A State of Flux

By Tom Branna, Editorial Director | January 10, 2012

The laundry category continues to slump, as marketers face rising raw material costs and lingering pressure from retailers. What could change all that?

Pods. Tide Pods. All apologies to Sean Connery and his James Bond brethren, but laundry detergent makers really need to be rescued from falling sales and rising costs. Folks within and without Cincinnati are counting on another breakthrough technology from Procter & Gamble to shake things up…but at press time, the world was still waiting for Tide Pods.

For nearly two years, US laundry detergent sales have been tepid at best and downright dismal at worst. In recent months, the category has been swooning, with sales declining more than 5% as marketers continue to discount products and usage levels fall as consumers opt for washing fewer loads of clothes. No wonder why marketers are rethinking their business in a big way.

“What a detergent is, is being challenged by product form, by appliances and by delivery,” said industry veteran Keith Grime, president of KJG Consulting, Cincinnati and chairman of the 2012 World Conference on Fabric Care in Singapore (see p. 54). “Everything we think about the cleaning industry is in flux.”

According to one source, US laundry care sales fell more than 5% to $4.3 billion during the past year, as consumers, beaten down by an anemic recovery and high unemployment, looked for ways to save. But according to SymphonyIRI data, the decline wasn’t quite so dramatic. The Chicago-based market research company estimates laundry detergent sales fell nearly 1.5% to $3.5 billion in food, drug and mass merchandisers, excluding Walmart, for the 52 weeks ended Oct. 30, 2011. Leading the decline was sales of non-traditional product forms such as packets and bars. Sales of these products fell more than 22% to $42.4 million. For the same period, sales of powders fell more than 8% to $486.6 million. In contrast, sales of liquids rose a bit—and just a bit—up 0.16% to slightly more than $3 billion (see charts, p. 50 and 52 ).


Improved formula Purex promises to brighten, whiten and clean clothes.

But regardless of whether a segment is rising or falling, marketers are hoping that the worst is over.

“Price erosion has stopped a bit,” explained Stephen Koven, director of laundry care additives, Henkel. “But it’s still a soft category. People are being more frugal about using home care and laundry products and there is still some trading down.”

According to Koven, new consumer frugality trends span the gamut from only running full loads, to wearing attire more than once between washing to making sure not to overdose on detergent.

One way to avoid overdosing is to use a single tablet, er, pod. Tide Pods’ three chamber liquid unit dose is designed to simplify the process and provide better, more delightful results, noted Petra Stovickova, associate director, external relations, fabric care, North America, P&G.The Pods also provide other benefits. For example, Tide Pods drives an increase of more than 25% in satisfaction on “provides a deep down clean” and “bright whiteness”and an increase of more than 43% in“completely removes difficult stains” and “excellent results with minimal time and effort.”

“The announcement of the launch of Tide Pods seemed to attract the interest of competition in this category,” observed Stovickova.“Both aspects of the story are clear indicators that the unit dose product proposition has a great potential in growing the unit dose category.”

Seventh Generation’s 4X concentrated liquid laundry detergent boasts a new formula, novel packaging and carries the US Department of Agriculture’s BioPreferred seal.

When P&G rolls out Pods, other manufacturers are sure to follow, which should result in the new generation of compaction and ultimately further reduce costs for manufacturers. Industry observers noted that at the beginning of the millennium, liquids held a 62% share of the detergent market. Now liquids, with their better margins, hold an 83% share.

“More compaction is coming,” noted one industry observer. “Pods are the panacea. Church & Dwight, Henkel and Unilever are all planning similar launches.”

The Regulatory Picture

While detergent executives pin their hopes on new technology, the regulatory picture remains cloudy. At the Federal level, industry experts don’t expect an overhaul of the Toxic Substances and Control Act (TSCA) any time soon—despite great efforts by a number of associations. Ernie Rosenberg, president of the American Cleaning Institute, called TSCA reform the biggest issue facing the industry and the biggest disappointment after a Nov. 17, 2011 Senate hearing with industry stakeholders went nowhere.

“All the associations (including ACI, Consumer Specialty Products Association, Grocery Manufacturers Association and Synthetic Organic Chemists Manufacturers Association) have put a lot of effort into TSCA modernization,” noted Rosenberg. “But there was no effort in the Senate to move to the center on the issue and it is dead in the House now, too. We had substantive discussions in the Senate, but the hearing that didn’t reflect any of those discussions.”

Still, ACI is determined to keep the process moving forward in 2012. Trade associations know that the law needs to be modernized and they were willing to negotiate over issues such as safety standards, new chemicals and testing requirements. Unfortunately, non-government organizations (NGOs) refused to compromise. Moreover, the Environmental Protection Agency dug in its heels, insisting it must approve every new chemical on the inventory.

Further complicating the issue is confidential business information. Rosenberg noted that the industry has rolled out innovations such as cold-water detergent, new ingredients and new packaging—all of which reduced carbon footprints. Yet, the EPA has made no provisions for confidential business information (CBI).

“Why would our members spend a lot of money on innovation if they have to give away their secrets?” asked Rosenberg.

He labeled the Institute’s relationship with non-government organization as good, noting that in the past industry and NGOs came together to voice their frustrations over TSCA reform and suggested that similar talks will take place in the future.

“We need to re-engage. The industry has a very good record on sustainability,” noted Rosenberg. “We disagree (with NGOs) on chemical management, but we will agree on TSCA modernization in the future.”

At the state level, ACI is closely monitoring green chemistry legislation in California. There, the Department of Toxic Substances Control (DTSC) is soliciting input from stakeholders and is expected to issue preliminary regulations in March, with final regulations expected in late summer or fall of this year, according to Paul DeLeo, PhD, senior director, environmental safety, ACI.

“From a cleaning products standpoint, we have a good handle on the ingredients in our products,” noted DeLeo. “Our industry has done a good job of screening chemicals and making sure that they have a strong safety profile.”

Still, there are concerns, as the DTSC’s process is opaque and open-ended, according to DeLeo. For example, DTSC is proposing a large list of chemicals of concern, which number 3,000. In contrast, ACI maintains that the list exceeds 4,000 when all product variations are added up.

“It’s that uncertainty that is troubling people right now,” DeLeo noted.

At the international level, ACI staff is keeping watch on the European Union’s regulation on Registration, Evaluation, Authorization and Restriction of Chemicals (REACH). This year, EU authorities are expected to alert industry about what chemicals they want to evaluate. In 2013, REACH will add new companies and non-high volume chemicals to its list.

In other European issues, ACI continues to work with the Organisation for Economic Co-operation and Development (OECD) on chemical assessment tools and is monitoring new developments to the Global Harmonization System (GHS). For example, the Europeans have a new classification and packaging regulation with new deadlines that don’t follow GHS as ACI understands it, according to Rosenberg.

A New Generation of Products

Pods aside, P&G,rolled out an array of new products during 2011. For example, the company rolled out Downy Unstopables and new Gain fragrance variants (see p. 57) and repositioned Era to address the needs of the consumers who seek laundry stain removal without extras.

Henkel says Purex Crystals reinvigorated the fabric softener category.

“Consumers are looking for various benefits from their laundry solutions, and Era fulfills the need for those who want straightforward performance at the right price,” explained Stovickova.“Era thus brings a lot of fight, with a little dough and rich character, all with the support of a unique and innovative campaign that helps consumers choose the right value brand. By using light humor with a straightforward attitude we are able to speak to our consumer in a way that is unexpected in laundry”

According to Stovickova, the brand’s personality was brought to life by becoming the only detergent brand approved by Chuck Norris.Chuck’s tough image and “get it done” attitude is a perfect fit for the Era brand and resonates with the Era consumer. Taglines such as “Era makes grass stains stain themselves” shows the parallel between Norris and the tough stain-fighting power of Era consumers expect.

The strategy’s working as Stovickova noted thatEra became one of the fastest growing detergent brands in the P&G portfolio last year.The brand’s unique voice captured a dedicated following on Facebook as well with more than 106,000 fans in under six months.

With a growing emphasis on sustainability both among regulators and consumers, Seventh Generation would appear to be well-positioned to take advantage of the trend. After all, the company was one of the first to promote the eco-benefits of its products and over the years, Seventh Generation has become a leading player in laundry products. Now, the company will expand its leadership with the Spring rollout of four new laundry products built on plant-based surfactants: 4X Laundry Detergent, Natural Laundry Stain Remover, Natural Oxy Stain Remover and Natural Fabric Softeners. The launches come on the heels of Seventh Generation receiving the US Department of Agriculture’s BioPreferred seal, which certifies products that are entirely or significantly made from renewable agricultural ingredients and materials. The USDA labeling program is intended to help consumers make purchases that reduce dependence on petroleum, boost rural economies, and alleviate climate change.

The real breakthrough in the formula is a six mole, linear alcohol ethoxylate, developed by Rhodia, that’s based on sugar cane. In fact, the new surfactant enables Seventh Generation to offer a 97%, biobased laundry detergent formula.

“A six mole linear alcohol ethoxylate has great stain removing ability,” explained Reed Doyle, global strategic sourcing, Seventh Generation. “The big thing for us is improving efficacy and improving authenticity. It gives us bragging rights to say we have the highest biobased content in the industry.”

Seventh Generation also has one of the highest, if not the highest, level of concentration in a widely distributed laundry detergent for consumer use. Its 4X liquid laundry detergent concentrate formula is now packaged in 100% recycled fiber. The entire packaging system uses 66% less plastic than a typical 100oz 2X laundry bottle. The formula contains multiple enzyme systems, rather than solvents, to eliminate stains. That eco-friendly product profile resonates with consumers, according to Seventh Generation executives.

“The consumer wants to take simple steps to live an environmentally-preferable lifestyle,” explained John Henry Siedlecki, category manager, Seventh Generation. “We really see a steady growth trend (in the green household cleaning category) and expect the category to be well over $1 billion (retail) by 2015.”

Seventh Generation relied on enzymes for its Natural Laundry Stain Remover and Oxy Stain Removers. Meanwhile, the company’s reformulated Natural Fabric Softener is available in a concentrated formula that provides more uses for fewer ounces.

Launches such as these, along with pod-type technology, place an emphasis on efficiency, space, weight and volume. As a result, compaction and sustainability will be at the core of product innovation. In this environment, formulators are under pressure to use more enzymes, cleaning boosters and high-density materials, according to industry experts.

Sustainability continues to be a top priority at P&G, as the company has committed to deliver 70% of washing machine loads washed in cold water on the global level. The reason for the cold water focus is the fact that the biggest sustainable improvement can be achieved in the phase of consumer usage of the full lifecycle by switching from washing warm to cold water. The heating of water to do laundry is one of the largest uses of energy in a typical American household, accounting for up to 70% of the energy used per wash load in the US.

By moving away from hot/warm water washing to cold water, US households could reduce CO2 discharges by more than 11 million metric tons on an annual basis. P&G is going to deliver that goal through product innovation (Tide Pods’ film dissolves in cold water), consumer education (as part of the Global Clinton Initiative, P&G commits to reaching 100 million US households with the information they need to convert from hot water laundry habits to cold water washing by Earth Day 2013) and by cooperating with washing machine manufacturers, according to Stovickova.

Compaction across P&G’s powder laundry detergent portfolio is another clear example of the company’s commitment to sustainability. By compacting its powder cartons across all of its brands (Tide, Gain, Cheer, Dreft, Bold and Ivory Snow), the company expects to generate a dramatic reduction in the overall environmental footprint, as the process uses 40-50% less water and 30-40% less energy to manufacture product, as well14-40% less packaging, and 40-57% fewer trucks to transport the product.

Crystal Clear

Consumers may still be cautious, but that hasn’t stopped them from making Purex Crystals, Henkel’s novel fabric softener technology, a big hit since their debut last year. Through November 2011, sales in all tracked channels topped $35 million, according to SymphonyIRI data. The launch of Crystals helped propel sales of the Purex brand up 158%.

“We are bringing new consumers into our franchise,” insisted Koven. “It has been a phenomenal success and we will continue to delight consumers.”

The success of in-wash fabric softeners such as Purex Crystal is in sharp contrast to sales of softening devices such as P&G’s Bounce Bar, which posted a 13% decline in sales for the same period, while sales of dryer sheets, the third fabric softening option, were flat.


The Global Outlook

Outside the US, marketers are becoming more likely to abandon powders altogether in favor of easier-to-manufacture liquids. For example, P&G and Unilever recently moved into Argentina with liquids rather than powders.

“We are seeing across the world a migration from powders to liquids,” explained Ian Bell an analyst with Euromonitor International. “Manufacturers see that liquids are cheaper to produce and they are trying to protect their margins.”

In emerging markets, the situation is quite different. Bell noted that 60% of consumers around the world wash their clothes by hand—no wonder why washing machine penetration is so low in Africa, the Middle East and parts of Latin America and Southeast Asia.

In July, for example, P&G rolled out an improved version of Ariel laundry detergent to developing countries, which is said to rely on 3D technology to get clothes clean.

“The business is changing rapidly all over the world,” noted Grime. “Africa is opening up to the laundry business, as are other regions.”

Here’s a look at how the players ranked by market share in the nearly $70 billion global laundry care category in 2010, according to Euromonitor International.



% Market Share

Procter & Gamble






Reckitt Benckiser








Sun Products


Church & Dwight


Nice Group


Private Label





2012 and Beyond

In the new year, industry experts expect raw material costs to continue rising across the board. How can marketers survive as sales slow and costs rise? Henkel is taking a multifaceted approach to the problem, improving cost structure, and optimizing formulas and supply chain.

“We (also) have to be smart about marketing and trade spending to make sure it is efficient,” added Koven. “We are looking at ways to pull additional costs out of delivering products without having to down formulate.”

At the same time, there are other ways to improve efficiency when it comes to the laundry category.

“There are a lot of ways to talk to consumers more efficiently,” explained Koven. “We have a large list of potential efficiencies. Along with innovation and efficacy, efficiency is a part of culture, because a large part of our portfolio is on the value side. We have to think that way.”

Another plus, according to Koven is that price promotion will continue to decelerate.

New product development will also play a role at Henkel as gets set to relaunch its entire Purex liquid detergent franchise this year. The rollout will boast improved formulas and packaging, backed by sufficient marketing support that will go beyond television to include all consumer touch points.

“We have a great product that can compete with more premium products,” noted Koven. “Our new positioning is triple action: bright, white and clean. They are the most important aspects for consumers.”

Later this year, Henkel will roll out improved versions of Crystals and is relaunching Borax as well as some of its color-boosting products. According to Koven, the laundry additives business is particularly challenging in today’s value-oriented market since booster usage is discretionary. Still, with the right formula, Henkel executives are confident that they can compete in a tough category.

That’s because in recent years the company has found ways to delight consumers in the laundry segment with products such as Purex 3-in-1 and Purex Crystals.

Clearly the global laundry detergent is undergoing rapid change with new ingredients, new product forms, new regulations and new sustainability issue.

“The cleaning business is subject to the same pressures that any other business is subject to at the moment,” observed Grime. “It’s going to take innovation to make sure that the branded products maintain their superiority and are selected by the world’s consumers. But in 2012 we will begin seeing these new materials and products come on the market. I am optimistic about the future.”

ACI Annual Meeting & Convention Set for Jan. 30-Feb. 4 in Orlando


• What’s in store for the global laundry care market, the US economy and the US Presidency in the new year? To find out the answers to all those seemingly disparate questions, be sure to attend the American Cleaning Institute’s Annual Meeting & Industry Convention, which will be held Jan. 30-Feb. 4 at the Grande Lakes Orlando, in Florida.


On Thursday, Feb. 2, Bob MacDonald, chairman, president and CEO of The Procter & Gamble Company, and Jeffrey Ansell, president and CEO of The Sun Products Corporation, will participate in a CEO Panel.


Karl Rove, former deputy chief of staff and senior advisor to President George W. Bush, and Robert Gibbs, longtime advisor to President Barack Obama and former White House press secretary, will offer “Point/Counterpoint,” on the day’s leading political issues on Friday, Feb. 3 during ACI Convention Week.


Other sessions include ACI issues briefing and breakfast and global industry update with international association executives (Feb. 1) and New Realities for the Fragrance Industry (Jan. 31). In addition, the meeting will include an offsite industry volunteer event, charity golf tournament, charity duck race, networking bar, opening reception and closing dinner.


More info: meetings@cleaninginstitute.org or www.cleaninginstitute.org


Be Seen in Singapore! AOCS Conference in Asia


• Why wait for Montreux 2014 when you can get keep up with the detergent industry in Singapore in October, 2012? The American Oil Chemists' Society (AOCS) will hold a world conference on fabric and home care, Oct. 29-31 at the Shangri-La Hotel, Singapore. The event comes just two years after the industry gathered in Montreux for the World Conference on Detergents, but industry experts maintain that more frequent exchanges are needed to solve the problems that beset the industry.


“Four years is a long, long time between hearing about what’s going on regarding major trends in the market,” explained Keith Grime, general chair, Singapore 2012. “And Asia is where the business is. We wanted to make sure that the frequency matches the pace of innovation and that the location reaches an audience as broad as it can be.”


Singapore 2012 will feature keynote addresses from the CEOs of Procter & Gamble, Unilever and Kao. In addition, the conference will include presentations on balancing shifting market dynamics, resource management, product performance, environmental responsibility and revolutionary products and many other topics.


Singapore is the logical location for the event, according to Grime, who noted that it is centrally located for executives in countries such as India, China, Japan and Indonesia.


“There is a huge sustainability movement that is taking hold and it requires real action,” concluded Grime. “As the oleochemical center of the industry, Singapore is the perfect spot.”


More info: AOCS, 1-217-359-2344; Email: meetings@aocs.org

Related End-User Markets:

Related Raw Materials: