Everyone is best at something: a tour of Western European tissue trends

A whistle-stop tour of European tissue; who is consuming what and why. Some of the trends are quite revealing, perhaps even illustrating something about national character. One of the clearest relationships is how the state of national economy plays a key role in all aspects of consumers’ lives, tissue being no exception.

Ian Bell, Head of Tissue and Hygiene Research - Euromonitor International

Tissue sales across the breadth of Western Europe are well established and arguably at saturation point in many markets. Although there appears much uniformity in tissue consumption - we are after all, near neighbors, with many of us sharing a single currency - there does remain some significant variation in approach to tissue, as well as consumption patterns and preferences. What follows is a whistle-stop tour of European tissue; who is consuming what and why. Some of the trends are quite revealing, perhaps even illustrating something about national character. One of the clearest relationships is how the state of national economy plays a key role in all aspects of consumers’ lives, tissue being no exception.


WHO SPENDS THE MOST? Typical to most fmcg categories, on a per capita basis, Scandinavia and Switzerland tend to lead the per capita expenditure charts. That said, there is one country which stands head and shoulders over the others: no prizes for guessing the identity of the priciest country in Western Europe, it has to be Norway, with Norwegians spending 51 euro per person a year on retail tissue, a full 10 euro more than the Swiss. Anyone who has visited Norway probably won’t be so surprised: it is an expensive country, but just how expensive is clear when we compare with our lowest spenders, Turkey, with just 8 euro per capita spent in 2014.
While Turkey continues to spend the least in terms of per capita consumption, the rapid development of its tissue market, as well as what can only be described as Westernization of its tissue consumption culture, is plain to see. Back in 2000, just 37% of all Turkish retail tissue value sales were generated by toilet paper, while the broader Western European average is closer to 60%. Such has been the pace of development that this figure had risen to 52% in 2014, with every sign that consumption in Turkey will mirror that in the rest of Mediterranean Europe by the end of the decade.


HOW ABOUT VOLUMES? In terms of volume sales, the UK leads per capita consumption charts with 11kg per person per year. Should we be surprised? Probably not; if there is one country in Europe which is most “American” in its consumption then it has to be the UK, and this is as true for tissue as it is for packaged food and even pet care products. The US leads global per capita consumption rankings with close to 14kg per person per year, but while the UK lags behind, both markets have seen tissue volume sales decline on a per capita basis since the recession hit. Categories such as kitchen towel and paper tableware have been most badly hit, as consumers look to cut back in more austere times. 2014 however suggested that, at least in terms of tissue, the economic recovery is seeing stability and volume sales recovering.
If we take a longer view, then the best performing mature markets since 2000 have been France and the UK, accounting for 25% of new volumes in Western Europe. In both cases there has been significant population growth thanks to immigration and also linked to something of an ongoing baby boom. In 2014, the UK, for example, saw the highest birth rate since 1973, which bodes well for tissue sales longer term, even if per capita consumption is dipping; the link between demographics and tissue sales is crucial for mature markets.


COMMODITY PRODUCTS. In toilet paper, the most significant category across Western Europe by volume and value, there are some interesting observations that can be made, particularly when it comes to accessing national priorities.
German consumers are arguably seen to have the most commodity approach to toilet paper in terms of their spending patterns, with the majority of sales classified at the economy pricing level. In 2014, 55% of value sales were reported in the economy classification, some way ahead of other neighboring countries where sales are typically around the 40% mark. While Germany is perhaps something of a curiosity in Western Europe in its approach to tissue, the popularity of its hard discounting model and the export of this retail approach may encourage other markets - especially those continuing to experience economic problems - into similar patterns of consumption.
Brand loyalty, or the lack of it, clearly relates to commoditization and there are no prizes for guessing that Germany reports the highest levels of private label penetration in toilet paper in Western Europe, reported at 77% by value in 2014. There are, however, a few surprises out there also; Spain, for example, isn’t far behind Germany, with 75% of all tissue products sales reported as private label in 2014, this up from around 50% a decade earlier.
Consumers who have been most clearly won over by private label or at least pushed into it have been the Greeks, who saw share taken by private label across all categories reach 62% in 2014, 20 percentage points higher than was the case even as recently as 2010.
Economic difficulties have certainly seen private label flourish, with retailers such as Spain’s Mercodona pushing private label now more than ever, a clear threat to brands and a trend that is unlikely to be reversed easily, if at all.


BIGGER IS BETTER. When it comes to bulk buying, French consumers are the leading consumers of bulk formats, with 12 rolls (in a pack) the most popular unit size, as opposed to the UK, where smaller 4-roll packs are the most common for toilet paper. Large packs in Western Europe pale in insignificance when compared with North America, where packs of 24 are in the ascendancy and an indication of how car-based grocery shopping and large household sizes have conspired to encourage preference for large pack sizes.
That said, Western Europeans are clearly moving to large pack sizes, and this has been something of a feature of the economies most affected by the recession. The appearance of jumbo rolls (once more familiar to institutional use in kitchens) for example took a massive 70% of sales in Greece during 2014, by far the largest percentage recorded across Western Europe in 2014.Another interesting feature of pack size development is how Turkey is fast resembling the Chinese pattern of consumption, with large pack sizes of 24 and 16 rolls tripling in sales over the last decade. Over in the UK, pack size development is also somewhat illustrative of polarization, with 18-roll packs being the fastest growing category across Western Europe (excluding Turkey) and also 2-roll packs rated as the fourth most rapid growth format.


PREMIUM TRENDS. When it comes to premium toilet tissue, French consumers lead expenditure rankings on a per household basis, reported at 9 Euro in 2014, this way ahead of the 8.5 euro reported in Germany. While the fact that France is associated with a wide range of products and brands having to do with with luxury is maybe not so much of a surprise, Germany’s second place ranking is perhaps more so. One can argue that toilet paper consumption in Germany, as in other countries, is showing increasing levels of polarization, and this could be indicative of the socio-economic change which is happening over the region as a whole; a greater divide between rich and poor.
Wet toilet paper is another important offer found in the premium price segment. Western Europe’s Alpine counties favor this format more than any other, with around 12% of toilet tissue (by value) found in the wet format. Germany also sees strong sales but there is a clear divide with countries outside this central belt consuming very little; France, for example, reporting sales of just 1% of toilet paper value, which is attributable to culture and the significance of the bidet. Clearly brand owners have worked hard to promote this hygiene aspect of premium toilet paper and have made some progress in the UK, for example, which has traditionally been quite resistant to change.
That said, the most impressive gains made by wet toilet paper have been seen in Spain, which flies in the face of economic orthodoxy. In markets which have been worst affected by the recession, consumers have become far less confident in finding facilities with toilet paper, and have turned to wet toilet paper as a consequence.


When it comes to format, who leads expenditure charts for kitchen towel? Somewhat surprisingly not the UK, but just over the water: Ireland ranks as the highest per capita spender in Western Europe. Kitchen towel for Irish consumers is the functional tissue product that dreams are made of, used for cleaning, drying dishes, as napkins and even to make notes and shopping lists on and the broad usage has resulted in a massive 6kg of consumption per household through 2014.
As for the most marginal consumers in Western Europe, that title goes to the Swiss, with only 2.5kg per household in 2013 - even lower than that of Turkey. This is surprisingly low for a country which is commonly regarded as having one of the highest living standards in Europe; kitchen towel is not always linked to economic privilege, as traditional home care practice appears to live on in the majority of Swiss households, preferring reusable cloths to disposable tissue.
That said, sales of kitchen towel in most cases are clearly closely linked with economic outlook, and since the recession, per household volume consumption has plateaued in Ireland, while arguably worse-affected economies such as Greece have seen volumes fall 17% since 2009 - this in spite of manufacturers’ efforts to popularize jumbo rolls, typically more familiar in institutional use than retail.


TISSUES, BOXES OR POCKETS? The tissues category proves once again that consumers are largely creatures of habit. Once they are used to a particular format, it takes a huge effort to alter modes of consumption, especially when markets are mature. What is interesting about tissues in developed markets is that regional preferences vary greatly, with consumers either favoring pocket handkerchiefs or boxed facial tissues. For example, 97% of the tissues sold in the US in 2014 were in boxes, while in Germany the volume share of boxed facial tissues remained below 10%.
The reason for such bias goes back to the early 20th century when manufacturers first launched disposable pulp tissues as a substitute for cloth handkerchiefs. While in the UK and the US the newly-founded Kimberly-Clark started to promote pulp tissues in boxes under the name Kleenex, German-based Vereinigte Papierwerke Nürnberg packaged its Tempo tissues in pocket formats to sell across continental Europe, eventually establishing opposing regional preferences.
In terms of share of sales, this regional variation continues in 2014, Ireland and the UK reporting the highest share of tissue sales in boxed format, with 90% of volume sales attributable to the boxed format in 2014. The opposite is the case in Northern Europe, where pocket tissues make up the vast majority of sales, at 90% for both countries.
Alpine countries Germany, Austria and Switzerland report the highest per household volumes, suggesting portability really drives consumption. Logic suggests that tissue boxes on display around the home encourage usage of tissue for a broader range of applications. However, statistics don’t bear this out - portability appears to have a greater effect on encouraging volume sales.


CONCLUSIONS. Regardless of the single market or the single currency, there remains a great deal of variation in tissue consumption around Western Europe. While many of these trends appear to be set in stone and have their own historical baggage, the region is in a state of change, and the recession has accelerated this. While it has never been likely that Western Europeans can develop the capacity to consume the volumes familiar to North Americans, it would appear that the German model of consumption, if not grocery retailing, appears to have taken a stronger hold during the recession.
If the future brings better times economically it will be interesting to see if consumers across the breadth of the continent will be interested in diverting from their commodity approach to tissue. In an environment where tissue has probably reached its upper limit in terms of per capita volumes, the prospect of value declines arising from down trading is a very real, long-term threat. The great variety seen in tissue consumption patterns should however, be seen as a boon rather than a burden. There is much to be learned from the success of one product or category in a particular country and much to suggest that variety rather than bland uniformity is a strength.



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