For laundry detergent, getting smaller could be the way to grow

October 8, 2014
3 min read

A few months ago, major competitors in the home laundry category announced their support of Walmart’s goal to cut 25% of the water from every dose of laundry detergent by 2018. The companies are heralding the move as an important advance in sustainability, noting that more concentrated detergents will save as much as 45 million gallons of water per year, require less plastic for packaging, and make transportation more energy efficient.

Detergent marketers may also be hoping that compaction will give sales a boost after several years of declines. Their hopes are rooted in laundry aisle history. In 2008, the last time the industry as a whole reduced water content in detergents, sales jumped 5% because the more concentrated formulations made it easier to pour more than the recommended dose. The bleach segment received a similar boost from a switchover to more concentrated formulations initiated by Clorox in 2012.

While overfilling may once again give detergent sales a short term boost, other dynamics in today’s market could soften the impact. Unit dose detergents, which eliminate the possibility of overfilling, have captured 10% of the market and will likely control a bigger share by 2018.

Increasingly intense promotional activity may be an even bigger drag on detergent sales growth. The recession and slow recovery have made consumers more deal-conscious than ever when shopping for detergent, which is typically among a family’s largest household product expenditures. Manufacturers and retailers have obliged, making laundry detergent deals a regular feature on the front pages of weekly circular ads. In their most recent earnings conference calls, both P&G and Church & Dwight cited competitive trade promotion activity, which effectively lowers prices without building volume, as a key factor in declining detergent sales.

Instead of relying on inadvertent overfilling to inflate sales volume, detergent manufacturers and retailers might enjoy a longer-term gain in sales and profits if they treat compaction as an opportunity to break their dependence on heavy trade promotion. Rather than focusing on discounts, in-store marketing could shift to other expressions of value that more concentrated formulations make possible. Highlighting smaller bottles that do more loads of laundry is one way manufacturers and retailers could reframe value without relying exclusively on price. Smaller, lighter bottles offering the same number of doses also make handling and storage in the home a little easier. At the shelf, smaller detergent bottles could translate to more facings, allowing retailers and manufacturers to enhance variety and reduce out-of-stocks.

Extra concentrated laundry detergents are another example of what could turn into a big move toward small across household product categories. Smaller, more concentrated products in various forms are already finding their way into the cleaning products aisle. As Mintel consumer trend Minimize Me points out, today minimalism is less a backlash against excess than a growing recognition that mini is just more practical. The benefits of going small are fairly clear for manufacturers, retailers, and the environment, but the bigger win will come when marketers help consumers understand all the ways that less is more.

For more insight into the home laundry products market, click here.

John Owen specializes in the household and home care market and has also provided in-depth analysis and insight across a broad range of related categories and topics, including health and wellness, food and beverages, consumer lifestyles and retail.

John Owen

John is the Associate Director of Food and Retail at Mintel, providing in-depth analysis and insight across food and retail reports in the US.

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