Who says innovation is dead? Just when the detergent category was limping along, two of the sectors biggest players, Procter & Gamble and Henkel, have revitalized the sector with interesting new products that promise to provide lifts to somewhat soggy categories. According to SymphonyIRI Group, a Chicago-based market research firm, laundry detergent sales fell 4.19% to $3.5 billion for the 52 weeks ended April 17, 2011 in food, drug and mass merchandisers, excluding Walmart. P&G dominates the liquid laundry detergent segment with a 59% share of the market, according to SymphonyIRI, and its share of the powder segment is a whopping 71%.
First up, though is Henkel, which introduced Purex Complete Crystals Softeners earlier this year. According to the company, the product’s unique crystal form works differently than traditional oil-based softeners that coat fabrics with oily residue. Purex Complete Crystals Softener is said to be easier to use than traditional softeners because it is added directly to the laundry load at the beginning of every wash cycle. Moreover, the softener promises to preserve flame retardant benefits of baby’s and children’s clothes, retain the wicking ability of athletic wear, maintain a towel’s built-in ability to absorb water and will keep white clothes from yellowing and graying.
Since its debut, Henkel has gotten distribution commitments for Purex Complete Crystals Softener from almost every major retailer in the U.S. And while it’s still early, Purex Complete Crystals Softeners is doing very well and is tracking to be more than a $70 million business at retail in its first year, maintain Henkel executives.
According to the most recent SymphonyIRI data, the launch of Purex Complete Crystals Softener has doubled Henkel’s fabric softener market share in the U.S. and allowed Henkel to surpass other well-known companies to become the fourth largest fabric softener in the category, according to the company.
Purex Laundry Crystals, available in an assortment of scents, is selling well at Henkel.
Stephen Koven, Henkel’s senior brand manager, fabric care, credits the successful launch to several factors, including convenience, the natural trend and product performance. He pointed out that consumers are multi-tasking more than ever, trying to gain a minute or two here and there. By dosing their laundry loads at the beginning of the cycle, consumers don’t have to wait around for the rinse cycle.
“It has been estimated that consumers spend four days of their lives waiting around for the rinse cycle,” observed Koven. “We just gave them four days back. Crystals are simpler and more convenient.”
In addition, Purex Complete Crystals taps into the natural trend, something that Henkel has been a leader in for decades.
Henkel calls 20 Mule Team Borax, an all-natural laundry booster.
“Henkel has always been green,” explained Koven. “Sustainability is a core value. We’re in the 20th year of reports on our global footprint. Green is in our DNA.”
Taken together, they add up to a successful launch for Henkel.
“Retail sales are exceeding expectations and consumers love it,” observed Koven. “We see that repeat is quite strong too.”
To keep the good times going, Henkel has invested in traditional FSIs as well as audio shelf liners at retail, created a fan base on Facebook and developed mobile apps for smart phones.
“As mobile becomes a bridge to the home and store, we want to connect to where the consumer is,” explained Koven. “Tens of thousands are using these applications. It’s a great way to be a resource to them on laundry care.”
At the same time, Purex has expanded its presence on social networks and has nearly 200,000 fans on Facebook.
But Henkel won’t have the segment to itself for much longer. In September, P&G will introduce Downy Unstoppables, its own version of crystal fabric softeners.
More from Henkel
Purex Complete Crystals may be the newest laundry product from Henkel, but it isn’t the only laundry line that’s posting good results for the company. Fels-Naptha’s sales have jumped from about $1 million in 2008 to $1.7 million last year, for a compound annual growth rate of more than 30%. In tough economic times, the value-based brand (Fels-Naptha bars cost just $1) has boosted its distribution and has proven to be a hit with the growing Hispanic population in North America.
“There aren’t too many 100-year-old products that are posting double-digit growth,” observed Koven, who noted that some consumers purchase Fels-Naptha for its green story and others for its value proposition.
Another Henkel brand that’s benefitting from the green trend is 20 Mule Team Borax. The brand’s FDMx sales rose from $11 million in 2008 to $13.5 million for a CAGR of nearly 11%.
Pods for Growth?
Despite Henkel’s success, P&G has dominated the U.S. laundry detergent and fabric softener categories for decades. Tide and Downy have led their respective markets in good times and in bad, through economic booms and busts. And through every economic cycle, consumers have hated doing laundry, according to Petra Stovickova, Procter & Gamble external relations, fabric care, North America.
“We realized that many women are not satisfied with the results or the laundry process itself,” said Stovickova. “It is actually no wonder as it's been three decades since the last big innovation was brought to them in the form of Tide liquid detergent.”
Fels-Naptha is a popular solid laundry soap.
To answer the unmet needs of consumers, P&G is rolling out Tide Pods, which it calls a new generation of Tide, and a powerful detergent that works in all temperatures and both in traditional top load and high efficiency washing machines. In mid-June, P&G delayed the launch of Tide Pods until 2012.
Prior to launch, more than 6000 consumers took part in research involving more than 450 packages and product sketches. To deliver the small, liquid unit dose, a new formula was created that is high-efficiency machine compatible and twice as compact as current 2x Tide liquid. The three-chamber unit dose design allows the chemistry matrix to work synergistically in the wash, according to P&G.
Like Cascade unit dose products, consumers can hold Tide Pods in the palm of their hand and conveniently, without spills, can add the product in one step to the wash load, according to Stovickova, who noted that in tests, Tide Pods has been a huge hit with consumers.
“After using Tide Pods, 97% of consumers were satisfied with the time, effort and excellent results experienced,” she explained.“In the past (before Tide Pods) the scores typically only reached 68%. Moreover, unit dose has become the number one selling form for Cascade and Tide Stain Release in the U.S. and consumers are continuously asking us for the same type of product for their laundry detergent,” Stovickova added.
Pods aren’t the first pre-measured laundry packs to make it to market. Back in 2005, Cot’n Wash Inc. rolled out Dropps liquid detergent packaged in pre-measured, dissolvable pacs.
Still, Tide Pods is the first to have the marketing might of Procter & Gamble behind it. In fact, industry sources say P&G will support the launch with a $150 million budget.
But whether it’s Tide Pods or Purex Complete Crystals, these new introductions are evidence that the U.S. laundry care market is set to grow again.