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Household Paper Products - US - October 2010

SCOPE AND THEMES
What you need to know
Definition
Data sources
Sales data
Consumer survey data
Advertising creative
Abbreviations and terms
Abbreviations
Terms
EXECUTIVE SUMMARY
Recession dampens sales from 2008-10
Green products and Hispanic population offer prospects for future growth
Private-label offerings build share at the expense of national brands
Segment sales trends
Toilet tissue is leading segment
Paper towels posts solid growth from 2008-10
Facial tissues and napkins show weak sales and lose share
Moist towelettes is fast-growing, but small, segment
Mass merchandisers move into the lead
Three largest suppliers command three quarters of market
Brand shares by segment show rise of private-label brands
Innovations seen in packaging, new products and retail approaches
Brand qualities vary with product type
Advertising strategies and major campaigns of 2009-10
Consumer trends: buying and usage
Paper towels
Napkins
Toilet paper
Facial tissue
Consumer attitudes and purchase behavior
Brand allegiance varies with product type, gender, age and income
Strength, softness and absorbency required
Attitudes towards reusable and eco-friendly products
Race/Hispanic origin significant in shaping usage and attitudes
INSIGHTS AND OPPORTUNITIES
Green products offer growth prospects
INSPIRE INSIGHTS
Trading Up, Trading Down, Trading Over
What it’s about: The recession is shifting our perceptions of value and purchasing habits
Just clean it up—with anything
Reusable consumers
Eco and Ego
What it’s about: Are we authentically concerned with being green, or does it just make us feel better about our consumption choices?
Greenvenience
Home as Self
What it’s about: We invest so much in our homes that they become a reflection of us
Be a décor partner…
…but maintain core brand equities
MARKET SIZE AND FORECAST
Key points
Recession hits market driving down sales since 2008
Paper napkins and facial tissues weakest segments in 2009-10
Private-label offerings likely to maintain share
Growth prospects in recycled products, wipes and with young, non-white
Figure 1: Total U.S. sales of household paper products, at current prices, 2005-15
Figure 2: Total U.S. sales of household paper products, at inflation-adjusted 2010 prices, 2005-15
Walmart sales
MARKET DRIVERS
Key points
Growth of U.S. households slows in 2008-09
Figure 3: Total number of U.S. households, 2001-09
Consumers cut expenditures in climate of economic uncertainty
Figure 4: University of Michigan’s Index of Consumer Sentiment (ICS), 2001-10
Over two thirds reduce household spending in 2009 to save money
Majority of consumers make changes to reduce spending on paper products
Recycled and eco-friendly paper products offer opportunity for further growth
Colds and flu can drive demand for tissue and for products used in household cleaning
COMPETITIVE CONTEXT
Key points
Reusable products compete with paper products
Figure 5: FDMx sales and forecast of sponges, cleaning pads and cloths, 2004-14
Innovations in renewable products include versatility and eco-friendliness
Disposable cleaning wipes compete with paper towels
Figure 6: FDMx sales and forecast of cleaning cloths/wipes, 2004-14
Clorox introduces heavy-duty wipes
Private-label products compete with national brands
National brands introduce basic, high-value products
Private-label offerings embrace more specialized products
SEGMENT PERFORMANCE
Key points
Toilet tissue slows, paper towels grows, facial tissues and napkins fall
Younger buyers and parents propel strong growth for towelettes
Figure 7: FDMx sales and forecast of household paper products, by segment, 2005-15
Figure 8: FDMx sales and forecast of household paper products, by segment, 2008 and 2010
SEGMENT PERFORMANCE—TOILET TISSUES
Key points
Price increases and brand allegiance shape five-year growth
Economizing leads sales to fall in 2010
Sales and forecast of toilet tissues
Figure 9: Total U.S. sales and forecast of toilet tissues, 2005-15
SEGMENT PERFORMANCE—PAPER TOWELS
Key points
Paper towels outperforms market, drawing sales from other segments
Promoting recycled materials and focus on healthy living may drive sales
Sales and forecast of paper towels
Figure 10: Total U.S. sales and forecast of paper towels, 2005-15
SEGMENT PERFORMANCE—FACIAL TISSUE
Key points
Competition from other segments and private labels drive down sales
Sales and forecast of facial tissue
Figure 11: Total U.S. sales and forecast of facial tissues, 2005-15
SEGMENT PERFORMANCE—PAPER NAPKINS
Key points
Limited brand allegiance and economizing efforts drive down sales
Sales and forecast of paper napkins
Figure 12: Total U.S. sales and forecast of paper napkins, 2005-15
SEGMENT PERFORMANCE—MOIST TOWELETTES FOR HANDS AND FACE
Key point
Moist towelettes offer exceptional growth
Innovations drive interest in the segment
Sales and forecast of moist towelettes
Figure 13: Total U.S. sales and forecast of moist towelettes, 2005-15
RETAIL CHANNELS
Key points
Mass merchandisers emerge as dominant channel
Supermarkets lose ground despite strong use by older, affluent consumers
“Other” retailers comprise fastest-growing retail channel
Sales of household paper products by retail channel
Figure 14: Total sales of household paper products, by retail channel, 2005-10
Figure 15: U.S. retail sales of household paper products, by retail channel, 2008 and 2010
RETAIL CHANNELS—SUPERMARKETS
Key points
Once dominant channel loses ground to mass merchandisers
Supermarkets offer range of private-label products
Supermarket sales of household paper products
Figure 16: U.S. supermarket sales of household paper products, at current prices, 2005-10
RETAIL CHANNELS—MASS MERCHANDISERS
Key points
Target offers standout graphics and playful packaging
Walmart offers varied private-label brands and promotes sustainability
Sam’s Club and Costco offer private label and bulk packaging
Mass sales of household paper products
Figure 17: U.S. mass sales of household paper products, at current prices, 2005-10
RETAIL CHANNELS—OTHER RETAILERS
Key points
Drug stores offer wide range of private-label offerings
Convenience stores and dollar stores also develop store brands
Figure 18: U.S. other retailer sales of household paper products, at current prices, 2005-10
LEADING COMPANIES
Key points
Procter & Gamble leading supplier, followed by Kimberly-Clark
Growth in private-label brands at the expense of the major suppliers
Manufacturer sales of toilet tissues, paper towels, facial tissue, paper napkins, and moist towelettes
Figure 19: Manufacturer FDMx sales of toilet tissues, paper towels, facial tissue, paper napkins, and moist towelettes, 2009 and 2010
BRAND SHARE—TOILET TISSUES
Key points
Scott Naturals offers best performance for K-C
P&G shows small gain in share
Georgia-Pacific’s Angel Soft gains market share
Moist tissues show poor sales for all three major suppliers
Private-label offerings gain market share
Manufacturer and brand sales of toilet tissues
Figure 20: Selected brand FDMx sales and market share of toilet tissues, 2009 and 2010
BRAND SHARE—PAPER TOWELS
Key points
National suppliers lose share to private labels
P&G has leading share with Bounty
Kimberly-Clark loses market share
Georgia-Pacific posts declines in sales
Private label shows strongest growth in the segment
Manufacturer and brand sales of paper towels
Figure 21: Selected brand FDMx sales and market share of paper towels, 2009 and 2010
BRAND SHARE—FACIAL TISSUE
Key points
Kleenex leads segment, but loses share
P&G’s Puffs sees sales fall and share stagnate
Irving-Scott sees share in decline
Private-label offerings expand reach
Manufacturer and brand sales of facial tissue
Figure 22: Selected brand FDMx sales and market share of facial tissue, 2009 and 2010
BRAND SHARE—PAPER NAPKINS
Key points
Georgia-Pacific continues loss of market share
Building on strong brand presence in paper towels, Bounty performs well
Hoffmaster offers specialty products
Private-label offerings expand lead in segment
Manufacturer and brand sales of paper napkins
Figure 23: Selected brand FDMx sales and market share of paper napkins, 2009 and 2010
BRAND SHARE—MOIST TOWELETTES FOR HANDS AND FACE
Key points
Private label drives growth in the segment
Playtex’s Wet Ones remains dominant national brand
Kimberly-Clark sees sales fall
Manufacturer and brand sales of moist towelettes
Figure 24: Selected brand FDMx sales and market share of moist towelettes, 2009 and 2010
INNOVATION AND INNOVATORS
Key points
Innovations in sizing and packaging
Innovations in design
Licensing agreements in kid-oriented products
New wipe products with kid-friendly packaging and lotions
Eco-friendly products
Kleenex hand towels carve out new area for product usage
Launch of soap.com may change retail landscape
MARKETING STRATEGIES
Overview and key points
 MARKETING THEMES
Babies and cute animals to suggest softness, vulnerability of toilet paper brands
Paper towel brands tend to emphasize toughness, strength and performance
Tissue brands focus on design, femininity and health of kids
 COMPANY AND BRAND ACTIVITY
Cottonelle and Charmin Ultra use puppies and cartoons in toilet paper ads
Figure 25: Brand analysis of Cottonelle, 2010
Figure 26: Cottonelle toilet tissue, TV ad, 2009
Charmin offers long history and touts high value
Angel Soft showcases softness and strength in toilet paper
Cottonelle’s humorous, irreverent multi-platform Great Debate Ad Campaign
Figure 27: Cottonelle “great debate” tissue, TV ad, 2010
Cottonelle social media
Bounty
Benefits from brand history and showcases value
Figure 28: Brand analysis of Bounty, 2010
Quality promoted on TV
Figure 29: Bounty paper towels, TV ad, 2010
Bounty and P&G’s innovative use of website with dinnertool.com
Kleenex offers varied activity
Showcases how its products help protect kids
Figure 30: Brand analysis of Kleenex, 2010
Figure 31: Kleenex facial tissue, TV ad, 2010
Promotes hand towels for the bathroom as cleaner alternative to cloth
Figure 32: Kleenex hand towels, TV ad, 2010
Outreach to Hispanics with design competition and other programs
Kleenex social media
Scott Naturals presents “Green Done Right”
Figure 33: Scott Naturals, TV ad, 2010
 PROMOTING CHARITIES AND CAUSES
CONSUMER—USAGE TRENDS, CONSUMPTION PATTERNS, PURCHASE LOCATIONS
Key points
Trended data show drop in napkin usage from 2004-09
Figure 34: Household paper consumption, by product type, 2004-09
CONSUMER—TYPES, BRANDS AND VOLUME USAGE
 PAPER TOWELS
Key points
Household paper consumption
Figure 35: Types and brands of paper towels used, by household income, February 2009-March 2010
Usage averages about a roll of paper towel per week
Figure 36: Volume of paper towels used, by household income, February 2009-March 2010
Household size and children in household drives use of paper towels
Figure 37: Volume of paper towels used, by household size and presence of children, February 2009-March 2010
 PAPER NAPKINS
Key points
Almost half report using store brand napkins
Figure 38: Brands of paper napkins used, by household income, February 2009-March 2010
Lower-income households use the most paper napkins
Figure 39: Volume of paper napkins used, by household income, February 2009-March 2010
Household size and kids drive use of paper napkins
Figure 40: Volume of paper napkins used, by household size and presence of children, February 2009-March 2010
 TOILET PAPER
Key points
Charmin brand leads in toilet paper
Figure 41: Brands of toilet paper used, by age, February 2009-March 2010
Upper-income households show higher use of Charmin
Figure 42: Brands of toilet paper used, by household income, February 2009-March 2010
Household size drives demand for toilet tissue
Figure 43: Volume of toilet paper used, by household size and presence of children, February 2009-March 2010
 FACIAL TISSUES
Key points
Household paper consumption
Figure 44: Types and brands of facial tissues used, by age, February 2009-March 2010
Larger households and those with children use the most tissue
Figure 45: Volume of facial tissue used, by number of people in household and presence of children, February 2009-March 2010
WHERE HOUSEHOLD PAPER PRODUCTS ARE BOUGHT
Key points
Location where purchased
Figure 46: Source of household paper products, by age, June 2010
Income shapes retailer choice
Figure 47: Source of household paper products, by household income, June 2010
Larger households turn to Walmart and warehouse stores
Figure 48: Source of household paper products, by household size and presence of children, June 2010
BRAND VS. PRIVATE-LABEL PURCHASING
Key points
Brand choice
Figure 49: National vs. store brand household paper brand purchase habits, by gender and age, June 2010
Income shapes likelihood of purchasing national brands
Figure 50: National vs. store brand household paper brand purchase habits, by household income, June 2010
One-person households buy fewer products and fewer national brands
Figure 51: National vs. store brand household paper brand purchase habits, by household size and presence of children, June 2010
REASONS FOR BUYING NATIONAL BRANDS
Key points
Strength, softness and absorbency key qualities in toilet tissue
Figure 52: Reasons for choosing national brand toilet tissue, by gender and age, June 2010
Strength and absorbency top qualities for paper towels
Figure 53: Reasons for choosing national brand paper towels, by gender and age, June 2010
Strength and absorbency top qualities for napkins
Figure 54: Reasons for choosing national brand paper napkins, by gender, June 2010
Softness is key for facial tissues
Figure 55: Reasons for choosing national brand facial tissue, by gender and age, June 2010
ATTITUDES TOWARDS HOUSEHOLD PAPER PURCHASE, ECONOMIZING AND USAGE
Key points
Attitudes and practices
Figure 56: Household paper product purchasing economizing attitudes and practices, by gender and age, June 2010
Income shapes the primacy placed on price
Figure 57: Household paper product purchasing attitudes and practices, by household income, June 2010
Household size and presence of children have significant impact on attitudes
Figure 58: Household paper product purchasing attitudes and practices, by household size and presence of children, June 2010
EFFECT OF THE RECESSION ON PURCHASING
Key points
Majority make changes to economize
Figure 59: Effect of the recession on household paper product purchases, by gender and age, June 2010
Efforts to economize strong for households with income less than $100K
Figure 60: Effect of the recession on household paper product purchases, by household income, June 2010
Larger households buy in bulk
Figure 61: Effect of the recession on household paper product purchases, by household size and presence of children, June 2010
ATTITUDES TOWARDS HOUSEHOLD PAPER PURCHASE AND ENVIRONMENTAL CONCERNS
Key points
Those aged 18-34 show strongest interest in eco-friendly products
Figure 62: Eco-friendly purchasing attitudes and practices, by gender and age, June 2010
Income drives interest in “green” products
Figure 63: Eco-friendly purchasing attitudes and practices, by household income, June 2010
Larger households and families undertake more “green” practices
Figure 64: Eco-friendly purchasing attitudes and practices, by household size and presence of children, June 2010
Interest in “green” options rises with educational attainment
Figure 65: Eco-friendly purchasing attitudes and practices, by level of educational attainment, June 2010
IMPACT OF RACE AND HISPANIC ORIGIN
Key points
Napkin brand choice varies with race/Hispanic origin
Figure 66: Brands of paper napkins used, by race/Hispanic origin, February 2009-March 2010
Blacks and Hispanics use more napkins
Figure 67: Volume usage of paper napkins, by race/Hispanic origin, February 2009-March 2010
Blacks and Hispanics use more toilet paper
Figure 68: Volume usage of toilet paper, by race/Hispanic origin, February 2009-March 2010
Variations seen in facial tissue preferences
Figure 69: Types and brands of facial tissues used, by race/Hispanic origin, February 2009-March 2010
Usage of facial tissue higher among blacks and Hispanics
Figure 70: Volume of purchase of facial tissue, by race/Hispanic origin, February 2009-March 2010
Attitudes vary with race/Hispanic origin
Figure 71: Household paper product purchasing attitudes and practices, by race and Hispanic origin, June 2010
Asians and Hispanics economize
Figure 72: Impact of recession on household paper product purchases, by race and Hispanic origin, June 2010
Asians and Hispanics undertake more “green” practices
Figure 73: Eco-friendly attitudes and practices, by race and Hispanic origin, June 2010
CLUSTER ANALYSIS
Paperless, economically unaffected
Demographics
Characteristics
Opportunities
Price-sensitive, store-branded
Demographics
Characteristics
Opportunities
National branders
Demographics
Characteristics
Opportunities
Characteristic tables
Figure 74: Household paper clusters, June 2010
Figure 75: Source of household paper products, by household paper clusters, June 2010
Figure 76: National vs. store brand household paper brand purchase habits, by household paper clusters, June 2010
Figure 77: Household paper product purchasing economizing attitudes and practices, by household paper clusters, June 2010
Figure 78: Effect of the recession on household paper product purchases, by household paper clusters, June 2010
Demographic tables
Figure 79: Household paper clusters, by gender, June 2010
Figure 80: Household paper clusters, by age, June 2010
Figure 81: Household paper clusters, by household income, June 2010
Figure 82: Household paper clusters, by race, June 2010
Figure 83: Household paper clusters, by Hispanic origin, June 2010
Cluster methodology
CUSTOM CONSUMER GROUPS
Key points
National brands most popular among blacks with higher household income
Figure 84: National vs. store brand household paper brand purchase habits, by race and household income, June 2010
High household income non-Hispanic consumers more eager for national brands
Figure 85: National vs. store brand household paper brand purchase habits, by Hispanic origin and household income, June 2010
Children help men be more aware of toilet paper quality
Figure 86: Reasons for choosing national brand toilet tissue, by gender and presence of children, June 2010
Figure 87: Reasons for choosing national brand paper towels, by gender and presence of children, June 2010
Men without kids already know why to buy national brand facial tissues
Figure 88: Reasons for choosing national brand facial tissue, by gender and presence of children, June 2010
IRI/BUILDERS PANEL DATA—KEY HOUSEHOLD PURCHASE MEASURES
 PAPER TOWELS
Consumer insights on key purchase measures—paper towels
Brand map
Figure 89: Brand map, selected brands of paper towels, buying rate, by household penetration, 2009*
Brand leader characteristics
Key purchase measures
Figure 90: Key purchase measures for the top brands of paper towels, by household penetration, 2009*
 TOILET TISSUE
Consumer insights on key purchase measures—toilet tissue
Brand map
Figure 91: Brand map, selected brands of toilet tissue, buying rate, by household penetration, 2009*
Brand leader characteristics
Key purchase measures
Figure 92: Key purchase measures for the top brands of toilet tissue, by household penetration, 2009*
 FACIAL TISSUE
Consumer insights on key purchase measures—facial tissue
Brand map
Figure 93: Brand map, selected brands of facial tissue, buying rate, by household penetration, 2009*
Brand leader characteristics
Key purchase measures
Figure 94: Key purchase measures for the top brands of facial tissue, by household penetration, 2009*
 PAPER NAPKINS
Consumer insights on key purchase measures—paper napkins
Brand map
Figure 95: Brand map, selected brands of paper napkins, buying rate, by household penetration, 2009*
Brand leader characteristics
Key purchase measures
Figure 96: Key purchase measures for the top brands of paper napkins, by household penetration, 2009*
 MOIST TOWELETTES
Consumer insights on key purchase measures—moist towelettes
Brand map
Figure 97: Brand map, selected brands of moist towelettes, buying rate, by household penetration, 2009*
Brand leader characteristics
Key purchase measures
Figure 98: Key purchase measures for the top brands of moist towelettes, by household penetration, 2009*
 BABY WIPES
Brand map
Figure 99: Brand map, selected brands of baby wipes, buying rate, by household penetration, 2009*
Brand leader characteristics
Key purchase measures
Figure 100: Key purchase measures for the top brands of baby wipes, by household penetration, 2009*
APPENDIX: TRADE ASSOCIATIONS

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