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HOUSEHOLD GOODS

sector Overview:

The household goods sector is an amalgam of several product groups including personal care, oral care, laundry, paper products and household cleaning. It is dominated by a number of multinationals such as Procter and Gamble, Unilever, L’Oreal, Kimberley Clark, Henkel, Colgate-Palmolive, Reckitt Benckiser and Beiersdorf. Some pharmaceutical corporations also have an involvement in personal and oral care and there are specialist players including SC Johnson. In addition, retailers, and particularly Wal-Mart, are beginning to penetrate this sizeable market space with their own label value offerings: unsurprising when you consider that the US oral care market alone is worth c. $7.4bn and the household cleaning market is now touching $4.5bn. With its 8% share of all US retail shopping, Wal-Mart’s buying power is strong.
Within highly competitive markets, brand association combined with innovative products are the key to commanding the added value sales. For example the global brands of Colgate and P&G’s Crest lead the oral care market; Beiersdorf’s Nivea, Unilever’s Dove and P&G’s Olay are all strong in personal care, while Reckitt Benckiser’s Dettol, Vanish and Lysol make it the leader in household cleaning. Across the sector, the core trends influencing consumers’ purchase decisions include convenience, fragrance, confidence and product effectiveness. It will also be interesting to see the impact that concerns around the increase in viruses, particularly avian flu, will have on the growth of antibacterial products. In addition, as with many sectors increased consumer environmental awareness has stimulated a demand for less water use, less packaging and more eco or natural product variants.

Leading players are also keeping their eye on the growing market for low-cost detergents, toilet tissues and soaps available through discount stores. So far the impact on market shares has been marginal but increasing declines in consumer confidence and fears of a recession might change this. Finally, with the overall household products market mature in many regions and much future growth now being targeted at China, Eastern Europe and SE Asia, delivering successful differentiating innovation is seen by all key players as a primary concern.

ONES WE ARE WATCHING

 

P&G
P&G, now including Gillette, continues to lead the personal and household sector in terms of scale. It has set the standard for improving internal consumer understanding, time-to-market and strategic use of design, and is also using its well-established Connect-and-Develop Open Innovation programme to increase revenues from externally sourced ideas. It has also embarked on a regional growth plan with, for example, Autodish entering the European stronghold of Reckitt Benckiser.

Kao
Kao, the 8th largest company in the personal and household category, is a rising star from Japan and Asia. With consistent growth over many years the company has recently re-organised with a greater consumer focus and a drive for new high-value-added products. Despite rising raw material prices and strong competition, sales increased by over 26% in the last fiscal year to March 2007 due largely to the success of its premium brands Jergens, Biore, Kanebo and Molton Brown.

 

 

 

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