According to Mintel International Group – an independent provider of market intelligence, analysis and recommendations – household products are defined as paper towels, home laundry products, cleaning equipment and tools, household surface cleaners (which includes everything from all-purpose cleaners to rug cleaners and furniture polish), dishwashing products and bleach.
Citing a report by Demand Media, The Nest – a consumer magazine that focuses on marriage and home life – cleaning products generate more than $168 billion in annual revenue around the globe. The magazine says that the US Bureau of Labor Statistics shows annual spending on cleaning products rose from $639 in 2007 to $659 in 2009. Though averages differ based on geographic location and income, the data showed a strong correlation between household size and spending. For example, in 2009, a one-person household spent an average of $345 per year on cleaning supplies, while a household with five or more people spends an average of $798 per year.
Big brand vs. private label
Though spending has increased, economic concerns determined where, exactly, that money was being spent. In an October 2012 report by Mintel, Senior Household Analyst John Owen said, “The deepening of the 2007-09 recession helped drive strong increases in private label market share in nearly every household product category and segment. However, while consumers remain as budget conscious as ever in a tepid economic recovery, household product store brands collectively have lost share in 2011 and 2012. Leading name brands have sharpened their value propositions, and consumers’ attachment to familiar national brands remain strong. To put private label back on a growth track, retailers will need to work hard to convince consumers they deliver the best combination of price and performance.”
Time Magazine put it another way in a November 2012 article, titled Brand Names Just Don’t Mean as Much Anymore: “The assumption that higher price means quality is fading.” In fact, in late 2010, PwC Consultancy reported that 93% of shoppers said they’d changed their behavior as a result of the economic downturn.
For label converters, the change is seen in smaller customers who are capitalizing on shifting consumer behavior. John Giesfeldt, senior marketing manager at WS Packaging Group in Neenah, WI, USA, says, “When it comes to shelf impact, store brands have had to adopt the same strategies as the national brands. They invest in package design and labeling efforts that are all aimed at capturing consumers’ attention at the shelf, at the moment of truth.”
On the other side of the coin, there are private brands that are sticking with their niche. Louis Iovoli, vice president of strategic partnerships and marketing at Hammer Packaging, Rochester, NY, USA, says, “High-end brands are always seeking to use packaging as a means of separating themselves from the generic brands. This means they will seek packages with more form and function to be more value-added. These packages will use the latest decorating technologies to stand out from the crowd. As far as the generic brand goes, that really depends how you define generic. There are many private labels that are high-end and will try and match the best packaging with their private labels, and then there are the true generic brands that focus on quality product at the lowest possible unit price. Each has a strategy.”
Effective and eco-friendly
Household products represent an interesting intersection between eco-destructive and eco-friendly requirements. On the one hand, consumers demand products that will deliver results. On the other hand, reducing synthetic chemicals in the household is increasingly important to consumers.
The labeling of these chemicals was the subject of much debate in 2009, when Sen. Al Franken of Minnesota proposed legislation that would require household cleaning products to carry labels with a complete list of ingredients. According to Minnesota Public Radio, the current law requires that product labels list “immediately hazardous” ingredients, but companies are not required to list ingredients that might cause harm over time.
Though the bill was not passed, Franken has said that he plans to reintroduce the bill in the 112th Congress. If passed, the bill could require significant changes to household product labels, and, therefore, significant changes for label printers.
For now, however, converters need only worry about the chemicals in the bottle harming the label on the bottle. A damaged label is a potentially dangerous, expensive situation, and converters go to great lengths to avoid it.
Bill Orme, marketing communications manager at Smyth Companies, LLC in St. Paul, MN, USA, says that even just a small amount of bleach reaching the label could obliterate the label print and obliterate the stock itself. “Most product labels in this sector are printed on sturdy, synthetic film stocks, capable of withstanding corrosive and caustic ingredients. Additionally, print inks are often UV-cured, making them much more durable and resistant to chemicals.”
Orme also acknowledges the household market’s changing chemical composition. “In many ways,” he says, “this market is probably the leader when it comes to the introduction of environmentally-friendly products. Household brands have responded to environmentalists’ concerns by introducing ‘organic’ and other products with claims that they do no harm to the environment. Some companies have introduced whole new brand lines, with ‘green’ names and taglines, in order to win over consumers who are sensitive to environmental concerns.”
In addition to introducing organic ingredients, brand owners have taken steps to reduce the quantity of packaging, Joel Carmany, president of Consolidated Label in Longwood, FL, USA, says that many companies have combined packaging methods for various items such as instructions and materials. “Instead of printing the information on different elements of the products, all information is now printed right on the label thus reducing the amount of packaging needed for particular products. Most companies have not gone to recycled labelstock because the coat is higher.”
Regarding products that have yet to completely eliminate potentially harsh chemicals from their products, Carmany says that testing is key. “Ingredients are critical in determining the durability of the labels. Depending on what ingredients are in the products, certain label materials must be used in order for the labels to last. In order for the labels to withstand certain hazardous ingredients, we recommend doing testing with the label materials prior to printing. Many of these products require a poly film with lamination to meet application durability requirements.”
Paul Johnson, vertical markets manager at Weber Packaging Solutions in Arlington Heights, IL, USA, adds that while durability is a consideration, ensuring the label is permanently adhered to the bottle is the primary objective.
“There aren’t a lot of durability gaps in labeling materials these days, because there are a wide variety of products to address hazardous ingredients, be it films, overlaminates or adhesives,” he says. “One of the bigger challenges is getting the label to stay on the container or cover it to maximize surface area. The trend to use unique container shapes means you need to have labels to conform to the shape, especially if it is handled a lot.”
Shrinking and digitizing
One way that converters have reacted to uniquely-shaped container trend is by using shrink sleeve labels. Because of the expense, it is generally seen on name brand products more than private label brands.
Giesfeldt, of WS Packaging, says, “Aesthetically, shrink labels offer more leverage in the food and beverage categories. As is often the case with household products, usage instructions are required. Shrink does not lend itself very well to that requirement. For example, back-printing the prime or back label so it can be read by looking through a clear PET container cannot be executed with shrink.”
He adds, “Shrink can offer an advantage since it covers more real estate on the bottle. In fact, shrink can extend up the neck of a bottle and that space provides additional room to put promotional messages in a very visible area of the bottle.”
From a marketing standpoint, shrink sleeve labels are much more likely to make a high-impact statement on the shelf than a traditional label. Gwen Chapdelaine, marketing manager at Fort Dearborn Corp. in Elk Grove, IL, USA, says that household products are one of the more recent product categories that have embraced shrink sleeve packaging. “The combination of full coverage graphics and unique container shapes is ideal for launching a new product or revitalizing an existing brand. Since shrink sleeves are film-based and reverse printed, they are well-suited to household product applications.”
Though the initial costs can be prohibitively expensive for small private label brands, Carmany of Consolidated Label points out that it could benefit brand owners who are thinking long-term. “There’s been a move towards more shrink sleeve packaging in all markets including household,” he says. “Shrink sleeves continue to grow year over year. The graphics appeal and long-term cost savings with shrink sleeves are offering companies more flexibility when it comes to packaging.”
Given the SKU proliferation in household products – laundry products alone come in dozens of scents, and some specially formulated to have none – it comes as no surprise that digital capabilities are becoming ever-more popular for this market. Mark Johnson, west coast sales representative for INX International Ink Co., says that digital has a huge upside in this market since so many SKUs make short run jobs more cost efficient.
“Also, with online finishing capabilities, product resistance issues are no longer a problem,” he says. “However, product performance has not approached the levels of inks and coatings and press speeds. Applications regarding hazardous ingredients for shrink sleeve applications continue to be dominated by UV flexo, solvent and high-speed press equipment.”
In addition to the advantages of variable data, digital also provides prepress advantages. Iovoli of Hammer Packaing says, “Digital technology helps get a quick first look at the package. There are new tools available like 3D modeling that also help and assist in quickly giving key people in an organization a low-cost look at new packages. Digital also helps with sales sampling, focus group testing, and other trade related events. It is a growing print method that will continue to find uses in this market.”
The next steps
Certain trends and expectations are universal in consumer packaged goods, and that includes the household market. Chief among those trends: consumers will continue to demand eco-friendly and environmentally sustainable products, and competition will be fierce. In the household products market, competition between store brands and high-end brands shows no sign of slowing down.
Orme, of Smyth Companies, says that the trend toward going green is a driving force behind that competition. “Brands will compete for the environmentally-friendly high-ground,” he says. “Look for continued expansion of brands and sub-brands looking to occupy shelf space outside traditional borders.”
The inclination towards shrink sleeve labels will only enhance brand owner’s ability to offer sustainable packaging options. According to Johnson at INX, market trends indicate continued efforts to offer packaging with less wasted shipping or containers. Additionally, he says, “Better graphics for point-of-purchase improvements with high performance end use for household products seems to be another growing trend.”
Becoming more sustainable in terms of shipping and packaging isn’t just essential for consumer satisfaction. Sometimes, it’s a standard that’s set by a multinational corporation, and everyone in the industry follows suit. Johnson, of Weber Packaging Solutions, puts it this way: “Expect Walmart’s sustainability efforts to be a continuing driving force in rethinking packaging for this market.”
Because of the nature of the household products market, it is generally expected to continue to remain steady well into the future. Consumers made a lot of concessions in order to save money these last few years – shorter or no vacations, waiting to buy that new car – but virtually no one would be willing to forgo a clean home.
Giesfeldt of WS Packaging says, “The future for household products will remain an incredibly strong market as a whole, because consumers need and want the wide range of products that add convenience to their lives.”