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Porter, Thyra

Housewares Face-Off (disposables coming on strong) HFN The Weekly Newspaper for the Home Furnishing Network; 4/8/2002

Industry insiders called the trend "indicative of our increasingly disposable society," and said any company that chooses to ignore it will regret that decision.

"Five to 10 years from now, the packaged goods companies are going to be even more important players in our industry," said A.J.

Riedel, senior partner for Riedel Marketing Group. "They'll be at the Housewares Show. They won't take it over, but they'll be there."

Although the cleaning category was the first to be affected and is still the hardest hit by this new wave of disposable products, the business has evolved to include cookware and bakeware, food storage and battery-operated toothbrushes.

Items like the Procter & Gamble Swiffer and Pledge's Grab-It are sweeping up; Reynolds Pot Lux Oven-Ready Cookware poses a threat not only to traditional housewares-branded cookware but to supermarket-level cookware and bakeware, as well; Ziploc has produced its own reusable but disposable food storage containers, threatening the likes of heavy hitters such as Rubbermaid and Tupperware; and Crest and Colgate are among those offering low-priced, battery-operated electric toothbrushes to compete for a share of the increasing power-brushing market.

Although housewares vendors are quick to say they're not necessarily feeling threatened, analysts and other industry watchers believe they should be paying very close attention, especially if they're in the cleaning business.

"This is absolutely a threat, especially in cleaning," said Riedel. "Quite frankly, the traditional cleaning goods people are going to get their clocks cleaned."

"I'm not sure that there's definitive data that says the preference is now for goods like the Swiffer," said one analyst. "But most of the companies on the cleaning side of the aisles, the P&Gs, the Cloroxes, are constantly trying to improve the cleaning experience, and you can't ignore what they're doing because it appears to be working."

Analysts said one of the most important factors surrounding the new disposables is that the companies have addressed the most immediate concerns of consumers and put those concerns up front in their marketing. "People hate to clean kitchens and they hate to clean bathrooms, and a traditional mop and bucket is about as appealing as I don't know what," said an analyst. "These new products are easy and they're quick, and they get the users' hands out of the water and the companies are making those points known."

Vendors in the traditional stick goods category noted the disposable market became popular about three years ago, "when our friends at Procter & Gamble were test-marketing the Swiffer," said Michael Silverman, vice president of marketing for Butler Home Products. "It was really the beginning of a transformation in the cleaning category of disposables. Since that time, it's just exploded."

Silverman noted that while the stick goods business has been relatively flat, the disposable business has grown tremendously, partly because it came out of nowhere. "It's a whole new category," said Andrew Libman, vice president of sales and marketing for The Libman Co. "It's created incremental sales, but I have not seen it take away from the traditional category of brooms, mops and brushes. I think consumers use the disposable products for different uses, such as light-duty cleaning, while they use traditional products for heavy-duty cleaning."

Silverman agreed, saying "they are re-educating the American consumer on ways to clean differently."

It was argued, however, that the re-education may actually be a lesson in how to say goodbye to your traditional cleaning methods.

"Fifty or 100 years ago, people didn't have brooms and mops," said Moe Vazin, chief executive officer of VM International, which distributes housewares products to supermarkets. "They got down on their hands and knees and cleaned with a rag. But then someone invented the mop and the broom, and no one got down on their hands and knees anymore. Swiffer and those guys have done a similar thing."

Although the new products are not currently expected to fully eliminate the traditional categories, "they will definitely cut into their business," Vazin said.

The stick goods market may currently be most at risk, but it is by no means the only one. Disposable products are infiltrating shelf space in other areas as well, posing a threat to categories like cookware and bakeware, food storage and oral care. Again it was agreed the situation is one of intelligent marketing.

"These companies are being so smart in their message to the consumer," said Riedel. "Ziploc is telling you: If your spaghetti sauce stains the container, so what? Throw it away. Reynolds is saying you can bring their cookware to an event and leave it behind without worry. It's exactly what consumers want to hear."

She added that there are some hidden advantages to the overall game plans, however. "They're worming their way in," she said. "Eventually, the consumer may take it a step further on their own and decide: If the products are good enough, why should they leave them behind?"

The traditional companies for these goods said it has yet to become an issue.

"So far we have not had that come up as a competitive issue," said Nils Pederson, vice president of marketing for G&S Metal Products Co., whose bakeware appears in supermarkets. "Grocery is a big part of our distribution, and we are going to keep our eye on it, but we aren't seeing a significant effect yet. It hasn't been brought up by the buyers."

The oral hygiene department has seen changes as well, but vendors of the higher-end goods said lower-priced, battery-operated models are a welcome member of the group.

"We're excited with what Crest and Colgate and the others are doing because its introducing new consumers to power brushing," said Kevin Morton, marketing manager for Conair's Interplak line. "Once they're hooked, they look to trade up, they want more, and that's where we come in."

Susanna Wilson, vice president of the KidGenics division of Oralgiene, said brands like Crest and Colgate are "bridging the gap between the manual and the power brushes. And that bodes well for all of us."

While Riedel agreed with the idea of low-cost, battery-operated models serving as an inexpensive introduction to the category, she said "the problem will become the consumer's wondering, `If this is working so well, why should I trade up?' They trust those brands, they're already using them, why would they leave them?"

Conair has recognized a more savvy consumer who is "more in tune with technology and wants to know exactly what extra features" come with the higher price tag. Both companies said descriptive packaging and visibly advanced features, like Interplak's unique Dupont brush head with three different bristles or KidGenics' "dexterity angle brush" are highly successful when attracting the trade-up consumer.

It was repeatedly and strongly advised that vendors of traditional products rethink their marketing and product development plans to reflect this growing disposable trend.

"It's all marketing to me," said Vazin. "An item like the Swiffer shows a value to me. They have made their point clear."

"The real and huge threat is that the consumer packaged goods are coming in and they do their homework," said Riedel. "They advertise and market so well and to exactly who they want. Anyone who is ignoring them is simply not paying attention."

The Threat

Portable sweepers with disposable wet or dry clothsTraditional mops and brooms

(e.g.: Swiffer, Pledge Grab-it)(e.g.: The Libman Co., Quickie, O-Cedar)

Oven- and microwave-safe, reusable, Traditional cookware and bakeware

disposable cookware and bakeware

(e.g.: Reynolds Pot Lux Oven-Ready Cookware)(e.g.: All-Clad, Farberware, Mirro)

Reusable, disposable food storage Traditional food storage

(e.g.: Ziploc Food Storage)(e.g.: Rubbermaid, Tupperware)

Battery-operated power toothbrushesRechargeable power toothbrushes and plaque removers

(e.g.: Crest, Colgate, Reach)(e.g.: Interplak, Sonicare, Oral-B)

The Standard

Traditional mops and brooms

Traditional cookware adn bakeware

Traditional food storage

Rechargable power toothbrushes and plaque removers

COPYRIGHT 2002 Fairchild Publications, Inc.

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