Paper Predictions

In the coming years, retailers are expected to continue improving their paper products so they perform just as well as their national brand counterparts.

In 2012, the U.S. paper products market — including toilet paper, paper towels and facial tissue — enjoyed "slightly improved" volume growth in 2012, compared to the "shallow recovery" of 2011, says Howard Telford, U.S. research analyst with Euromonitor International, Chicago.

"Unlike Europe, the U.S. remains a market predominantly controlled by large, lucrative tissue brands," he explains.

However, Telford notes that retailers are building on the paper product gains they made during the economic downturn.

"Discounting and value-seeking behavior learned by the consumer during the downturn [show] no signs of abating," he points out.

Trends with traction

According to Daniel David, executive vice president of operations with Medford, N.Y.-based Global Tissue Group, many retailers have been improving their paper products so they perform as well as their national brand counterparts, as well as to meet specific price points and consumer needs.

"This trend will be even bigger in the coming years because it offers retailers the independence to create successful programs to help grow their private label paper [products]," he explains.

But when it comes to creating eco-minded paper products, mainstream retailers might want to tread lightly.

"Sustainability and — particularly with fiber sourcing — may be employed by some brands, but have yet to resonate with the mainstream consumer of retail [paper products]," Telford says.

One reason eco-minded products don't resonate with mainstream consumers could be that all too often, these people see such products as being of inferior quality in terms of softness and absorbency, says "Category Insight — Paper Products," a March 2012 report from global market research firm Mintel. Therefore, retailers need to make sure eco-minded products perform just as well as their standard counterparts. As a national brand example, Scott Naturals aims to offer a quality product that also is good for the environment by blending recycled and nonrecycled fibers, explains "Household Paper Products," a February 2012 Mintel report.

"There may be room in the market for more products like this," the report adds.

As for marketing their paper products, retailers could take a cue from the national brands. Telford notes that prominent national brand toilet paper manufacturers have employed "bolder and more humorous" television spots to draw consumers' attention.

"Community engagement and charitable initiatives are also an important part of sustaining brand equity with the consumer in these heavily commoditized segments," he adds.

Trends on the horizon

Although retailers have been spending much of their paper product development efforts on optimizing performance attributes, the industry soon could see an increased focus on store brand paper products' visual features. The Mintel report notes that paper products' patterns, colors and designs might not matter as much as performance attributes, but they go a long way in making products stand out on shelves.

Understanding the importance of a paper product's color, in particular, Global Tissue Group recently introduced Pixel, the first-ever line of premium paper towels offered in an assortment of vibrant colors and made in the United States, David says. The line is available for retailers' private label programs.

"Consumers can now show off their individuality by expressing themselves and their celebrations with the colors they purchase," he explains.