Turning Vision into Execution
Detergent industry must do a better job on sustainability, insist speakers at the 6th World Conference on Detergents.
It’s been four years since the last World Conference on Detergents (WCD) and, though the industry has done a good job defining the issues for the next 100 years—which include developing solutions for developing markets, sustainability and forming effective partnerships between marketers, suppliers and retailers—much more work needs to be done.
The meeting attracted more than 1000 industry executives from around the world and featured more than two dozen presentations from market leaders such as Unilever, Procter & Gamble, Reckitt Benckiser, Kao and Henkel. In addition, there were presentations from advertising industry executives, networking experts and other non-detergent visionaries who provided a unique perspective on the industry.
“We’re very pleased with the quality of the program,” said conference co-chairman Keith Grime, vice president, corporate R&D, Procter & Gamble. “We added more keynotes and had more perspectives from those outside the industry.”
Away from the podium, attendees had the opportunity to visit with 40 suppliers at an exhibition or review the findings from more than 20 poster presentations. Together, the WCD provided a comprehensive look at the state, and in some instances, the future of the detergent industry.
“You name it, we’ve touched on it,” said WCD executive committee general chairman David S. Duncan, senior vice president, research and development, home and personal care, Unilever, United Kingdom. “This industry is dynamic and I think the one thing we’ve learned is that if you like something, don’t get used to it because it will change. But if you don’t like something, don’t worry, it will change.”
In addition to Drs. Duncan and Grime, the executive committee included Dale S. Steichen, vice president, research and technology, Akzo Nobel Surfactants and Michael F. Cox, research manager, alcohols and surfactants, research and development, Sasol North America.
The conference was co-sponsored by the American Oil Chemists Society, Comité Europeen des Agents de Surface et leurs Intermédiares Organiques (CESIO), International Association for Soaps, Detergents and Maintenance Products (AISE), Japan Oil Chemists’ Society (JOCS), Japan Soap and Detergent Association (JSDA) and The Soap and Detergent Association (SDA). Organizers noted that the meeting’s focus changed since four years ago. In 2002, the emphasis was on detergent technology. Last month, the focus was clearly on the business of detergent.
We’ve Got a Long Way to Go
The conference got underway with a sobering assessment by Patrick Cescau, chairman of Unilever. Mr. Cescau told the audience that much work still needs to be done in areas such as sustainability and serving emerging markets.
“Vision is one thing, execution is another,” he charged, pointing out that the recent success of Al Gore’s “An Inconvenient Truth” underscores the gravity of the environmental issues and insisted that the need for action has become more urgent. Unfortunately, the detergent industry has so far failed to keep pace.
“The time for talk is over,” he insisted.
Instead, marketers and their suppliers and retail partners must find solutions to the two biggest global issues for the next 100 years: climate change and sustainable development.
Mr. Cescau noted that one report suggests that one-third of the earth will be desert by 2100.
“We must act as an industry, the tide is irreversible,” he said. “Our industry is too concerned about its own future, but we are not masters of our own destiny.”
While the detergent industry mulls its future, other companies are already taking action, proving that the green consciousness is everywhere. Wal-mart, for example, made its entire staff watch “An Inconvenient Truth” and in recent years, has become the biggest buyer of organic produce. Elsewhere, UPS now has 1,500 alternative-fuel vehicles on the road.
Digital TV…Not Detergent
And while the industry takes baby steps toward sustainability, it continues to lose customers who choose to spend their money elsewhere.
Mr. Cescau recalled how in one market survey, Unilever researchers discovered that some consumers in India prefer satellite TV to running water!
“How can we make our brands as exciting as mobile phones?” he asked. “It all starts with the consumers. They’re excited by technology, not detergent.”
That’s because the industry hasn’t offered consumers anything truly different for decades. Products have become more convenient, yet the technology behind them remains the same.
“We’re offering them the same solutions that we offered their parents,” he insisted.
Besides exciting the consumer, today’s detergent makers must deal with a host of new regulations, not the least of which is REACH. But Mr. Cescau insists that the new regulation provides an opportunity to reinforce to the consumer and regulators that detergent ingredients are safe for the environment.
“But REACH is just the tip of the iceberg,” he told the World Detergent Conference audience. “Are we really facing up to the challenges of sustainability and lack of water?
He noted that Unilever rolled out Surf Excel in India. It reduces water consumption by 50%, according to the company. Unilever also launched Skip Actigel laundry tablets in India and other markets around the world last year. The chemical composition of the tablet was reduced by 20% and the size and weight of the package fell 5%. Skip Actigel debuted in 2005 and was one of the fastest growing home care brands in France.
“At Unilever, we’re raising our sights on responsibility and sustainability,” he insisted. And now, Unilever has its sights set on the consumer too, as Mr. Cescau noted that 95% of the water used in a detergent lifecycle comes at the consumer level.
“We have much more work to do to get the consumer to save more water,” he admitted. “In Africa, 10% of water use goes to the laundry process.”
To help reduce the amount of water in a typical load, Unilever is studying the feasibility of recovering and recycling rinse water and improving the rinsability of its products.”
But Unilever’s efforts aren’t totally focused on Africa. The company rolled out All Small & Mighty, a compact detergent that greatly reduces the environmental impact of the laundry process and saves retailers valuable shelf space too.
“We must look at the world and see how new environmental initiatives, new textiles and new regulations are shaping our business,” Mr. Cescau insisted. “Digital cameras made film obsolete almost overnight. We can’t let that happen to our industry.”
Retailers Begin to Look Beyond Their Borders
As multinationals roll their products out around the world, consumer wants and needs become more uniform, noted Neil Stern, senior partner at McMillanDoolittle, a consulting firm. Despite that, the globalization of retail is in its infancy. He pointed out that 30 markets account for 90% of the $8 trillion in global sales. Yet, the No. 1 retailer in the world, Wal-Mart, still derives 85% of its sales from the U.S. and there are troubling signs out of Bentonville, AK.
“Wal-Mart is struggling domestically and fighting to remain relevant internationally,” said Mr. Stern. “Sales are slowing in the U.S. and the company recently pulled out of Korea and Germany, where it got outflanked by its rivals. Now, Wal-Mart is trying to take the lead on the organics issue, with experimental stores in Texas and Colorado, but it appears as if the giant retailer is trying to find its way.”
Similarly, Carrefour, the No. 2 player, gets 90% of its sales from Europe. In contrast, McDonalds operates in 115 markets around the world and Spanish retailer Inditex is is 56 markets.
Among traditional retailers, Mr. Stern cited Tesco as the most successful at going global.
“Tesco is moving fast,” he asserted. “The company has an enormous capacity to understand the consumer and adapt to local markets.”
Unfortunately for marketers, Tesco derives nearly 40% of its sales from its own label, a trend that is picking up steam in many mature markets.
“Retailers are becoming more powerful,” observed Mr. Stern. “They already own the theater, now they own the actors as well.”
New Age Textiles
Besides worrying about what retailers are doing, detergent companies must keep a close eye on garment manufacturers as well. Robert Kirkwood of Invista, which owns the Lycra brand, observed that man-made fibers may not be glamorous, but they are having an impact on consumer buying decisions and may affect laundry care sales in the future.
“Easy care fabrics are here,” asserted Mr. Kirkwood. “We’ll never have fabrics that require no washing, but we will see clothing that repels dirt and stains.”
In many ways, the future is already here in textiles. For instance, Textronics markets a sports bra that monitors heart and breathing rates and Lycra Body Care contains aloe vera to soothe skin. But in the not-too-distant future, clothes will have the ability to adjust body temperature and boost security via a tracking system inbedded in the fabric.
“Don’t think of clothes as clothes. Think of them as solutions,” offered Mr. Kirkwood. “What clothes can do will become more important than how they look!”