Give Them More

Paper products are big business. After all, we all use them, and we all buy them. Yet sales across the board could be better, with the industry seeing only “modest” sales growth from 2008 to 2013, according to Mintel’s “Household Paper Products — US” report, released in February 2014.

Currently, consumers are clamoring for higher-quality products that last longer, as well as new product innovation. Retailers that heed those trends, coupling efforts with a focus on sustainability, could see sales of store brand paper products grow, particularly with their cost advantage over the national brands.

Keep quality high

A crucial point that retailers need to keep in mind for their store brand paper products is that going with the cheapest product available, even if it initially translates into purchases, could backfire. When it comes to successful sales, quality is simply essential in the paper products category, no matter what the pricing.

“If a private label brand does not perform as promised, no matter what its price point, it is unlikely that a consumer will make a repeat purchase,” says John Sarraf, president of Edgewood, N.Y.-based U.S. Alliance Paper Inc., which manufactures both private label and branded paper products.

So how could retailers offer the quality shoppers want in the paper category? Two key words are thickness and strength — a paper towel, for example, must hold up to a spill. While the manufacturing costs for a more durable paper product are higher, the resulting perception will be that the store brand product is the best value.

According to data from global market research firm Mintel, shoppers are associating quality with economy.

“Consumers are responding to recent branding around the whole ‘less is more’ concept. In the toilet paper segment, for example, the idea that thicker, stronger toilet paper is not only more effective, but can save money is gaining traction,” says Jamie Rosenberg, global personal care analyst for Mintel. “There has also been a near doubling of the installation of premium-focused manufacturing capacity over the past five or six years, with much of that having been installed by private label manufacturers,” he adds.

One demographic particularly likely to respond to higher-quality store brand paper products is the millennial generation. That’s because, Mintel notes, those in that age group tend to buy fewer paper products, particularly facial tissue, but they prefer the premium options with added benefits such as lotion on the product.

Offer choices

Quality factors aside, though, customers still want paper products that are affordable, and one way that retailers could reach out to price-conscious consumers is by offering store brand products in a range of price points, from basic to premium.

“A dominant trend in the paper category is the emergence of different product tiers,” John Sarraf says. “Adding different tiers of quality makes a lot of sense, especially as retailers try to compete with the many different channels of business and brands.”

Balance is what many are looking for when shopping the paper aisle.

“Customers are asking themselves, ‘Do I want to spend a lot of money and get the best quality, spend a little money and get the worst quality, or do I want somewhere in between where there’s the right balance of what I need and what I can afford?’” says Daniel David, executive vice president with Medford, N.Y.-based Global Tissue Group, a manufacturer of private label paper products, including facial and bath tissue, paper towels and napkins.

He adds that quality and price are the “two big drivers” for the category. Yet, not every retailer is great at offering that balance.

“Some retailers miss opportunities by pushing their paper program too far to either side of the spectrum — too concentrated on premium or too focused on opening price point and large pack sizes,” Steve Sarraf, vice president of sales for U.S. Alliance Paper Inc., points out.

When considering what quality to add at what prices, retailers might also want to look at their sheet counts.

“Bewildering as it may be to consumers, national brands continue to play with sheet counts to mask price increases,” John Sarraf says. “This may also be an advantage for retailers, as the margins in private label afford them greater pricing flexibility in order to invite direct on-shelf comparison.”

Push your paper

Effective marketing also is important for store brands, especially considering the high rate of product loyalty in the category, particularly for facial tissue and toilet paper.

“While not as high as some CPG categories, about half of consumers across all paper segments say that buying a brand they like is a top purchase criterion,” Rosenberg says.

Effective advertising, however, could make shoppers aware of a store brand before they even get to the store.

“Retailers needs to have promotions and advertisements in their mailers that push their private label products more than or just as much as the national brands,” David says. “They need to be in front of the customer, not only in store, but also in marketing materials.”

Messaging on the package is also important, but the best selling point for a store brand paper product might simply be the price tag. While many private label products use sheet and roll counts as a means of comparison to branded products, it’s not always the best strategy, due to frequent product changes.

“While perhaps effective in raising perceived value, there is the risk of falling flat as competitive products change their sheet count and size frequently,” John Sarraf points out. “Shelf tags or other in-store promotions that call attention to the price advantage over national brands are always an effective and simple way to boost a paper program.”

Highlight sustainability

For the shopper concerned about his or her carbon footprint, paper product usage often is a concern. After all, it is a one-time-use product, and it is easy to use a lot of it, especially if the quality is poor. National brands are making strides in offering eco-friendly paper products that respond to customer concerns about sustainability, though, and retailers need to be making the same efforts with their store brands if they want growth in the category.

“Over the last five years, we have seen an amazing increase in consumer awareness for products carrying eco/green credentials,” says Julian Gray, brand manager at New Zealand-based Greencane Paper, which manufactures toilet paper and paper towels from a mix of recycled sugarcane waste and bamboo, along with timber fiber. “Consumers are now interested in how their products are made and are keen to be part of a recycling story.”

Besides attracting eco-minded customers, sustainability efforts can lend themselves to innovation, as evidenced by Kimberly-Clark’s recent launching of Scott Tube-Free toilet paper, sold without the cardboard tube at the center.

And retailers might want to consider recycled paper for their store brand paper products, as well as the use of alternative materials.

“The most significant trend we see in paper products is the introduction of non-tree-based raw materials as a sustainable and viable alternative to wood fiber,” Gray says.

If using a new material for store brand paper products, though, retailers need to be absolutely sure it will be as effective as the material in traditional paper products.

“The underlying characteristic for consumers in the paper industry remains unchanged in the sense that they want paper products that are fit for [the] purpose,” Gray says. “Bath tissue must be strong yet soft, while paper towels need to be absorbent.”

Besides the product itself, claims on the package that can grab consumers looking for green products are “BPA-free,” “tree-free” and “free of chemicals, dyes and fragrances,” according to Terry Lehmann, founder and CEO of Boca Raton, Fla.-based TG Eco Products, which makes a variety of 100 percent tree-free paper products, adding that color can make a difference too. “Many merchandisers are utilizing the color green on their product regardless [of] whether the product is considered green.’”

There’s also the matter of the packaging.

“We question why sustainable paper products are wrapped in plastic — one of the most unfriendly environmental materials,” Gray says.

Packaging store brand paper products in recyclable materials instead could position the products as greener and newer to shoppers.

Invest in innovation

In response to the need for growth, some of the national brands are reinventing their paper products. Cincinnati-based Procter & Gamble, for example, recently launched Puffs SoftPack family-sized containers of tissue in flexible packaging, an alternative to the usual cardboard box that is more convenient for both travel and home use. And some paper towels, including Bounty DuraTowel, another Procter & Gamble brand, are being positioned as strong enough to function as dish cloths.

According to Rosenberg, some overseas paper innovation includes paper towels that claim to absorb calories from cooked foods. Such a claim might be “tenuous” for some consumers, he says, but they “are in line with efforts in the U.S. to rebrand paper towels from being about cleaning to being about cooking.”

With innovations such as those occurring, retailers might want to look at their top store brand sellers in the paper category, and ask whether they could offer their own customers something new. As David points out, the best tactics for selling your store brand paper products might come from knowing who your customers are and making that connection with them.

“I think retailers need to be more innovative in understanding their own customer and tailoring their paper program towards their own consumer, versus mocking the national brand or competition,” he says.

Do remember that high quality is essential to a repeat purchase in the paper product category.

Don’t discount consumer sustainability concerns in what could be viewed as a wasteful category.

Do research your shoppers and invest in innovations that mesh with their wants and needs.

Don’t just put new store brand paper products on the shelf; support them with marketing and promotion efforts.