Everything old is new again in the laundry detergent category, and so far it appears to be working pretty well this time around.
Procter & Gamble Co. has been widening its lead over the pack with products such as Tide With a Touch of Downy and Tide Coldwater, using propositions whose roots stretch two decades or more. And as Unilever's All and Dial Corp.'s Purex make gains in the value tiers of the business, P&G is again testing something it gave up on about 10 years ago, a new low-end value brand of its own.
P&G launched Tide With a Touch of Downy last year, updating a combination detergent/fabric softener combo concept originally launched in the 1970s with since-discontinued Solo and Bold. This time, the idea wasn't to replace fabric softener but to give consumers a "touch" of the product but not discourage usage in the fabric-softener category P&G also dominates.
The idea appears to have worked, helping Tide add 0.4 points to push its already commanding market share above 40% of the $3.31 billion detergent category, according to Information Resources Inc. (see chart). And it's inspired similar combo products from All, Purex and P&G's own Gain, all without so far seriously hurting sales in the $877.6 million fabric softener category (sheets and liquid), according to IRI. P&G in the 52-week period ended mid-April 2005 has picked up 0.6 share points to 62.9% of fabric softener market.
P&G followed in January with Tide Coldwater, specially formulated to work better in cold water, harkening back to Cheer campaigns of the 1970s behind that brand's all-temperature positioning that later evolved into a superior fabric-care claim.
COLDWATER: A PARADIGM SHIFT
Coldwater appears to have been even more successful than Touch of Downy, helping push P&G's market share up more than a point in the first quarter, according to IRI figures reported by Deutsche Bank. Coldwater has achieved an 8% share since launch, rivaling shares of such established brands as All, Purex and Gain, according to P&G.
P&G research found only 13% of consumers use cold water exclusively. But there was room to better serve the 57% who primarily use warm as a compromise, says Julie Woffington, brand manager for Tide. "Consumers told us cold doesn't clean as well and there are certain stains that are difficult to clean in cold water."
P&G, spending heavily in TV to back Coldwater, also used inserts in utility bills nationwide from February through June to extol the virtues of cold water: The average household can save $63 annually by washing in cold water. A "Tide Coldwater Challenge" invited consumers to pledge to switch to cold-water washing and to ask their friends to do likewise. One million took the pledge and got samples.
To push Tide's boundaries, P&G is test marketing Pure & Simple by Tide, a value brand priced to compete with Church & Dwight Co.'s Arm & Hammer and Dial's Purex.
Others have struggled amid this onslaught. Unilever's All gained about a share point last year, after switching ad agencies. But Unilever has continued to lose overall detergent share, about a point in 2004 and tracking toward a similar loss in 2005, mainly from the continued decline of Wisk, a brand that is part of a global agency review with siblings Omo and Sunlight. Unilever also has been fighting on price, cutting prices of its laundry brands last year despite rising raw material costs, according to retail buyers. Unilever has since reversed the cuts but hasn't followed P&G's 8% hike on midtier brands like Cheer, Gain and Era and then dealing back the price hike through promotion.
In another sign of pain for P&G competitors, Colgate-Palmolive Co.'s plans to sell Fab, Ajax and Dynamo late last year fell through when bidders wouldn't meet Colgate's price.