Laundry Daze

November 22, 2005

Manufacturers search for ways to entice consumers by adding new benefits to existing brands.

It’s been a quiet year in the laundry category. No major innovations or headline-grabbing acquisitions. No big gains for any of the market leaders, although Huish is making in-roads in the liquid category. And the relentless erosion of powder sales continued in 2004. Sales of liquid laundry detergents topped $2.4 billion, while powder detergent sales brought in $850 million for the year ended Oct. 31, 2004, according to Chicago-based Information Resources, Inc. Overall, U.S. laundry detergent sales fell 3.5% to $3.3 billion, according to IRI. While liquid sales remained relatively static last year, dollar sales from powders continued to plummet, down more than 10% compared to the previous year’s figures. It is also no surprise that Procter & Gamble’s Tide held on to the No. 1 spot in both liquid and powder categories (with combined sales approximately $2 billion). And the same big players, including P&G, Unilever, The Dial Corp. and Church & Dwight, continued to lead the pack in product sales.

As liquids continue to offer additional benefits at an affordable price, powder sales are suffering the consequences. “The category has been transitioning from powders to liquids for quite some time now,” commented Stacie Bright, communications marketing manager for Unilever North America. “At this point, it’s a self-fulfilling prophecy as the trade continues to de-list powder SKUs to make more room for more liquids, where most of the innovations are focused. Manufacturers are focusing their efforts largely on liquids and trying to maintain their powder shares rather than trying to re-grow the powder segment.”

Is brand loyalty still a key factor when it comes to choosing a detergent? “It continues to be important, but I don’t think it is an absolute,” said Kevin Kuchinski, Church
& Dwight’s senior director of marketing, laundry group. “Consumers have several brands in their acceptable set, and one preferred brand. They are driven by price and promotion.”

According to Ms. Bright, consumers usually consider several detergents before making the decision of which one to buy at the point of purchase. “That said, consumers can certainly be enticed by new products that they perceive offer a real advantage over what they are currently using,” added Ms. Bright.

Although there has been little in the way of major innovations for laundry detergents in the past year, manufacturers are looking for ways to boost sales in a relatively static market and entice consumers to continue purchasing—or switch over to—their brands. Line extensions featuring a variety of new scents, stain-removal gadgets and improved formulations to existing brands are crowding the shelves. Obviously, consumers expect laundry detergents to get clothes clean, but what else are they looking for?

“Cleaning is the name of the game in this category,” commented Ms. Bright. “But consumers are looking for benefits to layer on top of that. Fragrance has been the primary focus, but there have been niche opportunities for [washing in] cold water, keeping darks dark and now, of course, the additional benefit of some level of softening in the wash as well.”

Powder Sales Continue to Plummet
Here are the top vendors of powder laundry detergents in the U.S., along with the total sales figures for the laundry powder category. Results are for the 52 weeks ended Oct. 31, 2004 and do not include Wal-Mart sales.
Company $ Sales % Change $ Share Unit Sale % Change
Procter & Gamble $626,554,688 -8.0 74.1 80,424,328 -8.2
Church & Dwight $67,269,208 -16.2 8.0 13,478,860 -17.7
Lever Brothers $59,043,580 -20.2 7.0 10,731,700 -16.7
Private Label $20,521,552 -22.5 2.4 5,050,318 -20.7
The Dial Corp. $20,400,180 -25.1 2.4 7,299,407 -24.6
Huish $18,359,012 -0.5 2.2 6,640,154 -1.1
Fabrica De Jabon $16,560,155 -9.6 2.0 5,410,954 -10.1
Colgate-Palmolive $11,432,467 -11.9 1.4 3,025,821 -7.5
Redox $2,540,564 -16.7 0.3 420,491 -13.5
Category Total $845,265,984 -10.6 100 132,980,456 -11.4
Source: Information Resources, Inc. (IRI), Chicago

Getting Soft on Clean
In a society where time is of the essence, many consumers don’t want to wait around the laundry room to add in fabric softener. Earlier this year, Procter & Gamble found a way to solve this problem with the introduction of Tide with a Touch of Downy, which company executives call the biggest initiative since Tide with Bleach was introduced in the 1980s. By adding Downy right into the detergent, the whole softening aspect takes place throughout the wash so consumers don’t have to add in softener separately.

Tide with a Touch of Downy is P&G’s biggest initiative since Tide with Bleach was introduced in the 1980s, according to executives.

“We ran a test of more then 125 different concepts among thousands of consumers and this was a leading idea,” said P&G spokesperson Randy Chinchilla. “We made a strategic choice to pursue innovation and we moved ahead in record time. It took us one year from idea to market for Tide with a Touch of Downy and consumer response has exceeded expectations.”

The need for softener is more than a passing trend, according to Ms. Bright. “Softening in the wash will become a segment of the category that, like bleach and fragrance variants, will become part of every franchise,” she predicted.

Top Ten Powder Laundry Detergents by Brand
Here are the top 10 powder laundry detergent brands in the U.S for the 52 weeks ended Oct. 31, 2004, excluding Wal-Mart sales.
Brand $ Sales % Change $ Share Unit Sale % Change
Tide $403,837,952 -7.9 47.8 45,179,428 -8.1
Gain $126,207,208 -4.0 14.9 19,326,406 -4.7
Cheer $57,077,172 -14.8 6.8 8,101,128 -15.1
Arm & Hammer $55,152,836 -13.6 6.5 9,118,798 -12.2
Surf $40,376,572 -12.9 4.8 7,153,500 -10.1
Private Label $20,521,552 -22.5 2.4 5,050,318 -20.7
Sun $18,320,564 -0.3 2.2 6,635,709 -1.0
Ariel $17,226,436 -1.6 2.0 4,717,388 -3.8
All $15,318,838 -7.0 1.8 2,942,388 2.6
Purex $15,303,777 -24.5 1.8 4,570,510 -23.0
Category Total: $845,265,984 -10.6 100 132,980,456 -11.4
Source: Information Resources, Inc. (IRI), Chicago

Creating an Experience
Earlier this year, researchers Linda Buck of Seattle’s Fred Hutchinson Cancer Research Center and Richard Axel of Columbia University earned a Nobel Peace Prize by explaining how the sense of smell evokes memories and past experiences. Executives at Church & Dwight couldn’t agree more. “Consumers are moving toward more experiential fragrances,” explained Mr. Kuchinski. “We are not just selling a scent, we are selling an experience.” In 2004, the company introduced Arm & Hammer’s Tropical Burst and Xtra’s Floral Garden Fantasy. “Floral Garden Fantasy gives consumers the feeling of being in a garden with flowers all around, while Tropical Burst is like an escape to a place of peace and serenity.”

Church & Dwight has also redesigned its packaging to make it easier for consumers to harmonize the scent of products used. The caps are color-coded so consumers can match the fragrances of detergent and softener at a glance without wasting time reading labels. Products also feature a photo-realistic image corresponding to the scent on the lower right-hand corner. Arm & Hammer liquid detergent has also changed from yellow to the company’s signature orange, helping consumers visually link the color to the trusted Arm & Hammer name. The detergent itself has been reformulated to provide 50% whiter and brighter results, according to Mr. Kuchinski.

Procter & Gamble launched Downy Simple Pleasures, a collection of fabric softeners created with natural essential oils for a “new scent experience,” according to company executives. “These products are for consumers who want to get more enjoyment from the ordinary things in life,” commented Mr. Chinchilla. “They are directed to create an experience, not just a nice smell, sort of like fabric softener meets Bath & Body Works.”

The products are available in Vanilla & Lavender, Water Lily & Jasmine and Morning Glory & Honeysuckle variants.

Shreveport, LA-based Essencia also incorporates essential oils into laundry care products. In September, the company introduced dryer bags in lavender and chamomile, allowing consumers to reap the benefits of aromatherapy in their laundry. The porous paper bags, which contain natural lavender and chamomile flower buds, are tossed in the dryer with wet laundry, where the heat activates the essential oils. Each bag can be reused up to five times and retails in specialty stores for $2.50.

To connect to consumers on an emotional level, Unilever’s All brand underwent a major repositioning by creating a bright new package graphic and an advertising campaign encouraging All consumers to laugh at life’s little mishaps, explained Ms. Bright. The ads show scenarios such as freshly laundered clothes dropping out of a basket and someone spilling a little wine after a few too many sips. The “Look on the Bright Side” campaign will be expanded during 2005, said Ms. Bright.

Liquid Sales Remain Relatively Stagnant
Here are the top 10 vendors of liquid laundry detergents in the U.S., along with the total figures for the entire powder laundry category. Results are for the 52 weeks ended Oct. 31, 2004 and do not include Wal-Mart sales.
Company $ Sales % Change $ Share Unit Sale % Change
Procter & Gamble $1,349,451,904 3.9 55.4 193,517,456 2.0
Lever Brothers $404,971,520 -6.3 16.6 82,014,848 - 4.6
The Dial Corp. $251,960,000 0.1 10.3 75,147,152 1.0
Church & Dwight $251,733,200 1.0 10.3 83,529,536 2.8
Colgate-Palmolive $74,409,168 -0.4 3.1 23,641,806 1.8
Private Label $54,020,744 -9.8 2.2 16,797,078 -7.1
Huish $26,041,838 25.8 1.1 9,014,749 35.6
Reckitt Benckiser $8,326,569 -6.3 0.3 3,014,399 18.8
Redox $3,432,943 -25.3 0.1 833,278 1.1
Laundry Aids $2,763,086 -8.8 0.1 1,283,989 -12.5
Category Total: $2,435,986,688 1.0 100 490,463,104 1.0
Source: Information Resources, Inc. (IRI), Chicago

A New Approach to Eliminate Stains
When it comes to fighting stains, manufacturers have discovered new ways to make the process easier for time-crunched consumers.

Clorox’s Bleach pen allows for precise application.

In 2003, Clorox introduced a dual-tipped pen containing bleach in a gel-form that allows consumers to target stains. One tip is a narrow, fine point for precise stain removal and the other is a wider, broad scrubber tip for larger tasks. According to Aileen Zerrudo, communications manager for Clorox, the Bleach pen is a timesaving tool for the laundry room. “It is ideal for time-strapped consumers who want to eliminate stains on clothing because the quick, targeted application achieves fast results.”

Earlier this year, P&G launched the Tide Stainbrush—a battery-powered brush with an oscillating head that helps the liquid detergent penetrate the stain. “This product represents Tide thinking out of the box, literally,” said Mr., Chinchilla. “Because 70% of consumers pretreat in some form or another, we identified a need and found a way to makes consumers’ lives easier with a brand they know and trust.”

Orange Glo’s OxiClean has seen strong growth in 2004, insisted Cathy Underwood, brand manager. Last spring the company launched OxiClean Dual Stain Fighter, which is currently being re-branded as OxiClean Triple Power and will be on shelves this month. “This product has triple power just as the name says,” said Ms. Underwood. “It helps consumers save time because you get it all with just one product. It fights stains, brightens colors and boosts the detergent. Consumers don’t have time to sort through laundry to find the stains.”

Ms. Underwood said consumer response has been phenomenal. During a recent survey conducted by Orange Glo, approximately 96% of consumers who used the product said they would repurchase it.

The Soap and Detergent Association Looks Back on a Busy Year
As The Soap and Detergent Association (SDA) prepares for its 79th annual meeting & industry convention, president and chief executive officer Ernie Rosenberg recalled a non-stop, whirlwind year of activity and achievement.

“As the U.S. home of the cleaning product and oleochemical industries, SDA has been more focused on delivering value for our members,” said Mr. Rosenberg. “We recognize the challenging business and regulatory environments in which our members operate on a daily basis. Every one of our members has to deliver value to their customers to succeed. We maintain the same focus for SDA’s membership.”

Ingredient Defense
Ingredient defense has long been one of SDA’s hallmarks and 2004 was no different. SDA continued its successful opposition of state-level attempts to ban the sale of automatic dishwashing detergents containing phosphates, through direct legislative testimony and in-state coalition building. But SDA is expecting ban proponents to renew their efforts in 2005, especially in Michigan, Minnesota, Vermont and Massachusetts.

Similarly, SDA worked to protect the I&I marketplace for cleaners, disinfectants and sanitizers. The association helped convince Massachusetts lawmakers to forgo legislation that would have required state product purchases to be made from a so-called “healthy cleaning products list.” SDA testified in person twice against the bill and shared SDA educational materials with lawmakers, describing how cleaning products are effective in reducing the triggers that cause allergy and asthma suffering.

SDA also helped convince the U.S. Food and Drug Administration (FDA) not to restrict the use of tallow derivatives undergoing specified processes, in food, cosmetics and dietary supplements. As a result of SDA’s work and research, tallow derivatives were exempted from the Interim Final Rule published on July 9, 2004.

Leadership on HPVC Issues
SDA is one of the leading managers of chemical consortia fulfilling the demands of the global and U.S. high production volume (HPV) chemical programs. Of the nine SDA-managed chemical consortia, seven (aliphatic acids, aliphatic alcohols, alkyl sulfates, amine oxides, glycerides, hydrotropes and fatty acid esters) have achieved “global consortium” status and sponsored their respective chemicals to the OECD chemical screening program known as the “SIDS Programme” (Screening Information Data Set).

“It is imperative that we communicate accurate information on HPV chemicals used as cleaning product ingredients to the stakeholder community, particularly those considering the development of voluntary and regulatory testing initiatives and right-to-know programs,” said Mr. Rosenberg.

Important Strategic Partnerships
One of SDA’s proudest achievements is its ongoing partnership with the U.S. Centers for Disease Control and Prevention (CDC). The School Network for Absenteeism Prevention (SNAP) program (www.itsasnap.org) encourages middle schools to develop programs that make hand hygiene a priority for students, teachers, school health personnel, administrators, and parents. SNAP received national recognition last month when it was profiled by Parade magazine.

Looking Ahead: 2005
The theme of SDA’s 2005 convention, January 25-29, 2005 at the Boca Raton (FL) Resort & Club, is “A better world through hygiene, health and wellness.”

“During our 3rd Annual SDA Hall of Fame, our members will be exhibiting posters that showcase how their products make the world a better place to live,” said Mr. Rosenberg.
The topic will also be addressed by Dr. Sue Bailey, an NBC News health analyst and a former Assistant Secretary of Defense-Health Affairs, in a keynote breakfast speech.

Another highlight will be a keynote address by former U.S. Senator Bob Dole, who will offer his perspective on the U.S. political and legislative landscape.

“We will also be unveiling our new SDA Principles of Sustainability, which represent our members’ commitment to the enhancement of human health and quality of life through the responsible formulation, production and sale of cleaning products and ingredients,” added Mr. Rosenberg.

More info: (202) 347-2900 or visit the website at www.cleaning101.com.

Finding A Niche
In an industry where the major players rarely change, smaller companies are trying to find a place for themselves by introducing products to niche markets.

Hobe Sound, FL-based The Ecology Works launched Anti-Allergen Solution Hypo Allergenic laundry detergent in June. “For years allergy suffers have relied on tannic acid to neutralize allergens with some success,” explained James Burnett, president of The Ecology Works. “But tannic acid has several drawbacks. It will stain lightly colored fabrics and, due to its acid pH, it does not combine with alkaline-based laundry detergents.”

Mr. Burnett said sales have been strong through the traditional markets such as specialty stores, but the crossover into the mainstream is just beginning. CVS Pharmacy has added an environmental allergy control section in stores and has started selling his products.

OxiClean also launched an anti-allergy product this past summer. OxiClean Free is a stain removal powder with no dyes, fragrances, harsh detergents or bleach. The liquid form will be introduced sometime this month.

In another niche area, OxiClean launched OxiClean Baby Stain Soaker in both a powder and a spray. “We saw a need for baby-specific products so we launched these two,” explained Ms. Underwood. “Baby stains are different from kids’ stains—more organic. We felt we could develop a formula for babies to get rid of stains and be gentler on the skin.”

Both products are sold at BabiesRUs, Target’s baby section and, beginning in January, SafeWay will carry the products. According to Ms. Underwood, moms have been waiting for an accompaniment to their regular laundry care with stain removing properties.

“We launched our first advertising campaign in parenting publications earlier this year,” explained Ms. Underwood. “We offered a free sample to consumers who called in and we actually ran out of samples.”

Fruits & Passion’s Art Home collection features ecologically friendly products.

Canadian company Fruits & Passion introduced the Art Home collection, which is comprised of ecologically minded cleaning products designed to pamper household surfaces. As opposed to competing with other brands on the market, Fruits & Passion is simply looking to find a niche market of consumers who are willing to pay a little more for an efficient, ecological product that they enjoy using.

“The ‘ritual’ notion is the main idea behind all of our product lines,” explained Severine Mathe, marketing manager, product development, for Fruits & Passion. “The cleaning ritual is a daily ritual. We also wanted to create a cleaning line with pleasant fragrances. A daily ritual can be very powerful when it evokes one of our senses.”

The company introduced Botanical detergent for delicate fabrics, Linen water and Linen water spray. The products are sold in specialty stores and gift boutiques.

When it comes to competition, it hasn’t been business as usual for private label manufacturers this year, commented Ash Gandhi of Manhattan Products, Inc. According to him, private label manufacturers are no longer being asked to duplicate national brands. Stores now want a unique product that will entice consumers to come back to their store to buy the same item. “There is a shift taking place where these stores are saying, ‘I have my own brand and I want a unique formulation to go with it.’”

Top Ten Liquid Laundry Detergents by Brand
Here are the top 10 liquid laundry detergent brands in the U.S for the 52 weeks ended Oct. 31, 2004, excluding Wal-Mart sales.
Brand $ Sales % Change $ Share Unit Sale % Change
Tide $930,120,704 2.8 38.2 117,491,864 0.0
All $246,057,600 7.5 10.1 50,520,540 9.6
Purex $245,711,216 0.3 10.1 73,013,080 1.3
Gain $167,661,280 24.5 6.9 29,922,210 23.4
Xtra $138,419,792 2.4 5.7 51,151,372 3.0
Wisk $124,709,152 -12.4 5.1 24,136,750 -10.9
Cheer $118,845,936 0.3 4.9 20,568,844 1.0
Arm & Hammer $107,655,432 -2.3 4.4 30,723,454 0.7
Era $84,460,168 -8.1 3.5 18,549,328 -4.8
Private Label $54,020,744 -9.8 2.2 16,797,078 -7.1
Category Total: $2,435,986,688 1.0 100 490,463,104 1.0
Source: Information Resources, Inc. (IRI), Chicago

What’s Happening in Europe?
Just like in the U.S., manufacturers in the European laundry care market are looking for new ways to add value in a mature market by introducing products that go beyond the basic cleaning function of a detergent, according to Euromonitor. Compact detergent formats, such as powder and liquid tablets, are recording strong growth in most of Europe with the exception of Germany, where liquid tablets almost vanished from the marketplace in 2003 due to the high price and environmental concerns regarding the plastic pouches containing the liquid. In the UK, sales of liquid tablets grew by nearly 27% in current value terms in 2003.

European consumers are also looking for new fragrance options and “natural” fragrances have proved to be particularly popular. In the UK in 2003, Lever Fabergé launched two new fragrances—Lily and Riceflower—to its leading Comfort Brand, while Procter & Gamble extended its Daz range with a limited edition Citrus Burst fragrance, which was first launched in April 2003 but proved so successful that is was re-introduced in early 2004. In France, Lever Fabergé introduced Skip Aloe Vera, which has been very successful among consumers because of its natural ingredients.

According to Euromonitor, growth opportunities will present themselves in the laundry aids sector rather than the laundry detergents market in Western Europe. While the detergent market is expected to post 4% growth during the 2004-2008 period, the market for laundry aids is expected to surge, with an increase of more than 40% in value terms forecast for the same period. This sector will be driven largely by growth of spot and stain removers, along with color-safe laundry bleach.

Eastern Europe is expected to be an attractive market with good prospects for the core laundry detergents category. Growth is expected to result in a 35% increase in value terms during the 2004-2008 period, driven mainly be the increased purchasing power of the average Eastern European consumer.

Arm & Hammer with a Touch of Softener launches in 2005.
In the Works
According to Mr. Gandhi, manufacturers are going to scramble to follow P&G’s lead by introducing laundry detergent with softener. “It is just leveraging two products into a single product execution,” said Mr. Gandhi.

Manhattan Products, Inc. has a formulation ready to be rolled out in the first quarter of 2005 and Church & Dwight will introduce Arm & Hammer with a Touch of Softener. The company also plans to improve its softener franchise, executives said.

P&G’s next big initiative, which launches in February, is Tide Cold Water. “It is a detergent specially designed to provide Tide cleanliness in cold water,” said Mr. Chinchilla. “Consumers want the benefits of washing in cold water but they can’t achieve the level of cleanliness they want and this product allows them to do both.”

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