Spinning around
The laundry category, over the past five years, has surged from decline to strong value growth and back again - but one certainty is that it's a survivor.
Print10 June 2009
The home laundry products category is mature with stable household penetration overall. In the two years to 2006 the general household category experienced a period of stagnation, with the important laundry segment actually declining due to price competition from private label and discount brands. However, as Euromonitor reported last September, the category returned to strong value growth.
This growth was primarily thanks to continued substantial investment in product innovation and marketing by the three key players in the sector, Unilever, Procter & Gamble and Reckitt Benckiser. A most important achievement of this work was driving consumer perception of the superior quality and effectiveness of the brands versus the cheaper private label products.
Key innovations in laundry care, particularly those that combine functions such as fabric softening and stain fighting, and that provide increased convenience, drove the category to strong value growth from 2006 to 2007. Irish consumers’ increased discretionary spending power and shortage of time led to heightened demand for ultra-effective and convenient products.
Growth was sustained as the market began to change through new less tangible innovations, such as exotic new fragrances and sensory properties that enhance well being, or that are uplifting or soothing. In tandem with these developments, innovative advertising campaigns were an essential component in driving the high value laundry category.
However, the market has changed considerably in Ireland. The economic downturn has seen a change in consumer habits and a change in demographics. Convenience and effectiveness have lessened in importance as drivers while value for money has arisen as a key motivator for this category. Competition from discount brands and private-label has become intense and consequently laundry care products have become subject to rigourous price promotion.
However, key brands have retaliated with clever innovation, such as low temperature wash detergents, which not only addresses consumers’ growing need for environmentally friendly products, but also saves them money on their energy bills. In this battle, offering consumers value for money is imperative but victory for brands will lie in offering more through innovation and continuing to support the perception of superior quality and effectiveness.
Towards the end of 2009, the rate of unemployment is slowing, the global economy is stabilising, and consumer habits will begin to reflect this. Trends show that consumers still need products that offer multiple benefits and convenience, and also increasingly that are made from natural ingredients and protect the environment. Major manufacturers will continue to invest in innovation to deliver solutions to meet these varied needs but communication will remain key in order to get the message to consumers, particularly during these more turbulent times.
Attention grabber
Killeen Colour Grab sheets is the latest innovation from Killeen, following on from the highly successful launch of the Killeen household glove range last year. Killeen Colour Grab sheets offer 20% more sheets per pack and a lower RRP than their nearest rivals while maintaining great retailer margins.
Supported by a high profile and memorable TV advertising campaign entitled ‘The Sneaky Red Sock,’ Killeen Colour Grab sheets in 24 pack, 40 pack and unique long lasting product, have outstanding on-shelf presence.
Close to 500,000 sample packs will be distributed to drive customers into stores and the eye-catching motorised in-store POS (with images from the TV ad) will ensure high levels of product sell through.
Killeen Colour Grab sheets provide a high quality value offering to the consumer with the full backing of Killeen’s first class sales force and a track record in increasing sales.
For more information phone Killeen Household Products on 041 9870300 or contact your Killeen sales rep.
Laundry giant grows 4.8% in first quarter
Unilever announced last month its first quarter results for 2009, reporting a 0.7% drop in turnover and a 43% dip in net profit across the business. Despite these results, the company said that all categories grew during the first quarter producing underlying sales growth of 4.8%, which it described as a “solid start.” While performance held up in developing and emerging markets, and improved in the US, Western Europe sales declined as market conditions continue to be challenging.
Overall, Unilever’s ‘home care and other’ category grew by 10.7% in the first quarter, mostly due to strong gains made in developing and emerging markets, which now represent 80% of turnover. Innovations such as the stain removal ingredient Oxymax has contributed to this growth, particularly among lower income consumers in South East Asia and South America.
In Western Europe however, the company is focusing on converting consumers to concentrated liquids, while also accelerating restructuring to improve its cost base. Unilever aims to stimulate growth in the slower European market through innovations such as Cif Acti-fizz and Domestos 24 Hours.
In India, Unilever is investing in CRS (corporate responsibility and sustainability) to help conserve water, through product innovation with its laundry product Surf Excel. The detergent which is mostly used for hand washing – a heavy water consumption activity – was reformulated to require less rinsing and therefore less water. As result, new Surf Excel Quick Wash saves two buckets of water per wash, and a targeted campaign was devised to promote the water conservation message.
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