Coming clean about detergent

Articles
January 14, 2011

Coming clean about detergent

Households don't skimp much on cleaning their clothes. U.S. consumers overwhelmingly buy their favorite brands, which still account for a 96% share of domestic heavy-duty liquid detergent dollar sales, says Nielsen. Globally, about two-thirds of consumers "are willing to endure some economic burden to protect the environment" and help lessen the amount of over-packaging, suggests a new Datamonitor study, The Future of Sustainable Household and Laundry Care Packaging. Meanwhile, F3 observations at store shelves reveal an apparent race by manufacturers to streamline their packages for several key reasons: First, to visibly demonstrate their environmental awareness to consumers, and to keep their items easier to carry home, especially by women ages 35-64, who index high for detergent purchases, according to Nielsen Homescan Consumer Facts, total U.S. for the 52 weeks ended June 26, 2010. Second, to reduce supply chain costs (less weight, less cube, less shipping expense), and take up less cubic space in category planograms and promotional displays, in order to be able to show higher sales-to-space ratios to their retail customers. Many retailers also rely on this category to drive traffic with frequent sharp deals in circulars throughout the year. Indeed, this strategy helps the grocery channel retain 57.4% of U.S. households as detergent purchasers, according to Homescan data, which also notes that 36.6% of heavy-duty liquid detergent sales occur on deal, plus another 13.8% with a manufacturer coupon.

Households don't skimp much on cleaning their clothes. U.S. consumers overwhelmingly buy their favorite brands, which still account for a 96% share of domestic heavy-duty liquid detergent dollar sales, says Nielsen. Globally, about two-thirds of consumers "are willing to endure some economic burden to protect the environment" and help lessen the amount of over-packaging, suggests a new Datamonitor study, The Future of Sustainable Household and Laundry Care Packaging.

Meanwhile, F3 observations at store shelves reveal an apparent race by manufacturers to streamline their packages for several key reasons:

  • First, to visibly demonstrate their environmental awareness to consumers, and to keep their items easier to carry home, especially by women ages 35-64, who index high for detergent purchases, according to Nielsen Homescan Consumer Facts, total U.S. for the 52 weeks ended June 26, 2010.
  • Second, to reduce supply chain costs (less weight, less cube, less shipping expense), and take up less cubic space in category planograms and promotional displays, in order to be able to show higher sales-to-space ratios to their retail customers.

Many retailers also rely on this category to drive traffic with frequent sharp deals in circulars throughout the year. Indeed, this strategy helps the grocery channel retain 57.4% of U.S. households as detergent purchasers, according to Homescan data, which also notes that 36.6% of heavy-duty liquid detergent sales occur on deal, plus another 13.8% with a manufacturer coupon.

Clearly, people want to save where they can on such frequently used products without compromising on the quality they seek. Without earlier-year comparable figures on promotional sales to compare, F3 can't say that deal or coupon purchases are occurring more often. However, we do suspect a change in consumer behavior that would tie to saving both household budgets and the environment - we believe people are cleaning more full loads of clothes and linens and fewer partial loads.

F3 feels this is a contributing factor to the across-the-board declines in dollar sales and equivalized unit volumes (16-ounce basis) of both heavy-duty liquid detergents and packaged detergents, measured by Nielsen in U.S. food, drug and mass merchandiser stores (including Walmart) for the 52 weeks ended November 27, 2010.

During this period, dollar sales of heavy-duty liquid detergents fell by 4.4% to $4.45 billion, on a 2.6% EUV decline. This downturn followed a year in which dollar sales were up 3.2% despite a 15.6% EUV decline, the Nielsen data showed.

By comparison, dollar sales of packaged detergents slipped by 7.7% to $944.3 million, despite a 4.6% EUV increase in the most recent 12 months. A year earlier, both dollar sales and EUV were up, by 9.4% and 23.5% respectively, noted Nielsen.

Looking at liquid detergent package forms, the Nielsen data showed that dollar sales of liquid bottles fell by 8.5% to $4.11 billion in the latest 12 months, while dollar sales of pump dispensers were in a rapid upswing - a gain of 110.9%--to $327.0 million.