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    Features

    Pardon the Disruption

    Consumers are rethinking everything: what they eat, what they wear, how they shop and even how they clean their clothes.

    Pardon the Disruption
    That mountain of laundry seems higher than ever for many consumers.
    Pardon the Disruption
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    Tom Branna, Editorial Director01.01.19
    A lot of changes have taken place in the past 20 years within the global laundry space and many more are on the way. Speakers at last Fall’s Fabric & Home Care World Conference in Boca Raton, FL reviewed many of these changes, and suggested ways to stay ahead of and even profit from these socioeconomic gyrations.


    “The best way to manage disruption is to create it,” noted conference chairman Thomas Müller-Kirschbaum, Henkel. “We must think, plan and act to be the change that we want to see.”


    The AOCS conference organizers were certainly willing to change. The semi-annual event was held in the US for the first time, after decades in Montreux, Switzerland. And after two stints in Singapore, in 2020, the Conference will be held in Shanghai, Nov.16-19. In noting the Florida location, Müller-Kirschbaum explained that the state and the US provide a hub to reach the increasingly important Latin American market.


    Latin America, not to mention Asia, Europe and North America, were all top of mind for many conference presenters, as FMG companies and their suppliers scour the globe in a never-ending search for growth. Several experts, including opening keynote speaker Oxiteno CEO Joao Benjamin Parolin, referenced global urbanization and how a growing middle class is changing the way the cleaning industry markets its products and services.


    “Fifty percent of the world’s population resides in cities,” observed Parolin. “Every week, 1.5 million people are added to urban populations.”


    Cities, he added, consume 73% of the world’s resources.


    Sree Ramaswamy, a partner with McKinsey & Company USA, noted that by 2025, nearly a quarter of the world’s biggest cities (46 of 200) will be in China. Growth is coming from smaller “middleweight” cities in emerging markets.


    “Half of GDP growth will come from cities most of us can’t find on a map,” he exclaimed. “By 2025, emerging regions are expected to be home to nearly half of the Fortune Global 500 companies. If you don’t get to their markets, they come to yours. Can you compete?”


    To compete in the global market, companies must go on the offensive, stay agile and be responsive. Finally, Ramaswamy urged mature industries such as home and fabric care, to think digitally.


    Digital technology is everywhere, he said, noting that 98% of the US has access to high-speed wireless internet. Companies must consider digitizing their supply chains, he reasoned, pointing out that most digital companies see outsized growth in productivity and profit margin.


    “Most digital companies enjoy winner-take-all benefits. We need to be digitally mature. If you haven’t made the investment, you can’t leap forward,” Ramaswamy insisted. “When digital technology takes hold in a business it changes that business.”


    Life’s Little Luxuries

    Technology has certainly changed the home laundry routine. Sundar Raman, general manager, fabric care, Procter & Gamble USA, noted that when P&G was founded in the 1800s, laundry care was an all-day process that typically involved several people. Now, a single person can do all of his laundry in less than 90 minutes a week.


    But have consumers’ lives really improved?


    “The level of dissatisfaction with laundry remains significant,” he said. “Less water and more clothes means more dirt and odor, and people feel less clean.”


    At the same time, consumers complain that laundry is a never-ending story; too many consumers say that their lives revolve around it. And that’s the reasoning behind P&G’s entry into the fast-growing laundry service business.


    “People want clean clothes, but they don’t want to clean their own clothes,” Raman explained. “The do-it-yourself laundry industry is growing 2-3% a year, but outsourcing is growing 4-6%.”


    Procter & Gamble maintains that its Tide franchise is the No. 3 dry-cleaning business in the US. The Tide name gives franchisees instant recognition and trust with customers, according to P&G. Buildings are light and bright, inside and out, with amenities such as drive-through and valet services. Staff members receive training and support, as well as proprietary services such as Tide ColorGuard and SpotLift. And all Tide Dry Cleaners use only the GreenEarth Cleaning process for all dry cleaning. Sounds good, right? Before you start sorting through your franchise options, be prepared to fork over some cash. Franchisees must have $500,000 in liquid capital and $1.0 million net worth.  


    Outside the home, laundry services extend to college students, too. P&G’s Tide University Laundry service is available at more than 20 colleges and universities in the US, from Alabama to Vanderbilt.


    “It’s a great time-saver,” said Raman. “And college kids wouldn’t have clean clothes if it weren’t for the Tide University Laundry service!”


    Finally, new TideSpin is an app-based laundry and dry cleaning delivery service in Chicago. At the touch of a button, laundry is picked up, cleaned by Tide-trained professionals, and delivered right to your door. Launched in early 2016, Tide Spin is only available in Chicago, but more cities are coming. TideSpin is committed to creating an experience that is clean and reliable. The business uses only Tide products by professionally trained staff using the GreenEarth cleaning technology. Plus, a customer service team is available day or night to answer laundry questions.


    “Outsourcing has specific cleaning solutions, protects clothes from damage and is ready when you need it,” explained Raman. “Consumers believe that when you outsource your clothing, you are protecting it. They even ask if we can make it look like new!”


    Procter & Gamble’s outsourcing business came about from its Loads of Hope initiative, which brought free laundry services to consumers impacted by Hurricane Katrina in 2005.  How do come up with the next big idea? Raman urged attendees to follow the consumer, develop innovations that solve problems and learn by doing.


    “Consumers help us identify problems and industry solves them,” he explained. “We spend too much time thinking; let’s learn by doing! Loads of Hope was our first out-of-home laundry service.”


    But not every idea is a success. Raman noted that P&G worked with several partners on Swash, the 10-minute clothing care system designed to take clothes from “in-between to looking clean.”


    “But we shut it down. We killed it,” he recalled. “The space is still valid, but the solution wasn’t there.”


    Of course, P&G doesn’t have all the answers when it comes to outside-the-home laundry service. Florian Färber is co-founder & managing director, Zipjet, a laundry service based in Germany.


    “On average, people spend 10 hours a month on laundry and dry cleaning,” he observed. “That’s a full year over the course of one’s lifetime.”


    The ZipJet app-based laundry, ironing and dry-cleaning service, was built in just 63 days. Users can place orders online in just three clicks, 24/7. 


    “The mobile phone is the remote control of our customer’s life,” explained Färber.


    But the real revolution happens in the supply chain in logistics and auto-routing. Zipjet calculates two billion routes every week. Right now, the service is only available in Germany, but Färber is confident that his Zipjet concept has more room to grow.


    “This revolution is 1% finished,” he said.


    Zipjet has the algorithm and the drivers, but who is washing all of those clothes?


    “We outsource,” he said cheerfully. “We are asset light. I dream of a world where you can outsource everything. Why waste time and money on a washer?”


    Resource Scarcity

    Unfortunately, the world can no longer afford to outsource resource management—nor can it keep kicking the can down the road when it comes to air, water and land pollutants. No home care brand is more closely aligned with environmental efforts than Seventh Generation, which was acquired by Unilever two years ago. Then-CEO Paul Polman admitted that he hadn’t done a lot of due diligence on the Seventh Generation deal.


    “I liked their mentality to think seven generations ahead—that’s the mentality we need to solve the world’s problems,” he explained at the time of the acquisition.
    Polman is out at Unilever, having retired earlier this month, but he certainly would have approved of what Seventh Generation USA CEO Joey Bergstein said at the World Conference on Fabric and Home Care.


    “Our world is what we put into it. We’re breathing it, eating it. What are we putting into it?” he asked.  “Can you live a healthy life on a sick planet?”


    Bergstein had another question for conference attendees: what is clean?


    “For too long, the definition of clean has been fragrance,” he charged. “We think that the smell of a disinfectant is the smell of clean!”


    That kind of thinking is completely out of touch, he insisted, adding that it makes no sense to kill all bacteria nor pump homes full of consumer products that help make indoor air quality worse than outdoor air pollution levels.


    “Risk equals hazard times exposure, but nobody knows how much exposure is safe,” he charged. “People don’t trust consumer product companies; we’re just ahead of the financial services industry in terms of consumer trust.


    That distrust, Bergstein said, is due, in part, because for years, industry told consumers that lead in paint was okay or other lies all in an effort to sell products.
    “Safe as tested. Who is to say what is acceptable?” he asked.


    What can be done? An easy start is to convince appliance makers to set washing machine defaults to cold water. Or, convince consumers not to wash their clothes in the first place.
    “Forty percent of clothes washed today are clean!” Bergstein asserted.


    That’s the impetus for Unilever’s Day2 Refresher, which was designed to refresh clothes draped over bedroom chairs all over the world. All those clothes were worn once, but don’t need washing.


    These “chairdrobes” can be found in about 60% of Millennial bedrooms, according to Unilever.


    Day2 Refresher is an aerosol spray that gets rid of odors, removes creases and softens fabric. Unilever is quick to say that Day2 won’t get grimy clothes clean, but it freshens up garments enough to let you postpone the full soap-and-water treatment. The product is available in the UK where it costs about $9.75 for a 200ml bottle. Soon, it will be available on Amazon, too.


    According to Unilever, Millennials show less loyalty to leading brands and want time-saving products that are also environmentally friendly. Day2 claims each bottle can save a full load of washing and the 60 liters of water it would have required. And Unilever says the bottles are carbon neutral.


    Before leaving the podium, Bergstein gave the audience with more things to ponder:  Why does the industry use petroleum-based products and why does it rely on certified-sustainable palm oil?


    “We need to find scalable, renewable non-land based solutions (to palm oil).”


    Our Lonely Planet

    According to McKinsey, by 2090 about one in four people will be 65 or older. And Parolin observed more people, especially the elderly, are living alone. That theme, loneliness, was reiterated by Kao CEO Michitaka Sawada, in his address, “Connecting with Care: Human-Centric Innovation Across the Industry” (to read more about the Kao CEO, turn to p. 55).
    Sawada noted that in today’s global and mobile society, connections are growing weaker. In a survey of older adults, most said that they didn’t have a family member that they could count on, according to Sawada.


    It’s no wonder then, that last year UK Prime Minister Theresa May appointed Tracey Crouch as the country’s first Minister for Loneliness.

    “For far too many people, loneliness is the sad reality of modern life,” May said.


    Sad, yes, and costly, too. According to a report last year from the Jo Cox Commission on Loneliness, more than nine million people in Britain—around 14% of the population—often or always feel lonely. That costs UK employers up to $3.5 billion annually, according to consumer cooperative CO-OP.


    The cleaning industry, asserted Sawada, can help rectify the situation.


    Cleaning is removing dirt, yes; but cleaning also shows care for others and enables us to connect with them,” he insisted. “Cleaning is an act of caring. It expresses love for someone else.”


    And it’s not only the elderly and isolated who can benefit from cleaning. Sawada said that in Japan, it is customary for schoolchildren to help take care of their schools; washing desks, cleaning hard surfaces, etc.


    “Cleaning cultivates gratitude,” he observed. “We can help kids create a strong connection to others. In Japan, when kids clean the classroom; they gain a sense of gratitude.”


    Cleaning has a real impact in the classroom. Whirlpool’s Care Counts laundry program put washers and dryers in schools to study the connection between access to clean clothes and attendance.


    The program has now completed its second year. For the 2016/2017 school year, laundry pairs were in schools in six cities across the US and, based on preliminary findings, it’s clear that clean clothes can make a positive impact on a child’s education: participating high-risk students attended nearly two more days of school per month during the program and more than half of participating students were no longer at risk for chronic absenteeism by the end of the school year. The students raised their attendance rates from 82% to 91%, and achieving more than 90% is often targeted as a goal for chronically absent students, according to researchers. Moreover, teachers surveyed said that 95% of participants in the 2015/2016 program showed increased motivation in class and were more likely to participate in extracurricular activities and interact with peers.


    “We wash hands, do laundry and clean homes every day, all very simple tasks, but they mean so much more,” concluded Sawada. “These examples show that our industry is having a new kind of impact on people. The focus is not on self, but on others. We can help foster strong communication between people. Caring builds connections.”

    For more coverage of the AOCS Fabric & Home Care World Conference, visit Happi.com.
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