European consumers are switching from brand name products to private label products in increasing numbers. More effective differentiation is the only way brand name products will be able to retain their position on the shelves.
Recession has affected the tissue market but less than other paper grades, relatively speaking. Many consumer tissue products are everyday essentials, which means that usage rarely falls off even during diffi cult times, according to tissue industry expert and consultant Dr. Guy Goldstein.
“Of course, sales volumes of some products, such as napkins, have gone down. Products in the AFH or Away From Home category used by hotels, restaurants and institutions have also dropped, but sales of those used in hospitals, in contrast, are likely to remain stable.”
Around 25 million tonnes of tissue are produced annually worldwide, with North America being today the largest market. Although consumption in Europe has been growing by around 2–2.5% annually in recent years, Western Europe is still far behind North America. Tissue consumption in Western Europe is currently at a level of 17–18 kilos per capita, compared to 25 kilos per capita in the US. Consumption in Eastern Central Europe and Eastern Europe is less than 5 kilos per capita.
The consumer is king
Where people are buying their tissue products in Europe is changing, and the recession is only accelerating this process. More and more consumers are switching to hard discount chains, which have introduced also a limited number of branded products alongside their own private label.
The pressure on branded products is growing everywhere. “The quality of the private label products offered by supermarkets and discount chains is as good as that of branded products today. That is one reason why I believe that the number of branded products in the field will decline, leaving perhaps only the number-one and the number-two brands. The others will be replaced by private label products,” predicts Goldstein.
“The size of packs is also growing, as retailers are keen to get consumers to buy in volume. It could soon be difficult to find traditional packs of four rolls of toilet tissue as a result.” The quality of tissue products is uniformly high today, something that we have the professionalism of the buyers at retail chains to thank for, at least in part.
Technology has also made a lot of progress and computers have greatly helped quality assurance. “The buyers can see from their inventory systems which products are selling and which ones are not, on a daily basis. Buyers are setting the pace, as no one can afford to loose customers like Carrefour or Tesco.”
Papermakers need to take the initiative and anticipate where consumer trends are going and what consumers are likely to want next. “The consumer, after all, ultimately decides what he or she buys.” While many brands are international today, the products sold under their name need to be adjusted to local conditions and preferences. Even successful products cannot simply be just ‘cloned’ from one country to another or from one region to another.
“The country-specific differences insomething like fi ber content are quite small, though, and vary by only as much as perhaps 10% – as manufacturers need to be able to switch products between different markets sometimes, for supply reasons. Packaging is generally similar from market to market for the same reason and in order to keep the product’s image consistent.”
Consumers prioritize convenience
The average consumer tends to prefer restrained colors, typically pastels, when buying toilet tissue or lightly printed kitchen roll. Napkins, though, are an entirely different ball game, and need to stand out from the crowd to get consumers’ attention and to embellish the table settings. Softness and strength are a given today, and are seldom highlighted in advertising any more.
“Manufacturers talk about things like convenience, thickness, and also strength to some extent, but now they try to focus on enhanced lifestyle.” Convenience is a definite priority in product development. Embossed products have quickly become most popular in European brand name toilet tissue, as they emphasize a product’s thickness and perceived luxury.
Products have also been launched that feature a soft top ply combined with a stronger bottom ply. Ply multiplication is also becoming more widespread, and is seeing two-ply tissue replaced by up to six-ply tissue. “Being able to stand out on the shelf is a life or death issue for manufacturers. They always need to have something new to offer, as there’s little in terms of quality between many different manufacturers’ products today.”
‘Light green’ sells
Consumers also appear to be unwilling to pay more for products based on recycled raw material. Green is beautiful as long as it does not hit your pockets. People’s awareness of this issue varies a lot from country to country, however there is a greener attitude in
Northern Europe at this point than in the South. “The majority of consumers are ‘light green’ when it comes to what they buy, in other words, they’re likely to prefer ecobranded products or products containing recycled material if they don’t have to pay a premium for them. We shouldn’t forget, though, that consumer attitudes shape environmental policy and legislation over the long term, as well as companies’ desire to promote themselves as environmentally aware.”
Text: Jussi-Pekka Aukia
>> Read the full article in Kemira Solutions magazine 1/2009
The theme of the issue is tissue paper.