Get ready for that peanut butter wipe: how meaningful is the recent explosion in wipes for airlaid nonwovens? (Airlaid Commentary).
IN THE PERSONAL AND HOUSEHOLD WIPES category, heavy promotional activities in support of the new offerings continue to be solidly in place. Thus--surprise to no one--we have seen the North American wiping segment already crossing the billion dollar retail sales mark. Even this very magazine had no other choice but to declare 2001 "The Year Of The Wipe." And, earlier this year, attendees at the Vision consumer products conference in New Orleans, LA did not have to guess twice about what to honor. By now, this wiping explosion should have left everyone and everything in the new millennium fresher, cleaner and very, very shiny. Only in America, would you say?
In Europe, where the attitude concerning any expense related to wiping has been traditionally conservative, the European Disposables and Nonwovens Association (EDANA) statistics suggest that disposable wipes now comprise nonwovens' fastest growing end use segment. Demand for wipe substrates has fueled during the past 12 months (spunlace is leading this category in Europe) with no less than six spunlace line startups, two of which are complemented by airlaid forming stations.
Meanwhile, in North America, Buckeye, Concert and Kimberly-Clark collectively contributed in 2001 to what is historically the largest-ever, one year airlaid capacity addition. Since the availability of locally made spunlaced materials is rather limited in North America, this trio is now eagerly willing to serve the booming business of "The Specialty Dispensing Devices," a euphemism for lotioned wipes.
So, here we are and this industry of ours is now betting their next fortunes on wiping. The business climate nowadays continues to be tough and adopting an optimist's outlook is particularly desirable.
In reflection of the above, let me share with you--without apology--a few off-stream thoughts of mine. After leaving the corporate world five years ago, I am, on given occasion, a quasi-professional party pooper. No harm done here, I guess. The beauty of our business venues is that one can rarely figure them out quite right anyhow. And, as demonstrated vividly by the most recent twin hoopla market introductions of the moistened toilet tissue on a roll, sometimes the only thing new in this world is the history we don't know.
SPUNLACED IS AN ESTABLISHED ENTITY AS THE preferred choice in many wiping applications. Thanks to the impressive technology's advancements delivered to us from France and Germany, in combination with (again) the European process application skills, this substrate looks pretty when embossed, dispenses well and "just feels right." Believe me, neither the converter/marketer nor the European consumer can be fooled easily. The perceived substrate value has been generally acknowledged, although the ever-present pressure on its price point continues. That issue is addressed with an attempt to downsize the rayon content with the subsequent process complement of wood pulp addition. Have desirable results been achieved? Not quite yet. That pesky cellulose fiber is still causing some headaches (in the water processing step particularly), but the problem can and will be solved.
THE PICTURE DOES NOT LOOK AS ROSY FOR THE current "plain vanilla" airlaids. Why? Airlaid can be a decent carrier for a variety of active ingredients to be applied effectively and economically to whatever surface and whatever wiping result one can imagine. Throughout the technology's history, it has been successfully used in a number of wiping jobs. But historically, again, the airlaid-based wipe--in spite of many hard tries--did not make (as yet) the substrate producer particularly rich. The wiping tonnage, too often at distress margins, was and continues to be used only as the machine's "capacity filler." As such, every airlaid maker will gladly trade it for anything else as soon as his sales people put the more value-added order on the books. And that appears to be the destiny of the "plain vanilla" airlaid grades. Unless...unless, we shall discover there is life beyond vanilla.
Perhaps the "cappuccino airlaid"--and I am now repeating myself--is the answer. What is it? Not quite the "champagne airlaid," but it is a sophisticated enough grade of the airlaid wiper-to-be-converted substrate designed to enhance the wipe's particular performance. Being custom engineered for that purpose, it may earn the extra buck that we all gladly pay every day for a decent cup of cappuccino.
Did our airlaid manufacturers succeed in the task of engineering the cutting-edge wipe substrate that will fetch premium pricing? I don't see any evidence of this. They invested boldly into new equipment just to learn that the anticipated inroads into the baby diaper core are not materializing as quickly as many of us had hoped.
And, the wiping business segment? Wipes are happy with the abundance of spunlace around and are showing a stubborn unwillingness to absorb (rightfully so, in my opinion) more of the plain vanilla airlaid.
Consequently, in this "morning after" scenario, the Buckeyes and Concerts of the universe are busy issuing rather distressing profit warnings. A quick reality check may expose a simple bottom line truism: The equity invested into airlaid (at its present cost) is prohibitively high to justify rudimentary wiping substrate manufacturing. Therefore, as the cappuccino grades are absent from our radar screen, the most pregnant contemporary challenge for airlaids continues to be in their ultimate acceptance in the personal hygiene absorbent core!
I regret if this sounds like a sour note to some. I am--as I always was--a committed believer in the bright prospects for airlaid technology, yet not necessarily in wiping.
IN THE WILD WORLD OF WIPES, IT IS TEMPTING to think that the opportunity to succeed is as huge as the current marketing hype suggests. But, it is also getting increasingly more difficult to develop a consumer product that is truly a breakthrough. And, keeping it from becoming a commodity is even harder.
One of my friends in the industry keeps kidding about a peanut butter wipe when asked what else is possible in this business segment. Sooner or later, someone will think it's convenient to pull out a wipe loaded with peanut butter and smear it over a slice of bread. Exciting enough? Well, just don't forget the sober statistics. During the past 50 years, the failure rate of new consumer products is more than 95%.
With all probability, we may never sell that peanut butter wipe, but the yesterday's water in a bottle concept we do see successfully on today's wiper. Revolutionary? Perhaps. Yet, even as the retail marketplace demonstrates its desire to be on the fast track, we, the wipe substrate suppliers, are painfully slow. We invest in new lines and, during the next fiscal quarter, when that investment handicaps our bottom line, we slash our research and development funds and personnel. Then, empty-handed, we wait to react. It looks to me that we didn't learn how to move the cheese, as it's nowadays fashionable to say.
For sure, the wiping business segment will continue to grow, but our industry must develop the right material for the right application. As the wipe's convenience feature is well-recognized and appreciated by many, its real growth still depends on what the cost of that convenience will be. Because of the wipe's commodity nature, the bulk of that business is and will be on the value end, not on the premium.
So, good luck with your margins, one dares here to say.
Ivan B. Pivko is a farmer industry executive. His Florida-based management consulting firm, Notabene Associates Inc., focuses--rain or shine--on airlaid nonwovens. Mr. Pivko can be reached at email@example.com.
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|Date:||Oct 1, 2002|
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