£50m wiped off nappy and loo roll sales

The bottom has fallen out of the big grocers’ paper products sales, with volumes down in three of the fixture’s four key categories. Nearly £9m has been wiped off loo roll; nappies have lost more than £44m. Why? 

The rise of the discounters, bargain stores and Amazon, where a growing number of savvy shoppers are bulk buying their paper products, is having an effect, of course. And as the multiples respond to the growing competition, range rationalisation and the growth in own-label toilet paper are all fuelling change. 

Just look at the £24m losses of Andrex, the sector’s biggest brand, for proof of how tough things have become. A Tesco range review in November 2014 “decimated” the brand , says one industry source, and fierce deals over the past year have heaped on more misery, with the brand’s average price falling 2.9%. 

Not everyone was hit as hard. “SCA (supplier of Cushelle and Velvet) came off quite well from the Tesco range review in 2014,” says the source, adding that the loss of Andrex backfired. “It didn’t reflect well in category value overall, so Tesco are now rethinking the mistake and will undo it. We’re going to see brands coming back next year as they ramp up activity. There’s not going to be a continuing trend towards own label.”

Kimberly-Clark is ramping up Andrex activity with new packaging across the range and a £10m campaign with the strapline ‘How Andrex do you feel?’ The brand is also focusing NPD on a burgeoning area of the market: moist toilet tissue. Although only making up 4% of the market, the sector has seen double-digit growth year on year. Andrex launched Skin Kind washlets in February, and Asda also entered the market with three-packs of moist toilet tissue under its Shades range. 

Wipes clean up

“Retailers have expanded on their toilet tissue wipe formats, recognising the growth of this category,” says Andrex marketing director for family care Karel Van Der Mandele. “Wipes continue to deliver double-digit growth as more consumers realise the benefits of a dry then wet routine.” 

Cushelle, meanwhile, is in strong growth, its 13.6% value growth worth £7.5m at the tills and its 18.3% volume growth reflecting a sharp fall in price. Nevertheless, the brand is one of the priciest on the market. SCA attributes much of the brand’s success to a Good Housekeeping Reader Recommended endorsement, which has been displayed in logo form on standard and double packs throughout 2015.

Kitchen roll is the only category across the four key paper sectors in which brands are in growth. With overall value of kitchen towels up 0.5%, brands are driving growth with value up 5.6%; own label has fallen 6.3%. Regina has become the second-bestselling brand with value up 31.3% after distribution gains in all of the big four. 

“Brands have become the reference point for the category,” says brand owner Intertissue’s category manager Adam Gray. “All the major retailers are growing - 78% in Asda, 44% in Morrisons, 27% in Sainsbury’s and 17% in Tesco. The category has widened with British consumers using the products for general cleaning as well as for food uses in the kitchen.”

And the sector has widened in more ways than one: value of jumbo and fat roll ‘added value’ products is up 19.9% to £80.9m. “Regular products including own label are dropping down and new branded areas are picking up the slack,” says Intertissue’s Gray.

Bestselling brand Plenty says its The Fat One roll for ’bigger jobs” is growing 17% year on year and is now worth over £35m. “Growth is being driven by shoppers trading up to bigger pack sizes,” says brand manager Holly Baron-Morgan.

The brand is also taking a leaf out of Andrex’s book and adding value with its own moist wipes. Plenty Easy Clean was launched across grocery in June in three variants. The brand also spent £8m in marketing in 2015 including sponsorship of ITV’s Lorraine, and Plenty’s iconic ambassador Juan Sheet will make a return to TV screens in 2016.

Tough times for nappies

With brands leading the march in kitchen roll and own label up in loo roll and facial tissues, no one’s a winner when it comes to nappies. Market value is down 9.8% on volumes down 4.1%; own label has suffered an 11.1% loss, brands are down 9.1%.

“The nappies category is one of the most fiercely contested as both discounters and grocers seek to attract the crucial family shopper,” says Pampers commercial leader Victoria Tiffin. “There’s been significant price erosion and this highly competitive market has required everyone to up their game.”

Lidl says sales of its nappies are up 9% year on year and it’s launched three new lines in the last three months, with two newborn packs in size 1 and 2 and an XL pack in size 6. “Our baby range is of high importance to us and we want to offer our shoppers nappies throughout the different stages in a baby’s growth,” says Lidl’s senior buying manager for nappies Antonio Schiorlin.

Pampers is upping its game by focusing on social media with ‘breakthrough marketing’ including a royal baby video on the day Princess Charlotte was born and a #pooface campaign that won an award at Cannes and generated millions of online hits. The brand also plans to reverse its decline with the September launch of Baby Dry Pants, designed to make nappy changing on the go easier. 

Such innovation is essential in all four sectors, says Velvet’s brand manager Charlotte Parrish: “Brands will only be able to thrive if they stay relevant to the consumer and distinct from the competition.”

TOP 5 Toilet tissue				SALES
				£m	change (£m)	change (%)
Total volume change: 0.1%			Total Category	1,048.90	–8.8	–0.8
			Total Own Label	461.1	25.2	5.8
1	1	Andrex	Kimberly-Clark	351	–24.0	–6.4
2	2	Velvet	SCA	129.3	–11.2	–7.9
3	3	Cushelle	SCA	62.30	7.50	13.60
4	4	Nicky	Intertissue	7.80	0.70	10.30
5	5	Regina	Intertissue	7	–0.9	–11.8

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TOP 5 Nappies				SALES
				£m	change (£m)	change (%)
Total volume change: –4.1%			Total Category	408.6	–44.2	–9.8
			Total Own Label	137.2	–17.1	–11.1
1	1	Pampers	P&G	264.80	–26.9	–9.2
2	2	Nature Babycare	Naty AB	4.4	–0.1	–2.7
3	3	Happy Shopper	Booker Belmont	1.1	–0.2	–15.5
4	NEW	Chicco	Artsana	0.3	0.3	●
5	6	Carrefour Baby	Carrefour	0.30	0.20	192.60

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TOP 5 Kitchen towels				SALES
				£m	change (£m)	change (%)
Total volume change: –2.1%			Total Category	348.3	1.7	0.5
			Total Own Label	140.80	–9.4	–6.3
1	1	Plenty	SCA	99.9	6	6.4
2	3	Regina	Intertissue	46.6	11.1	31.3
3	2	Thirst Pockets	Intertissue	37.1	–6.5	–14.9
4	5	Mega	Accrol Papers	3.30	0.30	9.60
5	4	Fiesta	Kimberly-Clark	3.10	0.00	0.00

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TOP 5 Facial tissues				SALES
				£m	change (£m)	change ()
Total volume change: 3.2			Total Category	210.3	2.1	1
			Total Own Label	90.5	8.1	9.9
1	1	Kleenex	Kimberly-Clark	103.70	–4.5	–4.2
2	2	Velvet	SCA	8.5	–1.2	–12.8
3	3	Handy Andies	SCA	1.6	0.6	54.9
4	4	Tempo	SCA	0.6	–0.4	–39.7
5	5	Bloomsbury & Tate	Consuma	0.50	–0.2	–24.2

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