PAPER TRAIL

The environment and the economy are impacting what consumers choose in the paper goods aisle, said food retailers interviewed by SN. As a result, supermarkets are seeing a polarity in purchasing habits as demand for higher-priced eco-friendly recycled papers serves as a counterbalance to spending habits driven by shoppers' concerns about money. They're seeking lower-priced goods for everyday use.

The environment and the economy are impacting what consumers choose in the paper goods aisle, said food retailers interviewed by SN.

As a result, supermarkets are seeing a polarity in purchasing habits as demand for higher-priced eco-friendly recycled papers serves as a counterbalance to spending habits driven by shoppers' concerns about money. They're seeking lower-priced goods for everyday use. As shopping habits shift, retailers see an opportunity to further grow their private-label lines.

“Even in the Midwest Rust Belt, we are experiencing a big push toward more earth-friendly goods and services. I think the big green machine has finally found a permanent parking spot in all retail sectors, and Americans will become even more insistent on purchasing goods that leave less of a footprint on the environment in the future,” said Eric Anderson, senior vice president of marketing, Fresh Encounter, Findlay, Ohio. The company operates 30 stores under the Community Markets, Fulmer Community Markets, Sack 'n Save and Great Scot Community Markets banners. Anderson noted that Earth First is a top-selling eco-conscious brand, with toilet paper and paper towels producing good profits.

According to sales figures from Information Resources Inc., Chicago, Earth First products are fast movers. The brand's toilet paper sales increased 19.8% to $1.8 million during the 52 weeks ending Dec. 2 in the food channel. Earth First paper towels were also up, 19.6% to $1.6 million.

“The entire world celebrated Earth Day in 2007 and has not looked back,” Anderson added.

Ted Taft, managing director at Meridian Consulting Group, Westport, Conn., advises retailers to capitalize on consumer demand for sustainable products by cross-merchandising green paper goods with complementary organic or natural items. Recycled paper towels and organic surface cleaners are a good match, he said.

“Green is a huge plus in this and any category in supermarkets,” he said.

Boyer's Food Markets, the 17-store chain in Orwigsburg, Pa., carries environmentally friendly paper towel and bath tissue sets made by Marcal, which, according to Anthony Gigliotti, vice president of sales and marketing, have been selling very well in recent years.

“This tells us that there are green shoppers who are worried about the environment and recycling,” he said.

On the other hand, Gigliotti sees more consumers leaning toward value in the paper category. The trend may not be toward the cheapest paper products shoppers can find, but they are looking for quality products at a fair price, he added, attributing shopper sensitivity to the climbing price of gas.

Shoppers at Boyer's continue to buy various sizes of toilet paper packs in counts of six, eight and 12 rolls. Popular sizes and brands vary drastically from week to week, depending on which are on sale, he said. The retailer has increased the number of paper products incorporated in its month-long Special Buy program.

“Premium products like Chinet and less expensive brands like Solo both sell well when we drop the prices,” said Gigliotti. “Other popular brands include Bounty and Georgia Pacific. Scott's also does well.”

Shoppers at Big Y, Springfield, Mass., have turned to lower-priced paper goods in recent years, according to Brian Paulin, one of the chain's grocery executives.

“There has always been a loyal following for upscale paper products, but I see a shift in shopping patterns toward the more value-added brands,” he said. “Earth-friendly products have also gained in popularity in recent years and continue to attract shoppers.”

Big Y routinely runs earth-themed promotions on products like Marcal and Earth First. Some promotions center on organics and natural brands and tie in paper goods with environmentally friendly cleaning products.

“We also try to use as many displays as possible to support our weekly themed ads,” said Paulin.

PRIVATE PAPER

According to IRI, store-brand toilet paper, napkins and paper towels all fared well in 2007. Sales of private-label toilet paper jumped 5.4% to $431.2 million. Store-brand paper towels were up 12.7% to $47.9 million, and private-label napkins increased 1.0% to $406.8 million.

Jon Hauptman, a partner with Willard Bishop, Barrington, Ill., encourages retailers with existing lines to add even more stockkeeping units to their shelves.

“Retailers with private-label lines probably already have a line of standard paper products, but they could benefit from offering a greater variety, including green goods and even an upscale line,” he said. “Premium store-brand products are important, because while people are looking for value items for everyday use, it's now socially acceptable to entertain using paper plates, napkins and cups, so having premium products would fill that demand too.”

Jim Wisner, president, Wisner Marketing Group, Libertyville, Ill., agrees. He said consumers are not only more selective about what paper products they use, but also when they use them.

“People are more likely to use a premium paper towel in the kitchen vs. the garage,” he said. “They tend to buy a pricier brand for household cleaning and inexpensive ones for oil spills and other messes. They also tend to stock higher-quality tissues during cold season, when softness and added ingredients like lotion and antibacterial components are much needed.”

Big Y's Paulin also believes that despite the desire for premium products, shoppers will continue buying lower-priced products. He cited the vast improvements in private-label goods as one reason for the switch.

“Private label has become much better in recent years, so shoppers now have quality products at a more attractive price point,” he said.

Wisner encourages retailers to host sampling events that feature their own brands and to hand out trial-size portions of tissues during cold and flu season. “I would definitely be using my own brand of towels, napkins and plates when sampling food items too. And, I would use my towels and napkins at coffee counters, near antibacterial dispensers up front and anywhere else shoppers will be using them in my stores,” he said.

One type of product Wisner sees as a great sampling item, if chains have their own SKUs, is select-a-size paper towels. Various-sized sheets being torn off in front of shoppers quickly and easily shows off the product's innovative, waste-conscious qualities, he said.

Procter & Gamble's Bounty Select-a-Size is one example. The product touts approximately two times the perforations compared with the standard perforated roll, enabling users to tear off smaller sheets for smaller cleanups.

P&G also has a paper towel, Best Ever Bounty, made for multiple uses, with an on-pack message that reads, “One Sheet, Keeps Working.”

“We know that consumers want to minimize their environmental impact without sacrificing performance,” said Dewayne Guy, spokesman for P&G. “Our Best Ever Bounty addresses such issues. So does the Charmin mega-roll, which reduces packaging, [cardboard] cores and energy in transportation.”

Wisner sees the benefits of some products, but questions the logic of others.

“In terms of reusable paper towels, at some point people have to stop and wonder if they shouldn't just use real towels instead, so I'm not sure how well those will do,” Wisner said.

Guy disagrees and expects such high-end products to gain in popularity. Even if the economy continues to lag, consumers will keep buying because they see the long-term value, he said.

“While premium products cost more, consumers realize that they can use less of a premium product because of the superior performance,” said Guy.

The same applies to value-added items, Guy added. Puffs Plus with the Scent of Vicks, for instance, combines a tissue with the menthol characteristics of Vicks. This, he said, is an enticing option for sniffling shoppers who don't have the cash to buy both.