Saturday 5 January 2013

Global Hygiene Markets. What now? Where now? Where next?

Alice Diepenbrock, Head of Country Research, Euromonitor International (United Kingdom) pointed out that Tissue and Hygiene, the sector including  most absorbent hygiene products, amounted to only 3.2% of the average EU non-freshfood spend.  Globally this sector is relatively recession proof, but not in the developed markets where year-on-year growth has been below 2% since 2008, but is now recovering.  

By contrast, the developing markets have been growing at >10% consistently since 1998.  For diapers and femcare, 90% of the growth since 2002 has come from the developing regions, and it is only adult incontinence which is doing better in the developed regions.

Inputs to AHP  manufacturing all rose substantially in 2011, but retail prices have been stable since 2006, and innovations by the brands such as “glow in the dark”, national flags and football themed diapers have been popular this year.  KC’s Depend for Men inco-pants have been launched and price-led innovations such as Giga packs of diapers and wipes are doing well. Maybe surprisingly, private label products have lost share. 

GDP/Capita is increasing rapidly in the developing regions. By 2020 the Middle East and Africa will be at the level ($3500) where diaper sales take off and Eastern Europe and Latin America should see rapid growth in wetwipes ($8000) and incontinence products ($10000).  Asia Pacific passed the diaper take-off threshold in 2010. 

So, half the diaper market growth through 2016 will come from China, while in the west, the per capita spend on diapers will be at best static and may even decline slightly.  Two thirds of the femcare market growth will come from Asia Pacific while declines in the per capita spend will occur in Australasia, North America and Western Europe.  The incontinence market will grow strongly in Latin America, North America and Western Europe this being GDP driven rather than demographics-driven, with the exception of Japan.

Supermarkets are gaining share over the traditional outlets in developing regions and this allows the Private Label sector to develop.  PL is targeting 40% of the Aditya Birla business in India and a similar proportion in Russian supermarkets.  Internet sales are growing rapidly in developed regions with incontinence products doing best.  $200m worth of diapers are now sold on line annually in the USA and has acquired for $580m.
Japan spends $600 per year on diapers compared with the USA’s $331.  This appears to be because in Japan the more expensive pants (formerly known as training pants) are used from the age of 6 months.

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