Tissue and Hygiene: Half-Year Update 2022

Delivery

This report comes in PPT.

Key Findings

Cost and price rises proliferate

Tissue and tygiene is subject to a heady combination of supply chain cost increases related to energy and materials which have a specific impact on the industries as well as general economy-wide inflation which is already beginning to have an influence not only on product pricing, some brand availability but also consumers rationalising expenditure, down trading (where possible), trading out and looking for alternatives.

Running on empty

With supply chain disruption especially due to stratospheric energy price increases in Europe, the tissue industry in this region specifically appears already over exposed with what is arguably the most challenging operating environment in the post-World War II era. Production shut downs due to cost implications and the disappearance of budget brands from some store shelves indicate H2 2022 will be one typified by out-of-stocks and if conditions tighten then potentially far more severe than that.

Sustainability inflection point

Such is the cost pressure on supply networks and consumers that there is observable interest growth in new materials and alternative solutions. For sanitary products, the emergence of reusable during the height of the pandemic has been given further impetus as the influence of saving and sustainability combine, tissue and hygiene seemingly meeting its own inflection point as savings dovetail with sustainability objectives for brands and consumers alike.

Heightened social aspects

For developed economies where tissue and hygiene consumption is already engrained, the very real prospect of loss of utility from not being able to access these products for financial reasons is engendering a growing social sustainability debate. The Scottish government, the first to legislate in a bid to end “period poverty” is likely the first of many similar initiatives. Hygiene products now more closely linked (legally speaking) with social equality meaning that many categories will transcend fmcg status with implications for business models and the social contract.