competitors, it is impressive that individual household paper brands have managed to maintain a strong performance and record growth. Focusing on range USPs has proved important in maintaining consumer loyalty and attracting new shoppers.
These include factors such as strength and durability, luxury, valued skincare features, anti-bacterial properties and environmentally friendly credentials. Innovative marketing campaigns and eye-catching point of sale materials have also played a key role in attracting consumer attention, as have engaging social media platforms. Leading brands have also responded to consumer demand by offering excellent value-for-money for budget-conscious households, and providing a range of sizes and formats to suit all needs.
Indeed Mintel analyst Richard Hopping emphasised the importance of adding value through such considerations in a recent report. “Purchasing household paper products tends to be a habitual process, meaning that brands need to work to break habits in order to increase sales,” Hopping says. “There are consumer concerns about the environment in this category, suggesting that there may be scope to increase interest in recycled or alternative fibres. However, brands need to clearly indicate how these products can add value that transcends price, either through trial or effective, tangible, marketing.”
Euromonitor also published a report in March of last year, specifically examining retail tissue within the Irish market. According to Euromonitor, the recovery of the economic conditions in Ireland towards the end of the review period led consumers to purchase more retail tissue products, pushing volume sales in the category up by 4% in 2016.
Again, Euromonitor’s report also stressed the importance of value-added products. In addition, in a category in which demand is highly mature, companies are investing in premium products and segmentation in order to compete, while brands are encouraging consumers to move towards more convenient value-added retail tissue products, Euromonitor found. During 2016, the category outperformed the review period CAGRs. The expansion of demand and the slowdown in unit price declines permitted retail tissue to recover somewhat, recording positive growth over the course of the year. Euromonitor likewise found the efforts of manufacturers in terms of launching new products and refreshing their existing ones were successful in terms of giving dynamism to sales.
Forecast up to 2021
Over the forecast period to 2021, the analyst forecasts demand for retail tissue is expected to remain steady, with the category set to increase in volume and value at a CAGR of 2% in constant 2016 terms. That said, growth rates are set to be limited by the slow expansion of the total population of Ireland, with population growth of just 1% expected between 2016 and 2021. Contrary to what happened over the review period, Euromonitor reports the pressure on unit prices in the category is expected to subside. The fierce price competition which has been seen in recent years has slashed manufacturers’ margins and the constant increases in unit prices are set to make it difficult for retailers to continue sustaining price reductions.
Number one hits!
Cushelle is now the number one brand in the Irish market over 12 weeks with 17.7%* value share in the toilet tissue category. Cushelle has the most valuable shoppers in the category spending €8.70 on average per trip*. Cushelle grew shopper numbers by 79,000 this period Vs last*. Over 52 weeks the Cushelle brand holds 12.4% value share in the toilet tissue category and has value sales of over €15 million**. Cushelle has exciting brand plans to continue this growth in 2018, with the launch of a new Quilted Cushelle pack supported with a new advertising campaign for TV, digital and cinema featuring the brand icon Cushelle Koala.
Velvet toilet tissue is a must-stock brand in the toilet tissue category with value sales over almost €3 million**. The brand focuses on its product quality while offering shoppers value across its wide variety of different pack sizes. For instance, to suit all shoppers Velvet has a core range that includes both four and nine roll pack sizes appealing to both the basket ‘top up’ and trolley shoppers. For those shoppers who prefer to make a larger purchase, Velvet has a range of larger-sized packs to cater for them whilst also encouraging trade-up with the smaller pack shoppers.
Plenty is Ireland’s number one household towel brand with value sales of over €6 million**. The focus for the brand in 2018 is to continue to drive category innovation through the launch of longer rolls, offering consumers double the number of superior quality sheets on every roll. Whether you’re mopping, wiping, polishing, shining, cooking or cleaning, Plenty’s superior performance and longer rolls are even more perfect for every task around the home. Plenty will continue to invest in driving awareness of this discretionary category with a heavyweight marketing campaign across TV and digital VOD throughout 2018. The new TV campaign, which will continue to see Plenty reach key householders with kids builds on the brand’s heritage as a household hero with the evolution of much loved brand ambassador Juan Sheet – into ‘Super Juan’!
Essity Ireland (formerly SCA) is a leading global hygiene and health company, with operations in Ireland based in Dublin. The group develops and produces sustainable personal care, tissue and forest products. Sales are conducted in about 150 countries under many strong brands, including the leading global brands TENA and Tork, and regional brands such as Cushelle, Plenty, Velvet, TENA, Bodyform and Demak’Up. The company has its headquarters in Stockholm, Sweden, and is listed on Nasdaq Stockholm. Essity used to be part of the SCA Group. More information can be found at www.essity.com.
*(Source: Kantar Worldpanel 12 week data to 31 Dec 2017)
**(Source: Kantar Worldpanel 52 week data to 31 Dec 2017)
Bring value home
The Homestead paper range continues to be one of the strongest categories within the Homestead portfolio. 2017 was an extremely competitive year in this category and the sales of Homestead tissue continue year-on-year to be extremely positive.
The paper range, which includes a variety of toilet rolls, kitchen towels and man-size tissues, is produced to the highest quality using 100% virgin pulp paper sourced from well managed forests. The selection rivals any market leader while remaining well-priced in order to compete successfully in the private label market.
In 2017, the Comfort 16 Roll on-pack support for the Marie Keating Foundation generated €25,000 for its Comfort Fund which provides financial support to families affected by cancer all over Ireland.
2018 will see the continuation of its toilet tissue and man-size tissue price-marked packs to ensure continued day-to-day value for the consumer.
The launch of Homestead Absorb Jumbo Two Roll Kitchen Towel in quarter one 2018 will see a stronger, more absorbent kitchen towel introduced to the Homestead portfolio which will replace its current Splash Kitchen Towel.
According to Homestead brand manager Janice Gibney: “As demand from consumers grows for stronger more absorbent kitchen towel in larger roll formats, the launch of Homestead Absorb Jumbo Two Roll Kitchen Towel means we provide our customers with a product they want at very competitive price, ensuring Homestead continues to ‘Bring Value Home’.”
Quality consumers can trust
In terms of trends within the paper category, generally consumers are shifting to larger content pack formats. Regina’s sales data* and consumer research shows that consumers understand the benefits of this type of product. This involves bigger pack sizes in toilet tissue and larger roll contents in kitchen towel. With shelf space being a key constraint for many retailers, this can be a challenging issue to try and manage, but if done well, it has the potential to drive sales.
Consumers are also beginning to differentiate on product uses when it comes to kitchen towel. Some products are more suitable for absorption and kitchen-focused tasks, whilst others are more suited for household cleaning and multipurpose tasks. This is how Regina has come to differentiate its product range – with each product created with a particular use or specific need in mind. For example, the new Regina Wish uses a handy-sized sheet format, giving consumers greater choice in the amount of paper they select for their required use. It still provides the same absorption and strength needed for a high performance kitchen towel, but with the flexibility and confidence to use only what is needed.
As a category leader, Regina is a brand that has specialised in providing high quality products that consumers trust. Recent research** has shown that Regina Blitz household towel has the highest level of loyal shoppers of any brand in the marketplace. This comes from giving consumers a high quality product at the right price; not from being the cheapest product on display, something quite unique in the changing FMCG landscape, and something that the brand says it is incredibly proud of. The Regina household towel product range can give retailers a higher revenue from a smaller shelf area, according to the brand; helping to grow profits whilst also keeping their shoppers coming back to repeat purchase products that they know and trust.
In order to drive sales, simplicity is key for any category. Consumers need to be able to quickly identify what they are getting for the price they are paying. Ranges of tissue products should be grouped in terms of quality level of product with pricing clearly displayed. A great way to excite your consumers and really gain attention is the use of POS. Using POS can easily communicate key messages including price point, new products in-store or even competitions. In some instances the use of price-marked packs may be beneficial as it provides clarity to your shoppers in knowing they are paying a recommended retail price.
2018 will see Regina continue to focus on delivering the best quality products its loyal consumers have come to know and trust. Regina says it is always looking for new ways to improve the range to meet both consumer and retailer’s needs, so NPD will also be a key focus for the brand. This, along with maintaining its market-leading strategy to provide product differentiation, drive category value and develop products with its consumers at the forefront of its thinking, will be a huge priority in 2018.
*(Source: Nielsen Scantrack Total Coverage 156wks Until WE 30.12.2017)
**(Source: Nielsen Homescan 12 we 07.07.17)