The European Tissue Paper Industry Association
Administrative office:
Kunstlaan 44 Avenue des Arts, B-1040 Brussels
T : +32.2.549 5230 – F : +32.2.5021598 – E : info@europeantissue.com.
Press Information
March 2007
Paper Towels and Napkins:
fastest growing tissue category in Europe
There has been strong growth in the consumer sector of the European
market for paper towels and napkins, with the potential1 for a further
market growth of 270% for towels and 350% for napkins compared with
the current US market.
Household towels: new usages steer market performance
Superior product technology, improved quality and higher absorbance capacities
provide a versatility that has so far been unprecedented in West-European markets.
When comparing US towel consumption with Europe, dramatic growth areas are
revealed. Not only are they used in the kitchen but also in the broader household
environment. In the United States, in addition to kitchen use, paper towels are used
for a wide variety of household tasks, resulting in wider use for crafts, hobbies,
painting or drying working surfaces than in Europe. Household usages are the main
purchasing reason of this product in the US, unlike in Europe, to the extent that the
category previously known as “kitchen towels” could be re-named “household
towels”.
In Eastern Europe, where penetration levels are still low, paper towels are the
fastest growing category, with enormous potential for further growth. Here, the
growth opportunity resides in increasing product penetration into more households.
Largest increase in market volume in the last decade
In Europe, consumer kitchen towels accounted for the largest increases in market
volume between 1996 - 2004. Increasing use of premium quality products and
multi-ply product structures supported this growth. The introduction of new brands
based on TAD1 technology, bringing softer more absorbent products, supported by
extensive marketing campaigns, made a significant contribution to the buying trends
in this end user segment. The evolution of markets such as the UK, Germany and
Italy proves the superior quality and performance of TAD (Through Air Dry) towels.
The versatility of TAD towels for a multitude of uses appeals to the consumer and
encourages brand loyalty. Consumers are also willing to pay more for a high
1
ETS, European Tissue Symposium – market 2005 (see forecast of potential consumption of the
market per capita for Napkins & Towels as attached)
Wave 3 T&N - EN - 28022007- 1
performing product. For example, products such as Lotus Maestro (Georgia Pacific)
extend use and re-utilisation possibilities beyond those of any other paper towel.
There is a huge market potential for kitchen rolls. Two crucial factors foster value
growth for towels: some countries still have ample room for further penetration, and
new at-home uses will continue to grow in line with improved technology. These
aspects combined cause the value per towel-sheet to increase and will continue to do
so in the coming years.
Something similar, if slightly less pronounced, is happening with napkins:
consumption of napkins also continues to develop, reaching surprisingly high growth
rates in several countries, including those with traditionally weak napkin penetration
levels, such as Germany and the UK.
Northern/Central Europe and Southern Europe have traditionally been quite different
markets for napkins: white one ply napkins dominate the South while in the North
coloured and printed ones are the preferred option. Overall, recent trends show a
preference for attractive printed design napkins. However, it is predicted that white
napkins will gradually see more colour and printing, including in the Southern
European market. With a lot of development potential left, even in countries with
the highest per capita consumption of tissue - such as the Nordic countries and the
UK - and the increasing popularity of attractively designed products, a rapid
expansion of the napkins business can be Europe-wide.
The impact of new technologies
TAD towels (kitchen rolls) have been on the market since the late 1990s. A series
of initiatives such as Scottex Casa Ultra (Kimberly-Clark) in Italy 1992, followed by
the launch of Bounty towel (1997 – Procter & Gamble) - supported huge marketing
campaigns in the UK and Switzerland - followed by the German launch of Zewa
(SCA) in 1999, created a new high growth premium segment. More recently, in
France and Belgium, Lotus-Okay (Georgia Pacific) has been re-launched as a TAD
product.
As a consequence, the average quality requirements for ‘kitchen’ towels has risen,
evolving into a new segment of ‘household’ towels, suitable for new, heavy duty
usages outside the kitchen area. This is why in some markets - such as Germany
and to a lower extent Italy - producers have developed part of their traditional 2 ply
Wave 3 T&N - EN - 28022007- 2
product to 3 ply towels, steering this new, higher quality category to more profitable
levels in Western Europe.
Consumption per Capita Europe & USA
NAPKINS
UK
1,2
Finland
0,3
4,5
USA
Netherlands
0,5
Ireland
0,6
Austria
0,8
Norway & Iceland
1,1
West Europe
1,5
Germany
0,6
Sweden
1,3
France
0,6
Greece
3,9
Denmark
1,9
Spain
3,0
Italy
2,6
Switzerland
Current Market
Increase +350%
Potential Market
5,7
Belgium
1,7
Czech Rep.
0,3
Hungary
0,9
Portugal
0,5 b€
1,6 b€
2,1 b€
2,4
Croatia / Slovenia
1,1
Slovakia
1,2
Europe
1,0
Units: € per head, RSV billion €
Bulgaria
1,7
0,2
Poland
Romania/Moldavia
0,6
Baltic States
source: ETS estimates of
consumption per capita in
Europe and USA
0,9
East Europe
0,5
Russia
0,3
Ukraine / Beelarus
0,2
0
1
2
3
4
5
TOWELS
UK
4,9
Finland
6,5
9,3
USA
Netherlands
3,2
Ireland
4,3
Austria
4,2
Norway & Iceland
6
West Europe
4,6
Germany
5,2
Sweden
6,6
France
5
Greece
4,6
Denmark
7,9
Spain
5,7
Italy
4,6
Switzerland
3,8
Belgium
Current Market
Increase +270%
Potential Market
4,3
Czech Rep.
0,6
Hungary
2,2
Portugal
2,6
Croatia / Slovenia
2,9 b€
5,4 b€
7,4 b€
2,7
Slovakia
0,5
Units: € per head, RSV billion €
2,5
Europe
0,3
Bulgaria
0,7
Poland
Romania/Moldavia
source: ETS estimates of
consumption per capita in
Europe and USA
0,5
Baltic States
1,1
East Europe
0,4
0
2
4
6
8
10
ETS estimates of the consumption per capita in Europe and US, 2005.
In no other tissue segment is there a higher rate of growth in Europe
than for Towels and Napkins. Source: ETS.
Wave 3 T&N - EN - 28022007- 3
About ETS
The European Tissue Symposium (ETS) is a trade organisation. Its members represent the
majority of tissue paper producers throughout Europe and about 90% of the total European
tissue production.
Information provided by the ETS / European Tissue Symposium
Roberto Berardi - tel. + 39 011 8128810 - roberto.berardi@europeantissue.com
Wave 3 T&N - EN - 28022007- 4
Attachment: Market information on Towels & Napkins
In no other tissue segment is there a higher rate of growth in Europe than
for Towels and Napkins.
The industry2 predicts a continued potential market growth of respectively 270% for
Towels and 350% for Napkins for Europe compared with the current US market
situation.
The introduction of innovative high performance and differentiated
products, leading to a broader variety of usage in the household area, will increase
the overall value of the market.
The heavy duty effect in the UK: Bounty and Lotus kick the market value
upwards
Without doubt, Bounty (Procter & Gamble) simply and
drastically changed the paper towel category in the UK. Since
Bounty’s introduction seven years ago, the market has grown
by +55%: category value jumped from £191 to £297 million
by 2006. Bounty’s own value in this period went from zero to
£58 million, making it the UK’s top product in this category.
How did this happen?
Two key areas of success were identified: the introduction of a
superior product technology (TAD), and a creative high impact
TV campaign, fully supported in the distribution channels.
Simultaneously, Georgia Pacific continued to support its Lotus
Thirst Pockets Towels, with significant marketing efforts
contributing to important growth.
Driven by both brands and their marketing efforts, the trade registered an additional
turnover of £106 million. Market research confirms that the use of paper towels for
specific tasks increased between 60% and 900% from launch till today.
2
ETS, European Tissue Symposium – market 2005 (see forecast of potential consumption of the
market per capita for Napkins & Towels as attached)
Wave 3 T&N - EN - 28022007- 5
Italy towel market value trend increases by +215% in one decade
During 1998 the Italian market saw an unprecedented increase
in the previously steady value level of its paper towel segment:
a remarkable and sudden jump in growth of 26%! Why?
In this period, the Italian market saw its biggest increase in
over 5 years: products with high quality print, 3-ply products,
TAD-products, high performance (resistance and absorbency),
and new embossing all featured. Both domestic and international producers were
involved, and their products retain a significant market share and sustained growth
rate thanks due to the innovative nature of what has become a multipurpose
product.
300.000
(€ 000)
250.000
200.000
150.000
100.000
50.000
0
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
Source: AcNielsen. Tot Italy
Italian HHT Market Value Trend in 000 € - Source: AC Nielsen
Wave 3 T&N - EN - 28022007- 6
Embossed 2-ply napkins generate substantial market growth
Almost a year earlier, the Italian napkins market
underwent a similar change. Scottex (Kimberly-Clark)
launched a micro-embossed 2-ply napkin to support
category performance. In a flat and stagnant 1-ply
market, this new technology afforded value growth of
the category and the 2-ply branded segment.
Today, this product type is
responsible for half of the Italian market’s value.
1,9
1,7
1,5
1,3
1,1
0,9
0,7
0,5
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
Average RSP per 100 Napkins driven by launch of micro-embossed 2 ply –
source: AC Nielsen
Dutch kitchen towel adds value to the category
The last decade has seen a +32% increase in the Netherlands’
kitchen towel market. Lotus Maestro (Georgia Pacific) entered
the Dutch kitchen towel market in 1995, surprising with the first
premium product in this segment.
Georgia Pacific has been the first Use/Rinse/Re-use high wetstrength product in Europe. The product quickly developed good
distribution support, contributing to category growth. In fact,
growth in this category was due solely to Lotus Maestro,
demonstrating that the more a product is differentiated, the less it needs large-scale
promotional support and the more it drives loyalty, both trade and consumer.
Today, despite being double the price of regular tissue towel, it is the second most
common product in many Dutch households. Research also demonstrates that
repeat buyers represent more than 80% of the Maestro sales.
Wave 3 T&N - EN - 28022007- 7
70,000
60,000
Euro x 1,000
50,000
40,000
30,000
20,000
10,000
1990
1991
1992
1993
1994
1995
1996
1997
1998
KT EXCL LOTUS MAESTRO
1999
2000
2001
2002
2003
2004
2005
LOTUS MAESTRO
Dutch HHT Market Value Trend in 000 €
Its all about creating economic opportunities and value
As European consumers discover the enormous
variety of uses for tissue towels, opportunities are
created for the introduction of innovations and for
growing the value of the category.
At the end of 2001, Renova introduced the Double-Face concept: a new range of
two-ply towels, one interior blank sheet for safe contact with, for example, food,
covered by an exterior coloured ply. This exciting concept, with new fashionable and
seasonable print art designs, not only helped Renova to open new markets for its
brand in Northern European countries, but was a great contributory factor in the
10% growth of Renova’s value market share in Portugal over the last four years.
35%
30%
25%
RNV
20%
B1
15%
B2
10%
5%
0%
2001
2002
2003
2004
2005
Value Market share in PORTUGAL - Source Ac Nielsen
Wave 3 T&N - EN - 28022007- 8
Exceptional absorbency is good for business
What’s the difference between a sponge and
kitchen towel rolls? Not a lot since KimberlyClark introduced Scottex with a new level of
absorbency, reversed the price and promotional
pressure of the difficult competitive Italian market
with
Scottex
Cartaspugna,
creating
the
revolutionary giant segment.
Based on the TAD technology, Scottex Cartaspugna (the ‘paper sponge’) features
exceptional strength (+66%) and absorbance (+51%) in larger sheets if compared
to previous standards. Consumer acceptance is impressive. Competitive brands
achieve between 1% to 22 % consumer bonding, Scottex now achieves 54%. If
every kitchen roll in Italy were sold at the same price as Scottex Cartaspugna, total
market value would grow by 24%.
Two leading brands, Scottex (Kimberly-Clark) and Regina
(Sofidel), also launched extra-long kitchen towels which were
sold at prices clearly above the average price of standardlength rolls. These products stimulated the overall growth of
the market by bringing the average value per roll to a higher
level.
Whereas the traditional Italian market in the past was
characterised by standard products with price as the driving force, these two brands
established what is effectively a new category, generating such brand awareness
that their names joined the hall of fame alongside major household brands such as
Bic, Gillette, Lego and Coca Cola in this market.
Market Value per Segment
350.000.000
300.000.000
250.000.000
+61% vs. previous year,
driven by the new
Scottex Cartaspugna
200.000.000
150.000.000
100.000.000
50.000.000
TOTAL KITCHEN
ROLLS
Source: AcNielsen. Tot Italy
GIANT+MAXI
2.005
MEGA
REGULAR
2.006
Market Value by Segment – Source AC Nielsen
Wave 3 T&N - EN - 28022007- 9