Paper Possibilities

Next year should be a slow but steady year of growth for household paper products.

Ladies and gentlemen, prepare yourselves for a relatively modest year in the household paper products category. According to the April 2011 - Sept. 2011 Category Insight: "Paper Products," a review from the Global New Products Database of global research firm Mintel International, brands can expect "steady, but unspectacular growth" in this market during 2012.

Trends with traction

One current trend in the household paper goods segment that will continue to gain traction in 2012 revolves around product reformulation, notes Daniel David, executive vice president of operations with the Global Tissue Group of Medford, N.Y.

"Many national brands have reformulated their paper products to meet specific retailer price points and consumer needs," he says. "Independent converters have followed by reformulating the private label paper products in order to be national brand-performance equivalent."

Another trend with traction is packaging reformulation. Howard Telford, U.S. Research Analyst with Euromonitor International, Chicago, says Kimberly-Clark recently bolstered its Kleenex brand's market share by developing new package sizes, shapes and designs. Other brands could follow suit.

"We can expect leading manufacturers to introduce package designs to replace the staid, traditional boxes on store shelves with bright and exciting new designs," Telford explains. "Cottonelle's 'Respect the Roll' campaign this summer provides another example of the effort to expand package innovation on bath tissue."

But when it comes to reformulating their own-brand paper products to be more "green," mainstream retailers might want to think twice. Telford notes that the down economy has made consumers less willing to purchase eco-friendly paper products.

"While smaller players like Seventh Generation will continue to have success in specialty channels, the mass-market green tissue push of the last two years will be less of a focus in 2012, as manufacturers and retailers emphasize value over green credentials," he says.

Trends on the horizon

It's possible that 2012 could be the year in which more consumers drop their kitchen towels in favor of paper towels. According to Mintel, improved paper technology suggests that paper towels could be a "more viable alternative" to kitchen cloths.

"If kitchen [cloths] at the higher end of the market can prove their worth, significant scope exists for encouraging wider use of [paper towels] — and not just in the kitchen, but … in the bathroom or anywhere that a cleaning cloth might currently be used," the firm says.

Opportunity also exists in premium store brand paper goods, Mintel notes — especially if the products are packaged with related items in other categories. For example, brands could package a facial tissue with a related personal care product to increase the size of a shopper's register ring.

But as material and petroleum costs rise in 2012, brands will have to make adjustments to their household paper products to stay competitive, David says.

"The industry will continue to keep changing/ lowering sheet counts and sheet sizes to keep prices competitive with the challenge of fluctuating raw material and freight costs," he explains.