Pulp play gets brawny

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Georgia-Pacific Corp. has an ambitious six-year plan to revamp its Brawny and Quilted Northern paper towel and bath tissue brands-including $50 million in annual media support beginning next year and the introduction of 17 new products.

Quality upgrades of the Brawny and Quilted Northern brands are expected by early next year, along with the rollout of Quilted Northern Moist Mates, a new value-priced entry into the moist roll toilet paper category already contested by Procter & Gamble Co.'s Charmin Fresh Mates and Kimberly-Clark Corp.'s Cottonelle Fresh Rollwipes, according to a report by Deutsche Bank Alex. Brown analysts Andrew Shore and Mark Wilde. The analysts said Georgia-Pacific also plans early next year to launch Brawny Shop Towels, a premium-price heavy-duty product geared toward home improvement stores that uses advanced tissue-making technology pioneered by Kimberly-Clark.

The larger plan, however, set for 2003 through 2007, calls for 17 new products-11 in tissue-towel and six in other areas, such as its Dixie disposable tableware.

As Georgia-Pacific focuses more on high-end products, it's also streamlining an overall lineup that includes nine tissue-towel brands by discontinuing its value-priced Coronet paper towels, retailers said. The company's goal isn't to boost market share but to boost prices and margins by reducing promotion while spending more on ads.

A clear beneficiary should be Omnicom Group's DDB Worldwide, New York, which handles Brawny and Quilted Northern. Exposure for those brands in the past year has come primarily via a corporate branding effort from Publicis Groupe's Fallon Worldwide, New York.

But Georgia-Pacific is swimming against industry currents in trying to shift from promotion to ads. Retailers say rivals, particularly P&G, have stepped up discounting.

In a conference call with analysts last week, Georgia-Pacific Chairman-CEO Alton "Pete" Correll said P&G's promotional activity has become so intense that even though its Bounty brand outsells Georgia-Pacific's Sparkle by about three to one overall, the two sold about the same number of units at regular price last quarter. The other two thirds of Bounty's sales came from units sold on temporary price reduction. "We will not chase after volume by cutting prices," Mr. Correll said.

Lafton Charriez, North American marketing director for Charmin at P&G, wouldn't comment on specifics of promotion, but added: "We continue to be competitive in that area."

A Kimberly-Clark spokeswoman said competitors appear to be plowing savings from lower raw material costs into promotion, but noted her company last month launched the first national TV ads ever behind improved Scott towels, which only gained full West Coast distribution this year.

Georgia-Pacific's entry into moist roll toilet paper could also be ill fated given what retail buyers in the Southeast, where rival brands are now distributed, claim are disappointing results for the Cottonelle and Charmin products launched in July. P&G, however, is planning to expand Fresh Mates to the West Coast early next year, according to retailers.

The Kimberly-Clark spokeswoman said the Rollwipes launch is still in early stages and continues to get strong TV, print and promotional support.

"Keep in mind," P&G's Mr. Charriez said, "that this is a new category and consumer habits take time to change."

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