The extra mile

After a period of less than dazzling sales, things are finally starting to look a little brighter in the laundry detergent aisle. Manufacturers, led by industry giant Procter & Gamble, have introduced innovative items, most notably detergent/fabric softener combinations, targeting consumers' needs for convenience and value, and shoppers seem to be responding, as sales in the category have begun edging up after years of negligible or even negative growth.

According to ACNielsen, for the 52 weeks ended Aug. 13, sales dollars for the heavy-duty liquid detergent category in food stores with $2 million or more in sales increased 2.5 percent.

Consumers now have a load of value-added laundry detergents to choose from, including ones designed to be used in cold water, or with lower-sudsing high-efficiency washing machines for energy and cost savings, or specifically on fade-prone dark clothes, or for people with concerns about the impact on their health or the environment of using certain soaps.

Consumer packaged goods companies are currently "focusing on innovations of well-established brands," notes Brian Sansoni, v.p., communication and membership for the Soap and Detergent Association in Washington, D.C., a trade organization for such manufacturers. "Laundry detergent is a fairly mature category, and products with added benefits, like fabric softeners and fragrances, meet niche needs."

Sansoni says the value-added tack on the part of companies makes good economic sense, since it can be "expensive to launch a new brand." Of course, he observes, the chief question manufacturers should be asking themselves is, "How can we make doing laundry easier?" The most successful of this new breed of products are doing just that, and smart retailers are paying attention.

Take, for instance, Woodbury, Minn.-based Kowalski's Markets, a 10-store upscale retailer operating in the Minneapolis-St. Paul area. "We carry all the value-added items available to us," says grocery supervisor Britt Lindemann, who handles shelf management for the company. "This includes items with bleach, fragrances, fabric softeners, and items that are free of any additives.

"Usually, when a new type of product comes into the market, the initial reaction is strong, especially when the item is accompanied by a coupon drop to help promote [it]," notes Lindemann, although he acknowledges that "reaction generally levels out after a few months." Still, he confirms, "The most popular items on the shelf in [the category] are the original item, followed by the added-bleach and the free [versions]. [Additionally, among] the fastest-growing items are the high-efficiency products."

Aside from CPG companies' FSI coupons, Kowalski's depends on its wholesaler, Minneapolis-based Supervalu, to promote new products. According to Lindemann, "They pass on allowances from the manufacturers to the stores. The stores can then pass that on to the consumer. We also follow the Supervalu ad program, which promotes laundry detergent weekly."

When it comes to merchandising, the grocer doesn't normally think outside the aisle, but there are exceptions. "When we put up a display of an item, we try and keep it close to the aisle that the item is in," explains Lindemann. "The exception to that rule is that if the item is at a particularly hot retail [price], we'll put it on a mass display. We'll also tie in items that go together on a display, i.e. dryer sheets with laundry soap."

Another component of Kowalski's laundry detergent strategy is its focus on natural and specialty laundry detergents (see the sidebar on page 50).

Although the grocer doesn't carry private label products, others have introduced store-brand value-added detergents that can compete with the big boys.

Rochester, N.Y.-based Wegmans has been only too happy to tout that its value-priced private label Advanced Formula detergent tied for first place with Tide Coldwater in a cold-water washing test a local news reporter conducted that pitted those two products against regular Tide, Purex with a cold-water formula, and Cheer All-Temperature.

"[W]e were not surprised at the good results," said Wegmans director of consumer affairs Mary Ellen Burris in an online column. "We are committed to high standards for our Wegmans brand products...[and] we're proud of the Wegmans Advanced Formula detergent."

More product choices

The undoubted leader in coming up with new value-added products has been Cincinnati-based Procter & Gamble, maker of the top-selling liquid laundry detergent, Tide, and introducer over the past 18 months of such brand extensions as Tide with a Touch of Downy, Tide Coldwater, and, most recently, Tide with Febreze Freshness, which features the odor-eliminating power of P&G's Febreze. The company has also rolled out extensions of its popular Gain and Cheer brands of detergent.

"Consumer-driven innovation is clearly the cornerstone of our strategy for strengthening our [products'] leadership in the laundry aisle," notes Tide spokesman Randy Chinchilla. "We maintain a competitive edge by listening to our consumers and delivering innovation that meets their wants and needs."

And the company is able to deliver that innovation at a premium price. "Overall, our focus on innovation is what gives us the agility to respond to marketplace trends in order to maintain our cost and product advantages," explains Chinchilla. "This focus allows us to differentiate from value brands and to succeed in the premium tier, a segment that we expect to continue growing with new value-added offerings."

For P&G to remain in the vanguard, it first has to do its homework. "[C]onsumer research [tells] us how we can best match...needs with our technology to deliver best-in-class products," notes Chinchilla.

Next come strong promotions that include retail participation. "Partnering with our retailers on most or all of our new initiatives is a key element of our marketing strategy," he says. "We base our marketing programs on holistic executions that reach consumers at multiple touchpoints (TV, in-store, newspapers, interactive, etc.) with a consistent message that reaches and attracts consumers in a compelling way."

Merchandising is also a key way to get P&G's message across. In addition to Tide, the company's Febreze Freshness line includes versions incorporating Downy liquid and Bounce dryer sheet fabric softeners. "These new products, which have a common scent, provide retailers the opportunity to encourage regimen sales of a laundry and fabric softener together," says Chinchilla. "By advertising, merchandising, and shelving these products together, retailers [can] encourage multiple purchases and growing category sales."

To date, this multipronged approach has performed well for P&G. "Consumers have rewarded us with increasing shares despite competition from the price tiers," reports Chinchilla. "These results partially reflect the consumer's acceptance [of] our new offerings."

Of course, other manufacturers have been far from idle in the value-added arena. One of the busiest has been Princeton, N.J.-based Church & Dwight, maker of Arm & Hammer laundry detergents, which has developed its own value-added products, including Detergent Plus a Touch of Softener and Free, which contains no perfume or dye.

According to v.p. of laundry and cleaning products Kevin Kuchinski, detergent/fabric softener combinations appeal to consumers who weren't previously using liquid softener, whether because of the extra cost and inconvenience, or the perception of softener as a "luxury" item that can be easily dispensed with. Once they try it, however, they see the benefit, in the form of softer clothes. "It's a great example of a successful value-added product," he notes.

Kuchinski sees an "increased search for value" among consumers, which he believes will continue as shoppers' priorities shift from caring mainly about getting clothes clean to other issues in a world where people "don't get as dirty as they used to." One important consumer factor Kuchinski points to is the desire for products that are beneficial to health and/or the environment. In keeping with this concern, Arm & Hammer is reformulating its Free detergent, he says, adding, "The improvement to the product should drive additional gains."

Another issue is compaction or concentration, in which the same cleaning power is available in smaller packages, leading to savings in packing, distribution, and fuel costs, as well as more shelf space at retail. Kuchinski says Church & Dwight is currently "looking at the right way to concentrate, so as to provide value to the retailer and consumer."

The company has been involved in co-marketing ventures with top retailers, including Albertsons and Safeway, to promote Arm & Hammer laundry products. Church & Dwight also worked with Kroger, employing News America Marketing's Price Feature Plus program, which consists of a freestanding insert with both supermarket-specific ads and traditional FSI promotions. The insert highlighted Kroger's sales prices for Arm & Hammer detergents on top of the savings available by using Arm & Hammer coupons.

Other retailers have presented different marketing challenges. For Ralphs, which was still trying to regain its footing in the wake of the economically devastating Southern California strike/lockout, Arm & Hammer used a sweepstakes to encourage trial and drive traffic, notes Kuchinski.

Church & Dwight is now finalizing four corporate events to be held during the second quarter of 2006 with the participation of retail partners. The aim of these events will be to harness "the full power of the Arm & Hammer brand, to drive sales across the business." The company is looking at such possibilities as sponsoring Earth Day or giving back to local communities. Although all Arm & Hammer products will be promoted, the brand's laundry detergents will play a central role: "Laundry detergent is a destination category, and we will anchor those products [in the promotion]," says Kuchinski.

The ultimate goal of laundry detergent manufacturers, he observes, is to find new and creative ways to provide value, and those companies that do will be richly rewarded. "Consumers are willing to spend more in the category."