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- RESEARCH & AWARDS
America is seeing green. Restaurants are selling locally grown food, buildings are being constructed from recycled materials, and travelers are reducing their carbon footprints.
One would assume that America’s green quest would negatively impact the paper products category - yet the opposite has occurred. According to Information Resources Inc. (IRI), Chicago, toilet tissue sales rose 2.6 percent, and moist towelette sales, excluding baby wipes, increased 7.4 percent during the 52 weeks ending Oct. 7, 2007 (excluding Wal-Mart). What’s more, sales of private label toilet tissue increased 8.7 percent, and sales of private label moist towelettes rose 27.7 percent during the same timeframe.
According to Bruce Woodlief, director of marketing for Potlatch Consumer Products, Spokane, Wash., “The paper tissue category has one of the leading case volume shares among all store categories, currently estimated to be more than 22 percent.”
The bottom line is that until we find another way to blow our nose or wipe our hands, the paper product category will continue to thrive.
One of the main trends elevating the growth of paper products is the introduction of added product features. According to Travis Potter, category and market manager at Cascades Tissue Group, Kingsey Falls, Quebec, Canada,“There is [now] more emphasis on higher-end private label products.”
No longer are ordinary paper towels the norm on store shelves. Instead, consumers are able to purchase extra-soft, extra-strong or even extra-long paper towels. Looking for lotion-filled tissues? You can find them next to the toilet paper that doesn’t leave lint behind or the moist towelettes that smell like summer rain.
“As a rule of thumb, there are four different grades of paper quality - economy, value, premium and ultra - so depending on your preference, there are many choices to meet your needs,” Potter says.
For a period of time, private label brands were not able to compete at the higher levels. However, by adding extra features, private label manufacturers have been able to improve the quality of their products and, in turn, successfully compete with the national brands. For example, Potlatch Consumer Products recently introduced improved conventional premium paper towels.
“Potlatch reformulated its premium conventional paper towel to virtually eliminate the amount of lint left behind on cleaning surfaces,” Woodlief says. “The reformulated product now has more strength and fiber content.”
Potlatch also developed premium-quality napkins that are thicker, softer and more absorbent.
Cascades Tissue Group also has a line of premium paper towels, with no added color or scent, and Extreme paper towels, which are designed to be 150 percent more absorbent.
“The quality of these high-end products will outperform the Charmin basic and Bounty Basic products,” Potter says.
Sustainable PracticesAnother trend that is greatly impacting the category, as well as the country, is the focus on recycled and earth-friendly products.
“Private label suppliers are putting more emphasis on recycled/green products when applicable,” Potter says.
The unfortunate truth is that paper creates a number of problems for the environment. One of the biggest problems is that most paper is made from wood. As more and more paper is made, deforestation increases. In addition, paper that is thrown away not only fills up landfills, but also releases damaging chemicals as it decomposes.
The good news is that the paper industry is dedicated to using sustainable forestry methods and creating more recycled products. According to the Paper Industry Association Council, “The United States Paper Industry recovers more material from the municipal waste stream than all other industries combined.” In 2005, 51.5 percent of the paper consumed in the United States was recovered for recycling, and every day papermakers recycle enough paper to fill a 15-mile-long train.
People have been recycling paper for more than 100 years, and private label manufacturers are using environmentally friendly practices and creating recycled products. For example, Cascades Tissue products are made from sustainable raw materials and are chlorine-free. Cascades also recycles 2.7 million tons of paper each year; examples of their recycled products include 100 percent recycled napkins, paper towels and tissues. Similarly, Potlatch is certified by the Forest Stewardship Council and limits timber harvesting on its forests.
A Numbers GameAlthough private label manufacturers have improved paper products’ features and are making more recycled products, the cost of resources has increased in the past year.
“Virgin pulp is up 10 percent from a year ago, and the cost of diesel is up 22 percent from a year ago,” Potter says.
Therefore, manufacturers have been forced to reduce their sheet size to offset the cost increases of their resources.
“With the reduction of sheet counts, brands are redefining roll sizes in several segments of tissue and paper towels,” Woodlief adds. “What was once a big roll has become a giant roll; giant rolls are becoming mega rolls; and so on.”
Since sheet sizes are decreasing, there are essentially more sheets per roll.
“Suppliers are creating additional larger pack configurations and putting greater emphasis on having more paper on each roll,” Potter says.
Despite the decrease in sheet size, the category’s dollar sales have not suffered. The caveat is that regardless of the growth in dollar sales, unit sales have slightly decreased in the past year, according to IRI data. However, the decrease is a reflection of rising prices and an unstable economy, and is not indicative of the category’s future. The private label paper products category is growing and will continue to do so.
“Over the past 10 to 15 years, the private label tissue industry has made significant capital investments to improve product quality and product offerings,” Woodlief says.
Consumers are recognizing these improvements and, in turn, shifting their buying patterns.
“Consumers are becoming increasingly aware that the private label product is similar to the national brand product and generally has a lower retail price. It makes sense to choose the product with a lower retail, especially when there is not a difference in product performance,” Potter adds.
Paper products are an essential part of our everyday lives. Whether one is at work or home, paper is constantly being used (and recycled). The emphasis on higher-end products - combined with the introduction of environmentally friendly products - will lead to continued success in the paper products category.