Beyond Clean

January 5, 2006

Manufacturers of laundry detergent and fabric care products continue to add new and improved formulations, super concentrates and more sophisticated scents.

Beyond Clean

Manufacturers of laundry detergent and fabric care products continue to add new and improved formulations, super concentrates and more sophisticated scents.

Christine Esposito
Contributing Editor

Laundry detergent manufacturers have their fingers to the washboard these days. Regardless of their stature in the overall market, laundry marketers are working hard to provide a diverse consumer base with laundry care products that suit their lifestyles.  In today’s market, it’s not just about getting clothes clean. Laundry detergents must save consumers time and money, and offer scent experiences and end results that go beyond clean.

Method Home was one of the first to market with a triple-concentrated liquid laundry detergent.
On the business side, powder sales continue to plummet, with consumers opting for more convenient liquids. In addition to niche players offering alternative products that feature unique delivery methods or fabric-specific care, there are new companies on the scene. Phoenix Brands now owns Colgate-Palmolive’s detergents and Method Home has moved into the top 10 among liquid detergent vendors. Lastly, as the number of high-efficiency (HE) washing machines continues to rise in the U.S., the industry recognizes that it needs to better educate homeowners regarding the proper use of HE-specific laundry detergents.

P&G and Liquids are King

It’s no secret to anyone close to the household products industry that P&G remains the 800-lb. gorilla in the U.S. laundry detergent market, and that the product form of choice is liquid. The only questions are just how much P&G sales rise and just how much powder detergent sales continue to fall each year.

According to Chicago-based Information Resources, Inc., in U.S. supermarkets, drugstores and mass merchandiser (excluding Wal-Mart) powder detergent sales fell 11.4% to just under $750 million and units dropped 14.5% in the 52 weeks ending Oct. 30, 2005. Liquid sales rose 5.1% to $2.56 billion in the same period with unit sales rising 2.4%, according to IRI.  Procter & Gamble’s detergent sales dwarf that of its nearest competitor in both liquid and powder. In fact, P&G commands a 57.1% dollar share in liquid and 75% of the powder portion of the market, according to IRI. Lever Brothers/Unilever and Church & Dwight hold distant second place spots in the liquid and powder segments, respectively.

It is in the 43% of the liquid market that P&G doesn’t own where there have been some changes in what is normally a staid category.

Take, for example, Method Home, a San Francisco, CA-based company founded in 2001 by former high school friends Eric Ryan, a chemical engineer, and Adam Lowry, who had experience in style and branding.  In the 52-week period tracked by IRI, Method had posted a 303.8% gain in liquid laundry detergent sales to $4.73 million, moving it ahead of Redox Brands and into the top 10 vendors in liquids, according to IRI.

According to co-founder Adam Lowry, Method has been able to post significant growth in the laundry category by zeroing in on a specific group of consumers.

P&G has added Tide with Febreze Freshness, Downy with Febreze Fresh Scent and Bounce with Febreze, pulling the Febreze name and familiar scents through the entire laundry regimen.
“Method focuses on the premium end of the cleaning market, on consumers who are home involved, environmentally aware and lead busy, active lives,” Mr. Lowry said.  Like its other household and personal care products, stylish packaging has helped Method laundry detergent catch the eye of the consumer.

“By infusing style and design into the products, along with market leading performance that is delivered through environmentally-sensitive means, Method is able to better serve the desires of this premium segment,” he added.

In addition to Method’s moves in the market, there’s a new player in the detergent scene. In August, Colgate-Palmolive sold its North American heavy-duty laundry detergent brands to Phoenix Brands LLC. Formed by Lehman Brothers Merchant Banking Group in 2003 to purchase brands from Unilever, Phoenix Brands is now selling Fab, Dynamo, Arctic Power, ABC, Cold Power and Fresh Start detergent brands. The deal also gave Phoenix Brands the license to the Ajax brand for laundry detergent in the U.S., Canada and Puerto Rico.

The brands—which accounted for approximately one percent of Colgate-Palmolive’s net sales—gives Phoenix Brands a greater base in the laundry market; it already owns Niagara spray starch (which holds 42.1% share of the approximately $41 million starch category, according to IRI) and Rit fabric dyes.

But there’s more to Phoenix Brands and Method than a stable of established brands and slick packaging. They are proving to be companies to watch in terms of new product development. Phoenix touts SunGuard, a laundry aid that helps block more than 96% of the sun’s harmful rays from reaching skin, and Method was one of the first to market with a triple concentrated liquid, launching the detergent in August 2004.    

“The triple concentrated detergent format is a quantum leap from an environmental standpoint, with the potential to save millions of gallons of water, plastic packaging and fuel each year,” said Mr. Lowry. “Other leading brands are now following suit with concentrated versions of their detergents.”

Unilever became the first major marketer to launch a super-concentrated detergent, when its all Small & Mighty—which provides 100 oz. of detergent cleaning power in a 32 oz. bottle—debuted in October.

According to Helayna Minsk, director laundry, Unilever, All Small & Mighty delivers on two fronts. “For the trade, All Small & Mighty offers powerful cleaning in a bottle that’s easy to pour, store and carry. There are also tremendous environmental benefits such as using less plastic in the bottles, and in the amount of fuel that it takes to get the product from the manufacturer to the retailers’ warehouse to the shelf.”

Getting It Right the Second Time

Major manufacturers continue to report success with combination detergent-fabric softener products, as consumers welcome the time-saving benefit these products provide.

And while most major manufacturers have launched a detergent with fabric softener, this is not necessarily a new development in laundry care. When the first combination products came to market back in the 1990s, consumers liked the idea, but they weren’t smitten with the results.

Detergent makers contend they have gotten these products right this time around. “Unilever uses truly new and proprietary technology in All Cleans and Softens that makes the benefit of softening in the wash very real,” said Ms. Minsk. “You can definitely feel the difference in softening in the end result versus that of regular detergent. It’s not even in the same class as the old products that claimed to be two-in-one but disappointed in the end result.”

According to Randall Chinchilla, external relations manager for fabric care, it was critical for P&G to find the right recipe when it launched Tide with a Touch of Downy in 2004. 

“P&G’s crown jewel in laundry is Tide. So for million of consumers, it is synonymous with cleaning. Downy is synonymous with softness. We wanted to make sure we remained true to both of those brands’ perceptions in the consumers’ eyes,” he said.

P&G bet heavily on the launch of Tide with a Touch of Downy, and that investment has paid off. According to Mr. Chinchilla, if Tide with a Touch of Downy was a brand by itself,  “it would be third or fourth in terms of sales.”

With that success under its belt, P&G has formed yet another alliance between popular brands.  This summer, P&G added Tide with Febreze Freshness, Downy with Febreze Fresh Scent and Bounce with Febreze, pulling the Febreze name and familiar scents (Spring & Renewal and Meadows & Rain) through the entire laundry regimen.  

“We extended the scent experience for the consumer, which is obviously a driver of the purchase,” said Mr. Chinchilla. “Consumers love and trust these four brands, which are number one in all their categories.”

Ultimately, this alliance could help further increase the popular brands’ already high usage rate among U.S. homeowners. According to P&G, Tide, Downy, Bounce and Febreze can be found in at least 20% of households in the U.S. 

Niche Players with Niche Products

While industry giants such as P&G can boast 20% household penetration, there are plenty of other companies that would welcome even 0.2% market penetration. These niche players contend they provide real benefits to consumers with unique solutions for their specific laundry needs.

Cot’nWash Inc. has added pre-measured dissolvable packets of super-concentrated laundry detergent called Dropps, which are phosphate-free and formulated with what are billed as “biodegradable organic surfactants.” The packets, which contain detergent for one load of laundry, are put directly in the washer with the clothes. Water dissolves the packet completely, releasing the cleaner.

According to Jonathan Propper, who has taken over the company his mother founded in 1985, the inspiration for Dropps was his wife’s wish to avoid measuring and pouring liquid laundry detergent.

“We looked at several different packaging options. Most of them involved a traditional package with either a measuring cap or pump.  All of these options were still messy and they involved more unnecessary packaging which we felt neither the consumer nor the environment necessarily needed,” Mr. Propper said.  

The solution was to put a concentrated version of its Cot’nWash liquid detergent into a water-soluble material similar to that used for breath strips or dishwashing liquid packages.

The company worked on the package for approximately two months before launching Dropps in November. They are currently being sold online at the company’s website (www.cotnwash.com) and through a toll-free phone number (800-355-WASH). According to Mr. Propper, there’s more to come, including a naturally scented version and a pretreatment that will “take advantage of the Dropps’ convenient technology.”

When it comes to clothes, everyone has that favorite t-shirt, pair of jeans or cocktail dress that they take special care not to ruin in the wash.  For athletes and outdoor enthusiasts, “smart” fabrics such as Under Armor, GoreTex and Dri Fit have become must-haves. Often, these garments carry high price tags, but after a while, their performance characteristics—temperature control, moisture wicking, UV protection and water repellency—start to fade.  

Jon Reichlin—a triathlete and owner of Philadelphia-based Penguin Brands Inc., a manufacturer of shoe care, apparel care, insoles and gear for runners and outdoor enthusiasts—noticed that when he washed his high-performance clothing in regular detergent, the performance features began to fade and the gear retained an unpleasant odor. “My fellow athletes were complaining about the same things,” he said.

According to Mr. Reichlin, the reason for the odor was residue from detergent. “The problem with residue in a high-performance article of clothing is it prevents the engineered fabric from working correctly. The fibers in high-performance wear are shaped almost like shingles, allowing for water movement,” Mr. Reichlin explained. “When residue is left behind, the water gets trapped. Bacteria can grow in the residue and the water, which is what causes the fabric to stink.”

Mr. Reichlin set out to create a product that would prolong the life of the apparel and remove the smell. The result was Penguin Sport-Wash, which rinses completely, leaving nothing to clog the pores of the fabric.  The 18-oz. bottle, which can wash 18 loads of laundry, sells for $10 in specialty running stores and catalogs.

Penguin has conducted tests to compare how well two leading high-performance fabrics retained their high-performance features when washed in its own Sport-Wash as well as other products, such as Tech Wash (made by Nikwax), Tide and Woolite. In the study, fabrics were washed five times in each detergent. The clothing washed in Penguin Sport-Wash received the highest scores in terms of wicking, water repellency, breathing and the ability to dry quickly, according to Penguin Brands. In addition, when the fabrics washed with the other products were re-washed with Penguin Sport-Wash, water repellency was restored, the company said.

Energy in High-Efficiency?

If there remains one niche area of the laundry market that detergent makers watch closely, it is HE machines.  According to the Association of Home Appliance Manufacturers, front-loading units represented 23% of the market 2005, up from 15% in 2003. Those figures are expected to climb higher, fueled by home renovation trends, consumers’ love affair with high-end appliances and increased awareness of the savings these products can deliver in the long run.

Cot’nWash Dropps are single load doses of liquid laundry detergent in a water-soluble material.
“The growth has been driven by products that have delivered on some very important consumer needs and desires: energy savings, huge capacity and outstanding performance,” said Steven Peterson, marketing manager for clothes care at appliance maker GE, which recently launched a new GE frontload laundry washer and dryer pair which will have greater appeal among consumers.

According to Mr. Peterson, frontload washers have been around for a very long time, but it wasn’t until recently that the “industry began offering the capacity and design that resonated with the consumer. The growth has been terrific year over year and we anticipate that more than 30% of the washer industry will be in the front-load category by 2010.”  

As consumer purchases of HE appliances rises, it’s safe to say sales of these products should be following a similar track. But that might not be the case. According to the Soap and Detergent Association (SDA), only 15% of HE machine owners use HE detergent.

“With increasing penetration of HE machines, the increase in the use of HE detergent isn’t necessarily pegged to it. Some consumers aren’t aware that they need to use special detergent for these machines,” said Mr. Chinchilla of P&G.

It has become apparent that the industry needs to do a better job educating consumers about HE laundry detergents. Along those lines, SDA has published a free, online guide for consumers, “High Efficiency Washers and Detergents: Working in Harmony to Save Energy and Water,” to help support a U.S. detergent and appliance manufacturers educational initiative to encourage energy and water savings through the proper usage of HE detergents and washing machines. According to Ernie Rosenberg, SDA president, the brochure has received very good reviews and a positive reaction from equipment makers and users.

Growth opportunities in HE are no doubt catching detergent companies’ attention. Method has added its own HE 3X laundry detergents, and P&G may relaunch its HE line of detergents in the next six to eight months.  

“We think that it is the future of the category,” Mr. Chinchilla said.

Keeping it Clean

As the detergent market moves through 2006, companies will continue to pay close attention to consumer desires when it comes to their laundry needs.  Industry players Happi spoke with will continue to focus on liquids as well ancillary products, such as fabric softeners and dryer sheets.

Unilever has added All Cleans & Softens.
P&G will further push the fragrance experience with Gain Joyful Expressions, which hits store shelves this month. According to Mr. Chinchilla, Gain Joyful Expressions will be a “significant change in the traditional scent.” Using what Mr. Chinchilla said is the “best scent technology,” the detergent will be offered in apple mango tango and gardenia delight.  

But is apple mango tango pushing the scent envelope too far? Not for this brand. “People who love Gain are scent lovers,” Mr. Chinchilla said, noting that the launch will also feature a significant change in packaging.

In addition, P&G is bringing the value-added concept to fabric softeners with new Downy plus Whitening, which company officials say will get whites whiter after just one wash.     

“Consumers who are really into whitening  will stop at nothing to get the best whites,” said Mr. Chinchilla. The color-safe fabric softener debuts this month.

For 2006, Unilever will expand its reach with concentrates. “We will continue to push out on the super-concentrated market,” said Ms. Minsk.  “We see tremendous benefits here for retailers, for consumers and for the environment. The trade is very excited about it, and the consumer response we have received to date has been fantastic.  They say that this is the product they have been waiting for and that it makes their lives so much easier, so we will build awareness of this new format and expand our offerings.”

While detergent marketers will continue to look for new ways to entice consumers with added benefits, unique scents or super concentrates, they can’t forget the basic function of their products. In the end, there’s no scent, fancy packaging or amount of softness that can mask a poor cleaning product.

“Cleaning is the base point,” said Mr. Chinchilla. “Otherwise, consumers don’t want the other benefit.”