Roll Call

WENDY TOTH

Paper products have traditionally posed a challenge for the average consumer looking to save money without skimping on value, retailers told SN.

To remedy this, major manufacturers have offered numerous innovations during the last two years, including extra-soft variants, sheets with more frequent perforations and, notably, more sheets per roll, according to the 2008 Household Paper Products report from Mintel, Chicago.

In addition, private-label providers have stepped in with products offering high recycled-fiber content at a midlevel price point, differentiating them from most mainstream brands.

All the effort has paid off, particularly with extended-roll products that boast more paper per roll.

“The majority of our paper towel and toilet paper product offerings are of the larger, or extended-roll, variety,” said Dan Donovan, spokesman for Giant Eagle, Pittsburgh.

“The larger rolls are more popular with our customers, though we do not believe there is one leading factor to this trend.”

In addition to having extended-roll products included among its own brand offerings, Giant Eagle merchandises extended-roll products from national brands, including Viva, Bounty, Brawny and Scott.

Wal-Mart Stores, Bentonville, Ark., is working with suppliers to develop even more extended-roll products as part of its ongoing sustainability initiative. According to the retailer's website, these products eliminate the need for extra cardboard centers, reduce the amount of packaging required, save space on shelves and in trucks, and are designed to save customers time and money.

Citing the Charmin 6 Mega Roll pack as an example, Wal-Mart said the product contains the same amount of toilet paper as a regular Charmin 24-roll pack. By selling twice as many Charmin 6 Mega Roll packs, Wal-Mart can ship twice as many units, eliminate 89.5 million cardboard roll cores, eliminate 360,087 pounds of plastic wrapping and reduce diesel consumption by 53,966 gallons, according to the site.

Procter & Gamble, the manufacturer of Charmin products, is well known for working with retailers to take cost out of the system, says Paul Weitzel, a consultant with Willard Bishop, Barrington, Ill.

“This effort is very similar to P&G's work with Wal-Mart in developing concentrated laundry detergent and mass-producing small package sizes,” he said. “The sustainability angle is seen by them as a smart long-term strategy, but it will be five years before other manufacturers catch on in a big way.”

The trend begins with the consumer, said Dewayne Guy, spokesman for P&G's Family Care division. “For consumers, running out of bath tissue is the No. 1 point of dissatisfaction for smaller rolls,” he said. So with a toilet paper product like Charmin Mega Roll, the roll can be changed less often.

At his Lee's Market store, in Westport, Mass., Albert Lee finds that extended-roll products are doing well, with no change from last year, and customers continually switch brand preferences based on price. “Our customers look for their favorite brands first and consider which is cheapest in price second,” he said.

Since price points shift depending on weekly sales, shoppers have become more flexible. “Our biggest paper towel sellers are Bounty, Scott and Marcal, in that order,” Lee said.

CHANGING PREFERENCES

Bounty was the paper towel leader in the supermarket segment for the 52-week period ending Jan. 25, according to Information Resources Inc., Chicago, with $672 million in dollar sales. Private-label brands came in at a close second, with $428 million.

Charmin is leading in toilet paper, with $537 million in sales for the same period, followed by Scott at $495 million, and private-label third at $490 million.

Consumers will stick with their favorite brands for some products, but many are embracing private-label products, which tend to be 46% cheaper than national brands, as a coping strategy, according to Mintel's study.

Mainstream brands tend to win out in the toilet paper category, with the top three suppliers — P&G, Kimberly-Clark and Georgia-Pacific — generating 84% of sales in the food, drug and mass market channel, according to Mintel.

Overall, since many new private-label offerings in the segment are of the “green” variety, mainstream suppliers position the higher-sheet-count rolls as their environmental offering. “Private label and low- to mid-priced brands are in a better position to offer high recycled-fiber content, simply because consumers of premium brands are less likely to desire a change to the product,” according to the Mintel report.

For retailers, the benefits are with shelf efficiencies, according to P&G's Guy. Additionally, retailers have the potential to increase consumption in the category and benefit from sustainability, because more paper per roll means less core production and fuel consumption.

P&G has not moved entirely to extended-roll-life products at any retailers it supplies. “We offer a range of options to all of our retail customers, from which they decide what is best for them and their shoppers,” said Guy.

B&R Stores in Lincoln, Neb., carries a variety of extended-roll paper products, but the volume depends on store size, since the chain's stores range from 25,000 to 75,000 square feet. “The trend with our shoppers has been toward buying larger rolls that will last longer. Our customers prefer those over the traditional four-roll pack,” said Mike Seaboch, paper products category manager.

“We want to be a destination for these products for our customers,” he added.

For supermarkets, however, that can be an issue. Sales in the paper products market have grown steadily in the past five years to $13 billion overall, but sales through the grocery channel lost 5.5 market-share percentage points to mass and other channels, according to Mintel. However, consolidation in the grocery channel from 1997 to 2007 has resulted in increased buying power among regional chains, the report adds.

Over time, mass and club stores have added to the appeal of extended-roll products, which may help the grocery channel overall, according to Ted Taft, managing director, Meridian Consulting Group, Westport, Conn.

“The reason these products have been doing well over the years can be seen in the strength and growth of club stores, which have long focused on larger sizes with less packaging, where the benefits of cheaper cost per use are passed to the consumer. And with the economy, consumer interest is only further increased.”

At B&R stores the key is simply making sure at least one paper product is included in the weekly sales circular. “Shoppers look for the sales, and we make sure there is something to offer, even if we have limited space on the page,” said Seaboch.

Paper Towel Takeover

A more informal lifestyle has led consumers to care less about which paper product is being used for what, and paper towels have become a stand-in for nearly every other type of household paper product, except for toilet paper, according to the 2008 Household Paper Products report from Mintel, Chicago.

The trend is reflected in recent sales.

For the 52-week period ending Jan. 25, paper napkins earned $373.5 million in the grocery channel, compared with paper towels' $1.8 billion, according to Information Resources Inc., Chicago.

Facial tissues came in at $676.6 million, and toilet paper earned $3 billion.

Naturally Better

Retailers have answered the call to environmental waste challenges with innovative paper product offerings. According to the 2008 Household Paper Products report from Mintel, Chicago, these new products include: