Feel the difference

When it comes to household paper products, paper towels and toilet tissue are the rock stars of the category. When combined, they account for more than 80 percent of total category sales in the United States, notes global market researcher Mintel in a February report titled “Household Paper Products — US.”

Unlike paper towels and toilet tissue, which carry the status of “household essentials,” facial tissue and paper napkins are seen as more discretionary than necessary and even replaceable, in some instances, by toilet paper or paper towels. This consumer attitude could have played a part in the fall of their sales between 2008 and 2013; facial tissue sales fell 6 percent and paper napkins fell 4 percent, Mintel notes.

Millennials, in particular, are less likely to use facial tissues and paper napkins, states John Owen, household analyst at Mintel. However, when millennials do buy facial tissue, they gravitate to added-benefit products such as facial tissues that soothe the nose and relieve congestion. In fact, younger consumers are more likely to say that these types of value-added benefits are among the most important attributes they consider before purchase. Retailers looking to boost facial tissue sales might find a move into the value-added space will generate more sales.

Offer premium products

Private label’s market share in the household paper products category is substantial. According to Chicago-based Information Resources Inc., store brands account for about one-fifth of all sales of facial tissues and toilet tissue, and about one-quarter of all sales of paper towels (see the table, p. 76). And about 40 percent of all paper napkins sales come from store brands. But retailers that are interested in growing store brand purchases of household paper products might need to re-evaluate how they create value for the consumer, when it comes to both product quality and sustainability.

To consumers of household paper products, the meaning of “value” is changing. No longer is value measured only by feet per roll. Instead, consumers consider product quality, often described using the terms “thicker” and “stronger,” as a better way to gauge value. For example, nearly four in 10 consumers believe that a thicker or stronger toilet paper saves them money because fewer sheets are needed per use, Mintel reports. This same attitude also is found among users of paper towels.

But consumers are still focused on savings. In fact, between 2011 and 2013, private label market share rose a full percentage point, primarily at the expense of value-tier national brands, Mintel says.

One reason for this growth could be store brands’ built-in lower-price reputation and emphasis on high quality, Owen states. Plus, with more private label suppliers acquiring through-air-drying machinery, production capacity for higher-quality tissue has increased, allowing for more launches of premium-quality private label products.

Premium-quality also often involves innovation, so retailers that work with their manufacturers to rethink their paper products and find ways to surpass the national brands will create for themselves a competitive edge, says Craig Nelson, executive vice president, consumer products – United States for Cascades Tissue Group, Kingsey Falls, Quebec. Retailers would do well to think about how they could offer new and unique private label products that might not have a national brand equivalent. He gives two examples of products that Cascades recently launched that do just that.

The first example is ServOne, a 188-count napkin product that is packaged in poly wrap and dispenses napkins one at a time through an opening at the top, similar to a facial tissue box. By keeping the napkins contained and easily dispensed, the product becomes ideal for use at picnics or in the car, he says.

The second example Nelson gives is of an antibacterial paper hand towel. When it comes into contact with the water on consumers’ hands, it releases an active ingredient that kills more than 99.9 percent of harmful bacteria. The towel doesn’t require any additional steps for the consumer and is made from 100 percent recycled fiber.

But retailers could also offer consumers a more premium option without any new innovation. Sometimes “premium” could simply mean ignoring the lead of the national brands. Recently, many national brands have begun to “down sheet” their toilet tissue products while also shrinking the size of each individual sheet, says Daniel David, executive vice president of Global Tissue Group, Medford, N.Y. Consumers have noticed this change because the toilet tissue roll doesn’t fit the same as it used to on the spindle and doesn’t feel the same in their hands. Retailers that refuse to follow this particular national brand trend could use callouts on their store brand packages to show they offer 20 or 25 percent more product than the national brand.

Offer sustainable options

According to Mintel, almost 25 percent of category purchasers say they are more likely to buy from companies that promote ethical and sustainable practices. And the same percentage of consumers say they are interested in buying paper products made from sustainable non-tree sources such as bamboo.

Besides fitting in with the increasing demand from consumers and environmental groups, sustainable practices could make good business sense, Owen states. Resources such as bamboo and sugar cane husks have the potential to be stable, lower-cost sources of pulp.

And their regenerative powers also could make these two tree-free resources highly appealing. True Green Enterprises, Boca Raton, Fla., creates tree-free household paper products using a mixture of both bamboo and sugar cane husks. On the company’s website, it states that it can take trees up to 30 years to regrow after harvesting. However, sugar cane can regrow in as little as one year, and bamboo can, under the right growing conditions, grow up to 3 inches in one day.

Sugar cane is currently the No. 1 crop in the world, states Terry Lehmann, CEO of True Green Enterprises. After the sugar is extracted, the stalks are often burned, causing environmental damage to the Earth’s ozone layer. True Green, however, found a way to take the sugar cane stalks, pulp them and mix them with bamboo to create 100 percent tree-free paper products that are both soft and strong. True Green’s paper products are found in thousands of stores across the country under the Green2 brand, as well as at Walgreens stores under the Ology brand.

“Consumers care about the environment and want to be a good steward for Mother Earth,” she says. “Tree-free paper products provide an alternative to tree-made and recycled paper products.”

Additionally, retailers and manufacturers are discovering that household paper products created without the use of chlorine chemistry to bleach the wood pulp and wastepaper fibers are another way to increase sustainability and save money, states Archie Beaton, executive director and founder of the Chlorine Free Products Association, Algonquin, Ill.

“Large corporations have been bleaching paper products for so long that consumers assume that white means sterile, but I can guarantee you that if you put an unbleached brown diaper on a baby, the baby wouldn’t mind,” he adds.

One company that Beaton works with stopped using chlorine chemistry and reduced the amount of fresh water it uses by more than 30 thousand gallons per ton of paper product produced. Because it doesn’t use chlorine chemistry, this company recycles water through its plant more than 30 times; this practice saves the company money because it doesn’t have to constantly heat new water, and it reduces its environmental impact because it decreases the amount of fresh water consumed.

To put it into perspective, Beaton gives the following example: A single sheet of copy paper produced with chlorine chemistry uses more than a soda can’s worth of fresh water, about 13 ounces, but if processed chlorine-free, it requires less than 3 ounces of fresh water.

Make a statement

The paper aisle can be very confusing to consumers, Lehmann states, as there are not any standards for the size of the paper, the number of sheets or the number of feet per roll. So getting noticed comes down to the merchandising of the brand. With that in mind, retailers might improve sales by making big, bold statements on the product packaging advertising what is special about their store brand products.

Callouts are a great way for retailers to attract consumer attention at the shelf and create differentiation, David says. But instead of using “compare to” language, retailers should be stating how the store brand is better than the national brand, whether that be because it offers more product, is softer and stronger, or is innovative and different.

To catch the consumer’s eye at the point of purchase, Nelson also recommends that retailers “get sophisticated.”

“When a package of toilet paper has the phrase ‘Bath Tissue’ front and center, larger than all the other phrases on the package, the retailer is giving up valuable design space that could be better used as a billboard to reinforce their private brand name,” he says.