Keep The Converts

The recession spurred consumer trial and acceptance of store brand paper products. Retailers that stress innovation and marketing will be able to keep the momentum going as the economy recovers.

Despite appeals from environmental advocates to ditch the disposables in exchange for paper napkins, cloth handkerchiefs and the like, consumers do not appear to be abandoning the paper products segment in droves. (And let's face it; they really have no acceptable non-paper alternatives when it comes to toilet tissue.)

Although dollar sales declined slightly in the facial tissue and paper napkins subcategories during the 52 weeks ending April 17, according to The Nielsen Co. of New York, they rose slightly in the paper towels and toilet tissue subcategories (see table, p. 42). And private label actually posted significant dollar sales gains in all of the subcategories.

Philip Shaoul, director of business development for the Medford, N.Y.-based Global Tissue Group, calls the store brand side of the sector "strong and growing," thanks to a still-limping economy that has consumers clamoring for value.

"Since the products are as good as the national brands, it will be hard for the brands to win back these consumers without heavy promoting, coupons and incentives to buy," he says.

Bruce Woodlief, director of marketing for Clearwater Paper Corp. of Spokane, Wash., agrees.

"Like many [other] private label categories, the past 18 to 24 months have been a time of increased consumer trial and acceptance of quality store brand alternative products," he says. "We expect the conversion to private label to be good as we continue to pull out of the slow economy."

Push for premium

Although store brands are sitting pretty across all price tiers, retailers probably will reap the most rewards in the months to come by augmenting their premium and "ultra" product offerings, says Brian Carlson, U.S. marketing director, retail products for Cascades Inc., Eau Claire, Wis. Why? Because consumers who want to upgrade their tissue product purchases as the economy brightens likely will seek out high-quality private label items instead of jumping right back to the national brands.

"The price spread between the branded and private label will drive the initial purchases to the premium lines of private label," Carlson explains.

Consumers also are pushing for product innovation here, Woodlief stresses.

"Premium and ultra-premium products need to not only be national brand comparable, but they also need to have unique value-added attributes and benefits," he says.

Those attributes and benefits run the gamut from softer, thicker, stronger and more absorbent designs, Woodlief says, to the ability to disintegrate faster.

Inspiration for innovation also can come from the national brands, Shaoul says. As an example, he points to the decorative facial tissue dispensers that brought a fresh look and a little excitement to the category.

"If retailers can accept such creativity in their private label, I believe they will see positive results with very little risk," he says.

The inclusion of sustainability-related certifications also can be a major plus, Woodlief believes — one that highlights a retailer's commitment to environmental and social responsibility, and makes consumers feel better about purchases within the category. Clearwater Paper recently became the first U.S. tissue supplier to offer consumer products from responsibly managed Forest Stewardship Council (FSC)-certified forests. FSC Chain-of-Custody certification by the Rainforest Alliance's SmartWood program ensures the pulp used to make private label tissue products comes from suppliers engaged in environmentally and socially responsible forestry practices.

"With increasing awareness about the environment, both consumers and retailers are looking for products that can make legitimate claims," Woodlief says. "For the tissue category, historically this has meant recycled products, which fills only a very small niche in the category."

Of course, recycled content does still count on the green front for retailers that choose to go that route. If all U.S. house-holds replaced just one 175-sheet box of virgin fiber facial tissue with a box of 100 percent recycled tissue, they collectively could save 163,000 trees, according to the National Resources Defense Council.

In general, Woodlief encourages retailers to manage store brand product development much like the leading national brands do. That strategy should include a well-executed packaging design and a full-line offering of product tiers.

But a fine line exists between a well-thought-out assortment and a bamboozling mess. Retailers should not try to be "everything to everyone," Shaoul says, by offering so many different package orientations, sheet counts and product grades that they confuse their shoppers, waste shelf space and saturate the category.

Art of persuasion

No matter how responsibly sourced or absorbent a new paper product is, it might be destined to gather dust on the shelf if retailers fail to communicate the product's message to shoppers. And communication starts at the shelf — with the packaging itself.

Many of today's store brand paper products sport packaging that is "stuck in the 80s," the age of generics, Carlson contends.

"The true challenge is to design a package that conveys the message of quality and performance and has the ability to 'pop' off the shelf," he says. "Many of the national brands are very brightly colored, well-balanced and literally jump off the shelf at the consumer."

Carlson encourages retailers to alter their package labels a bit, focusing less on what is inside the package and more on their branding and identity. He routinely sees product identifiers such as "bath tissue" overpowering the brand name by completely taking over valuable billboard space.

But don't try to mimic a national brand's look, Carslon advises — at least not too closely.

"A design that is too close will lead to a potential infringement lawsuit," he stresses.

Packaging functionality also presents a potential area of innovation. For example, Shaoul says Global Tissue Group is able to add a handle option to bulk packs as a convenience-minded feature.

What also sets the leaders apart from the laggards in attracting consumers to trial is a marketing, merchandising and promotional strategy that mimics that of the national brands, Woodlief says. Leaders give store brand paper products their fair share of promotional activity (in line with that of the national brands). They also commit to pricing discounts against target national brands and execute effective store brand promotions across advertising media ranging from weekly circulars to in-store POS.

"Fair share marketing can make a big difference in the success or failure of a private label tissue program — fair share in shelf presence, promotion [and] display advertising are just a few key considerations," he adds.

And Carlson is a big fan of sampling in the category, particularly within the premium/ultra product sector.

"Store brands need to show the consumer that there is an upgrade path to take," he says, "and jumping all the way to national branded is not necessary."

Do ensure premium/ultra-premium paper products boast value-added features and benefits such as a more absorbent design and/or the inclusion of a respected sustainability-related certification.

Don't try to be everything to everyone by offering so many packaging orientations, sheet counts and product grades that you confuse your shoppers, waste shelf space and saturate the category.

Do give store brand paper products their fair share of marketing — at the shelf and in displays, promotions and advertising.

Paper Product Performance

Source: The Nielsen Co. Food, drug and mass merchandiser stores, including Walmart, for the 52 weeks ending April 17, 2010 (prepackaged, UPC-coded products only).

Don't allow the product identifier e.g., "bath tissue") on the packaging label to dwarf your brand name/identity.