Despite atrocious travelling conditions in many parts of the US about 190 of the 220 delegates pre-registered for this meeting and all but one of the speakers made it to Carlsbad for this annual INDA event, normally held in New Orleans. Carlsbad, being in one of the very few states unaffected by snow, proved to be an inspired choice of venue.
In the interests of maximising networking opportunities, moderators minimised after-speech questioning. The Visionary Award presentations continue to be the unscripted highlight of the conference.
Global Trends
Paul Leinberger of the Futures Company has identified that consumers are learning to live with increased economic uncertainty and are becoming less frivolous with money. They are now thinking twice about increasing consumption and prefer to “protect the world”, strengthen relationships, and share responsibility for the consequences of past overconsumption. In 2010, FC’s global Monitor survey covered 27,000 consumers in 27 countries:
· 54% of those questioned felt less secure about the financial future than they did a few years ago, and only 26% feel they have enough savings to rely on.
· 69% are now more thoughtful about purchases and 60% do more research before choosing a product.
· There is a renewed sense of trust in quality brands and less inclination to go for the cheapest products (c.f. 2009 survey)
·
Consumers in Spain, Ireland, France, Italy and
Japan are stressed and struggling to cope.
·
Those in the UK, USA, Germany, Russia,
Argentina, Mexico and Columbia feel the worst is over but remain cautious,
trying to live within their means.
·
Those in India, China, Brazil and Saudi Arabia
are now hopeful and optimistic and feeling increasingly well off. They are least likely to think twice or buy
less.
There are three global trends to watch closely:
·
The desire to make a difference in a world where
social and environmental issues are causing concern. However consumers no longer believe corporate
environmental puff, and will boycott
businesses seen to be irresponsible.
·
The desire to maintain and improve health. Consumers feel more positive about their
emotional and physical well being and are treating this as a key priority.
·
The desire better to manage the pace, complexity
and fluidity of modern life. Consumers
will expect everything to be as convenient and simple as possible. Minimising mental and physical energy
expenditure is becoming more important than saving time.
Global Hygiene TrendsPricie Hanna of John Starr Inc observed that the emerging nonwoven markets, driven by government stimulus programs and hygiene market growth opportunities – especially in diapers - were recovering from the recession faster than the mature markets. Her predominantly demographic data included the following statistics:
·
China had 395 million women between the ages of
14 and 49 in 2010 giving a potential feminine hygiene market of 118.4 billion
units.
·
China had 16.19 million births in 2010 (12.2% of
global), an infant population of 39 million under 30 months and hence a
potential diaper market of 71 billion units.
·
India had 335.5 million women between the ages
of 14 and 49 in 2010 giving a potential feminine hygiene market of 100.6
billion units.
·
India had 25 million births in 2010 (18.9% of
global), an infant population of 59.6 million under 30 months and hence a potential
diaper market of 108.5 billion units.
·
In China, diaper use was growing at 21% (CAGR),
had reached a penetration of 20% overall and 40-45% in towns and cities, while
disposable feminine hygiene products (9% CAGR) had 73% of the theoretical
market.
·
In India, diaper use was growing at 6%, had
reached a penetration of 6% overall and 21% in towns and cities, while
disposable feminine hygiene products (9.5% CAGR) had 70% of the theoretical
urban market.
·
Mexico: 10.3 billion unit femcare potential, 71%
penetrated; 9.8 billion units diaper potential, 85% penetrated.
·
Brazil: 17.9 billion unit femcare potential, 70%
penetrated; 16.3 billion units diaper potential, 61% penetrated.
·
Russia: 11.6 billion unit femcare potential, 61%
penetrated; 6.98 billion units diaper potential, 26% penetrated.
·
Turkey: 6.7 billion unit femcare potential, 57%
penetrated; 6.35 billion units diaper potential, 25% penetrated.
Expansions of hygiene
production in included:
·
Unicharm’s planned diaper start up in India and
its 3rd diaper plant in China.
·
P&G value diaper production in India,
expansion of its Xiqing plant in Tianjin, a new diaper plant in Vietnam and
further expansion in the Phillipines.
·
Daio building a new diaper plant in Thailand.
·
New spummelt lines in China from Avgol, Toray Polytech,
First Quality and Fiberweb/Chisso (each with 15-20,000 tonne lines?)
·
New card/through-air bond line in China from
Chisso, with 4 more planned. (ADL production)
·
Mitsui adding a 6th spunmelt line in
Japan.
·
Fibertex building a 24,000tonne/year spunmelt
line in Malaysia.
·
New spunmelt lines in Brazil (Providencia –
20,000 t/y); Peru (Fitesa/Fiberweb); USA (Avgol, Fitesa/Fiberweb and
Providencia)
·
New diaper lines in Russia (2 at K-C Stupino in
June 2010; new SCA plant for diapers and incontinence products in Sept 2010;
P&G Pampers expansion in Novomoskovsk)
·
New spunmelt lines Russia (PEREHT Regent’s 2nd
line), in Turkey (Gulsan’s 3rd and 4th lines both
bico-capable), in Czech Rep. (Pegas 9th line – bico capable)
·
New diaper and femcare lines in Egypt: P&G’s second plant (by 2020) and a new
Unicharm plant for diapers and femcare by 2012.
·
P&G adding a second diaper line in South
Africa.
Ms Hanna concluded that strong growth prospects exist and
will continue to be driven by penetration of emerging markets (diapers and
femcare), ageing of mature market populations (incontinence), and the
replacement of older nonwoven production equipment in all regions.
Emerging MarketsAnthony Pannozzo of Continuum claimed to have helped P&G develop Swiffer and Pampers. He observed that emerging markets were driven by an emerging middle-class, and these new consumers would provide the main growth opportunity for the next 20 years. Forget the “base of the pyramid”:
·
Since the war most of the growth in the
developed economies is due the middle-classes.
·
Middle-classes have driven innovation.
·
Now the global middle-class is growing by 65
million annually.
·
The World
Bank estimates 93% of the world's middle-class live in emerging markets.
It was necessary to rethink conventions to deal in emerging
markets. A series of disconnected
examples from Continuum projects were provided:
·
Only 19% of Kenyans have bank accounts but 38%
of the population have access to mobile phones.
So, people are buying and selling “minutes” as a way of transferring
money, and the phones are providing a form of banking using minutes as
currency. (Nokia has observed this
phenomenum and having missed out on smartphones may evolve into a bank.)
·
Even the hard-up will trade-up. Most people will choose to act wealthy for
their chosen hobby.
·
Selling Milk in India: Western marketing doesn't work. It had been necessary to live and eat with
Indian families to understand how milk is used before effective marketing could
be developed.
·
Coke bottle recycling in Brazil involves
re-using the bottles for cleaners and detergents.
·
There's no room in Chinese houses to store big
packs of diapers. Also, thick diapers
are perceived as insufficiently breathable by mothers used to keeping toddlers
in split pants. Unlike the west, Chinese
families have on average 6 people who can act as child carers. So, cheap US style Pampers did not
succeed. The new Chinese Pampers have an
ultra-thin core and sell at 10c each.
·
In India, the Tata Nano car has been launched at
a $2000 price point with a 50 hp engine, no electric windows, and one
windscreen wiper. While this would not
work in the west, in India the Nano is pitched at motor-cyclists who aspire to
a safer and drier form of transport.
·
The Nano can be assembled using adhesives by back-street
mechanics. This will grow a whole new “vehicle
assembly” cottage industry.
·
Detergent marketing: whiteness and stain removal
are less important than minimising water use.
Asked about environmentalism in emerging markets Mr Pannozzo
said it tended to be less important than product safety at present, but the
next generation is very aware of the damage being done to the environment by
this generation and will demand change.
INDA ReportRory Holmes of INDA said the global nonwoven market would continue to grow at about 7.8% CAGR to reach 10.3 million tonnes by 2015 ($35 billion). On an area basis, due to the continuing trend to lighter weights, the growth rate would be 9% reaching 280 billion m2 by 2015.
·
North
America used 1.56 million tonnes (35 billion m2 worth $6.2
billion) in 2010, 68% of this tonnage being disposables, and 70% of this being
hygiene, wipes and medical.
·
Compared with 2000-05, 2005-10 NA growth rates
declined dramatically in wipes (23% to 5.5%), and in hygiene (8% to 2%) but wipes share (up from
19% to 25%) continues to gain over hygiene (down from 37% to 30%)
·
Spunmelt accounted for 49% of the total NA
tonnage, PET Staple 17%, PP staple 13%, other synthetics including bico 8%,
woodpulp 9% and rayon 4%.
·
Europe
used 1.6 million tonnes (50.7 billion m2) in 2009, 53% of the
tonnage being disposables, and 89% of this being in hygiene, wipes and medical.
·
Asia used
2.6 million tonnes (35 billion m2; $6.2 billion) in 2009, 64% of the
tonnage being in disposables. 65% of the
production was in China, with Japan 2nd at 11%, Korea 8% and India
6%.
VA Finalist: Huggies Jeans
Julianne Gonzalez of Kimberly Clark listed the commercial, technical and process innovations which led to the successful launch of the Little Mover Jeans-style diaper last summer.
·
Pre-seeding the market by sampling bloggers and
celebrities who wrote enthusiastically about the new design.
·
A fashion show in New York hosted by Rececca
Romijn, where kids could parade on a catwalk, play in a gym and pose in front
of a green screen to allow parents to take photos.
·
The product was featured on the Ellen Show, the
Today Show, on Good Morning America and on Mall media in over 150 malls in the
USA and Canada.
·
Jeans diapers were promoted at all the leading
retailers in June and July just as consumer attention was grabbed by the
marketing activities.
·
The launch made the “Forbes Top 10 product
launches for 2010”.
·
Registration of the pigment-print denim pattern
with waistband, fasteners and landing zone while obtaining consistent colours, all
blue outside and all white inside.
·
Flexographic printing of the stitching and
label.
·
The vision control system had to be improved
with “masked OB and UV registration marks”.
·
The improved vision system is now used on
standard diapers.
·
Overall, the colours in the laminated backsheet
work together with the surface printed detailing to create a realistic 3D denim
look.
In the first 6 weeks the Jeans-style diaper achieved a 2.5%
($) share and the program improved the Huggies brand share by 2.7 points mainly
by attracting customers from lower-priced competition.
VA Finalist:
Readi MaskKaren Conte and John Schwind of Global Safety First demonstrated and described their particle mask with integrated eye-protection which uses adhesive around the edge to seal the product across the forehead, down the sides of the face and under the chin. The upper anti-fog eye-shield is welded to the lower electretted meltblown filter sheet sandwiched between two layers of Del-Net. Claims include:
·
Removes 99.9% of dust, bacteria, viruses,
allergens and dry spores over 3 hours of usage. (Testing carried out by CDC,
Nelson Labs and the Australian government.)
·
Fits all face sizes and shapes (but comes in 2
sizes, child and adult)
·
Excellent breathability (proved by John Schwind
who wore one throughout his talk.)
·
Protects wearer from external contamination and
prevents wearer spreading any airborne infections.
·
Now used in Morgan Stanley, T-Mobile and
Deutsche Bank offices where Readi-Kits for all staff are mounted in special
cabinets near stairwells.
·
Being stockpiled by authorities for use in
pandemics and other emergencies.
The police demanded a demonstration of its ability to resist
a direct hit from pepper spray applied at close range. John Schwind was the guinea-pig and the video
of the event was convincing. Usage by
first responders in emergencies is anticipated.
The Red Cross are interested.
VA Finalist:
Simply Soy®Cathy Horton of Nutek Green Chemistry said she founded the company in 2007 and patented the idea of a biodegradable lubricating wipe powerful enough to clean rust from old tools and yet safe enough to use in food preparation, schools and hospitals. The 12” square Simply Soy wipes are made from heavyweight hydroentangled cotton and are recommended for rust removal, cleaning grills and lubricating chains, cables, sliding doors and windows. They come in individual pouches or canisters of 24. The lubricant is food-grade soy oil.
Cathy sees the main market as replacing the blue shop towels
and oily rags in mechanic bays and garages across the USA. Her product is made in Ohio and all the
materials used are sourced in Ohio. The
main customer appeared to be Home Depot.
Nutek was bought by Hoover in 2010.
VA Finalist:
Pampers with Dry Max™Lisa Sanchez of Procter and Gamble hailed the Dry Max core as the biggest innovation in diapers of the last 25 years. It had taken 10 years to develop and now allowed diapers to be ultra-thin and ultra-dry. The resulting Swaddlers and Cruisers with Dry Max were “twice as dry and 20% thinner”, and the most tested diapers ever, the core being evaluated in 300,000 diaper changes before launch. The Dry Max core had a top layer designed to acquire and absorb urine rapidly before the pulp-free superabsorbent bonded-powder core locked the fluid away. Consumer appeal had been demonstrated by a 92% response to a 10,000 user survey where the Cruisers with Dry Max were preferred to current Cruisers. The new diapers also addressed sustainability issues by using 12% less raw material, 27% less packaging and 23% fewer trucks for transportation.
VA Finalist: Equate Flushable Wipes
Cathie Petak of Rockline Industries described the challenge set by WalMart to develop a wipe to match K-C's “Cottonelle” flushable moist wipes. She introduced the result, the Equate wipe based on Ahlstrom's “Hydraspun” dispersible nonwoven. Technically the key issue had been to develop an attractive embossing pattern without affecting performance compared with the flat version. However embossing weakened the Hydraspun and the only practical solution was to increase the basis weight so that the strength after embossing was satisfactory. The extra weight and thickness gave a more substantial hand which proved attractive to users while doing nothing to spoil the main claims of water dispersibility and 95%+ biodegradability.
Flushability Update
David Powling of
Kimberly-Clark provided an update from the INDA and EDANA flushability
groups:
·
INDA opposed the Feb 2010 California AB2256
legislation to regulate on-pack flushable claims because of a lack of evidence
that the sewage pump blockage problem in the Bay area was caused by flushable
wipes.
·
The Bill passed through Assembly but not the
Senate.
·
INDA convened a meeting with the Central Contra
Costa Sewage Department and UC Berkeley to review pump blockage history at the
Moraga pumping station and as a result initiated a 1 month study of the
materials causing blockages (June 2010)
·
Debris from screens and pump blockages was
segregated into product categories by UCB after INDA training on
identification.
·
Materials removed by the screens comprised paper
hand towels (54%) personal hygiene wipes (17%) household cleaning wipes (13%),
feminine hygiene wipes (8%) flushable wipes (4%) and “others” (4%).
·
The one pump blockage analysed was a “rope” of
debris, hard to segregate but mostly made up of long fibre materials typically
found in household and personal care wipes (70%), feminine hygiene wipes (19%) and others (10%)
including 1 paper towel. No flushable
wipes were found.
Interim conclusion: Non-flushables are causing the problem, not
flushables.
Holland reported a
€55m pump-block problem in 2007 and so EDANA, who published their Flushability
Guidelines in 2008, has now added a sewer pump test which has demonstrated that
flushable products will not block pumps.
The test, developed in collaboration with RIONED (Netherlands Centre of
Excellence for Sewage and Drainage) and Flygt Pumps measures the increase in power
consumption during pumping water to which a wipe is added every 10 seconds.
(Total 300 wipes in 5 runs).
In the UK,
snagging leading to clogging of sewers is the main concern and the Water
Research Centre’s CP311 protocol for assessing the flushability of disposables
(2008) has been endorsed by Water UK.
Water UK has also conducted a consumer study of flushables and embarked
on a “What not to Flush” campaign in collaboration with the EDANA flushability
group. An EDANA/UK Water Industry
Research Project will analyse sewage farm screenings and blockages along the
lines of the INDA/Moraga study and will work on combining the INDA/EDANA
guidelines with the Water Research Centre protocol.
The 3rd edition of the INDA/EDANA guidelines
should incorporate the conclusions of all the above. The “tiered” testing approach of the 2nd
edition is likely to be replaced by a “straight-line” series of tests including
a municipal pump-clog test, all of which a product has to pass to be labelled
flushable. Non-dispersible products are
unlikely to pass.
Asked if paper hand towels will have to labelled as
“non-flushable” in future, Mr Powling said this remained to be decided.
Adult Absorbents
Nancy Muller of the
National Association for Continence reviewed the demographic trends
impacting the demand for adult incontinence products:
·
Boomers are now turning 65 and becoming Medicare
recipients.
·
By 2030, 57.8 million Americans will be between
the ages of 66 and 84.
·
Chronic disease has replaced infectious disease
and accidents as the main cause of death.
·
Chronic diseases increase the prevalence of
incontinence.
·
Obesity contributes to stress incontinence.
·
Medical technology is failing to keep up with
increased prevalence of incontinence: medication fails for one third of
sufferers of over-active bladder, and surgery fails for one third of stress
incontinence sufferers.
Ms Muller had a list of improvements which producers could
make to their pads:
·
P&G’s Dry Max™ would be great as an adult
inco core.
·
Apertured film topsheets for improved uptake.
·
Side-opening and refastening anywhere on the
product to reduce wastage due to misapplication and to allow adjustments for
comfort.
·
Tailoring acquisition rate to the type and
severity of incontinence.
·
Breathability is essential for healthy skin:
quietness, comfort, odor control and fit are all important.
·
Packaging which is easy to carry and open, with
clear instructions and a 1-800 number for help.
·
System cost, calculated to include the economics
of skin breakdown, waste and the effects of impaired sleep should guide design
rather than simply achieving the lowest price.
Washington Update
Jessica Franken of
INDA predicted Washington would become more receptive to industry
needs and the development of a more
aggressive free trade policy would open up new opportunities. Policies which have hindered economic growth
will be avoided:
·
The climate-change bill is dead for the 112th
Congress
·
The EPA will suffer more oversight and there
will be attempts to derail its unilateral efforts to address GHG’s.
·
TSCA reform is now unlikely.
·
Consumer product safety issues: visit saferproduct.gov (after March 2011) to
be notified of complaints about your products.
Networking StrategiesJoan Izzo of Joan Izzo Communications LLC provided a collection of strategies to enable individuals to get the most out of networking opportunities e.g. at conferences. She also ran a session of Speed Networking during the lunch break where 50 pre-registered participants spent 3 minutes introducing themselves before moving on to the next contact. Among the strategies for effective networking were:
·
Use no more than 15 words to describe yourself.
·
A short personal story makes you memorable.
·
Highlight one key personal achievement.
·
Offer help, take notes and follow up within 24
hours.
·
Never sit with anyone you know.
·
Be the last person to fill a table.
·
Never eat alone.
·
Stay current: keep posting updates on social
sites (Facebook, Twitter, Linkedin).
Sampling Bloggers
Kevin Burke of Lucid
Marketing observed that traditional marketing methods such as TV, Newspaper
and Magazine advertising were in decline, but social media and bloggers in
particular were proving to be trendsetters with a powerful influence on their
readers. Advertisements had much less
impact than being given a sample of a product to try. Handing out samples in a store or shopping
mall had the following results:
·
2 out of 3 consumers will try a sample
·
1 out of 4 who try an unfamiliar product buy it
later.
·
1 out of 5 who try a product they’ve heard of
but not bought before will buy it later.
·
1 out of 3 who have bought it will buy it again.
·
1 out of 4 sampled buy the sampled product
rather than the competitive product they came in for.
When sampling is combined with social media spectacular
results can be achieved. Moms drive 73%
of the consumer spend in the USA and they are keen to chatter about their views
on purchases. Blogging gives them a
great opportunity to do this and there are now numerous mum-bloggers who have
loyal readerships of ~ 100,000/month.
These bloggers can be given samples and while the risk of negative
reports cannot be avoided, positive reports rapidly reach a wide audience via
follow-on blogs and posts on Facebook, Twitter etc. Tupperware used the technique to their
advantage via parties and Lucid had given samples of Boiron homeopathic
remedies to mothers who blog and reached 1.9 million on-line with much
additional off-line chatter. Unlike
traditional advertising, social media chatter is regarded as trustworthy, much
like a personal recommendation.
Bloggers who receive compensation for reviewing a product
must declare this on the blog. Failure
to do so results in the FTC prosecuting the sampler, not the blogger!
Innovation Metrics
Chris Andrews of Forrester Research observed that the
last decade has seen the emergence of several new large companies with
innovation at the front of their strategic thinking. Best known are Apple, Google, Facebook,
Amazon, Target, Whole Foods, SW Airlines and Cognizant. However while 80% of executives say
innovation is a priority in their company, 50% are dissatisfied with the return
and 68% are unsure of how to measure innovation. Forrester finds the definition “Innovation =
Invention + Commercialisation” works, and sees successful innovation arising
from teams staffed with senior and junior risk-taking rule-breakers who are
passionate about work, creative and have the necessary skills for the
project. These teams have rotating
leadership, are tightly linked into corporate strategy and report direct to a CEO who celebrates and
honors innovation.
Successful companies
have found that it is necessary to give up some control to liberate the
creativity of employees. Google is
lauded for giving employees 20% free time to work on anything that appeals to
them, and P&G were praised for their Connect and Develop program. More companies were throwing their
development challenges to a global audience for anyone to solve (for a pre-determined
fee paid on success) through websites such as Innocentive.
“Stage-gate” management and control of innovation is now
regarded as too bureaucratic and too slow.
Mr Andrews recommended the exploitation of social media such as Facebook
to allow continuous cross-functional conversations to occur outside management
control and suggested that these technologies would transform all businesses in
the next 5 to 10 years.
Boomer DemographicsLori Ross of Boomer Magazine defined the 78 million Boomers who now possess 70% of the nation’s wealth as the generation born between the end of World War 2 and the availability of the contraceptive pill (1964). Their parents had led “linear” predictable lives similar in structure to their grandparents, but Boomers led cyclical lives (school, college, marriage, divorce, back to college, remarry etc). They are the most educated group in history; racially, culturally and sexually diverse and are more familiar with change than any previous generation. However, they do seem to focus on nostalgia and tradition and appear too long for what they found safe and comforting in their childhood and which no longer exists.
Marketing to Boomers requires sensitivity:
·
They are sophisticated consumers who expect more
from old-age than past generations.
·
They don’t like to be called seniors or be
reminded about senior moments!
·
They feel at least 10 years younger and respond
to ads illustrating 40-50 year olds.
·
They also respond to “Boomer friendly” products
and services (e.g. easy to read, easy to open packaging)
·
They value relationships, experiences and the
need to “give something back” .
·
They are huge participants in social networking
and spend the most on technology products.
(An Accenture study shows Boomers embracing technology nearly 20 times
faster than the younger generation.)
·
So, Facebook and Twitter etc are, perhaps
surprisingly, great ways to market products to
Boomers.
Social MediaSally Witzky of the Traction Group gave us a double dose of social media, filling in for Keith Crisco who failed to escape the snows of North Carolina. She covered Facebook, Twitter, Linkedin and others as ways of developing personal brands, and ways of creating a buzz for new consumer products, with and without paid-for advertising. Traditional media consumption between 2005 and 2010 had been static (TV) or declining sharply (radio, papers, magazines) while internet use had grown 121% so that Americans were now spending as much time on the web as they do watching TV. Social networking users exceeded email users in June 09, and the time spent on social media exceeded time spent with emails in 11/07.
For the future, smart phones will encourage growth in mobile
shopping assisted by geo-location to allow ads targeted to specific areas of a
shopping mall to be received. Mobile
social networking (e.g Foursquare, a cross between social networking, city
guide, friend finder and game with rewards for doing interesting things) is
growing very quickly now - US mobiles are creating 600 billion geo-tagged calls
and messages a day.
Asked about value of social media in the sort of business to
business marketing most INDA members were involved in, Ms Witzky thought it
could be useful in creating closer contacts between companies as well as
individuals. See
Twitter.com/tractiongroup or Facebook.com/tractiongroup for more details.
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