Global Household Product Sales:
Innovative Items Clean Up
Analyzing household products on a global scale involves a pretty big bucket of categories and countries. What’s Hot Around the Globe: Insights on Growth in Household Products, one in a series of ACNielsen reports on the fastest-growing products and category drivers, encompasses 66 markets and 29 household product areas. Findings surfaced by the study identified four major trends responsible for growth: new product innovation, health and wellness concerns, convenient delivery systems and developing country contributions. Aggregated 2005 sales growth remained consistent with other reports in the series covering food and beverages and personal care products, showing 4% growth.
by: Jane Perrin Communications ACNielsen Global Services Mark Chesney Communications ACNielsen Global Services
Regional results
On an upbeat note, there were several regional pockets of double-digit growth. Emerging markets posted a 13% increase and Latin America an 11% jump in household product sales, leading Asia Pacific, North America and Europe results. Romania and Russia, both classified as emerging markets, reported impressive category expansion rates of 25%. ■ See chart 1. The complexity of dissecting regional and country contributions is illustrated by Asia Pacific, a sector comprising both emerging and developed markets, where the modest 4% gain in Japan blended with the momentum of a 14% jump in China. Turning from percentages to the absolute dollar metric, Asia Pacific achieved the largest dollar value growth overall at just under $U.S. 1 billion in 2005.
Chart 1: Global findings
Value Sales (U.S.$M) in Household Products* Global (66) Europe (19) North America (2) Asia Pacific (15) Latin America (12) Emerging Markets (18) 0 $50,000 $100,000 Global Growth in Household Products* (2004–2005) Global (66) Europe (19) 0% North America (2) Asia Pacific (15) Latin America (12) Emerging Markets (18) 0% 5% 10% 3% 6% 11% 13% 15% 4%
*Based on number of countries measured (Number of countries in parentheses)
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Leading categories
Among the 29 categories studied, only nine grew faster than the global average, five paced the 4% rate; and the rest lagged behind. In prior studies, the fastest-growing categories were also among the smallest in dollar sales. That was not the case in 2005. Five categories in the fastest-growing top nine—garbage bags, household cleaners, air fresheners, insect control and fabric softener—also registered among the top 10 categories in value sales. ■ See chart 2.
Performance enhancers
On closer examination, specific sub-segments accounted for the strong overall showing in some categories. For example, battery-operated freshening systems powered up a 191% sales increase, and air sanitizing sprays vaporized the category with their supercharged growth in sales of 36%. Similarly, the power cleaning sub-segment of household cleaners (75%) and those products with oxidizing ingredients for stain removal (11%) wiped up the rest of the category. The cleaning system concept debuted by Swiffer, comprising a re-useable element such as a handle with disposable cloths, sponges or brushes, has been syndicated to other categories including bathroom cleaners, toilet bowl cleaners, dusters, air care and insect control. The jury is still out on whether or not the consumer uptake on systems and onestep, multi-use products will successfully cross category boundaries.
Chart 2: Only nine categories grew faster than 4%
Top Growing Categories 1. Abrasive Cleaning Pads 2. Disinfectants 3. Garbage Bags* 5. Household Cleaners* 6. Air Fresheners* 7. Insect Control* 8. Plastic Storage Bags 9. Fabric Softener* No. of Markets Category Growing/ Growth Rate Measured 04–05 13 of 23 18 of 26 15 of 19 55 of 65 50 of 61 28 of 47 28 of 34 44 of 58 13% 13% 8% 6% 6% 5% 5% 5% 5% Category Growth Value $000 129,215 81,148 209,806 82,876 338,553 244,081 168,489 78,040 255,008
4. Laundry Stain Remover/Booster 30 of 37
Worthy of consideration
Consumer health concerns gave a shot in the arm to household cleaner and disinfectant category results. Both recorded higher than average growth rates, which may indicate a shift in the type of products used to clean around the world. While the discussion to date has surrounded growth rates, it is worthwhile to note that even though laundry detergent only expanded at the average pace, it represents the largest category overall and contributed more than any other category to global growth. continued on page 16
*Also among the largest 10 categories in value sales
The remaining top performers included abrasive cleaning pads, which shared top billing with disinfectants at 13%, laundry stain removers/boosters at 6% and plastic storage bags at 5%.
Chart 3: Top 10 categories and growth rate by region
Europe Total Household Care (0%) Brooms, Brushes, Mops (10%) Disinfectants (3%) Household Cleaners (3%) Laundry Stain Remover (3%) Garbage Bags (3%) Auto Dish Detergent (2%) Auto Dish Additives (2%) Plastic Storage Bags (2%) Batteries (2%) Waste Pipe Openers (2%) North America Total Household Care (3%) Disinfectants (23%) Laundry Stain Remover (12%) Garbage Bags (12%) Abrasive Cleaning Pads (7%) Toilet Care (7%) Kitchen Paper/Towel (7%) Air Fresheners (5%) Plastic Storage Bags (5%) Household Cleaners (5%) Aluminum Foil (4%) Asia Pacific Total Household Care (6%) Auto Dish Detergent (17%) Auto Dish Additives (16%) Abrasive Cleaning Pads (14%) Fabric Fresheners (10%) Air Fresheners (10%) Plastic Storage Bags (9%) Fabric Softener (9%) Batteries (8%) Garbage Bags (8%) Brooms, Brushes, Mops (8%) Latin America Total Household Care (11%) Abrasive Cleaning Pads (74%) Laundry Stain Remover (36%) Air Fresheners (16%) Bleach/Ammonia (15%) Plastic Storage Bags (14%) Fabric Softener (14%) Insect Control (13%) Aluminum Foil (13%) Toilet Care (12%) Household Cleaners (11%) Emerging Markets Total Household Care (13%) Fabric Fresheners (277%) Carpet/Rug Cleaner (37%) Waste Pipe Openers (37%) Air Fresheners (23%) Laundry Water Softeners (21%) Auto Dish Detergent (20%) Cleaning Cloths/Sponges (19%) Household Cleaners (17%) Fabric Softener (16%) Laundry Stain Remover (16%)
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Global Household Product Trends continued from page 14
Different strokes
The top ten categories within each region differ significantly, and none of the overall fastest-growing products shows up in every regional ranking. In Europe, only the leading category— brooms, brushes and mops—charted 2005 results that bettered the global average. ■ See chart 3, page 14. In North America, disinfectants killed off any competition in the top ten with a 23% annual growth rate. Only the laundry stain remover and garbage bag categories also posted double digit regional growth at 12%. Automatic dish detergents and automatic dish additives floated to the top of the Asia Pacific top ten list. In Latin America, every top ten contender boasted double-digit growth, but abrasive cleaning pad results scoured all comers with a whopping 74%. Laundry stain removers were a distant second in the line-up at 36%. The Emerging Markets’ winning entry, fabric fresheners, was in a class by itself with a 277% annual growth rate. Carpet/rug cleaners and waste pipe openers trailed with strong 37% increases.
Coming clean
Abrasive cleaning pads, the runaway category growth winner in Latin America, owes its phenomenal success to a single country: Brazil. This one country accounted for more than 95% of category sales, divided among three brands. Aggressive media support generated a 45% increase for the leading brand, with the number two and three brands each expanding by more than 200%. Global brand dominance was more diffused than in Latin America, with the top three brands comprising 65% of category sales and private label brands absorbing an additional 16%.
Hygienic habits
Germ-aphobic Americans kicked their cleaning standards up a notch, striving for a sanitized—versus merely clean— household. This microbe-free goal resulted in a 23% regional category sales increase. As always, convenience played into consumer decision-making, explaining why 80% of the absolute dollar growth in U.S. sales (excluding Wal-Mart) derived from a 60% increase in wipes. Disinfectant wipes, measured in only five markets, mopped up consumer dollars on a global basis for a 35% growth in sales. Their counterpart, disinfectant sprays, expanded at an average 10% rate in 12 of 19 markets measured. Brand sales are so heavily concentrated in this category that three brands accounted for 71% of dollar sales on a global basis. It’s worthy of note that although only 8% of sales can be ascribed to private label brands, their sales expanded by 26% in 2005.
Tying up sales
Garbage bag sales expanded at an 8% annual rate, twice the global tempo, with North America the sole region to wrap the year with double digit growth (12%). For such a seemingly mundane category, garbage bags represent an endless source of innovative benefits from anti-odor attributes to a host of tying options to stretch-and-flex fabrics that won’t rip. New features, coupled with raw material cost increases for the oil-based resins used in manufacturing, combined to justify the higher retail prices that raised dollar value sales. Private label products captured a significant share of
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garbage bag sales (40%), almost enveloping the 49% sales component contributed by the top three brands. Both private label and branded offerings increased by 8%.
Abuzz with potential
Insect control, the eighth fastest-growing category, owed its 5% expansion to Latin America, a region where bugs are more than a nuisance; they carry potentially harmful diseases such as dengue fever and malaria. Product refinements, such as electrically-powered items, command a price premium reflected in sales results. The North American no-growth scenario masks a 7% spike from Canada, possibly reflecting that country’s concern with the mosquito-borne West Nile virus. Private Label products barely show up on the radar screen in the insect control
Spotless outcomes
Both the pre-wash and in-wash products that compose the laundry stain remover category captured double-digit sales in three of five regions, with four of five regions ranking the category among the top ten. Tepid Asia Pacific results of 1% growth dampened the overall category average. “Oxi” products cleaned up in the category, spreading in seven of the 10 markets measured at an 11% overall rate. No-wash stain removers, including pen delivery systems, achieved explosive sales of 200% over the prior year. Key manufacturers virtually own the category, with the top three brands accounting for 72% of sales.
Chart 4: Private Label growth by category
Product Area 1 Aluminum Foil 2 Plastic Storage Bags* 3 Garbage Bags* 4 Kitchen Paper/Towel 5 Cleaning Cloths/Sponges 6 Auto Dish Additives 7 Plastic Wrap 8 Auto Dish Detergent 9 Bleach/Ammonia 10 Abrasive Cleaning Pads* 11 Laundry Water Softeners 12 Toilet Care 13 Brooms, Brushes, Mops 14 Fabric Softener* 15 Batteries 16 Hand Dish Detergent 17 Household Cleaners* 18 Disinfectant* 19 Oven Cleaners 20 Laundry Starch 21 Carpet/Rug Cleaner 22 Laundry Detergent 23 Air Fresheners* 24 Laundry Stain Remover* 25 Fabric Fresheners 26 Furniture Polish 27 Waste Pipe Openers 28 Floor Polish/Wax 29 Insect Control*
*Fastest Growing Categories Manufacturer brands growing faster than Private Label
Private Label Share 43% 41% 40% 28% 26% 22% 19% 18% 17% 16% 16% 12% 11% 11% 10% 10% 9% 8% 7% 7% 6% 6% 6% 5% 5% 5% 4% 2% 2%
Private Label Growth 0% 8% 8% 5% 7% 1% 4% 4% 4% 4% -18% 4% 18% 4% 3% 5% 5% 26% 5% -16% 6% 1% 1% 16% -5% 6% 13% -12% -4%
Manufacturer Growth 3% 3% 8% 3% 1% 4% -3% 4% 5% 15% 6% 2% 1% 5% 2% 4% 6% 12% -1% 0% -4% 4% 6% 6% -8% -4% 2% -2% 5%
Shipshape results
Convenient, effective household cleaners were swept off shelves by tidy consumers, with Emerging Market and Latin America households setting the pace. The two attributes dominating product selection were convenience and effectiveness. Major multinationals entered the power cleaning competitive fray, where sales velocity reached 75% last year. Sprayons earned high marks on the convenience criteria, and at 11% represented one of the fastest-growing segments. Product proliferation served to modulate the trend toward brand dominance observed in other categories, with the top three branded household cleaners garnering 43%, private label 9% and other products 48% of sales.
Something in the air
Air freshener sales caught a favorable updraft in Emerging Markets, Latin America and Asia Pacific, where 2005 consumption increased by 23%, 16% and 10%, respectively. Recent new product entries have kept sales aloft and in the top-ten tiers for four of five regions studied. Battery air fresheners, unveiled just last year, saw 2005 sales rocket into the stratosphere at a 150% rate. Air sanitizers eliminated odors and obstacles to consumer trial, hitting a respectable 36% growth number. Air freshener candle sales, reinvigorated by the introduction of scented oils, achieved an 8% growth rate, double that of the global average.
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category with a miniscule 2% of sales; the top three brands and all others split the rest of the category sales evenly at 49% apiece.
Commodity concerns
While private label offerings earned a 12% share of global household product sales, that penetration level underperformed the norm reported in the ACNielsen 2005 study, The Power of Private Label. However, the private label expansion velocity equaled that of manufacturer branded household products (4%), so private label neither gain nor lost ground in relative terms. Private label share and growth figures varied widely by category, from a 43% share in aluminum foil with zero growth, to an 8% share in disinfectants with a 26% growth rate. Regional considerations such as economic development and lifestyles influenced product uptake and utilization figures. ■ See chart 4, page 17.
In the bag
Plastic storage bag sales did slightly better at 5% than the global all-product average, with pockets of strength in Latin America (14%) and Asia Pacific (9%). Interestingly, private label sales for this category (8%) bested manufacturer brand performance of 3%. The private label preference was clearly strongest in Europe, North America and Emerging Markets, but picking up in Asia Pacific.
A soft touch
New product formulations, improved distribution, increased advertising penetration and price reductions contributed to the fabric softener category sales increases in Emerging Markets (16%) and Latin America (14%). Of note, in Mexico, products such as Downy Libre Enjuague (RinseFree) reduced the hassle factor for consumers who hand wash by eliminating the rinse step. The top three brands occupy the number 1, 2 and 3 positions across the majority of markets studied and together claim 68% of category sales.
Home basics
Household products weighed in with overall global growth rates consistent with other fast moving consumer product areas. There is no denying the influence of Emerging Markets as a factor in household product category growth, alongside a continuous stream of product innovations that keep consumers engaged and prices on the rise. Uniformly, consumers across the world gravitate to products that deliver against two key benefits: value and convenience. C i
About the Study
This survey of Household Products included 66 markets around the world and 29 categories. These 66 markets account for more than 90% of the world’s GDP and over 75% of the world’s population. The markets have been grouped regionally into five areas: Asia Pacific, Emerging Markets, Europe, Latin America and North America. For the purposes of this study, Mexico has been included in Latin America. ACNielsen analyzed data across 29 Household Products categories, comparing year-ending data from December 2005 with December 2004. Within these 29 categories, ACNielsen reviewed subcategories of products, which for the purposes of this study are called “segments.” This study looks at some of these key segments to understand the changes impacting the categories. New to the study this year is the inclusion and analysis of private label products within each category. ACNielsen Global Services intends to include private label information in future reports on product areas, to show the impact of both manufacturer and retailer products as drivers of consumer purchasing behavior. As with Global Services’ other studies, this report is based on purchasing information from retailers in grocery, drug and mass merchandise outlets and generally excludes kiosks or vending machines. In a few markets, sales from convenience stores may be included. Within the United States, data from the ACNielsen Homescan consumer panel service has been included to provide a total market read that includes Wal-Mart information.
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