GROCERY: Paper trail

What can be said about the paper goods aisle, except that it's on a roll? Consumers have fallen in love with the bigger bundle packs, softer rolls, and cute packaging that have become aisle mainstays in recent years. As a result shoppers keep finding new uses for paper products, buying more of them in the process. Just take a look in the aisles: You'll find nearly every shopping cart overflowing with a 12-, 24- or larger-count pack of toilet tissue, paper towels, and boxes of facial tissue.

"There has been a trend to larger sizes, and retailers seem more interested in promoting those," says James Riehl, senior v.p., marketing at Marcal Paper Mills in Elmwood Park, N.J.

"We're seeing more and more sales in those big packs of the 12-doubles and 24-singles," says Mike Taylor, senior brand manager, Angel Soft at Georgia-Pacific Consumer Products Division in Atlanta. "Consumers want bigger packs. Our consumer has two, three, or more kids and is going through a lot of toilet paper. It's important for her to be able to buy it in big packs," he says, adding, "By far our big movers are the 12-double roll and the 24-single roll packs, but now we're starting to see people move into even bigger ones, like the 18-double and 24-double roll packs."

"Over 60 percent of our business is now in extended-roll-life formats," says John Brase, Charmin brand manager at Procter & Gamble in Cincinnati. "Still, if you look at all the things consumers talk to us about when they talk about bath tissue, they'll still say their biggest frustration is that they need to change the roll too often. So we're going to continue to focus on ways we can put more paper on the roll. We're looking at some innovative things."

The problem is, if rolls get physically bigger, they won't fit in the dispenser, and that will sacrifice product performance. "The consumer will let you know loud and clear when they feel like you've sacrificed performance," Brase says. "But we still feel there are some definite ways to drive extended roll life without compromising product performance."

Toilet tissue manufacturers are looking to improve performance in other ways, too. Charmin now offers scented toilet paper in Wild Flower Fresh and Shower Fresh versions. "Both have done extremely well," says Brase, noting that the scent is applied to the roll and not the actual tissue itself.

In April P&G began shipping an improved version of Charmin Ultra. "We've made some tremendous strides in thickness and absorbency, which are two key areas that consumers continue to aspire for in bath tissue, so we made a significant upgrade on our Ultra product to differentiate ourselves from the pack in terms of the strongest, thickest, most absorbent bath tissue on the market," Brase says.

Flushable wipes

Another up-and-coming trend is wet toilet paper -- commonly called flushable wipes -- which is just beginning to fight for shelf space and is packaged in plastic recloseable containers. "When it comes to wet toilet paper, the U.S. is really behind the curve here," Brase notes. "We've seen phenomenal explosion of the wet category in Western Europe. What we're learning is that the system usage of wet and dry really is driving overall bath tissue consumption. The wet usage isn't coming at the expense of dry in Europe, which is great for us and our retail partners."

Georgia-Pacific, which is in the process of converting its MD brand in the Pacific Northwest and Northern California over to the Angel Soft moniker used in the rest of the country, has begun airing comical commercials featuring David and Larry, "Bathroom Angels" with a mission of helping families respond to bathroom emergencies by magically coming to the rescue with rolls of Angel Soft. "Basically Angel Soft is the affordable choice for people who want premium-quality toilet paper," Taylor says. "So we needed to develop a point of difference and a campaign to make sure that message was getting to our consumer."

Here's another message the industry is sending to consumers: Prices are going up.

Pummeled by a one-two punch of skyrocketing prices on pulp and natural gas, the three major players, led by P&G, announced a price hike. "We'll be raising prices by about 6 percent come July through a combination of reduced promotional spending and list price increase," says Celeste Kuta, external relations manager at P&G. "This was a really tough decision for us. Both pulp and natural gas, our two key raw materials, have been increasing much higher than 6 percent, so we held off as long as we could, trying to find efficiencies elsewhere and drive out costs. But it got to the point where we couldn't innovate anymore because we didn't have money to invest back into the product. The price increase will allow us to invest back into the brand and continue the innovation, which will be good for consumers."

While manufacturers don't expect the price increase to have an impact on consumption, it may cause some consumers to switch to value brands. One of those value players is Philadelphia-based Irving Tissue, a regional manufacturer created by former Scott Paper Co. officials who lost their jobs when that venerable company was acquired by Kimberly-Clark. It markets Soft Weve toilet tissue and Scotties facial tissues to about a dozen customers in the Northeast. "Soft Weve is a one-ply bath tissue with a distinctive 1,250-sheet count in the value, or 1,000-sheet one-ply, segment," says Linda Riondet, marketing director, Scotties and Soft Weve brands at Irving Tissue. "Our primary competition is Scott."

Those value-conscious shoppers may also be seeking out private label. "Although we're all affected by the rising cost of energy, the private label industry will still boast the most savings to the consumer," says Philip Shaoul, director of sales at Global Tissue Group, a primarily private label manufacturer in Holbrook, N.Y. "As the price of the brands go up, private label usually reaps the benefits in new purchases."

Private label is also increasing its share by developing better-quality products. "We will be introducing through-air-dried, or TAD, household roll towel for private label," Shaoul says. "This product is a high-end premium product."

Potlatch Corp. has developed its own TAD private label towel that it's marketing with a Hydrasorb trademark and targeting against P&G's Bounty. "Hydrasorb is a trademark that we developed," says Bruce Woodlief, consumer products marketing director at Spokane, Wash.-based Potlatch. "It's unusual for a store brand or private label to have any form of trademark. Usually it's generic, but we decided, with having more of an upscale and higher-performing product, why not add some branded techniques to develop a trademark that we could let our retail customers use?"

Potlatch typically targets key consumer brands, including Northern and Northern Ultra, in bathroom tissue. "The performance and the physical characteristics of those products typically match those of the target brand," Woodlief says. "In the case of our TAD paper towels, we've targeted Bounty in terms of Bounty's absorbency, look, and feel, although we've leveraged more of a softness feel that our consumers seem to like. We've done a fair amount of consumer testing, and our preference scores are pretty good compared to Bounty."

At the same time, however, P&G continues to fine-tune its Bounty line. Last month it began offering large-count packs of its Select A Size line, along with a collection of Touch of Color Prints that are available in 8-, 12-, and 15-roll packs. "We're also coming out with our Activity Prints for school, which involve our licensing agreement with Nickelodeon and feature Dora the Explorer, Blues Clues, Jimmy Neutron, and SpongeBob SquarePants," says Melissa Hale, external relations manager at P&G. "There are activities on the actual Bounty towel sheets for kids to work on as they're waiting for their meals, or just to entertain and educate them." She adds that P&G's Puffs facial tissues are also coming out with Jimmy Neutron and SpongeBob SquarePants activity boxes that will begin shipping in June.

"With Puffs a lot of the innovation has been in the design," Kuta says. "We just started shipping a new Puffs Cube design with scalloped, turned-in edges that's the first major packaging change in, like, 20 years. Consumers just love these, and the shipment of the SKU is up about 44 percent vs. a year ago because of these designs," she says.

Now that paper products have become a decorating tool, retailers can look for sales to rise after each new episode of "Trading Spaces."
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