Mary Carmichael reports on a race to market by two industry giants who were pipped at the post by a tiddler
Laundry products may include white powders but they're probably not anyone's idea of stimulants. Nevertheless, the recent flurry of activity in the category has been getting UK retailers excited.
The stirrings centre on the arrival of liquid sachets measured doses of concentrated liquid detergent encased in a plastic coating which dissolves immediately on contact with even cold water. These are expected to add value to an otherwise mature category as they offer the same convenience of tablets a measured dose, no wastage and less mess but with the added bonus that there's no need for nets and no residue left on clothes.
Their arrival has been accompanied by events worthy of a soap opera. The world's two biggest fmcg suppliers Procter & Gamble and Unilever have been working themselves into a lather in the race to give their brands Ariel Liqui-Tabs and Persil Capsules respectively first place on the fixture. P&G looks like winning this race because Ariel Liqui-Tabs is due on major multiples' shelves this week.
However, both global Goliaths have been felled by David' in the form of the Co-op's similar product Brio Actipods, which made it to shelves last weekend. Sainsbury's version, its own label Novon Solububbles, is also due out next week.
Historically, being first to market has meant leadership. Persil Tablets, which had more than a year's lead over their Ariel counterparts in 1998, helped Unilever to forge ahead. However, it's unlikely that the two or three weeks' difference in launch date will make much difference in long term sales.
There's marketing muscle available for the new launch, with Unilever promising to spend £9m on Persil Capsules from May, and an £8m budget predicted for Ariel Liqui-Tabs. But once retailers have worked out how to accommodate the turquoise and green pouches on an already crowded fixture, will they reap the benefits?
Some industry insiders have warned that any new activity may only complicate the category, after the plethora of laundry launches in the 1990s led to consumer confusion. Along with the ill-fated Persil Power in 1995, consumers were asked to get to grips with concentrated powder, liquid, colour formulas, tablets and colour tablets.
The past three years have been spent streamlining, with both big boys culling SKUs, and abandoning concentrates and dilutes. Tablets are one example of how innovation can really move a category forward. They now account for more than a quarter of the £846m laundry products market [Information Resources].
A Unilever spokeswoman says the company's research showed that 20% of liquid users were interested enough to have tried tablets, but that 60% of them preferred the fragrance and gentler cleaning of liquids and changed back. "A measured dosage of liquid was the next logical step," she adds
The new format is well equipped to capture consumers' attention and retailers expect it to grab a significant share of the market. Unilever predicts that it will capture a 30% share of the liquids sector, which itself accounts for around 16% of the total market.
"Liquid sachets will be every bit as successful as the manufacturers are predicting" says Barry Carter, senior buyer at Budgens. "Tablets have proved that consumers are keen to find easier, more convenient ways of dosing detergent, a trend for convenience which is also reflected in other markets."
Lindsey Williams, Sainsbury's detergent buyer, agrees and points out that the category attracts brand loyalty. "However, because this concept is so innovative and will be heavily driven by the big suppliers, customers may switch out of their usual brand for trial purposes,"she says.
So P&G may be looking to attract a few adventurous shoppers in Ariel's Liqui-Tabs' first few weeks, but it's not going to shift Persil from market leadership.
It seems that price is not likely to be an issue; this format is not cheap. Although Lever has not released details of pack size or price, Ariel Liqui-Tabs have an rsp of £3.49 for a pack of 12 and no-one expects a price war. "There will probably be initial price promotions," admitted Unilever's spokeswoman. "But it won't do any of us any good to keep undercutting. That's up to the own label products".
Extra value in a crowded category is the format's biggest selling point for retailers and if liquid sachets achieve the potential predicted by Unilever, they will have proved that the hoo-hah has been more than just a lot of froth.
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