shoppers have been more loyal to toilet tissue brands this year
On paper, 2009 should have been a torrid year for the category. In a recession, shoppers typically abandon keeping up with the Joneses and go for cheaper own-label alternatives or stop buying the stuff altogether if, as in the case of facial tissues and kitchen roll, it is deemed discretionary. And indeed volumes of kitchen towels slumped 7.6%.
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But although things have been tough, the category's fortunes have not been as dire as forecast. Toilet tissue sales rose in value and volume this year (by 3.1% and 1.7% respectively). Price inflation is responsible for much of the value growth, but the fact volume is up as well is positive given that last year it was down 0.7%.
The recession has encouraged shoppers to buy fewer but larger packs, which they believe offer greater value, and, predictably, economy lines are selling well. But, contrary to expectation, shoppers haven't deserted brands or premium lines.
Heavy promotional activity has played an important role in boosting branded sales, with market leader Andrex using it to particularly good effect to transform a 0.3% slump in value sales last year into 6% growth. Along the way it nabbed some market share from Velvet, which saw a 0.8% value sales uplift last year turn into a 0.7% decline this year.
But innovation, as well as promotions, also played a part in the Kimberly-Clark brand's success. Even in a recession, it is important to keep innovating at the premium end of the product spectrum, says Andrex marketing manager Steve Coghlan. "The category is 100% penetrated so the game has been very much around how we can trade people up," he says. "If you get the proposition right and do it right, people will buy into it irrespective of price."
Andrex Shea Butter, launched by Kimberly-Clark in March, is a case in point (see box) and Coghlan predicts strong sales over the festive period when consumers typically trade up. Further premium innovation is on the cards, he hints, adding that Andrex Moist presents a particularly good opportunity to add incremental value to the category.
As a result of the high levels of innovation and promotional activity by toilet tissue brands, own-label value is lagging behind the total sub-category's growth this year--in stark contrast to last year when it outstripped it almost five-fold (at 9.4% versus 2.9%).
Brands also outperformed own label in the facial tissues sub-category. Overall sales were up 3.4% in value and a substantial 6.1% in volume as fear of swine flu encouraged shoppers to 'catch it, bin it, kill it' as the government advised. A Kimberly-Clark brand again dominated, with sales of Kleenex up 6.6% in value this year.
Expectations had not been high at the beginning of the year, admits Kleenex marketing manager Marc Zander. "We all entered the year with a bit of trepidation in facial," he says. "There was a concern that it was a product category that you didn't always have to buy into."
Swine flu boosted sales not so much because people were falling ill, he says, but because the retailers backed the government's campaign by running promotions and featuring products more prominently in store. "Making tissues more visible encouraged people to buy them more often."
Sales of the Kleenex Hygiene Kits launched last autumn soared 1,000% in May when swine flu reached a tipping point, while sales of Kleenex's anti-viral range leapt 400% against total category growth then of 7% to 8%. Pocket packs also benefited from the outbreak.
But, says Zander, swine flu was not the only factor behind the sales uplift. Strong innovation and marketing have again been important.
This year the brand reaped the benefits of last year's launch of Kleenex Mansize in a compact format, supported by the Kleenex: Elephant ad. People who buy mansize tissues are now buying them 33% more often, says Zander, adding sales of Kleenex Mansize have risen 22% by value. Convenience is crucial, he adds, which is why Kleenex is launching a new ultra-thin pocket pack for men in January.
As elsewhere in paper, the nappy subcategory has been promotion-focused this year--with 60% sold on deal. The upshot has been an uplift in volume sales but flat value as the big four drive growth at the expense of Boots. Pampers and Huggies continue to lead the category, but there has been an interesting new entry in Babycharm, which, since its launch last November, has gained full distribution and grown strongly.
Eco-friendly products continue to grow and the premium sector has also seen strong growth, with promotional activity driving the average price down. Again, it was the brands that were riding high and own label that lagged behind the category in value and volume growth.