Transcript The Detergent Market in North America

The detergent
market in
North America
Internal prep meeting
Teresa Neal
January 26, 2009
2
20/07/2015
NOVOZYMES PRESENTATION
After glancing at the following pictures, what
do you notice?
WalMart
(discount
store)
Target
Lowes
(discount store)
(grocery store)
3
20/07/2015
NOVOZYMES PRESENTATION
This is
what I see
 Shelves appear to be ‘well-stocked’ with
high-tier products.
 Mid-tier products seem to have more empty
shelf space.
 This trend was noticed in three stores,
including WalMart, Target, and local grocery
store.
 A coincidence?
 Or does it signify a shift in consumption?
 Is this a result of consumers being more
price-conscious in a recessionary
environment?
4
20/07/2015
NOVOZYMES PRESENTATION
Pricing
Top tier
Mid tier
$0.31 per load
$0.15 per load
Low tier
$0.07 per load
5
20/07/2015
NOVOZYMES PRESENTATION
Expected changes in consumer behaviour
due to the recession…
Decrease in discretionary income
 Postponing major purchases
 Eating out less often
 Taking shorter, less frequent, less luxorious vacations
 Being more price-sensitive at the grocery store
 Increased business at discounters (WalMart, Target, etc.)
Source: Euromonitor
6
20/07/2015
NOVOZYMES PRESENTATION
Expected changes in consumer behaviour
due to the recession…
Consumers will spend on indulgent, ‘feel-good’ products
 As recompense for giving up larger purchases
 Premium ‘ready meals’
 Flat-screen TVs (stay at home instead of going out)
 Indulgent desserts
Source: Euromonitor
7
20/07/2015
NOVOZYMES PRESENTATION
The US laundry care market
 Grew by meager 1%, reaching US $10B
 Procter & Gamble continued to dominate
 Demand increasing for products that are better for the
environment
 Sales still very small, with quality and price being main
issues
 Discounting is expected to remain strong, with unit prices
declining for many laundry care products
 Due to consumer migration to value-priced retail outlets,
such as Wal-Mart and dollar stores
Source: Euromonitor
8
20/07/2015
NOVOZYMES PRESENTATION
Going green
 75% of US consumers put the
economy ahead of the environment.*
 Consumers are ‘tightening their belts’.
What will this mean for the Green
Movement?
 Still a lot of activity in the green
sector:
 Clorox launched ‘Green Works’ product
line
 Huish launched Wintree HDL (now
contains enzymes)
 Seventh Generation: sales still strong
 Expectation: Major companies will take
the plunge and either buy up already
established niche green brands or
launch an environmentally-friendly
range of their own
* The Caldrea Company
9
20/07/2015
NOVOZYMES PRESENTATION
Keep your eyes on SC Johnson
 SC Johnson scooped up Caldrea
(Mrs. Meyers Clean Day brand)
 Leading line of aromatherapeutic
household cleaners, is a well-known
eco brand in the US market
 Does this signal an entrance into the
laundry detergent market for SC
Johnson?
10
20/07/2015
NOVOZYMES PRESENTATION
Compaction
 Every major brand now has 2X liquid detergent.
 Year 2002: 64% concentrated liquids
 Year 2008: 85% concentrated liquids (estimate)
 Entire liquid detergent line converted to ‘compacted’
products in April 2008.
 WalMart reached goal of selling only concentrated
detergents by May 2008.
11
20/07/2015
NOVOZYMES PRESENTATION
Emergence of ‘Oxi’ products…
Especially in stain
removers/boosters
12
20/07/2015
NOVOZYMES PRESENTATION
Brand market share changes
60
40
20
-60
-80
% Change in market share
Fa
b
Er
a
isk
W
ra
Xt
ax
Aj
Dr
ef
t
Pu
re
x
Ch
ee
r
Al
l
o
Dy
na
m
Ti
de
&
-40
Ar
m
-20
Su
n
Ha
m
m
er
0
Ga
Pr
in
iva
te
la
be
l
CHANGE IN
MARKET
SHARE
(2003-2007)
13
20/07/2015
NOVOZYMES PRESENTATION
Private Label laundry detergents
 Held 4% value share
in year 2007.
 New product launches
of private label
detergents spiked in
4Q, 2008.
14
20/07/2015
NOVOZYMES PRESENTATION
Dishwash update
 Sales of dishwashing products increase
by 1% in 2007 in current value terms.
 Dishwashing additives grow by 10% in current value
terms in 2007.
 Cascade Plastic Booster, a product which claims to
remove red stains and odor from plastic dishes.
 Volume sales lag behind value sales, indicating
higher pricing.
 Procter & Gamble Co continues to dominate with its
powerhouse Cascade and Dawn brands.
 Dishwashing products are forecast to decline by
almost 2% in constant value terms between 2007
and 2012.
15
20/07/2015
NOVOZYMES PRESENTATION
Auto dish tablet popular
 Automatic dishwashing
tablets showed the highest
growth in automatic
dishwashing products.
 Tablets grew by almost 9%,
while liquids grew by 4% and
powders declined by 8%
 Americans like tablets, which
offer pre-measured convenience
and no mess
16
20/07/2015
NOVOZYMES PRESENTATION
Green dish detergents
 Manufacturers of automatic dishwashing products will
begin to reformulate their products to reduce the
phosphorus content.
 A number of states have passed laws to reduce the
phosphorus content in automatic dishwasher detergents
to a limit of 0.5% by weight, effective July 2010.
 The current phosphorus content in automatic dishwashing
products sold in the US is between 4.0% and 8.7%.