Ebb Tide?

By Tom Branna, Editorial Director | January 5, 2010

As the recession gathered strength during the past two-and-half years, so too did the appeal of private label laundry detergent. But a couple of national brands managed to buck the trend and more innovative formulas may be on the way.

The recession has claimed many a victim, but who could have thought Tide would be one of them? After all, the detergent brand has dominated the U.S. laundry segment for decades, yet according to recent data from Information Resources, Inc., Chicago, Tide actually lost a couple of share points during the past year to cheaper private labels and a couple of nimble competitors. In fact, one analyst called Tide’s little slip the big news in the laundry category.

“Before Procter & Gamble bought Gillette, the saying was, ‘so goes Tide, so goes P&G in the U.S.,’” he recalled.“Tide brings in something like $700 million in operating profits, so P&G can’t afford to lose share. The problem is, the model isn’t set up for 10% unemployment.”
So, while P&G tries to shore up its Tide base, other players, notably Church & Dwight and private label brands, have managed to grab market share. But national brand executives note that private label brands still only hold 4% of the market.

“Branded players are doing a good job of meeting consumer needs,” explained Eric Schwartz, vice president-marketing, brands and commercialization, laundry care, Henkel Consumer Goods, Phoenix. “Store brands’ growth rate is high in laundry detergent, but the acceptance is low.”

According to IRI, U.S. sales of laundry detergent in food, drug and mass merchandisers (excluding Walmart), rose more than 2.5% to $3.7 billion for the 52 weeks ended Nov. 1, 2009. More specifically, sales of liquid laundry detergent rose 2.6% to nearly $3.1 billion, while sales of powders fell about 2% to nearly $575 million.

However, some observers insist that when Walmart is added into the equation, laundry product sales gains actually turned negative as consumers cut back in normally recession-resistant categories.

“People are still buying detergent, but they’re starting to ration it,” explained Schwartz.

Sales of Tide Total Care are up, but sales of traditional Tide have slipped.
Rationing they may be, but other detergent forms, including packets and bars, have piqued consumers’ interest, as the category surged 111% to $48.2 million (see chart). Leading the way, in this segment, is Purex Complete 3in1 laundry sheets from Henkel/Dial, which combines detergent, fabric softeners and anti-static ingredients in one easy-to-use product. Purex Complete has been on store shelves since May and has provided a major lift to the company’s sales.

“It’s a breakthrough product that drives consumer compliance so that there is more product usage in each load,” explained Schwartz. “The retailer likes it because it expands the category and gets the consumer to trade up.”

Trading up is something new for the Purex brand, which traditionally plays in the low-price arena. Schwartz insists that Purex Complete 3in1 has plenty of room for growth.

“We have plenty of upside on this product, even though we sold over $43 million in retail in six months,” he insisted. “We’ve had a lot of trial but there’s plenty of headroom. That’s our focus for 2010.”

Another company that has added share in a down economy is Church & Dwight. Its value-priced Arm & Hammer brand has been a hit with cash-strapped consumers. According to IRI data, sales of A&H liquid soared more than 34%, topping $210 million.

Sun Products, too, has significantly added sales, but those gains are due primarily to its private label business.

Purex Complete 3-in-1 has been a hit with consumers since its launch in May.

Clean, Care, Delight

Tide may have lost a point or two of market share in the past year, but the brand still dominates the U.S. laundry detergent landscape with a share that approaches 50% in liquids and more than 40% in powders, according to IRI. In order to build market share, P&G researchers say their goal is to get as close to the customer as possible in order to understand her and her cleaning problems. According to Dawn French, P&G’s director of North American Fabric Care, the company has a deep understanding of a woman’s emotional attachment to particular garments, an understanding that has helped P&G’s innovation efforts in three key areas: clean, care and delight.

“We looked closely at the cleaning process and understand which stains bother her the most and are the source of her frustration,” explained French.

P&G’s new Swash brand, including Smooth It Out clothing dewrinkler, is only available online.
P&G researchers, for example, found out that nearly 50% of adults claim to treat their clothes in between washing. Armed with that data, P&G is rolling out Swash, a new line of products designed to provide quick and convenient stain, wrinkle and odor removal solutions. Swash will be sold exclusively online and includes four products: Smooth It Out, a clothing dewrinkler spray; Fresh It Up, a refresher spray formulated to remove odors; Steam It Out, 10-minute dryer-activated tumbler sheets; and Get It Out, a stain removal pen. All the Swash products were created to help people get more mileage out of their wardrobe.

But why is Swash only available online?

“Our consumers are shopping, working and playing online, leading to the decision to launch Swash online only,” said Alejandro Bethlen, Swash brand manager, in a statement. “As P&G explores new ways to launch products, we feel that Swash is the perfect test through which we can evaluate e-commerce launches.”

In-depth consumer research also led P&G to develop Tide Stain Release, which began shipping in August. The laundry additive reportedly contains a powerful combination of ingredients to “boost” the power of a detergent’s stain-fighting ingredients in the wash cycle.

But beyond cleaning, consumers also care deeply about the clothes that they wear. According to P&G research, 8 in 10 women surveyed said clothing is important to them and that they have an emotional attachment to their clothes. And after a 25-year career in the beauty care sector, French said she understands that attachment.

“A women feels the same way about clothes as she feels about her makeup,” she observed.

New Bounce Dryer Bar makes it easier than ever to keep clothes soft
To understand that attachment, P&G went into women’s closets to find out why an article of clothing gets “demoted” from “work wear” to “weekend wear” to Goodwill after a few wash cycles. Seems that the chlorine in the wash water was leaching the dye from the clothing. After watching their clothes fade, a lot women give them the heave-ho. So, P&G scientists introduced chlorine scavengers in Tide Total Care as well as several other P&G detergents. These scavengers are just the kind of ingredients that can keep private-label brands at arms-length, according to French. No wonder why sales of Tide Total Care have surged nearly 350%, according to IRI data.

“Ingredients such as chlorine scavengers are in almost all of our detergents,” she maintained. “It’s a big thing that is missing from a lot of our competitors’ products.”

Similarly, pilling has proved to be an area of consternation with consumers. Tide with a Touch of Downy and Tide Total Care both have conditioning ingredients to reduce wear—an increasingly important attribute at a time when washing machines are being developed to deliver more agitation to compensate for less water and cleaning ingredients.

“More agitation can damage clothes. We have an entire laboratory to run different garments through different types of machines,” explained French. “We’ve spent more time understanding the damage done by washing machines. It’s part of a journey that we’ve been on for the past four or five years to focus on care and keep the garment looking like new. Because when a woman puts on a new garment, that’s when she feels best about it.”

Delight, the final piece in the consumer equation, is getting more attention from P&G researchers who recognize that most women, no matter how much they may love their clothes, consider laundry a chore. After all, the average mom does 15 loads of laundry a week and typically spends 3-4 hours doing so. Therefore, improving the aesthetics of a product goes a long way in lightening her load.

For example, new Bounce Dryer Bar is a novel fabric softener product that delivers freshness, softness and static control benefits in a convenient two- or four-month bar form. The product attaches to the dryer drum to impart even and consistent benefits for about two or four months, depending on frequency of use and dryer settings.

Sarah Pasquinucci of Procter & Gamble’s external relations department explained that two consumer insights helped P&G develop the bar. The technology is similar to that in luxury hotels, but was reformulated for use at home.

“Hotels can do more than 100 loads of laundry a week, so they are certainly a great measure of efficiency,” she explained.

A new form of Method Laundry Detergent with Smartclean Technology debuts this month.
In its research, P&G found that while consumers loved the benefits of the Bounce dryer sheet, there were times they would forget to drop them in the dryer. The Bounce Dryer Bar helps ensure that the benefits are passed on in all loads.

Of course, there are many other ways to delight consumers, including different fragrance experiences, bottle design and ergonomics. While French wouldn’t divulge details, more of these delightful innovations are expected to be on shelf in the next couple of months.

A Novel Method

Consumers won’t have to wait long for the latest innovation from Method. This month the company is rolling out a new version of its Method Laundry Detergent with Smartclean Technology that is said to use 70% less detergent, water and plastic per load than conventional 2X detergent. A 300ml package is enough to do 25 loads of laundry. In fact, Method executives say their formula is four times more concentrated than Tide 2x, and eight times more concentrated than old 1x formulations.

The way the detergent works is different too. Traditionally a detergent’s cleaning agents are on the inside and water is on the outside. In order for these cleaning agents to work, they have to break open to release the surfactants, according to Rachel Rosenblum, a company spokesperson.

“This requires agitation and time, and can be a little hit-or-miss. Not all surfactants break through which means you use and waste more detergent than you really need,” said Rosenblum. “Our SmartClean Technology formula is designed to be inside-out with cleaning agents outside, water inside. This allows cleaning agents to get to work right away—once released into the wash, they’re like magnets immediately drawn to dirt and stains, so there’s less agitation and time required for contact. And unlike traditional detergent, more of our cleaning agents are used, which is why you can use so much less and still get a great clean.”

The 95% plant-based formula is bio- degradable and is compatible with high-efficiency and standard washing machines, according to the company.

“Nine out of 10 consumers agree that Method Laundry with Smartclean Technology cleans as well as or better than their usual detergent,” added Rosenblum.

The unique pump dispenser keeps overdosing to a minimum: two pumps for a small load, four pumps for a medium load and six pumps for a large or heavily soiled load, according to Method, which is based at San Francisco.

“We watched consumers use their existing laundry products in home and tested different prototypes,” explained Rosenblum. “They found the pump packaging to be the most intuitive, easiest to use and least messy dispensing mechanism that we could design. Then we made sure it was sturdy enough for daily, or more, usage and was ergonomically comfortable in the hand.”

More New Ideas

Seventh Generation, Burlington, VT, has been busy during the past year, rolling out a new product for Target and reformulating some existing ones. In its 2X concentrate detergent, Seventh Generation removed the sodium laureth sulfate (SLES) and replaced it with a new surfactant system. The primary reason for this change was to remove SLES which can contain 1,4 dioxane as a residual contaminant. Thus, the new laundry detergent tests as not detectable for 1,4 dioxane, according to Tim Fowler, vice president-R&D.
SDA Annual Meeting Set for Orlando
A new venue isn’t the only change for The Soap and Detergent Association (SDA) 2010 Annual Meeting & Industry Convention. Attendees will have more business networking opportunities than ever before at the cleaning product industry’s top business forum, according to SDA. The new location for the meeting will only increase these opportunities, as well as provide more attractions for registrants who want to bring their friends or family.

The convention will take place Jan. 26-30 at the Grande Lakes (www.grandelakes.com) in Orlando, FL.

“In our efforts to improve the business-to-business value of the SDA Convention, we’ve listened closely to our members and added more opportunities for networking among formulators and suppliers,” said Ernie Rosenberg, SDA president and chief executive officer.

Networking opportunities during Convention Week include:
• The all-new Networking Café, which offers companies a relaxed and inviting atmosphere to host business meetings and feature information about products and services.
• SDA’s President’s Welcome Reception (Jan. 27), a signature gathering for executives throughout the cleaning products industry.
• SDA’s Issues Briefing and Global Industry Update (Jan. 27), plus a speaker session featuring Alberto Dominguez, Walmart’s vice president, divisional merchandise manager of household paper goods and chemicals.
• A networking dinner and closing night party (Jan. 29) to bring together executives one more time during convention week.
• A charity golf tournament to benefit the Cleaning for a Reason Foundation, which provides free housecleaning services to women who are undergoing treatment for cancer. The tournament will take place Friday, Jan. 29 at the 18-hole, par-72 Greg Norman Signature Gold Course at Grande Lakes.

More info: meetings@sdahq.org
“Removing SLES and replacing it with our new surfactant system had the benefit of improving the renewable carbon content of our formula and enabling consumers to use the same dosage for both HE and conventional machines,” said Fowler. “As part of this change, we also upgraded the preservative system and improved the enzyme stabilization system.”

Seventh Generation removed the SLES from its Baby laundry detergent as well. The reformulated product boasts a new enzyme system and a more authentic preservative system, according to Fowler.

“In addition to this, we were able to move the product from a 1X laundry detergent to a 2X concentrated detergent and now the formula can be used effectively in both HE and conventional machines,” he added.

Finally, new Water Blossom-scented Natural 2X Concentrated Laundry Liquid was created exclusively for Target.

The Pace of Innovation

As the global economy slowly emerges from recession, industry experts insist that the pace of innovation will increase.

Henkel’s Schwartz noted that laundry has been a “fairly sleepy” category from an innovation standpoint during the past couple of years. He pointed out that many innovations available outside the U.S. that would interest consumers, have not been brought to the market as yet.

Schwartz predicted 2010 will be a competitive year, as retailers focus on picking the brands and products that delight their shoppers and eliminating those that don’t in order to simplify logistics and inventory.

“Most manufacturers are focused on 2011, but I wouldn’t be surprised if there are faster times to market if the economy improves,” he concluded.