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Household Paper Products - US - February 2015

SCOPE AND THEMES
What you need to know
Definition
Data sources
Sales data
Consumer survey data
Abbreviations and terms
Abbreviations
Terms
EXECUTIVE SUMMARY
The market
Amid economizing, an opportunity for premium-quality products
Figure 1: Total US sales and fan -chart forecast of household paper products, at inflation-adjusted prices, 2009-19
Three biggest segments dominate category but generate minimal growth
Figure 2: Sales of household paper products, segmented by type, 2012 and 2014
Top three companies control nearly three quarters of sales, but store brands on the rise
Figure 3: Manufacturer sales of household paper products, 2013 and 2014
The consumer
Usage slips for facial tissues and paper napkins
Figure 4: Household usage of paper products, by product type, 2009-14
Household size drives usage frequency
Figure 5: Household usage rate of paper products, by household size, August 2013-September 2014
What we think
ISSUES AND INSIGHTS
Leveraging new use occasions and partnerships to drive super-premium
The issues
The implications
Private label potential
The issues
The implications
Who says you can’t take it with you?
The issues
The implications
Cleaning up with push-and-wipe cleaners
The issues
The implications
MARKET SIZE AND FORECAST
Key points
Sales and forecast of household paper products
Figure 6: Total US sales and forecast of household paper products, at current prices, 2009-19
Figure 7: Total US sales and forecast of household paper products, at inflation-adjusted prices, 2009-19
Amid economizing, an opportunity for premium-quality products
Figure 8: Total US sales and fan-chart forecast of household paper products, at inflation-adjusted prices, 2009-19
Fan chart forecast
MARKET DRIVERS
Economizing mindset keeps sales growth in check
Figure 9: Paper product shopping behaviors, December 2013
Household income stabilizes but remains weak
Figure 10: Median household income, in inflation-adjusted dollars, 2003-13
Rising consumer confidence could help market
Figure 11: Thomson Reuters/University of Michigan Index of Consumer Sentiment, 2009-15
Households with kids decline as a percentage of all households
Figure 12: Households, by presence of children, 2003-13
Growing influence of Hispanic market
Figure 13: Households with own children, by race and Hispanic origin of householder, 2013
Figure 14: Population, by race and Hispanic origin, 2010-20
COMPETITIVE CONTEXT
Paper towels face competition from other cleaning products
Toilet paper not immune to competition from durables
Sales of sponges and scouring pads outpace paper towels by small margin
Figure 15: Total US sales and forecast of sponges and scouring pads, at current prices, 2009-19
Disposable wipes poised to gain, possibly at the expense of paper towels
Figure 16: Total US sales and forecast of cleaning cloths/wipes, at current prices, 2009-19
Competition across segments
SEGMENT PERFORMANCE
Key points
Biggest segments dominate category but generate minimal growth
Paper napkin sales slip amid declining usage
Flushable wipes and hand/face towelettes grow from small base
Opportunity to build all-family use of wet wipes
Sales of household paper products, by segment
Figure 17: Sales of household paper products, segmented by type, 2012 and 2014
Figure 18: Sales and forecast of household paper products, segmented by type, 2009-19
RETAIL CHANNELS
Key points
Value-focused channels continue to gain share
Subscription services gain momentum
Sales of household paper products, by channel
Figure 19: Sales of household paper products, by channel, 2012 and 2014
Figure 20: Sales of household paper products, by channel, 2009-14
LEADING COMPANIES
Key points
P&G share slips, but company holds lead
Kimberly-Clark manages slight gain
Manufacturer sales of household paper products
Figure 21: Manufacturer sales of household paper products, 2013 and 2014
BRAND SHARE – TOILET TISSUE
Key points
Private label continues to advance, but pace of gain slows
National brands place emphasis on specific features
Manufacturer sales of toilet tissue
Figure 22: Manufacturer sales of toilet tissue, 2013 and 2014
BRAND SHARE – PAPER TOWELS
Key points
Viva Vantage helps to expand super-premium niche
New super-premium entry from Bounty
Flexible sheet size options gain momentum
Manufacturer sales of paper towels
Figure 23: Manufacturer sales of paper towels, 2013 and 2014
BRAND SHARE – FACIAL TISSUE
Key points
Leading brands turn to packaging to reenergize slumping sales
Private label continues to advance
Manufacturer sales of facial tissue
Figure 24: Manufacturer sales of facial tissue, 2013 and 2014
BRAND SHARE – PAPER NAPKINS
Key points
Private label expansion puts squeeze on mid-tier brands
Manufacturer sales of paper napkins
Figure 25: Manufacturer sales of paper napkins, 2013 and 2014
BRAND SHARE – FLUSHABLE WET WIPES
Key points
Cottonelle’s dual use promotion may be benefiting overall segment
Manufacturer sales of flushable wet wipes
Figure 26: Manufacturer sales of flushable wet wipes, 2013 and 2014
BRAND SHARE – HAND/FACE MOIST TOWELETTES
Key points
Private label gains, but opportunities exist for innovative niche brands
Figure 27: Manufacturer sales of hand/face moist towelettes, 2013 and 2014
MARKETING STRATEGIES
P&G brands equate quality and strength with value
Charmin Ultra Strong
Figure 28: Charmin Ultra Strong, “Airport Security” TV spot, 2014
Charmin Ultra Soft
Figure 29: Charmin Ultra Soft, “Binoculars” TV spot, 2014
Bounty
Figure 30: Bounty, “Pizza Party” TV spot, 2014
Sparkle offers an alternative take on value
Figure 31: Sparkle paper towels, “Kerry the Fairy” TV spot, 2013
Cottonelle promotes dual usage
Figure 32: Sparkle paper towels, “Kerry the Fairy” TV spot, 2013
THE CONSUMER – WHAT YOU NEED TO KNOW
Key points
HOUSEHOLD USAGE TRENDS
Usage slips for facial tissues and paper towels
Figure 33: Household usage of paper products, by product type, 2009-14
HOUSEHOLD USAGE – KEY DEMOGRAPHICS
Facial tissue, paper napkin usage lowest among 25-34 age group
Figure 34: Household usage of paper products, by age, August 2013-September 2014
Usage incidence increases with household income
Figure 35: Household usage of paper products, by household income, August 2013-September 2014
Largest households a little less likely to use paper towels, facial tissues
Figure 36: Household usage of paper products, by household size, August 2013-September 2014
Black, Hispanic households less likely to use facial tissue
Hispanic and Asian households more likely to use paper napkins
Figure 37: Household usage of paper products, by race/Hispanic origin, August 2013-September 2014
USAGE FREQUENCY
Household size drives usage frequency
Figure 38: Household usage rate of paper products, by household size, August 2013-September 2014
BRANDS USED MOST OFTEN
Toilet paper brands show modest demographic skews
Figure 39: Brand of toilet paper used most often in household, by demographics, August 2013-September 2014
Bounty tops paper towel usage across demographic groups
Figure 40: Brand of paper towels used most often in household, by demographics, August 2013-September 2014
Kleenex dominates facial tissue usage
Figure 41: Brand of facial tissue used most often in household, by demographics, August 2013-September 2014
Private label paper napkins prevalent across demographic groups
Figure 42: Brand of paper napkins used most often in household, by demographics, August 2013-September 2014
APPENDIX – OTHER USEFUL CONSUMER TABLES
Household usage rate of paper products
Figure 43: Household usage rate of paper products, by age, August 2013-September 2014
Figure 44: Household usage rate of paper products, by household income, August 2013-September 2014
Figure 45: Household usage rate of paper products, by household size, August 2013-September 2014
APPENDIX – TRADE ASSOCIATIONS
American Forest & Paper Association (AF&PA)
Sanitary Supply Wholesaling Association (SSWA)
Manufacturers Representatives of America, Inc. (MRA)

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