A worldwide overview of the sanitary protection market.
Several factors over the last decade have contributed to this redistribution, namely product innovation, marketing strategies and methods of response to pressure from private labels and tampon producers as young women enter the workplace and concern over TSS diminishes.
In the sanitary napkin sector, these three leaders have what is basically a worldwide strategy. They design new products, which are then launched worldwide with minor modifications according to the requirements of specific markets. An overview of these different markets will show us that in the U.S. the market is saturated due primarily to demographics; this has led to increased price wars to gain market share.
On the other hand, the European and Asian markets seem to be more promising and lucrative. The potential is greater than in the U.S. and competition is particularly aggressive. The same situation holds true for Latin America, with a sharp growth in demand.
Since 1985, the trend in sanitary napkins has been toward thinner products with less fluff and increased consumption of superabsorbents. These have shown significant growth, both in branded and private label sectors. In the same period, apertured plastic film used as coverstock has gained on conventional nonwovens (carded or spunbonded).
In 1991, the worldwide consumption of sanitary napkins was approximately 43 billion units, an increase of 1.9% over 1990 (Table 1). The 1991 market was valued at almost $4.1 billion (up 2.5% compared to 1990).
Table 1 WORLDWIDE EXTERNAL FEMININE MARKET CONSUMPTION (Billion Units) 1985 1988 1991 North America 10.4 11.6 11.8 Europe 12.8 13.9 15.8 Japan 6.3 6.0 5.7 Asia/Pacific (excluding Japan) 2.3 2.9 3.4 Latin America 4.0 5.1 5.2 Africa .45 .57 .62 Total 36.2 40.0 42.5
It is in Europe that consumption is highest (more than one third of total consumption) followed by North America (Table 2).
Table 2 WORLDWIDE EXTERNAL FEMININE MARKET SPLIT BY REGION (%) 1985 1991 North America 29 28 Europe 35 37 Japan 17 13 Asia/Pacific 6 8 (excl. Japan) Latin America 11 12 Africa 2 2
During the last few years, the three market leaders, J&J, K-C and particularly P&G, have strengthened their position in the market. J&J is still number one in the world (Table 3).
Table 3 WORLDWIDE EXTERNAL FEMININE MARKET: MARKET SHARE (%) 1985 1987 1989 1991 J&J 27.7 27.6 26.4 23.7 P&G 4.4 6.1 10.2 19.4 K-C 13.9 13.2 13.9 15.0 Kao 5.1 5.3 5.2 5.6 UniCharm 6.8 6.0 4.7 3.9 All Others 42.3 41.8 39.6 32.4
A Regional Overview
United States. The feminine hygiene market is estimated at 17 billion units for an approximate value of $1.8 billion. Sanitary napkins represent 68% of market units (this market can be split up as follows: thick pads 15%, panty liners 23% and tampons 32%) and about 65% in value.
At present, market growth is slow, due to non-favorable demographics and competition between sanitary napkins and tampons. The number of consumers among women aged 15-50 grew during the early 1980's (at an average annual rate of nearly 2%); however, in the latter part of the decade, this trend slowed, decreasing to 1% annually. According to forecasts, this age group will remain stable for a time and then decline in size during the 1990's.
As can be seen in Table 4, K-C occupies the top position in this market with almost 33%, closely followed by P&G, while J&J's Personal Products Company now stands at 23%, picking up market share in 1992.
Table 4 U.S FEMININE MARKET: MARKET SHARE (%) 1989 1990 1991 K-C 27 30 33 P&G 26 28 29 PPC (J&J) 29 26 23 Tambrands 4 3.5 2 All Others 14 12.5 13
All these producers are now discounting their products; pricing wars will continue, as is characteristic of a competitive market with high penetration. Private label suppliers have suffered.
During the last five years, thin maxi pads showed the most significant growth, although now ultra thin pads and panty liners are taking off. Since P&G introduced its thinner product "Always Sheer Confidence (Ultra Plus)," which uses air laid material containing a superabsorbent as an absorbent core, the market has responded with competitive product designs ("Kotex Ultra Thin," "Sure & Natural Ultrathin").
In sanitary napkin product lines, the third largest segment, thick maxi pads, is fairly stable, potentially gaining some market share over incontinence products. According to experts' estimates, about 20% of this category is used as incontinence products. Market share is detailed in Table 5.
Table 5 TYPE OF SANITARY NAPKINS VS. MARKET SHARE 1990 1991 Thick maxi 37.8 38.2 Thin maxi 24.4 20.2 Ultra thin 0 4.2 Mini 2.7 1.7 Panty liner 33.9 34.7
Western Europe. With a consumption of more than 15 billion units and a progression rate that is still high in the South (in the area of 5-10% per year), Europe remains an interesting market (Table 6 and 7).
Table 6 EUROPEAN FEMININE MARKET (Million Units-1990) Napkins Shields France 2000 1000 U.K. 1350 400 Netherlands 850 550 Belgium 325 190 Italy 2400 1000 Spain 1500 600 Portugal 250 100 Germany 1600 1500 Austria 160 100 Switzerland 365 245 Sweden 215 150 Norway 145 70 Finland 175 110 Denmark 120 150 Source: EDANA Table 7 HYGIENE PRODUCTS MARKET SHARE - WESTERN EUROPE P&G Finaf Total Others Baby Diapers 36-39% 8-10% 44-49% 51-56% Adult Diapers 8-11% 13-16% 21-27% 73-79% Sanitary napkins 2-5% 12-14% 14-19% 81-86% Total 19-23% 10-13% 29-36% 64-71% Source: EDANA
This market is changing quickly and the situation is evolving at high speed. Before 1990, P&G was a minor participant in the sanitary napkin market, with products only in Greece, Spain, Portugal and Belgium. In October 1990, P&G announced a joint venture agreement with Fater (Finaf Spa), the major absorbent products company in Italy
One month later, Molnlycke/Peaudouce brought the proposed P&G/Fater joint venture to the attention of the European Community Commission, claiming that the union would break E.C. competition laws. In its Official Journal, issue C3 dated 7.1.92, the E.C. Commission announced that it intends to adopt a favorable decision regarding the modified proposed joint ventures between Finaf Spa and P&G.
After introducing its Always line in Belgium at the end of 1990 (most notably "Always Ultra," similar to Always Sheer Confidence in the U.S. and made at P&G's plant in Germany), P&G is now pursuing its offensive by launching the Always range in several European countries - Switzerland, France, Italy and the U.K. - with heavy advertising support and extensive product sampling to consumers. P&G and its affiliates presently hold about 20% of a very competitive market (Table 8).
Table 8 MARKET SHARE IN EUROPE * (%) % J&J including France@ 25 P&G and affiliates 20 Molyncke 15 K-C 10 Others 30 (*)Estimates (@)J&J is part of a joint venture in France managed by Kaysersberg S.A. called Vania Expansion
The other branded leaders, such as J&J, which has a strong presence in the European market, will continue to compete heavily. J&J (or its joint venture with Kayserberg) launched the following products early this year:
"Vespre Silhouette Plus," a sanitary napkin with wings, in the U.K.
"Serenity" in Switzerland and Italy
"Ruby Ultra" in France and "Serena Ultra" in Austria and Switzerland.
Jamont/Kayserberg launched its "Vania Ultra Plus" in March 1992. This product is a trifolded ultra thin napkin with wings and superior quality in use.
Molnlycke/Peaudouce has also reacted and recently introduced a winged napkin in Sweden, "Libresse," similar to Peaudouce's "Nana" marketed in France. A new ultra thin winged napkin, "Nana Invisible," is now being marketed by Peaudouce in Belgium. This new napkin will also soon be launched in France.
No doubt that the situation will evolve further in the near future since the leading branded producers have plans to continue to invest in Europe.
Eastern Europe. What tremendous potential. These countries traditionally have had a lack of products or a limited supply of generally poor quality. If we consider the population of the Eastern Bloc countries including the former U.S.S.R., we have a potential market of 400 million people. If these countries reach a level comparable to the E.C., we are looking at a massive need for investments. What a bright outlook for tomorrow, coming at a time when European growth is slowing down.
In most Eastern European countries there are few if any players. Molnlycke has a joint venture in Hungary and in Czechoslovakia with the local feminine care producer. German companies have always had good connections. Some U.S. companies have had representative offices in these countries for years waiting for signs of economic improvement before making a move. P&G already has a joint venture in Hungary for the production of baby diapers although its intentions regarding feminine care products are unclear. In Poland things also seem to be moving with a joint venture between Robinson and a local producer.
Far East. The Japanese market is estimated at $0.6 billion (about six billion units). Here again local feminine care producers are competing head-on with P&G's Always line, led by the ultra thin sanitary napkin called "Whisper." Table 9 illustrates the evolution of market share among the three branded leaders, Kao, Unicharm and P&G.
Table 9 FEMININE MARKET IN JAPAN: MARKET SHARE (%) 1988 1989 1990 1991 Unicharm 33 30 27 29 KAO 35 33 32 29 P&G 17 26 31 32 Lion 5 3 2 2 Shiseido 3 2 4 4 Others 7 6 4 4
In 1991, P&G overtook the leading Japanese companies and Japan now represents its second-largest overseas market after Germany. P&G substantially expanded its production capacities in 1990 by building a new plant in Haga-Cho for its full range of absorbent products and is now in a position to export converted products to other Pacific Rim countries.
Market share for ultra thin sanitary napkins has grown rapidly, going from 4% in 1990 to 11% at the beginning of 1992. It is also interesting to note that more sanitary napkins have wings (winged napkins have already reached 13% penetration).
Another typical characteristic of the feminine care market in Japan is that nonwoven coverstock is being replaced by perforated plastic films, presently being used on almost 50-55% of sanitary napkins. The market leaders have followed P&G, which introduced this type of coverstock in 1987. Unicharm uses a Smith & Nephew product, while Shiseido has been collaborating with Chicopee, Kao has developed its own product and Lion is operating a turnkey operation - recently provided by Fameccanica - to produce film.
Latin America. Latin America represents a promising market for the feminine hygiene producers. The penetration rate into this market is still weak, at approximately 50% (Table 10). The standard of living is increasing, however, and an increase in consumption should follow. The three market leaders in the U.S. also share the Latin American market (Table 11).
Table 10 LATIN AMERICAN FEMININE MARKET: CONSUMPTION/PENETRATION RATE Consumption Market Penetration (million units) (%) Brazil 2000 45 Argentina 740 58 Venezuela 400 59 Colombia 480 46 Chile 310 58 Table 11 MARKET SHARE IN LATIN AMERICA (%) % P&G 23 K.C. 22 J&J 21
P&G has increased its competitive position in this area, operating from Mexico and Caracas, home of its regional headquarters. A joint venture with Industrials Mammi in Venezuela was the first major strategic action taken to improve its position in Latin America.
South Africa. The market for sanitary protection products is split into 70% for sanitary napkins and 30% for tampons. The main player in the branded consumer sector is J&J, followed by Nampack (using Molnlycke technology) and Smith & Nephew.
Product Evolution, Future Trends
More secure and more discrete, this is how the worldwide trend for external feminine hygiene can be summarized. Discretion has meant that a number of flat products have disappeared, to the advantage of folded and individually wrapped products in a pouch, often colored and fitting the image of a young and dynamic woman.
In this area, as well as in many others, Japan has been the instigator and has stimulated companies' innovations, especially in Europe (Molnlycke Nana and Kayserberg Vania). On the other hand, the American market has been more reserved, slow to use what appeared to be the best product everywhere else. Some U.S. consumers are reportedly not satisfied with a pad that would not lay totally flat and this problem has influenced the market.
The search for greater comfort has led to innovative developments in the materials used to obtain greater adhesion to lingerie and to the appearance of more anatomical shapes.
One of the basic user expectations is to have a napkin that stays in place. This has now been obtained thanks to more and more effective adhesive systems and also to the widespread use of wings, also called flaps, clips or "fixettes."
With the primary objectives of providing more comfort and protection, anatomical forms made their appearance several years ago. From the early dogbone-shaped napkins, we have now moved to elastic-sided napkins that are thick in the center. This year also marks the introduction of "Nuvenia Pocket Anatomico" from Sodalco in Italy. This product, which is individually wrapped with a new stay-dry coverstock, is unique in the Italian market as it is the first sanitary napkin to be "shaped." The shapes, like the materials used, are growing more and more complex and sanitary napkins are becoming a highly technical product.
Adhesive suppliers have to increase their research efforts to satisfy the sanitary napkin producers, which are designing more and more complex pad configurations (internal multi-layered absorbent cores, external fixations and elasticized sides). It is estimated that in 1991 the adhesive market represented approximately 5000 and 5500 tons respectively for North America and Europe.
Another trend in the branded market is the introduction of baking soda as a deodorant in sanitary napkins. Personal Products was the first to incorporate this ingredient in its Stayfree line, followed by K-C. Deodorants for sanitary napkins are not limited to baking soda and trials with products such as baby powder deodorants seems an attractive idea. Many manufacturers are taking a wait-and-see approach, as is necessary in a market extremely sensitive to chemicals.
As in the baby diaper market, the three main branded producers in the sanitary napkin sector are trying to attain leading market positions through acquisitions and joint ventures. This is true especially outside North America, where the market is facing limited growth and tight profit margins.
The leaders will continue to invest in the more lucrative markets with greater potential, especially in Europe, Eastern Europe, the Pacific Rim and South America.
Changes in product design for sanitary napkins should continue under pressure of maturing markets. There is still sufficient potential both in full-size sanitary napkins, due to the overlap with the incontinence market, and in ultra thin napkins, the fastest growing segment for the near future.
Sanitary Protection - A Look At Two Components
In forecasting future trends and product developments in the feminine hygiene industry, Dr. Goldstein specifically discussed two components - absorbent cores and coverstock - and the changes that are occurring.
In absorbent cores, discretion implies that products must be of a reduced size, especially regarding thickness (from 4-6 mm). There are now products in all the large geographic markets - from P&G, J&J, Kayserberg, Peaudouce and K- C - that are less than three mm thick. This is only the beginning because the principal private label manufacturers are also showing a growing interest in this market niche.
The journey towards extreme thinness has begun. Have we reached the limit? Without a doubt, no! In 1976 in Amsterdam, I predicted at the first INDEX Conference that absorbent products would be as thin as postage stamps. Sixteen years later we are close.
A most interesting market is also opening up for the producers of superabsorbents who will benefit from greater usage of their products in ultra thin napkins. The question is, when will they develop market-specific products? Superabsorbent polymer producers proposing these specific products are still too few. Women do not wear diapers, they wear sanitary towels. For most of the producers, the decrease in thickness has been made possible by a massive use of super-absorbents (.5-1 g/unit), especially the polyacrylates of Nippon Shokubai, Hoechst, Sanyo, Dow Chemical, Atochem and Stockhausen, but also by an increase in the total surface area of the products.
Others, fewer in number, have chosen to innovate. J&J, for example, is leaning towards the more generalized use of sphagnum moss in its ultra thin napkins. It is converted and used in the sanitary application in a board-type form. Obtained from aquatic plants decomposed in peat, this substance's suction power is quite amazing; it contains tiny capillaries that soak up fluid quickly and do not release it easily. It is estimated that PPC/J&J uses sphagnum moss in about 1.5 million pads/year in North America and Europe.
Kimberly Clark also uses a special absorption strip on its Kotex Ultra-Thin with a sophisticated combination of melt blown Coform/SAP/tissue.
In comparison to superabsorbent producers, fluff suppliers could be significant losers in this race for maximum thinness. The feminine care market is currently using about 85,000 tons in the U.S. and 100,000 tons in Europe annually.
Some studies are predicting that superabsorbents eventually may supplant pulp in the market altogether as pad weights continue to drop rapidly. The demand for air laid will continue to grow and we are going to see new investments in this field by companies such as Walkisoft in the U.S. and Merfin Hygienic, which has planned to build a second plant in Canada.
In the coverstock area, a significant trend is the use of perforated plastic film as coverstock to improve comfort. This trend has been initiated by two of the main producers, PPC/J&J and P&G. Common to almost the whole range of P&G products is the new "Dri-Weave" top sheet, made from a loaded polyethylene film; it "keeps wetness locked into the towel" and menstrual fluid is not left on the surface of the pad.
P&G started in Japan with its Whisper brand napkin. It has now been followed by Kao, Unicharm, Lion and Shiseido. Today more than 50% of the coverstock used on sanitary towels in Japan are perforated plastic films. The same tendency is now occurring in both the North American and European markets but at a lower level than in Japan (about 30%). Some producers have developed their own plastic coverstock (J&J, Reticulon, Unicharm). The apertured film as coverstock has obtained a mixed response according to the panels conducted by branded producers. It is interesting to note that P&G is just launching a panty liner, Sheer Confidence, in the U.S. and Canadian markets with a thermal bonded web called "soft-sorb."
J&J and its Vania Expansion joint venture uses Reticulon coverstock on only part of its line, Silhouette in France and Germany and Sure & Natural, Modess elsewhere. K-C remains the only major producer still using spunbonded polypropylene nonwovens, integrating its own technology. This applies to K-C's full range, except its Profile sanitary napkin, which has a point thermal bonded carded polypropylene web as coverstock.
The other traditional technologies are used to provide coverstock - thermally bonded carded webs (mainly PP, bicomponent fibers PE/PP, PE/PET) with both technologies: point bonding calender or thru-air bonding to produce highloft products; spunbonded, mainly polypropylene and latex bonded polyester webs (a technology that is declining)