Consumer & Healthcare Trends in European Wipes Markets World of Wipes 2013 Helena Engqvist Engqvist Consulting

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A tour to Europe – a multi facetted region European Union, EU •

27 countries (+1)

•

500 million people

•

23 official languages

Extended Europe

http://www.nationsonline.org/oneworld/europe_map.htm 2013 ® Engqvist Consulting

•

47 countries

•

740 million people

European population  740m by 2030 Generations are shifting – more older people, less young European population by age groups in 2015 65+ years 17%

500 Million people

0-4 5-14 years years 6% 10%

European population by age groups in 2010-30

400 300 200 100 0

15-64 years 67%

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0-4 years

5-14 years 2010

15-64 years 2020

65+ years

2030

Source: UN Population Statistics

European wipes market value $3.65bn in 2012, steadily increasing Personal care wipes 56 bn pieces

3

60

2.5

50

pieces billion

$ billion

Personal care wipes $2.75 bn

2 1.5 1

40 30 20

0.5

10

0

0

Western Europe Eastern Europe 2008

2010

2012

2014

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2016

Western Europe Eastern Europe 2008

2010

2012

2014

2016

Source: Euromonitor International

European market driven by baby wipes Personal care wipes: $2.75bn in 2012 7%

Personal care wipes: 56 bn pieces in 2012

4%

6% 1% 8%

22%

67% Baby General

Cosmetic Intimate

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85% Baby General

Cosmetic Intimate

Source: Euromonitor International

Consumer talk … I use wipes for everything everywhere! If it’s rainy and muddy or hot and sunny - wipes help me stay clean and fresh. I don't think I can survive without!

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Baby wipes are super for my dog … and my horse …!

Snap-shots from the top 5 EU countries From a study on usage and product characteristics • Many countries face water stress, i.e. lack of water and water restrictions • Variations between countries in the north and the south • People buy a mix of branded and private label brands depending on the specific offer • Women use wet wipes for all purposes – cosmetic, make-up removal, hygiene, household and baby care • Men tend to use wipes more for hygiene and household • Using wipes can be a sign of wealth • The environment matters 2013 ® Engqvist Consulting

There is room for many applications

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It all starts in the cradle … baby wipes • Baby wipes represent over 80% of all personal care wipes in Europe – >85% of all wipes in Western Europe – >70% of all wipes in Eastern Europe

• Consumers value baby wipes because they are – Soft and smooth – Skin friendly – Cleans well – Chlorine free

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… and continues in life … • 2-3 major brands and multiple private label/retail brands • Used for everything – baby care, adults, pets, sports, stains … • Common to use 3-4 wipes per diaper • Heavily promoted

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Cosmetic wipes – a growing segment •

Cosmetic wipes 8% of personal care wipes in Europe; lagging behind the US – UK biggest market – Rapidly increasing in Eastern Europe and Turkey, but low volumes – 3-4 times more expensive than baby wipes – Usage rate ~1-2 wipes/day – Large differences between brands and PL

•

Convenience with small packs

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Consumer perceived features and expectations – Cleans well – Skin friendly – Chlorine free

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… with many niche applications • Special cleaning pads for – Eye make-up removal – Nail polish removal – Peeling, cleaning and moisturizing

• Facial – skin typing – Normal, oily, greasy, sensitive skin – Age-typing for anti-age and radiant glow

• Niche products for even add-on – Sunscreen – Self tan – Baldness 2013 ® Engqvist Consulting

Moist toilet tissue • Moist toilet tissue is one of the fastest growing segments, although still fairly small volumes • Germany is one of the key markets • Opportunities in increasing market penetration • The importance of promotions

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Medical wipes are a separate issue • Complex issues and regulations • Products for skin cleaning • Surface cleaning with disinfectant • Disinfection fluid – no standards • Higher share alcohol – Risk for explosions; low flame-point – Does not kill all bacteria

• Acrylic glass is damaged by alcohol • Everyone has a different solution 2013 ® Engqvist Consulting

Household wipes – a large business with many segments and functions • Cleaning and disinfection • Floor and multi-surface • Electrostatic for glass and furniture • Automotive • Dry mops

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Dry or wet? Why do people in Sweden prefer dry household wipes, while people in Germany want them wet? • Dry household wipes – Absorbent – Cleans very well – Durable – Strong tear-resistance

• Wet household wipes – Cleans very well – Durable – Disinfecting – Stays wet longer 2013 ® Engqvist Consulting

Challenges and hot topics • Classifications (field of use) define the regulations • All European regulations are under some kind of review • All components in the lotion used for wipes are regulated by the European REACH Directive • The CE-mark is only needed on medically related products • Flushability – a matter for discussion

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Three major directives for wipes 2 products in 1 = nonwoven substrate + liquid •

The Cosmetics Directive –

•

Focus on consumer safety

The Medical Devices Directive –

Focus on patient safety

–

Products used for disinfection in hospitals and wards

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General Products Safety (REACH)

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Biocidal Products Directive –

The GPSD and REACH apply on top of all the above

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“best used before the end of …”

The Cosmetics Directive •

Focus on consumer safety

•

New revision in place July 2013

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All consumer wipes for cleaning, maintaining, or deodorising of human skin

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No professional use

•

Communication with specific labels

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“best used before …” “once opened best used before the end of …”

To flush or not to flush? Industry and EDANA & INDA members together •

An industry stewardship effort

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Guidance document with voluntary descriptions

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The EDANA working group has established its 3rd guidance document

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Safety, health and wellbeing of water ways

•

Some things cannot – and are not designed to be flushed

•

Labeling on all packs, but habits & practices determine what people do

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The jungle of labels • Europe has many different environmental labels – Some labels have to be there by law – Some labels are placed on packages by markets – Some labels are brand labels

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Technologies & materials in Europe • Carded spunlaced nonwoven is the most commonly used nonwoven for wipes in Europe – Finer fibers – Better quality and opacity – Combinations of spunlaid, cellulose and carded – Basis weight depending on market

• Airlaid materials less frequently used • Wetlaid qualities in some segments • Fibers range from viscose, cellulose and cotton to polyester in many combinations depending on end-use • Consumers have no idea what wipes are made from 2013 ® Engqvist Consulting

A wipe for every season • Baby wipes used all-year around • Summer shows increasing sales for – Facial wipes – Hand-cleaning wipes – Deodorant wipes – Smaller package formats for travel

• Winter shows increasing sales – Anti-bacterial wipes – Against flu – Hand hygiene wipes

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A new marketing era …

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Trends and the future • Desire for convenience and efficient water-use • Sustainability • Smaller pack sizes for “On-the-go” • New marketing concepts – The health conscious consumer – Men’s grooming – Specialty wipes for pets, cars, computers

• Medical wipes with disinfectants • Highly competitive segments – Smaller, thinner, lower basis weight 2013 ® Engqvist Consulting

Thank you for your attention!

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Contact information Helena Engqvist Engqvist Consulting Rue Mauverney 18A CH-1196 Gland, Switzerland Tel: +41 (0)22 362 23 35 Fax: +41 (0)22 362 23 36 E-mail: [email protected] Web: www.engqvistconsulting.com

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About Engqvist Consulting •

Engqvist Consulting, headed by Helena Engqvist, was founded in 2004 and supports Fortune 500 companies and SMEs in consumer, health care and nano products

•

This presentation has been prepared by Helena Engqvist – Experienced professional with core competencies in nonwovens, hygiene and health care products, nano technology, consumer insight and market analysis, R&D and technology – Published a series of reports on single-use nonwoven surgical drapes and gowns, adult incontinence and company specific market studies – Career spans 35 years in management positions at Novartis in Switzerland, J&J in Germany and the U.S., and SCA in Sweden – Frequent writer in international trade journals, speaker and moderator – MSc in Chemical Engineering from Chalmers Technical University, and Executive MBA, Gothenburg, Sweden

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