Paper products go premium
The recession and less-than-booming economy post-recession brought good news to the store brand side of household paper products. According to \"Household Paper Products – US,\" a February 2012 report from global market research firm Mintel, consumers began turning to store brand offerings to save money. Moreover, much of the stigma related to private label quality has disappeared, \"with consumers feeling good about finding a quality product at a good price,\" the report states.
Although an improving economy could convince some folks to return to national brands, retailers are investing to help thwart that possibility, the report notes, relying on design and in-store promotions to catch consumers attention. But consumers also appear to be increasing their spending on premium household paper products – something retailers should note when it comes to new product development.
Value, premium or in between?
Despite rising consumer interest in premium paper products, Bruce Woodlief, director of marketing for Spokane, Wash.-based Clearwater Paper Corp., suggests retailers will find reason for product development across all of the different quality tiers.
\"The best program for store brand tissue continues to be a multi-quality-tier offering with true NBE in premium and ultra-premium products, flanked by a value/price assortment, to meet the needs of a variety of consumers,\" he says. \"Opportunities to enhance the program come through added value innovations that are meaningful to the consumer.\"
Such innovations include certified paper products created from fiber originating from well-managed forests, Woodlief says, pointing to the Forest Stewardship Council (FSC) as one appropriate certifying organization. These certifications provide an emotional benefit to \"green and eco-minded\" consumers and can help a retailer differentiate its brand from national brands (and competing retailer brands) lacking any certification.
David Shapiro, senior vice president of sales and marketing for Haines City, Fla.-based Sofidel America, agrees that eco-minded messaging presents an added-value innovation.
\"Sustainability is an important marketing message to promote in conjunction with the store brands manufacturing partner: Reduce CO2 emissions via reduced packaging and in the paper manufacturing process; promote 100 percent certified fibers from sustainable forests; produce paper using less water,\" he advises. \"The real green with superior product performance.\"
Another added-value innovation could be technology improvements that result in better products. For example, Woodlief says, retailers could invest in ultra-premium bath tissue made via through-air-dried (TAD) technology.
\"In the coming months of 2013, this technology will become the new standard for store brand ultra-soft and ultra-strong bath tissue,\" he adds.
Yet another added-value innovation worthy of consideration is new technology that brings rich colors to paper towels, says Daniel David, executive vice president of operations for Global Tissue Group, Medford, N.Y. He notes that Rochester, N.Y.-based Wegmans rolled out his companys new Pixel lineup under the Wegmans brand for Halloween – in orange and black. Other occasions and seasons present additional opportunities – for example, red and green for Christmas and \"spring colors\" for the spring season.
Fernando Gallego, national sales manager for Golden Gate Paper Company Inc., Del Mar, Calif., agrees that store brand opportunities are not limited to one quality tier. But he says the best opportunities lie on both ends of the spectrum – the value and top tiers.
\"I dont see much of a point in three tiers anymore,\" he says. \"The difference in quality versus the bottom and middle [tiers] isnt that much to justify a big price difference.\"
But Shapiro begs to differ.
\"NBE has been and will continue to be a driving force in store brand marketing,\" he says. \"Store brand shares are growing in each segment: good, better and best.\"
And even the top tier can be divided, David suggests. He says store brand opportunity knocks loudest within the \"mid-tier premium\" side.
Upsize or downsize?
As consumers product preferences within the paper products category evolve, so do their packaging preferences. Woodlief notes that the industry continues to reduce sheet counts within the bath tissue and paper towel segments as it introduces technology improvements – a reality that has consumers moving more often to \"double rolls, big rolls, giant rolls and mega rolls,\" based on the product.
\"Today, single-roll packs represent less than 17 percent of total bath tissue sales,\" he says. \"This is down from the low 20 percent from four years ago.\"
Still, single rolls have their place, Gallego suggests, adding that its the mid-sized bundles that consumers are avoiding.
David agrees, noting that six- and eight-count packs – which likely provide the most value to consumers – are the best sellers when it comes to bath tissue and paper towels. He adds that consumer interest in overpackaged bundle packs – wrapped items packaged with other wrapped items – is waning.
And with their sustainability positioning, big private label packs are popular for the \"aggressive\" retailers, says Cristian Vergara, director of retail sales for Sofidel America.
\"This is true across all channels – clubs, for sure, but even dollar stores and drugstores are more and more successful with big packs,\" he says.
And retailers also might want to rethink packaging design. Vergara points to the need for consistent packaging design across all categories with noticeable callouts that make a value comparison to the national brand counterpart (assuming the product has one).
\"Some retailers do this well, but others product offerings resemble generics,\" he says. \"There are green brands out there that have generic, non-descript packaging. There is every good reason to promote green sustainability with NBE packaging that invites purchase rather than being green via receding packaging design.\"
David agrees, noting that if a store brand paper product looks too generic, consumers will shy away from purchase.
Grab attention
In addition to consumer-centric product and packaging development, a little marketing and merchandising magic could go a long way to spur trial in the household paper products category. Here, bonus packs can be effective, Shapiro says.
\"These packs shout value relative to the NBE diminishing sheet/content count,\" he adds.
And dont give the end caps solely to the national brands, Gallego suggests. He recommends placing store brand items right next to the branded items here so consumers can make a side-by-side comparison.
Offering a free product with a purchase – such as a free box of facial tissue with the purchase of a set number of boxes – can help retailers build trial, too, David says.
\"Everyone likes a free product, and if the quality is there, theyll buy it again,\" he stresses.
The freebie doesnt necessarily need to be tied to a store brand purchase. As Woodlief notes, buy-a-national-brand-product/get-a-free-store-brand-product promotions represent a \"tried-and-true\" strategy that get the store brand product into the hands of targeted brand users.
And an emerging trial vehicle gaining in popularity, Woodlief adds, is made possible by retailers digital loyalty marketing programs.
\"Shopper loyalty data is now being used to tailor trial and repeat usage offers to specific shoppers,\" he notes.
Moreover, Woodlief advises retailers to think like the brands do when it comes to their own household paper products.
\"The key to executing an effective store brand strategy, particularly with tissue, is to make sure the disciplines of fair share marketing, merchandising and promotion are applied to the store brand,\" he says. \"If retailer A has a goal of 30 percent category share, then the SKU facings, product offerings and feature/display promotion activity need to be commensurate with the goal.\"
Pricing counts, too, Woodlief stresses. The store brand paper product should never be priced higher than the national brand even when the brand is on promotion.
Finally, retailers need to recognize that they have a lot of room to grow – and should pursue that growth aggressively, Gallego suggests.
\"If you look at Europe, where store brands are 60 to 70 percent, you could see what they could achieve in paper [in the United States], he says. \"I feel the brands still carry too much weight.\"
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| New on the shelf |
Winn Dixie Extra Soft Ultra Bathroom Tissue from Jacksonville, Fla.-based Winn-Dixie Stores promises twice as much product in convenient longer-lasting rolls. It claims to layer two soft premium tissues to create an ultra-thick, ultra-soft tissue. The Rainforest Alliance and FSC certified bath tissue retails in a pack of four double rolls. |
New from Walgreen Co., Deerfield, Ill., are Savings With A Smile Tuf Paper Towels. Said to be strong and absorbent, each roll contains 25 percent more sheets than comparable products. This product retails in a pack of eight rolls. |
Fred Meyer White Unscented Facial Tissues with Lotion from Cincinnati-based Kroger Co. boast a newly designed package. Each recycled pack containing 100 three-ply tissues that are formulated with aloe vera and vitamin E, and said to be extra strong. |
New from Supervalu Inc., Minneapolis, is Essential Everyday Soft & Strong Bathroom Tissue. Said to be free from ink, dye and perfume, the tissue is Rainforest Alliance and FSC certified. It retails in a pack of four double rolls. |
