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The U.K. adult incontinence market.

The U.K. Adult Incontinence Market

Incontinence is hardly a subject to inspire enthusiasm, but the market within the U.K. is reaching an interesting, vital and exciting stage. The potential scale of the market is being realized. However, "potential" is the operative word, as currently supply exceeds demand within the U.K.

It is generally accepted that the number of incontingent persons within the U.K. is around 3.1 million. However, to try and establish the exact number is extremely difficult, as is the value of products sold. To support this, an extract from a recently compiled report by ERC Statistics International ("Adult Diapers In Europe - 1989 Survey) states: "The size of the U.K. market of both body worn diapers and bed pads, is largely unknown and manufacturer's estimates vary widely."

We have taken data gained from Regional Health Authorities based on their contract consumption levels and added to this other known trade conducted within the regions. This data against what we have gained on the nursing home, retail and mail order markets sets up an intriguing picture:

There are around 200,000 people with incontinence supplied by the NHS with disposable pads to the value of [pounds]37 ($59 million) a year; that is an average of [pounds]185 (about $300) a year per person. The NHS is the prime purchaser of incontinence products in the U.K.

There are around 2.9 million incontinent persons uncared for by the NHS and the sales to this section amount to [pounds]17 million ($27 million), an average of [pounds]6 (about $10) a year per person. Granted, many adults within this group are buying sanitary protection products, rectangular nappy pads and baby diapers to cope secretly with incontinence (one estimate by a multi-outlet retailer is that 80% of rectangular nappy pads are used for adult incontinence). However, even allowing for this trade, it is clear that suppliers have a great deal of work to do to develop the potential of this second group.

Market Overview

There are 17 regions within the NHS, each with a Supplies (purchasing) Department that handles the purchase of incontinence products. It has to be said that each region's approach and attitude to the purchase of incontinence products varies and there is neither a universal specification nor a universal test method adopted.

The Supplies Departments have had to contend with an increasing number of companies all trying to achieve a slice of the [pounds]37 million ($59 million) trade. There are as many as 30 companies marketing disposable incontinence products to the regional contracts. These include Vernon-Carus, Molnlycke (Peaudouce, Ancilla), Hartmanns, Procter & Gamble, Smith & Nephew, Robinsons, Nicholas (Kanga), IDC, Hygicare, Ganmill, I.P.S., Warden Dressings, Charles Turner, Lewis Wolf Griptight, LIC, W.M. Supplies, UK Nonwovens, Disposables UK, Henley Medical, Salt & Company, Thames Valley Medical, Contenta, Macarthy, Coloplast, Bambo (Ontex) and Anglia Vale.

The market leader is Molnlycke, with an estimated share of 55% of the NHS trade, especially after the acquisition of Ancilla and Peaudouce. This begs the question as to how many more companies will be able to enter the market.

In an attempt to rationalize this situation, Supplies Departments aim to reduce the number of companies from whom they purchase the types of disposable pads by drawing up more detailed specifications. This product rationalization is moving towards the following range:

*Pants - pouch type pants, plastic pants, stretch pants and reusable pant and pad combinations;

*Pads - bed pads (fluff pulp and wadding type), nonpolythene rectangular pads for use with beds pads (25, 38 and 50 grams); polythene backed inserts (20, 45 and 60 grams); shaped pads (65, 100 and 135 grams); adult all-in-ones; and superabsorbent stress/dribble pads.

NHS demand for 1988-89 is illustrated in Table 1, except for superabsorbent stress pads. Added to this is about another 20% non contract trade, giving total NHS market of [pounds]37 million ($59 million).

At least five regions view the stress pad as a rapidly increasing product and one region is substituting this pad for some of the shaped pads normally used at the initial patient assessment stage. This particular region discovered that 65 gram shaped pads were being given to patients at preliminary assessment of their incontinence. Once the assessment was made that the patient only required a rectangular pad, the shaped pad was changed for a 20 gram and 45 gram rectangular pad. However, the patient felt so assured in the shaped pad that they often refused to change to what seemed a smaller and less adequate pad.

It is far more difficult to estimate the nursing home, mail order and retail trade. At nursing homes, the ownership and management dictates the type of product used. It is estimated that the trade in disposable incontinence products has risen to about [pounds]10 million ($16 million). This market is served by all the companies listed earlier either directly or through distributors.

The mail order market accounts for another [pounds]3-5 million ($5-7 million) and is served by either the manufacturers or by a specialist mail order company.

The retail market is served by chemists and some surgical supply shops. This market is running around [pounds]2 million ($3.2 million). It is interesting to know that Kimberly-Clark estimates the chemist trade is worth around [pounds]1 million and they expect it to rise to more than [pounds]13 million ($21 million) in five years. Sainsbury and Tesco (major grocery chain stores) have carried out pilot studies on the sale of incontinence products; however, the stigma and embarrassment that effects all retail work severely hampers the development of the retail trade.

Thus, in total the incontinence disposable pads produce a total turnover of [pounds]52-54 million ($84 million) within the U.K., with the NHS accounting for 70% of the total.

Market Trends

Regional Supplies Departments of NHS are looking to move away from the annual trauma of having to deal fairly with tender bids from more than 30 companies. To overcome this, some regions have introduced two year contracts, others have published Best Buy Guides to list a selected number of companies and yet other regions are looking at partnership situations with selected companies to run for two, three and possibly five years.

The cash restraints remain so much so that the government has introduced "income generation" into the NHS. The purpose of this is that the regions and districts will sell their products and services to others and the cash proceeds will be used to supplement their funds. This has actually led to some regions offering products from their stores (purchased at special contract rates) to private nursing homes in competition with the product suppliers.

As more people come forward with incontinence there are inadequate funds at the community nursing level. As a result, some districts are having to be asked to buy their own products. One Health District is planning to open a hospital shop that will have continence products for sale to clients.

As the financial restraints will remain, the NHS demand for incontinence products is unlikely to grow above the rate of inflation, leaving the key area for suppliers and manufacturers to concentrate their efforts for growth in the retail/mail order sector. One body, the Association of Continence Advisors, regularly lobbies Parliament to either make disposable pads available on FP10 (Drug Tariff) or make more funds available to the NHS.

With these cash restraints in the NHS, the more people that come forward the more that will be referred to retail chemists. However, can you imagine walking up to a shelf, taking the product from the shelf (given that you know which one to take), standing at a cash register queue waiting to pay for the product? This is the major stumbling block to the purchasing of incontinence products in the retail sector.

Some chemists have considered a side room to which the incontinent person may be taken, but how do they justify the investment in staff time and space given the present low demand?

The same argument applies to the grocery multiples like Tesco and Sainsbury, where high turnover is the requirement. What products do they sacrifice to introduce incontinence pads? What will be the return? At present, Sainsbury, Tesco and Asda are all watching each other to see who will make the first move and to see the consumers' reaction.

Mail order remains the "softest option" for the incontinent person, but this service has suffered as a result of some consumer mistrust about mail order offers. In addition, how long will they have to wait for supplies? Will they run out of pads? Suppliers are attempting to overcome the problem of how best to sell the mail order service.

A colleague from another company recalled that incontinence leaflets were left in doctors' offices to promote its mail order service. None were taken. The leaflets were then moved to private toilet areas and every leaflet was taken on every day they were left. Again, the shame and embarrassment is so deeply rooted in people that it effects their response to the mail order system.

The Way Forward

Demand by the NHS will be effected by the movement of the elderly back into the community to private care and by the increasing numbers that do come forward for treatment. The end result is likely to see sales to NHS only increasing at the rate of inflation.

Suppliers will find themselves fighting for the same size of cake and the Regional Supplies divisions will continue to exploit this competition to hold down the movement in prices. It is likely that to satisfy more people with products there will be a trend away from shaped, all-in-ones back to rectangular pads and slimmer superabsorbent products.

With adult all-in-ones there is a danger that the end user is being treated like a baby again, with the psychological problems this creates. Some marketing programs to highlight this factor may reverse the trend.

In the retail area, the more discerning and demanding consumer will demand, more neat, more attractive, more discrete options and the demand from this sector will be for smaller, thinner pads and for reusable pant/pads. In the instances that someone has to care for a dependent, bedridden patient it is likely that the NHS Community Nurses will be involved and thus the demand for shaped and adult all-in-ones will be marginal.

It is interesting that the major retail chemist chain is considering reducing its range of disposables to pouch type garments, stretch pants, smaller and thinner superabsorbent pads and reusable pant/pad systems. Not only do these take up less valuable shelf space, but they eliminate the handling of the bulky products in their warehouses and the problems this has caused on delivery to their outlets.

With the NHS likely to deal with fewer companies and two or three year or possibly longer agreements, many of the 30 companies in this field will have to pursue the retail/mail order routes more vigorously. The retail chemist, drug stores, grocery outlets and even department stores will be bombarded with product offers. However, the work that needs to be done by all suppliers is a) how best to encourage the potential customer to seek out products at retail outlets; b) once the consumer is in the retail outlet how they will ensure they will buy and not back out through embarrassment or fear; and c) how to encourage the retailer to stock, display and sell the product.

Clearly, if they succeed the non-NHS market may provide between [pounds]70-100 million ($110-160 million) instead of the current [pounds]17 million ($27 million) year market.

Kimberly-Clark launched its "Depend" range to the retail chemist in 1989 and is reported to be spending up to [pounds]750,000 ($1.2 million) on consumer advertising and promotion. This will greatly help everyone in the market. However, although they are creating greater awareness they still rely heavily on the incontinent person having the courage to enter a chemist and actually buy the product.

The Nicholas organization attempted television advertising to the North East for its "Kanga" system that encouraged people to "hop" to their local chemist. While Nicholas is not keen to give away the results of this exercise, it has not been continued or extended to any other areas. They may well have found the same difficulty of people not having the courage to buy.

Too Many Companies, Not Enough Sales

The NHS sees too many companies chasing trade that is likely to show increases at only the rate of inflation. Prices have been depressed in this sector chiefly as a result of the competitiveness. Any ventures by other European and non-European companies will only add to this competition.

It is the non-NHS market that has to be tackled. That is where the growth could be significant, dramatic and probably more profitable for those that have the most success.

While the nursing home trade may increase at around 10-15% a year, the same competitiveness with the NHS is being seen, with some suppliers using the market to off-load stocks not being bought by the NHS.

Retail is thus the gold mine, but it needs a golden key to the door.

Rather is than companies trying to compete to take this small amount of trade offered by the retail sector, it might be wiser to pool their resources and work on a program collectively or with special interest groups to create a better public understanding of the plight of the incontinent and to encourage people to come forward with less fear and embarrassment to obtain help.

As the NHS could not cope with any explosion of demand, people would have to buy their products by retail or mail order and, thus, the collective action would serve its purpose. Once the momentum towards purchasing the products has started, companies could then fight for their market share of a cake that would rapidly grow.
Pad Type [Pounds]
Nonpolyethylene inserts 2,500,000
Polyethylene backed insert 3,500,000
Shaped (anatomique) pads 7,000,000
Adult all-in-ones 7,000,000
Bed pads 10,000,000
Total 30,000,000

This article is excerpted from a paper given by Mr. Hay at the Pira Absorbency '89 Conference, Nov. 28-30, Aarhus, Denmark.
COPYRIGHT 1990 Rodman Publications, Inc.
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1990 Gale, Cengage Learning. All rights reserved.

Article Details
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Author:Hay, Gerry
Publication:Nonwovens Industry
Date:Apr 1, 1990
Previous Article:What's going on in sanitary protection?
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