20 January 2010 17:03 [Source: ICB]
Despite the global downturn, consumers are still choosing detergents with a green twist
CONSUMERS ALREADY have lots of information about product ingredients - and will soon have even more. Under growing pressure to become more transparent, detergent manufacturers have begun publishing more extensive details of their product formulations.
Rex Features/Chris Eyles
The SDA and two other North American associations have set up the Consumer Product Industry Ingredient Communication Initiative. Participating members began to implement it on January 1, by publishing product ingredients in a number of formats - including labels on packaging, manufacturer websites and even via a free telephone line.
This desire for greater product understanding goes hand in hand with another overriding consumer concern: the environment.
"Sustainability has been the message from the major retailers for the past three to five years," says Sansoni. "They're looking for more information and verification than ever before. They want to know how products are sourced, and details of their life-cycles."
He believes that all this information may one day end up on score cards that are displayed in supermarket aisles - as an aid to the consumer.
Green attributes can take many forms, such as naturally sourced ingredients, the ability to work at lower temperatures, or the use of concentrated liquid formulations.
"Much of this has already been implemented, and is now the norm in mass-market retail," says Sansoni.
And despite the punishing economic conditions - which have led to a surge in popularity for value brands - there is still an appetite for these higher-priced products with green credentials. "I think this segment of the market is here to stay," he says.
Similar initiatives are happening in Europe. At its December 2, 2009 Information Day in Brussels, Belgium, the International Association for Soaps, Detergents and Maintenance Products (AISE) announced extensions to its own plans to encourage sustainable production and consumption - such as the launch of its consumer website, www.cleanright.eu.
The site provides information and advice on the safe, sustainable use of cleaning products. It is available in eight languages - which AISE says will help it reach up to 345m people. Further languages are planned.
AISE reports that Europeans also have a growing appetite for sustainable products. Christophe Legraverend, quality and sustainability manager for household and personal care products at French supermarket Carrefour, said 'Ecolabels' - which identify products made accoring to environmental principles - have proved to be a big selling point.
"We saw a 40% sales increase for eco-labeled products in 2008," he told delegates at the AISE event.
According to AISE, European sales of detergent products topped €29bn ($42bn) in 2008 (see pie chart) - a 1.4% increase on 2007. Figures from global market research firm Euromonitor International also show steady global growth in detergent sales from 2003 to 2008: in that time, world sales of laundry detergents swelled by nearly 50%, to top $50bn (€35bn). In the same period, dishwashing products grew at a similar rate to reach more than $13bn.
Whether consumers are choosing green brands or value brands, major manufacturers are seeing declining returns from their detergent-related business segments.
Procter & Gamble, the huge US supplier, recently posted its first-quarter (Q1) results: its Fabric Care & Home Care division, which includes laundry and dishwasher detergents and fabric softeners, reported a 5% dip in sales, to $6.1bn.
Its Anglo-Dutch rival Unilever fared little better: Q3 sales in its home care division - whose brands include Cif and Domestos - fell by 4.8% year on year to $1.75bn. Sales for the first nine months were down by nearly 4%.
Meanwhile, Henkel, of Germany, saw a Q3 dip of nearly 3% in its Laundry & Home Care division - keeping sales just above €1bn - though it claimed organic growth of 2.4%.
"In Western Europe and North America, the difficult market environment impeded sales performance to the extent that neither region was able to attain the sales level of the prior-year quarter," said Henkel at its Q3 results presentation on November 11, 2009.
Sustainability is undoubtedly the major factor driving development of new detergents. But for UK cosmetics and toiletries consultant Colin Hession, this green approach is not appropriate for personal care products such as soap and shampoo.
"I would be very cautious about 'playing green' too hard in personal care," he says. "If there's a trade-off between green and price, then price will win. Cost is very important."
He says consumers are unwilling to pay more for green personal care products. Instead, they respond to tangible product qualities - such as fragrance and lathering ability - which he calls "nice-to-use" factors.
"Beware of setting technical challenges in personal care too far towards green issues, at the expense of cost or nice-to-use," he says.
An ongoing change within personal care - certainly in developed markets - is the shift from solid soap bars to liquid products. This is partly linked to the rise in popularity of showers over baths.
"Liquid soaps have now gone beyond the kitchen, and moved upstairs to the bathroom," says Hession.
Liquid soaps also give manufacturers more chance to add value, with new formulations. Traditional bar soaps, which are based on natural products, are still common in developing markets, but falling out of favor in Western ones.
Traditional soaps cannot demand high prices, says Hession, but the new breed of synthetic detergents - or 'syndets' - have a perceived added value that produces better margins. "Consumers want more interesting soaps, with fragrance and better lathering qualities," says Hession.
These products are also good for manufacturers, which can more accurately predict the cost of ingredients and chemicals, rather than animal fats and palm oil.
"The market is driven to an extent by consumers - but also by raw material variability and by manufacturers' desire to increase margins," he says.
Soaps are water-soluble sodium or potassium salts of fatty acids.
One of the earliest recipes for making soap was to combine wood ash with animal fat.
Nowadays, soap is made by treating fats and oils with a strong alkali - sodium hydroxide (to make hard soap) or potassium hydroxide (for liquid soap).
Soap's effectiveness is reduced in hard water, because it reacts with dissolved minerals (such as calcium and magnesium) to form an insoluble precipitate.
Synthetic detergents were developed in Germany during World War I, in response to a shortage of the fats used for making soap.
Synthetic detergents work on the same principle as soap - in that both have a hydrophilic ("water loving") and a hydrophobic ("water hating") end - but detergents can be engineered to work effectively in hard water.
The "greening" of detergents means that some are now derived from sustainable raw materials.
Both soaps and detergents are surfactants - surface-active agents that help water to spread across a surface, such as a piece of fabric, and wet it more effectively.
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