The average price of household cleaning products, loo roll, facial tissues and detergents has crashed 8% in the past year
Good news for the houseproud: the average price of household cleaning products, loo roll, facial tissues and detergents has crashed 8% in the past year [Kantar Worldpanel 52 w/e 8 October 2016]. So there really is no excuse for anything but a spotless home these days.
That’s not such good news if you’re trying to earn a crust out of the category, of course. Volumes are up 8.2%, but that hasn’t equated to value growth. Indeed, despite huge volume gains in some sectors (bin liners & accessories are up a staggering 21.1%), nearly £27m less has been put through the tills, a fall of 0.5%.
So what’s going on? Which sectors have seen the biggest falls in price? How can value be driven back into household? And what is Britain doing with all those extra bin bags?
In this report
Detergents have been hit hardest, with £45m (4.5%) wiped off value and volumes up by just 0.1%. This is because while consumers are buying more volume per trip, they are also shopping in the category less frequently, says Lyndsay Jones, head of marketing at McBride.
“Brands have been promoted heavily to gain available volume, with activity tending to be on larger pack sizes that, more often than not, are promoted to half price,” she says. “As a result, consumers are being taken out of the market for long periods.”
That detergent volumes are flat shows just how hard it is to drive incremental volume growth in a category most households already buy into. There are two options, other than fighting purely on price: raise value with pricier NPD (coconut oil loo roll, anyone?) or target adjacent, less penetrated sectors with more potential for volume growth.
Sectors such as fabric conditioners, a focus for the giants of household Unilever, P&G and Reckitt Benckiser in recent years (arguably the latter two created entirely new sub-sectors with the 2013 launches of P&G’s ‘fragrance booster’ Lenor Unstoppables and Reckitt’s antibacterial clothes treatment Dettol Laundry Cleanser). Overall, fabric conditioners have put an extra £12m through the tills; value is up 1.8%, volume 3.8%.
This is being driven by brands. The best performer was Comfort with growth of 6.9% in value and 9.1% in volume, driven by its concentrated format Comfort Intense, launched in April 2015 [IRI 52 w/e 26 November 2016]. Last year, Unilever dialled up the premium cues with the launch of Intense Luxurious.
Household care category report snapshot
“Ultra-concentrated formats have been incredibly popular as consumers look for more convenient offerings and efficient dosage systems, an area Comfort has tapped into with its Intense offering,” says Unilever UK’s senior category and shopping marketing manager for homecare, Steve Goodyear.
Despite Lenor’s decline of 7.8% in value and 2.6% in volume, P&G claims to be seeing continuing strong returns from Unstoppables, adding £30m to the category. P&G’s sales director Ian Morley says 80% of people who bought Unstoppables did so on top of a liquid detergent and, thanks to strong media and trial initiatives, 70% of consumers are now aware of Unstoppables. “There are still plenty of opportunities for growth, with continued focus on education and trial to drive deeper penetration across the UK,” he adds.
Pop-up Galley: Innovations in household care 2017
The success of Unstoppables and Comfort Intense, which Unilever says is developed with perfume experts, makes it clear that appealing to shoppers’ sense of smell can help drive sales. “Fragrance continues to be one of the biggest drivers in laundry and household cleaning, so it’s important we continue to innovate to keep consumers excited and engaged,” says Goodyear.
Brands dominate household & paper products, with sales worth £4,079m, or 69.3% of the category total. But brands’ share is diminishing, down by just shy of one percentage point in the past year as shoppers switch to the discounters, which focus more on own label. As we’ve seen, to stem shopper losses, the supers are slashing prices on brands.
That one of own label’s greatest share gains was in household cleaners, scene of some of the biggest branded losses of the year, is significant. Retailer offerings’ share of household cleaner sales has gone from 18.8% to 20.3% [Kantar], driven for the most part by a 8.8% fall in average price. The switch to own label is clearly fuelling price deflation.
Another factor is the rise of disposable cleaning wipes, which generally carry a lower price per unit than products such as gels and sprays. Volumes have surged by more than 40% since 2012, with sales up 5.7% to £76.7m on volumes up 11.8% in the past year, making wipes the only product group in growth.
Lower prices wipe £130m off household
Unilever says 40% of households now use disposable wipes, claiming the 2015 launch of Cif Power & Shine wipes in packs of 90 (standard packs contain 30) has helped drive growth. “Wipes are now moving to bigger packs as consumers become more frequent users,” commercial manager for household Nikki Hepburn said last year.
Own label has been a key driver of wipes’ growth, with the big four’s offerings often coming in at more than half the price of brands and multibuy deals driving volumes. Still, some argue the days of price being shoppers’ only consideration when it comes to buying household cleaners are ending.
Particularly when it comes to wipes, says Richard Peake, MD of eco-brands Ecover UK and Method, pointing to growing awareness of the environmental cost of wipes and microplastics. “There’s definitely a growing awareness of everyday products in homes and how they affect people’s health and the environment and as a result people are making small changes to be more sustainable,” he says.
Peake argues this will continue to drive sales of Method and Ecover. Others claim that brands can win back share from own label by building on the perception that they can offer more effective cleaning solutions. Indeed, many are fighting back through heavy investment in NPD and marketing campaigns.
This is particularly the case when it comes to products designed to keep household white goods clean and running efficiently. Finish forked out £7.4m on traditional ad space - much of that going on the TV campaign Who Cleans the Cleaner? for its dishwasher cleaning product - in the year ending 31 October 2016, a rise of nearly a fifth [Ebiquity]. Calgon washing machine cleaner has also been shouting about its effectiveness in TV ads.
“From insight studies conducted by McBride, it was highlighted that when it comes to specialist cleaners, consumers prefer branded products,” says Jones at McBride, which ran a digital campaign for its Oven Pride brand throughout December. “This is something that we’ve seen work well for Oven Pride, the UK’s No.1 oven cleaner.”
In the cleaning tools and gloves sub-sector, retailers have responded to the rise of discounters by rationalising ranges and drastically reducing SKU count in store to simplify consumer choice. In response, Spontex has been looking to highlight the difference between its products and own labels.
“We’ve used social media, digital advertising, sampling activity, blogger outreach programmes and other advertising means such as TV and experimental marketing to ensure we’re maximising reach and keeping the brand top of mind,” says senior brand manager James Ireson.
Such activity is crucial if brands are to maintain a premium over own label. And analysis from Ebiquity indicates brands are splashing out more on marketing, with household’s 10 biggest advertisers spending £95.2m on traditional ad space (96% of that went on TV), a rise of 43% [52 w/e 31 October 2016]. Fairy, for example, spent 37.9% more on traditional ad space during this period.
This contributed to one of the biggest branded success stories of the year, with Fairy’s value sales up 4.4%, driven primarily by its auto dish wash lines [IRI], on unit sales growth of 1.6%. Deals on larger packs have played a role (see p55), but P&G says it’s continued to drive trial by upping overall media spend by 20%. “With Fairy Auto Dish Wash representing almost 30% of the market and offering superior cleaning, without the need to pre-rinse, there is a real opportunity to grow category value,” says Morley.
That Fairy has prevailed in washing-up liquid and auto dishwash - two of household’s hardest-hit sectors with respective losses of £10.1m and £7.8m [Kantar] - supports Morley’s assertion, particularly in light of the 12.4% decline in own label washing-up liquid’s average price, driven chiefly by the rise of the discounters. In terms of auto dishwashing, McBride’s Jones says declines are driven by consumers buying bigger packs but less often, in reflection of a cut in multibuys.
Big nights in mean bigger cleanups afterwards
Brits spent an extra £28m on bin liners and cleaning accessories in 2016 [Kantar]. This was driven partly by NPD through product upgrades, but also by consumers buying larger pack sizes that offer better value for money, with the average price cut by 13.3%.
Homeware and laundry manufacturer Minky increased year-on-year sales by around 10%, driven by promotional link saves and multibuys, as well as seasonal promotions such as festive-design scourers and ironing board covers.
NPD growth has been driven mainly by further developments in its high-performance Microfibre cleaning products, says product manager Charlotte Farrow. She adds most of the growth in cleaning products such as cleaning cloths and scourers has been from larger pack sizes.
Daniel Neumann, MD of Easy-Do Products, says several factors may have contributed to the category’s sudden rise, including more time spent at home and consumers seeking value for money.
“There has definitely been a greater interest in home cooking, with more time spent in the kitchen creating a mess that requires more products to clean up afterwards.”
Neumann says people are also entertaining more at home, due to the cost of eating out, while nights in with Netflix mean they want to keep their homes clean and tidy.
“The home also becomes more important during times of economic uncertainty because people may spend more time indoors,” he adds. “They want to feel comfortable and safe, which again requires additional products to keep homes clean.”
Reflecting this, Neumann says within the tools cleaning market washing up tools are up 3% and sponge scourers up 3.8%.
He adds that his Dishmatic brand will continue to drive growth through a new website and promotional activity, as well as a greater social media presence in 2017.
Paper products, in contrast, are continuing to grow despite a 2.5% average price decline. That growth is being driven by own label, up 2.3% in value and 4.1% in volume, as a result of retailers cutting their prices to compete with the discounters and Amazon, where growing numbers are buying in bulk.
A lack of convincing NPD from brands is to blame for their losses, says Mike Docker, MD of private label paper supplier Northwood & WEPA, which next month launches a coconut oil infused Tesco loo roll (see left). “Brands continue to advertise to maintain emotional power, but sometimes fail to invest as much in product quality,” he says. “This means the rational power of big brands is diminishing.”
Retailers are indeed dedicating more shelf space to their own-label products. Asda, for example, has focused on its Shades range across toilet and facial tissues and house towels. “We know from consumer research and from scientific product testing that Shades, particularly on toilet tissue, is the best quality product on the market and so are very proud of it and therefore want to give it the presence on shelf that it warrants,” says a senior household buying manager for Asda.
Not that brands are giving up without a fight. Kimberly-Clark has relaunched its flagship Andrex Classic White toilet paper as Classic Clean - its biggest product change in 60 years. The new product has a thicker embossed base-sheet designed for a better clean. “As category leader, Andrex has taken on the challenge of repositioning the category from household essential to ‘intimate care’, in order to drive value back into the toilet tissue category,” says an Andrex spokesman.
SCA, meanwhile, claims to have made significant investment in the quality of its branded paper products Cushelle, Velvet and Plenty with all three undergoing major relaunches. Plenty, the UK’s No.1 household towel brand, underwent its biggest-ever upgrade to make its core range 15% stronger. “By continuing to hero the versatility of household towel products by ensuring usage is extended outside the kitchen, not only limited to spills and food prep, Plenty has become essential for a wide variety of tasks,” says brand manager Charlotte Parrish.
Accrol Papers (Mega, Mighty, Softy) was another strong performer with 18% year-on-year sales growth driven by new tissue technology (NTT) toilet tissue, quilted toilet tissue, multipurpose wipes and three-ply facial tissues. “NTT is the next big thing in toilet tissue, giving that softer feel and it also breaks down quicker when flushed away,” says sales director Gary Earle.
The importance of this issue shouldn’t be underestimated. The BBC has reported that water companies are spending ‘millions’ on unclogging sewage systems blocked by moist toilet wipes. “They say ‘flushable’ on them and they do flush away, but unfortunately they just do not break down in the sewers,” one water company spokesman told the BBC in October.
Environmental concerns will continue to impact the market, say many. “One of the biggest trends we are seeing within the category is a clear and growing demand for products which don’t require chemicals and our microfibre mops have seen some of the biggest growth in 2016,” says Lindsey Taylor, shopper product manager for Vileda UK.
Busy schedules are also pushing consumers towards convenience formats that get the job done quickly. To meet demand, Charlotte Farrow, product manager at homeware and laundry manufacturer Minky, says the brand is developing new handled cleaning products. “Hygiene and the spread of germs and bacteria remains a concern for consumers, consequently Minky is planning to expand its range with an additional line of antibacterial cleaning products and new product developments to serve demand.”
In terms of overall trends, one thing is certain to continue: the shift in volume from large grocers and the traditional trade to discounters and online. As a result, P&G is working with retailers to simplify its range and focus on bestsellers. “Our guiding principle and objective is to make it easier for the shopper to navigate and purchase, whilst maintaining the critical focus on range simplification,” says P&G’s Morley.
Within the cleaning tools category, Spontex’s Ireson says brands have suffered as a result of rationalisation, with retailers affording more focus and, in some cases, space to own label. “However, we’ve managed to maintain a strong brand presence within the marketplace as retailers understand the importance of including a trusted brand,” he adds.
Indeed, brands can claim some credit for bin liners and cleaning tools’ growth. There’s another factor. Surely bin bags’ rise in the same year as the imposition of a 5p charge for carrier bags is no coincidence?