Seasonality is becoming less important in sales of paper goods, as consumers buy paper plates for more than just picnics, and paper towels increasingly substitute for paper napkins.
Facial tissues sell better in cold and flu season, but, while acknowledging this, Spartan Stores' paper category manager, Karrie Thomason, says the Grand Rapids, Mich.-based chain does not display tissues near the cold and flu remedies.
Private label is a growing factor for Spartan Stores, which is also a wholesaler. "We have been making some nice increases, following the national brands' trends toward larger roll and package sizes," Thomason said.
Private label is the leading "brand" of paper napkins sold in the United States in all three channels, according to Information Resources, Inc., Chicago. Private-label paper towels ranked second, right behind Bounty brand and ahead of Brawny in sales.
IRI figures do not include reports from the club stores, like B.J.'s, Costco and Sam's Club, which food retailers say have taught consumers to look for giant packages of paper towels and tissues. Aside from the unknown factor of the clubs, the food channel leads drug and mass in the sales of paper towels and napkins, facial and bath tissue, disposable plates and cups, paper/plastic table covers, plastic utensils, and straws and swizzle sticks, according to IRI. The biggest segment among paper goods is toilet tissue, with total sales of $3.96 billion for the year ended Jan. 2, 2000, with $2.5 billion generated through the food channel.
Paper towels, also, are hot right now, particularly those that allow consumers to tear off different sizes, retailers told SN.
Jack Mahon, category manager with Genuardi's Family Markets, Norristown, Pa., predicts that paper towels will probably grow -- the segment generates about $2.55 billion a year in reported U.S. sales -- because of the select-size option they now give consumers. Bounty has Select A Size, Scott has Choose A Size, and Brawny has Pick A Size. "Usually they are number one or two in the category," Mahon said. "It's exactly what the consumer has asked for. The choices have added incremental sales to the category." In Genuardi's area, paper towels sell consistently throughout the year, he said, but in other parts of the country, sales of paper towels may go up when it's time for spring cleaning. Genuardi's still does spring and fall cleaning ads, but promotes cleaning overall all year, Mahon added.
"I think if you're in the retailing industry right now you have to be in bundle packs to be a merchant," said Steve Mitchell, vice president of marketing, Acme Markets of Virginia, North Tazewell, Va. "The mass stores and clubs have done a great job of educating the consumer to preferring multipacks."
Units are down while dollar sales are up in toilet tissue, paper towels and, to a lesser extent, facial tissue. The reason, according to Allan Young, category manager for Big Y Foods, Springfield, Mass., is that "we are selling more large units, 8-pack or 12-pack towels, 24-pack bath tissue, and so forth. We are increasing sales by doing bulk sales."
"We have increased our bundles in both paper towels and toilet tissue, because people like to load up and the savings are significant," added Genuardi's Mahon.
"We promote them pretty aggressively. We have bundles on sale two out of four weeks. We have a lot of 12-packs and 8-packs of paper towels, our own Genuardi's brand, and Marcal, and Scotty. We have increased our bundles dramatically and we merchandise them around waist level, not at the bottom. We took a different approach, and now merchandise the single rolls on the bottom shelf, the big single rolls on top, and bundles in the middle," he said.
Procter & Gamble's Bounty brand is still being nationally promoted in 15-roll packs, which Key Food, Brooklyn, N.Y., advertised recently at $10.99 with an additional $10 purchase.
"We promoted the [same pack of] Bounty at $9.99," said Mahon. "The 8-pack is still the number-one seller in units, but the 15 is higher ticket, and it provides the best savings."
New and different in disposable plates are Dixie's Rinse & Re-Use product and Hefty's Elegant Ware, both of which can be washed many times in the dishwasher. Mahon said both brands "are going after a consumer who normally does not buy paper plates." Solo has a new item, the all-occasion paper plate, a departure for the company, which previously had only plastic products, Mahon said. Genuardi's has the Solo plate on an in-and-out basis right now.
Paper cups and plates sell more during the holidays, said J.B. Pratt, owner of Pratt Foods Supermarkets, Shawnee, Okla. He stocks disposable tableware for the Jewish holidays, also, but says other parts of the country that have a more ethnically diverse population probably notice more sales of paper goods at Passover and Rosh Hoshana.
Weather can also play a role in the sales of paper goods.
Mitchell said "in the South, if you have a threat of inclement weather, that stuff sells like crazy -- paper towels, bath tissues, paper plates -- [because] with a hurricane coming, people stock up."
The number of bad storms striking the Southeast in recent years has led the chain to implement a hurricane preparedness program that involves keeping a close eye on the Weather Channel. "If they think it's going to come ashore anywhere around the North Carolina or South Carolina coast, we're stocking up," said Mitchell. The stores order extra stock, and to take care of customers' needs, employees will cut cases and stack them on the floor. "When you are the neighborhood supermarket, the community depends on you to stay open and supply its needs," he said. Acme also has some stores in South Carolina and Eastern North Carolina around Fayetteville.
On Procter & Gamble's Web site, consumers can order Bounty towels, which, "from a marketing standpoint, bypasses us, but from the distribution standpoint, doesn't," Mitchell said, adding that Acme has not been approached by Priceline.com yet, and in fact is not a partner with any on-line service.
Acme's paper assortment "is varied, and is governed somewhat by what the wholesaler carries. In paper towels, you have three segments: the premium brand, store brand or private label, and a generic label -- whatever label you use to take on your warehouse packs," he said.
In bath tissue, there is the value-added segment, which may differ in size of roll, what number ply or quilted, and Charmin now has one with lotion. Kleenex's Cottonelle has a new one that is textured, in ridges, sort of like corduroy.
Environmentally friendly products have caught on in some areas, New York for one, with brands like Green Forest that are recyclable. But, Mitchell pointed out that a large portion of the generic brands, which are low-cost, use recycled paper, making them automatically environmentally friendly. "Some promote it, the savvy ones," Mitchell said, by using a green triangle symbol on the package.
The paper napkin segment is struggling now in some locales, Mitchell said, as the paper companies try to revitalize and become more of a "grab and go" product that people take with them. The ubiquitous "soccer moms," he said, take a roll of paper towels with them along with sandwiches or snacks, instead of paper napkins, nowadays. "Napkin consumption is down, except for superpremium dinner napkins, in our stores," Mitchell said.
The trend in paper napkins is to go to larger sizes, such as 250- to 300-count, although napkin sales continue to decline.
Facial tissues keep adding varieties. There are the standard box, man size, purse size, travel size, bundle packs, and the three-pack, which is growing, according to Mitchell. Cold and flu season brings the highest sales of facial tissues, which can also come in unscented, with lotion, and decorator box varieties. Mitchell noted that many retailers have merchandised napkins and facial tissues together, but some are now moving napkins next to paper plates, and putting facial tissues either with the bathroom tissues or with facial creams.
"Sometimes category management out-thinks the consumer," Mitchell commented. He said the paper aisle often is split up, based on the retailer's belief that facial tissues belong over by cold remedies, while they put napkins next to picnic items. "Sometimes customers complain when grouping changes from the form type of sets, in which similar sizes and shapes and kinds are merchandised together, like napkins with tissues, to the grouping that follows function, such as tissues with cold medicine," he observed.