New Laundry Forms Helping Marketers Clean Up

Category Sales on the Rise as Innovation Fears Dry Up a Decade After Tablets Debacle

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NEW YORK (AdAge.com) -- When laundry tablets failed in the U.S. a decade ago and home dry-cleaning kits failed to meet expectations, marketers seemed to learn a lesson: Americans just weren't interested in new laundry forms.

Now it looks as if marketers learned the wrong lesson. A host of new laundry forms launched last year, roughly a decade after those laundry debacles scarred some marketers, appear to have fared well. This is despite a recession that's created a headwind for new products and sent consumers scurrying for value brands. And it's fueling speculation that more new forms are coming to U.S. laundry in the months and years ahead.

Tide Stain Release sales are giving the brand a boost.
Tide Stain Release sales are giving the brand a boost.
Less than a year after its launch, Henkel's Purex Complete 3-in-1 laundry sheets, which combine detergent and fabric softener for the washer with a fabric softener sheet for the dryer, have topped $100 million in sales in less than 11 months, according to Henkel.

Tide Stain Release laundry pre-treaters have gained more than 15 share points for Procter & Gamble Co. in its category since their launch last June, adding around $30 million in sales through April 18, according to SymphonyIRI data. That, unlike the data cited by Henkel, doesn't include Walmart, where both the Purex and Tide products have gotten outsized merchandising support, display space and sales. The biggest success in the Tide Stain Release lineup appears to be a new form for the category: single-dose gel packs.

Another new form, P&G's Bounce Dryer Bar, which stays in the dryer for multiple loads, has $16.4 million in IRI-measured sales through April 18 and considerably more at Walmart.

"The learning that people took away from tabs was to be very cautious about form change in this category," said Eric Schwartz, VP-marketing for North American laundry at Henkel, and a veteran of Clorox Co. "And it was the wrong learning."

Why tabs didn't work
Tabs were launched as a convenience item in a segment -- powder -- that was already declining, he said. But tabs were worse than powders on one key count, the failure of the product to dissolve. So even though tabs had good consumer trial a decade ago, the performance disappointed, he said.

Similarly, home dry-cleaning kits also got good trial, but people didn't repeat at the rates marketers hoped.

Repeat on Purex and other new forms, however, looks far better. Sales of new forms now are also largely incremental to their brands and categories. Mr. Schwartz said Purex 3-in-1 sales are 80% incremental to the brand. In IRI data excluding Walmart, Bounce's sales haven't been enough to offset losses for the brand overall to value brands and private label. But all of the Tide Stain Release sales have been incremental to the brand and category at a time, more broadly, when laundry can use all the help it can get.

Dollar sales are down in almost every segment of U.S. laundry in IRI data that excludes Walmart for the 52 weeks ended April 18, including liquid and powder detergents, fabric softeners and bleach. The exception is additives, where Tide's entry was enough to offset trade down to value brands and private labels. That's because laundry has become a tale of two trends, one where value brands have surged and price competition is intensifying; the other, albeit still smaller one, where higher-priced new forms and products are taking hold.

P&G makes moves
P&G has reacted strongly of late to incursions by value brands and private labels by cutting prices and ramping up promotions, most notably a current multiweek 22% price rollback on its 100-ounce Tide at Walmart and steep permanent price cuts for such smaller brands as Cheer and Era.

That, in turn, is leading competitors, namely Church & Dwight Co., marketer of value brand Arm & Hammer and cheaper-still Xtra, to react. After ramping up ad spending and controlling trade promotion last year, C&D plans to shift spending from ads to promotion in the months ahead in response to competitors' moves, executives said on an earnings conference call May 11.

But even amid pricing battles come signs consumers want more from laundry products. After soaring 50% in the year-ago quarter, sales of bargain-basement Xtra dropped 10% in the first quarter. A step up in price, Arm & Hammer experienced "strong growth," C&D Chairman-CEO James Craigie said.

At least some of that shift likely owes to changes in Walmart's assortment, but Arm & Hammer, too, is looking to sell consumers on a new form: Power Gels. Method recently launched a super-concentrated laundry detergent with a first-of-its-kind pump dispenser. And several market watchers expect P&G within a year to enter with a new "water free" liquid form of its own, either a Tide version of Ariel Actilift gel detergent from Europe or a super-concentrated gel pack take on laundry tabs. P&G declined to comment on the speculation.

Old forms shift
Amid all that, some of the old forms are also seeing new wrinkles. The long-term decline of powdered detergent has slowed some in the past year, because it's cheaper per load than liquids and because Walmart has given powders more space, particularly in supercenters close to dollar stores.

Early next year, all industry players will launch more concentrated powders, like the industry shift to more concentrated liquids two years ago. That could actually accelerate the decline of powder again, some in the industry believe.

As the industry heavyweight, with more than a 60% share of detergent and fabric softener, P&G has the most to gain from new forms, but also a bigger risk in a more dynamic category where challenger brands have turned up the heat.

While dominant everywhere, P&G has a 12-point higher market share in the old and declining powder segment than it has in liquids. To continue its same level of dominance, P&G needs to capture more than 60% of business from new detergent forms.

Wash cycles of history

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