Wednesday, 19 July 2006

PIRA Future of Wipes: London - 3-5th July 2006

Key points

• 110 delegates attended this highly-focussed short-notice conference, much to the delight of the organisers (PIRA - UK ) who plan to repeat it in a larger venue next year.
• Compared to other FMCG packaging, wet-wipes packaging needs to become easier to open and seal, and more distinctive, while meeting environmental concerns.
• Ahead of the ban on marketing cosmetic products tested on animals (March 2009), the EU now allowed promotion of “not tested on animals” where this could be proven for all ingredients.
• Clorox creates virtual R&D scale by Technology Partnering. Despite their small R&D operation, they and their partners claim 5 times as many relevant patents as P&G.
• Amcor Flexibles is developing packaging to improve fluid distribution in wet-wipes.
• Costco's 15% cotton wipe is now No.3 in the baby-wipe market and will soon be No.2
• Chinese made Household wet-wipes in canisters are now being sold in dollar and discount stores in the USA .
• “Flushable by Size” wipes will cause more problems in sewage works as the market grows. Dispersible products are becoming necessary.
• There is a plethora of data on wipes markets.

Jeff Slosman, President of the National Wiper Alliance (USA) gave this keynote address to start the conference. The global wipes market had tripled in size since 1997 and Household wipes had grown most rapidly to reach 38% of the $6bn market by 2004, and were now accounting for 45% of the total.

Thinking primarily of the pre-impregnated category, further growth could be expected in:

• Water-activated personal, baby and homecare wipes for use where water was readily available (bathroom/kitchen)
• Automotive and industrial.
• Consumer wipes adapted for industrial use.
• Food service wipes.
• Dust attracting wipes.
• Skin care – consumer, institutional and medical wipes
• Skin cleansing wipes.
• Dual-purpose, two-sided wipes.
• Multi-use wipes to replace single-use.
• New infant wipes – driven by a mini baby boom in the USA .
With regard to flushable wipes, increased usage is leading to increased attention to the problems they cause in waste water treatment plants. Dispersible products are needed. “Flushable by size” may not be a valid route as usage increases.
Numerous slides covered the import/export statistics for the USA , all nominally dealing with wipes. ( These were hard to interpret due to the fuzzy nature of the import coding for nonwovens, and few, if any numbers would have been wipe-specific. Ed. ) However Mr Slosman was clear that China was producing wet-wipes for export and these were now appearing in the USA .

Cosmetic regulations and wet-wipes

Hadjira Mezaiti, the Industrial and Scientific Affairs Manager of EDANA ( Belgium ) introduced the EDANA Wet-Wipe Working Group (WWWG) and reviewed the impact of the EU cosmetic regulations on wet-wipes. The WWWG now comprised 14 companies who together produced over 85% of the wet-wipes in Europe . Their mission was to be recognised as the voice of the industry on all wet-wipe issues and to co-ordinate the activities of the industry in matters of mutual interest, e.g. product safety, environmental impacts and benefits to society.

With regard to product safety, there were no specific wet-wipe regulations but the lotion applied to baby and personal care products had to meet the Cosmetic regulations, and that applied to surface wipes could come under the Detergents or Medical Devices regulations. The Cosmetics Directive (76/768/EEC) restricted the ingredients that could be used, controlled the way products had to be labelled, and was progressively moving to banning the use of animal testing for cosmetic ingredients. Finished product testing on animals had been banned since September 2004 and lotion-ingredient testing would be banned from March 2009. There would also be a ban on marketing cosmetics which had been tested on animals (outside the EU) no later than March 2009. There would however (June 2006 amendment) be freedom to promote “not tested on animals” on the pack but it was up to the producer to prove that all chemicals throughout the supply chain had never been involved with animal testing at any time, anywhere in the world.

Available test methods were now Skin Absorption and Sensitization (OECD 428 and 429), In-vitro skin corrosion (OECD 430/431) and In-vitro phototoxicity (OECD 432). While the above applied to the lotion specifically, nonwoven manufacturers need to consider how chemicals on their fabrics migrate into the lotion, and any other possible substrate/lotion interactions. Animal testing of fibre finishes and additives would be relevant.

Asked how the FDA controlled wet wipes in the USA , Ms Mezaiti thought the system was broadly similar. Were there similar regulations for household and industrial wipes? Yes, the Biocides directive would come into play for any product claiming to remove germs from surfaces.

Technology Partnering the Clorox Way

David Lowrance the Manager of Clorox's Technology Brokerage and Bill Ouellette (Research Fellow) explained how The Clorox Company managed to develop new products with an R&D budget less than a tenth of Procter and Gamble's. Clorox creates virtual R&D scale by partnering with many other companies and their Technology Brokerage orchestrates this partnering. To illustrate this, while P&G has more than ten-times as many US patents as Clorox (in Clorox categories), Clorox plus technology partners have 5 times as many patents as P&G.

The key to success in creating virtual R&D is to gain access to the partner's innovations and this is achieved by a process called “Win-Balancing”. At first both Clorox and the partner pool a small part of the intellectual property, but over time with good experiences and improved profitability on both sides, all IP is shared. Clorox no longer source materials based solely on price and quality, they pay extra to get access to the innovative skills of the supplier. That means they only partner with creative suppliers with relevant R&D activities. Suppliers are ranked according to their Alignment Metrics (product range, collaborative culture, strategic fit) and Innovation Metrics ( the value of their innovations at three stages, Initial assessment, Commercialization and Product launches.) Only those scoring highly on both metrics become suppliers and the rankings are shared with suppliers and failed suppliers so that they can see where they fit.

Once on board, the innovators in the supply chain are encouraged to interact directly with the users of Clorox products using prototypes and simulations to stimulate discussion and drive new product design. Now, 80% of Clorox's new products arise from partnering.

In passing Mr Lowrance commented on the different packaging required by US consumers of household wipes. Canisters were preferred to flow-packs because they could stand up under the sink, had a small footprint and were less likely to get lost as the wipes pack empties. Furthermore the canister approach offered better prospects for differentiation and co-ordination with Clorox's other cleaning products.

Asked how they got the innovators out of the lab and into the focus groups, Mr Lowrance said they were “dragged, kicking and screaming”. How many staff did the Brokerage have? This was confidential but it was no more than a few dozen. Did they single or multi-source? Generally they used multiple suppliers but tended to have just one supplier for each technology-need. Was their any evidence that paying more for innovation led to increased R&D spending by suppliers? No, but Clorox certainly got a bigger share of the available spend. Weren't they concerned that if their competitors did the same there would be no benefit unless suppliers increased R&D? No, their competitors wouldn't follow because the approach was counter-cultural.

Innovative Wipes Packaging

Simon Haarburger, Strategic Healthcare Director – Healthcare for Amcor Flexibles (UK) , a $1.67 billion packaging company with 57 plants in 22 countries provided a case-study of the development of a pack for a feminine hygiene wipe. Their brief was to design an innovative single-wipe pack with soft and silent texture, easy opening and capable of giving an 18 month shelf life. They adapted their EasyPack easy-open/multi-reclose system with a new polyethylene recipe to produce a pack rather like a mailing envelope. This has been launched in France , UK and Netherlands , is receiving excellent consumer feedback, and has allowed the brand owner to extend product life, and increase unit price. Mr Haarburburger thought the same approach could be used for other single-use wipes such as tanning and hair-coloration. Asked if he had an improved product for multi-wipe packs, he indicated they were working on it. More he couldn't say, but the new pack would include ideas for improving fluid distribution and may involve dispensing the wipes through the base of the pack rather than the top.

Nonwovens for Wipes

Susan Stansbury of Right Angle Concepts (USA) reviewed the various nonwovens used in wipes and their strengths and weaknesses:

• Air-laid is doing better than you think. Many producers are having a good time and keeping quite about it.
• Spunlace remains primarily suitable for premium personal applications: air-laid is used wherever low cost is important.
• Air-laid and spunlace are converging: air-laid adding longer fibres and spunlace adding pulp.
• Task-specific wipes will grow fastest.
• Even in baby-wipes expansion into new task specific products for older children is likely.
• There's a mini baby-boom underway in the USA .
• Water-activated wipes could be set for growth.
• Impregnated wipes will replace every liquid which has to be applied to a surface with a cloth or tissue.
• Ahlstrom Green Bay will have a line dedicated to cotton wipes.

Asked about water activated wipes, Ms Stansbury thought several companies were working on this mainly for skin-care applications. KC had a baby wash cloth and mitt using Coform. Imports from China ? Yes, Chinese-made canister packs of wet-wipes were being sold in the dollar stores for 1 or 2 dollars.

Consumer Wipes Outlook

Ian Butler, INDA's Director of Market Research and Statistics (USA) presented the wipes-related data from their Jan 2006 report on the Nonwovens Outlook to 2010. Between 2000 and 2005 the North American market had grown 75% from $1.6 to $2.8 billion (retail level) and household wipes had overtaken baby wipes, growing from 29% to 45% of sales. However in terms of nonwovens tonnage, the baby sector still accounted for 63% of the 120,000 tonnes used, household being 23% and personal care, 14%.

Of the Baby Wipe Market :
• KC had the largest share with 35% by value or 26% by numbers of wipes sold.
• P&G had 27% by value or 22% by number.
• Private label while only 32% by value had 47% of the market by numbers, reflecting their lower price.
• 35 billion baby wipes were sold in the same year as 18 billion diapers. This did not square with estimates of 4-6 wipes needed per diaper change (according to a survey of users) so was the market only half penetrated or were users using fewer wipes than they claimed?
• Baby wipes were expected to grow at 5% per annum through 2010.
• In 2005, 36% of babywipes used spunlace, 33% used air-laid pulp, 29% used Coform or wet-laid.
• Private label will stay with air-laid to maintain their price advantage.
• Costco's 15% cotton wipe is now No. 3 in the market, and could soon be No. 2.

The Personal Care Wipe Market• 33% by value is cosmetic/facial, 30% is adult toilet, 23% is general purpose including bathing, 6% is femcare, and 5% is childrens flushable.
• KC have 75% of the adult toilet sector with Cottonelle, which is now sold in tubs having recovered from the roll-wipe failure.
• Childrens flushable is led by K-C's “Just for Kids” with 36%, followed by P&G's “Kandoo” with 29%, and P&G's “Tidy Tikes” with 11%. Private label has 22%. This is a high growth sector, believed to be above 40% per annum. Expect a range of other wet-wipes for children's use.
• Flushable products are still causing problems in some sewer systems. The INDA/EDANA task force is now due to report guidelines by the end of this year.
• “Truly flushable dispersible and biodegradable wipes with strength will be a winner” and may require a move to air-laid pulp to achieve.

The Household wipes market• Wet floor cleaners lead with 31% share, Disinfectant wipes follow with a 30% share, Electrostatic dusters 18%, Furniture/window 9%, Cleaners 9% and Dry wipes/mops have 3%.
• P&G dominate the wet-floor category with Swiffer® (Wet and Wet-Jet - 70%); Pledge® has 14% and Clorox 6%
• Clorox dominate the Hard Surface category with 61%, Lysol have 23% and Private label, 7%. Overall growth will be 7-8% through 2010, with most growth now in Private Label. The canister packs now dominate – easier to display, store and seal.

Wipes share of the total NA nonwoven market has grown from just under 10% in 1995 to just over 15% in 2005 and is expected to hit 16% by 2010. 45% of all 2005 wipes were spunlaced, 31% airlaid and 17% Coform or wetlaid.

Asked if these production statistics could be rationalised with the retail data, Mr Butler thought they could.

European Wipes Market

Maria Lindahl of Euromonitor International (UK) thought busier lifestyles and more singles households were driving the growth of wipes in Europe . Wipes were providing time-savings, ease of use and convenience, so the sector (Personal plus Homecare) had grown from €0.5bn in 1997 to almost €2.5bn in 2005, the statistics being based on value at retail level, and included starter kits.
• Baby wipes dominated the Personal sector in 2005 with 70%, Cosmetics had 25%, General Purpose 4% and Fem-Hygiene 1%.
• Baby wipes had grown at 10% year on average since 1997, but this was expected to fall to 1.5% average over the next 5 years.
• Cosmetic wipes had grown at 35% CAGR since 97 and would continue at 3.5% until 2010.
• General purpose wipes had hardly grown and would decline in future.
• Feminine hygiene wipes showed the biggest growth from a low base (58% CAGR, 97-05) and would continue at 10% over the next 5 years.

Within Homecare:• Wet Floor wipes, non-existent in 1997 had shown a staggering 110% CAGR to 2005 but would now show a decline of about 3% through 2010. Early growth went to expensive starter kits. Floor wipes-only would grow at about 1% through 2010.
• Electrostatic wipes grew at 10% per year to 2005 but would decline by about 2% per year to 2010.
• General purpose wipes had grown at about 15% per year to 2005 and would continue to grow at about 2% through 2010.

Wipes sales in Europe have been mainly in the big 5 countries (UK, Germany, France, Italy, Spain) but highest growth rates will now occur in the others, Norway and Turkey leading the Personal Care sector and Switzerland and the Netherlands leading the Homecare sector.

Kids personal care – flushable wipes for the 3-7 year olds will show high growth.

Tomorrow's Applications

Henri Laetervo of Suominen Nonwovens Ltd ( Finland ) reviewed current wiping markets and took us through the products he thought would be developing over the next few years:

• Wipes carrying medications. (normally applied to the skin as creams or liquids.)
• Non-aqueous wipes for whole-body cleansing in the absence of bathrooms, or as an alternative to showering.
• Any application currently using a dry-wipe and fluid would be sold as a pre-impregnated wipe.
• Anti-viral wipes.
• Industrial wipes tailored to specific critical cleaning jobs (e.g. printing machine wipes).

Industrial Wipes

Sylvain d'Incau of DuPont (Switzerland) re-presented the data on the EU industrial wipes market from last month's Vienna conference and mentioned their latest developments for clean room, car polishing and static control.

The clean-room market was worth €30-60million and was growing at 8-10% per annum. 70% of the market was now spunlaced pulp/polyester which gave good absorbency as well as low linting. Dupont Sontara “Micropore” was specially manufactured under clean-room conditions.

Their Krytox® car cleaning/polishing cloth could be used for finish polishing on new paint or sealing a newly painted repair. It was also good for polishing chrome or plastic, and could be used instead of the best liquid polishes by professionals or consumers. It was a viscose/polyester spunlace, 30 x 40 cms, and 3 wipes were needed per car. The lotion was mainly water but the polymer ingredients were the key to its performance. Taxi drivers and chauffeurs loved it because it could be used in minutes between jobs to keep the cars looking great.

Their static control wipes have been developed for final wiping prior to painting, because many surfaces electro-attract atmospheric dust immediately after the final wipe.

US Wipes Profitability

Andrew Battista, Consumer Products Director for RISI (USA) summarised the US Wipes and raw materials scene for 2005:

• Wipes demand tonnage grew (after a 2-3 year lull) by 2.3% (7-8% increase in value). By 2008 the US market should consume 475,000 tonnes, worth $1.8bn
• Imports and exports are in balance and there is no real threat of increasing imports. Imports will remain at ~£15million per year.
• Costs will be controlled by reducing weights from about 10.5 to 9.8 gms/wipe. (2004-8)
• Retail value would rise from about 8.8 c/wipe to above 9, the exact prediction being obscured for anti-trust reasons.
• NBSK pulp climbed to $725/tonne by June 2006, when global market pulp production was running at around 95% of capacity.
• Polyester price increased by 20% and polyester/cotton materials reached the highest prices for a decade – 52c/lb.
• US polyester staple demand was about 1.1 million tonnes and rising slowly.
• Chinese polyester production has grown from 12% to 40% of global demand over the last 5 years. (Imports are holding down PES prices despite the increase in oil price.)
• At 72 c/lb, PP price was double that in 2002.
• Pressure on wipes producers margins should wane as and when (and if?) oil prices fall.

Microbiological Quality Management

Wolfgang Siegert of Schülke and Mayr GmbH ( Germany ) pointed out that all wet-wipes needed some preservative to prevent spoiling on storage. (This was a re-presentation of his Barcelona 2004 speech, as is the summary below)

For baby and cosmetic wipes these preservatives would have to comply with the Cosmetic Regulations, and here products from their Euxyl® range can be used. Raw materials should be checked for microbes, and water, the main ingredient was often a problem:

• Water should contain no more than 100 colony forming units/ml.
• Ion exchangers are a source of microbial contamination
• Unpreserved water over 3 hours old must be assumed to be contaminated.

Random checks on nonwovens are essential. Manufacturers QC checks on contamination are rarely valid or good enough by the time the nonwovens are used.

For the lotion, the key questions relate to the stability of the concentrate, and the level of antimicrobial protection remaining when diluted to use-level. Once applied to the nonwoven, is it even? Does it protect the nonwoven adequately? Uniform spray application to the unfolded nonwoven is essential: chromatographic effects can cause separation of ingredients if the nonwoven is allowed to soak up the lotion from a reservoir, and dip application can result in the nonwoven taking up some chemicals more rapidly than others.

Technical wipes come under the Biocidal Products Regulations and here Parmetol(R) A28 has proved the most suitable preservative for most formulations.

Wet toilet tissue has proved to be the most risky for allergic skin reactions. Here an increase in pH caused by nonwovens, especially air-laids can cause problems with the recommended Euxyl® K702 which is based on phenoxyethanol, benzoic acid and dehydroacetic acid. (Only the free acids are preservatives and these are mainly undissociated only when pH is held below 5).

Paint Shop Wipes

Bart van Dongen of PGI Nonwovens (Netherlands) said car producers wanted paintshop wipes with good tensiles, low lint, solvent resistance, zero residues, a total absence of silicones, easy-glide, good dust pick-up and a QC system giving traceability. Silicones were the main cause of craters or fisheyes in the finished paint surface, so employees, both of the car paint-shop and the wipes manufacturing were prohibited from wearing nail-polish, hair-gel, skin creams or clothes washed with fabric softners. Growth was expected in India and China where car production would increase from 6 to 10.5 million cars per year by 2010. However increasing use of robotics would reduce the need for wipes.

3-D Nonwovens for Wipes?

Dr Steve Russell of Leeds University Nonwovens Research Group (UK) updated the work on the hydroentanglement analogue of the Napco “3D needlefelt” technology (See TechTextil Summary – April 2003, and INTC Summary Sept 2003). At Leeds , water jets are used to bond two pre-bonded webs together either side of spacers, which, if tubular, could simultaneously be used to fill the spaces with powders. He thought the powder could be a superabsorbent if it were possible to dry the web in the space between the last HE zone and the end of the spacers.

Since 2003 work had been carried out using millimetre or sub-millimeter wire spacers between the webs to create a corrugated surface after hydroentanglement. The corrugated surface could be made from different fibres to the back and wipes with novel characteristics could result. Maybe these small cavities could be filled with lotions or creams and maybe they could be engineered from different webs to deliver the cream through one face only. Asked if the filled corrugations would survive the pressures in a converting machine, Dr Russell pointed out that fabrics had only been made on a very small scale in the laboratory. The project had applications in wound care, but he thought some of the principles maybe adaptable to the wipes market.

Wipes Packaging Workshop

Andrew Streeter of CPS International (UK) compared global FMCG packaging trends with current wet-wipe packaging and tried to identify how the latter would have to evolve. FMCG packaging is changing from Production-driven to Consumer-driven as the producers discover that higher quality differentiated packaging building on a brand identity with unique colours and shapes can increase sales. Brands need to “shout from the shelves”, and pack shape can play a big part, especially if the shape has real functions that make the product easier to use as well as easier to identify.

Problems arising from the popular wipes flow-packs were listed as follows:

• On supermarket shelves, only graphic design differentiated the packs whereas many other products now used pack shape as part of the brand identity.
• The pack format had changed little over the last 10 years.
• They're hard to open and require dexterity to extract the wipe.
• Often deliver multiple wipes by mistake.
• Any attempt to replace surplus wipes is very unhygienic, but commonly done.
• Wipes can dry out quickly once the pack is opened.
• Reclosure is difficult.

On the plus side, flow-packs were minimalistic and hence better for disposal. They allow great flexibility to the converter by allowing the same machinery to handle different wipe sizes and counts, and they are of course very cheap.

For the future, Mr Streeter felt the wipes industry had to accept that on-pack graphics don't differentiate brands in the longer run. Distinctive colours and shapes were essential. In fact the pack features proven to encourage consumers to pick up a product as they pass down the supermarket aisle were:

• Colour
• Shape
• Typography and branding
• On-pack features
• Value for Money
• “Persona”

Once the product had been bought, the on-pack features became more important to allow the consumer to “engage in use” and become “friends” with the product thereby encouraging repurchase. So, in addition to failing in “shouting from the shelves” wet-wipe flow-packs, failed to deliver a rewarding experience in use.

What could be done? Clearly the more expensive rigid packaging gave more scope than flow-packs for on-shelf differentiation. Maybe if they were made from moulded pulp with a film coat on the inside, some of the environmental concerns would be met. They should certainly become easier to open with one hand, and here the new Freedent chewing-gum dispenser was used to illustrate a possible approach. (A new Huggies® wipe pack used a rotating closure which could indeed be operated with one hand but here the overall presentation was thought to be “boring”!). Ideally any special shaping should have a real function – i.e. the design should be multi-functional.

If rigid packs really were unacceptable, then the newer flexible packs with welded sides now being used for confectionery could be adapted for wipes and allow vertical rather than horizontal display on the shelves.

In conclusion, wipes brands:

• are not exploiting the advantages to be gained from modern packaging.
• are at the cross-roads, needing to change but nervous about spending more for distinctive packs.
• must grow into distinctive families.
• must move to special-shaped, easy-open, one-trip packs which are multifunctional, while meeting any developing environmental concerns.

(This Workshop had 32 attendees)

Calvin Woodings - 11 th July 2006

Link to Photos