Laundry detergent marketers are out to prove that they’re more than a one-trick pony. Although sales of unit dose laundry packages have been a success with consumers, their introduction has done little to increase overall category sales in the US. As a result, formulators are trying to entice consumers with even more product forms, different concentrations, complex fragrances and of course, new products—loads of them, in fact.
All of this activity comes at a time when the US laundry category continues to be weighed down by a weak economy. Consumers are taking shortcuts to clean clothes and the result is lower overall sales. According to Information Resources, Inc., Chicago, laundry detergent sales dipped more than 3% to just over $7 billion for the 52 weeks ended Nov. 3, 2013 (for a look at the segment leaders, see the chart on p. 71). While sales of unit dose products surged nearly 80%, sales of liquids dropped 6% and sales of long-suffering powders declined 12%.
Ed Vlacich, executive VP and GM-national brands, Sun Products, blames the decline, on a couple of factors:
- One, as consumers adopt single dose formats, they are less likely to overdose on detergent as they might with liquids; and
- Two, high efficiency (HE) washing machines are becoming more prevalent in the US (40% share). Some HE machines now have built-in auto detergent dispensers, which also reduce overdosing, and therefore use less detergent than traditional washing machines.
“Consumer confidence wanes when there is no innovation. Laundry is a rather mundane task. It’s all about delivering simple delights,” he told Happi. “Consumers will pay for innovation that delights them.”
That’s why, despite the mixed results during the past year, marketers remain bullish on the segment, and have big plans to roll out an array of products later this quarter. Leading the way, of course, is Procter & Gamble, which is introducing Tide Simply Clean and Fresh, Tide Plus and Tide Oxi multi-purpose stain remover, as well as Gain Flings.
New Tide Simply Clean and Fresh is expected to shake up the whole category, as marketers jostle for position in the mid-priced tier of the market.
“There are consumers for whom a lower price is a more critical element,” A.G. Lafley, P&G’s CEO, told analysts at a Barclays conference late last year. “We need to have brands and products that are relevant for them as well, and we increasingly will. We’ve upgraded or introduced several mid-tier products in the US… We can generate profitable growth at the high, mid- and even the lower end of the pricing ladder.”
Maybe so, but some analysts have reservations about the launch; they worry that a low-priced Tide may pull once-loyal consumers away from premium Tide. The folks in Cincinnati may not admit it, but they have similar concerns; that’s why shoppers won’t find Tide Simply Clean and Fresh next to regular Tide. Instead, the new Tide will be shelved away from existing Tide products. And while the new Tide variant will be priced at a discount to regular Tide, it will still be priced at a higher cost per load relative to bargain detergents like such as Xtra detergents from Church & Dwight and Purex from Henkel. To further differentiate the new product, Tide Simply Clean and Fresh will be packaged in a yellow—not orange—container.
Price and package aside, Tide Simply Clean and Fresh, according to the company, was “specifically designed with the cleaning and odor removal and freshness needs of mid-tier consumers in mind.”
Around the same time that Tide Simply Clean and Fresh debuts, P&G will roll out Gain Flings, the latest unit dose offering from the company. Analysts have suggested that a lower-priced Tide product could also siphon some Gain users from their favorite brand.
But the introduction of Flings could be more than enough to hold the Gainiacs’ attention. That’s because Gain Flings boast the added cleaning power of OxiBoost and the malodor removal power of Febreze. Prices for Gain Flings will range from $4.49 for a 14-count bag to $21.49 for a 90-count tub. Of course, the beloved Gain scent will remain the same, but P&G is adding Moonlight Breeze, a brand new scent to the Gain portfolio. (For more on P&G’s laundry strategy, see “A Passion for Pants,” p. 72 in this issue.)
Putting the Hammer Down
Price-conscious consumers have put Church & Dwight’s value-based portfolio top-of-mind and that’s led to some nice gains for the maker of Arm & Hammer, even as the overall laundry category dipped a bit during the past year.
“We saw contraction in the detergent category driven by the economy and the modest negative effect of unit dose,” noted Kevin Kuchinski, VP-fabric care, Church & Dwight. “But we had a strong year, being one of the few companies to gain share.”
According to IRI, C&D added less than 1% in liquid laundry detergent dollar sales, paced by a 4.85% gain for Arm & Hammer liquid and sales of its unit dose detergents increased 42%. But like so many other marketers, its powder sales fell, down more than 21% (see chart).
“When consumers are stuck in a tough economy, they look for value,” noted Bruce Tetreault, director, Arm & Hammer detergents.
“With Xtra on the extreme value side and OxiClean, we have the right portfolio. Plus we offer the performance for a good cost per load.”
In another nod to performance, this year Church & Dwight is rolling out Arm & Hammer Ultra Power 4x, a concentrated detergent that promises 50% whiter and 50% fresher clothes thanks to double scoops of baking soda. Also new is Arm & Hammer Clean Sensation, which promises cleaner, whiter more vibrant laundry, better odor removal and fresh scent. To promote Clean Sensation, Church & Dwight has teamed up with the National Park Foundation (see Now Smell This!, p. 63).
For even whiter whites, C&D is launching OxiClean White Revive, which is said to deliver chlorine-like power without the risks of traditional bleach products.
“If you get a splash of bleach on a garment it’s ruined,” said Kuchinski. “This formula is safe, but powerful. You can even soak clothing in it for even more stain removing power.”
With an emphasis on value and performance, Church & Dwight executives are confident that 2014 will be another good year for their laundry brands. They expect to add more shelving in stores, as space-strapped retailers make room for winning players who are innovating and investing back into the category.
“We’re proud of the fact that we’ve been able to win even in tough times,” said Tetreault. “We are delivering what consumers want. OxiClean is growing in the face of severe competition, Xtra delivers extreme value and Arm & Hammer is winning too.”
Dawn of a New Day
Sun Products also offers a wide range of value brands as well as a robust private label business, which could expose the company more than others to P&G’s plans to launch a cheaper Tide variant. But Sun is fighting back with several launches for 2014.
“Sun is poised for growth,” insisted Vlacich. “Innovation is the lifeblood of any company and we are bringing innovative products to the detergent and fabric softener categories and have momentum with All and Snuggle.”
All Free Clear is already the No. 1 detergent for those with sensitive skin. Now, Sun is set to roll out All Free Clear liquid fabric softener and dryer sheets. With these introductions, Sun can offer a complete “laundry regimen” for those with sensitive skin.
According to Sun, 50% of households include a member with sensitive skin or skin allergies, yet only 30% of these households buy a product that is made for them.
Obviously, Sun executives see plenty of upside for the All Free Clear brand.
“We want to capitalize on the fact that All Free Clear is the No. 1 recommended brand by doctors, dermatologists, pediatricians and allergists. We are very proud of that,” said Vlacich, who foresees sensitive skin consumers purchasing the entire All Free Clear lineup, much like they purchase the same brand of shampoo and conditioner.
In the unit dose category, Sun is launching All Mighty Pacs Oxi, which promises to remove stains, and whiten and brighten clothing. Aimed specifically at households with children, the formula is said to provide superior cleaning on tough kids’ stains such as grass, grape juice, chocolate ice cream and the like. To complete the kid-friendly tie-in, the All brand remains the official laundry detergent of Little League Baseball and Softball.
Within fabric softeners, Sun is rolling out Snuggle Scent Booster pacs, which promise to give laundry a burst of long-lasting freshness. Or, as the company notes, “Little pac. Big Snifference.” The product is available in two scents, Lavender Joy and Blue Iris Bliss. They join Snuggle Exhilarations, a line of long-lasting fabric softeners that deliver scents that last from wash to wash and are available in five fragrance combinations, including Wild Orchid & Vanilla and White Lilac & Spring Flowers.
“The launch capitalizes on two trends—single dose and scent boosting,” said Vlacich. “Nobody else is doing that right now.”
Agitators in Washington?
With retail price wars moderating and no raw material issues on the horizon, it seem as if the laundry detergent industry is in for smooth sailing in 2014. Well, not so fast; regulators still are doing—or not doing—their thing in Washington and in states throughout the country. The much-needed reform of the Toxic Substances Control Act (TSCA) seemed to be moving in the right direction following the 2013 introduction of the Lautenberg-Vitter bill. But with Frank Lautenberg dead, the bill has stalled a bit in Congress.
“We miss Senator Lautenberg,” acknowledged Ernie Rosenberg, president of the American Cleaning Institute (ACI). “He could have driven the bill through Congress faster.”
ACI, of course, supports the measure as it makes for a stronger national program. According to Rosenberg, a credible federal program will make it less likely for states to enact their own programs. But the TSCA bill doesn’t give industry a free ride, warned Rosenberg. If and when it passes, it will mean more costs to and more data from industry members and will probably require more testing as well.
“Still, the industry sees TSCA reform as critical,” asserted Rosenberg. “There is no other way to stop retailers and states from creating a patchwork of regulations around the country.”
TSCA aside, ACI is taking the lead on a number of issues including safe storage of unit dose detergent packs, sustainability and creating a unified message with other associations in Asia, Europe, Latin America and the rest of the world. To find out more about TSCA, as well as a host of other issues confronting the industry, be sure to attend the ACI annual meeting later this month (see p.69 for more information).
Regardless if the conversation is about regulation or innovation, clearly, there is plenty of activity in the laundry segment these days—but keeping an eye on cost will remain paramount.
“In detergent, the 10-20 year trend is on value,” insisted Kuchinski.
And while the flurry of new products demonstrates the robustness of the business, more can and will be done, say industry experts.
“Not every performance parameter is being met,” noted Vlacich. “Consumers still want even whiter clothes and better stain removal.”
Sounds like the R&D department will remain hard at work through the New Year and beyond.
• It will be a grand time in Grande Lakes, as the American Cleaning Institute (ACI) holds its annual meeting in Orlando, Jan. 27-Feb. 1, 2014. Last year, the event attracted more than 800 industry executives and ACI expects to top that number later this month.
“Members tell us that this is a critical meeting for them,” noted Ernie Rosenberg, president, ACI. “They conduct a lot of business for the entire year during the meeting. It’s global and attracts high level executives.”
Business deals aside, the annual meeting also boasts a full roster of industry sessions, including:
“There’s a lot of meat in this meeting,” joked Rosenberg.
More info: American Cleaning Institute, www.cleaninginstitute.org