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Afh Tissue: Global Business Dynamic and Demand

September 2021

The global AFH market saw a weak performance during 2020 and 2021. The coronavirus (COVID-19) pandemic forced consumers to stay in their homes and reduce the use of public places. However, a global recovery in AFH demand is looming, although its pace will depend on the state of the pandemic. The recovery brings opportunities as well as challenges, including those that will accelerate the shifts affecting the AFH market pre-COVID-19, such as the use of robotics in some sectors of the economy.

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Key findings

AFH demand recovery charts a gradual path to growth, with wipers recording spike in COVID-driven environment

A global recovery of AFH demand hinges on consumers’ financial confidence and the health of the foodservice and hospitality industries, which are largely at the mercy of the state of virus control and any future global shocks due to new variants. In an uncertain environment,  wipers  (especially nonwovens) offer a great growth potential, given their cleaning and disinfecting efficiencies

Heightened hygiene awareness generates new user occasions and drives product improvements

Hygiene vigilance is fuelling tissue consumption and quality expectations across the globe, leading to new products with better cleaning properties and an improved user experience. Rising disposable incomes, urbanisation and a health-centric lifestyle shift in emerging markets will present significant opportunities for greater away-from-home tissue penetration.

Structural changes in business, education and foodservice squeeze tissue demand

Pandemic-accelerated structural shifts, such as remote working, e-learning and food delivery, will recast the away-from-home landscape, and, depending on the extent and duration of these shifts as the pandemic develops, will weigh on AFH tissue demand in at least the short term.

Touchless technology and automation place additional pressure but also open up new opportunities

As new technologies emerge to fill in gaps in the new touch-free, efficiency-hungry economy, tissue needs may slide, due to the lack of human presence. However, high-tech machines and devices also generate new applications for specialised, electronics-friendly wipes.

Expectations of sustainability usher in heightened demand for eco-friendly products

Rising dedication to more eco-friendly lifestyles and increasingly stringent regulatory moves have brought eco concerns further into the spotlight, forcing another sustainability reckoning. While AFH products are not subject to the same degree of scrutiny confronting the retail market, a wave of green movements are already shifting the AFH landscape.

 

Introduction

Scope
Key findings

Market Overview

Asia Pacific and North America lead AFH tissue’s path to recovery
Uneven global recovery in 2021, with China outpacing the rest
Speed of economic recovery shapes spending potential and value growth
Asia Pacific to become the largest regional market in 2026
Emerging markets see slowing growth in consumer spending
Developing markets offer significant growth potential
Toilet paper drives consumption, while paper towels lead recovery
Cleaning and waste efficiency at the centre of product improvements
Wipers forecast more moderate growth following pandemic surge
Disinfecting efficacy dominates wet wipes innovations

Opportunities and Challenges

Opportunities and challenges through the lens of institutional channels
AFH tissue’s recovery largely hinges on horeca channel spending
Hotels and catering will be the fastest growing area of spending
Asian consumers to increase their already high savings ratio
Emerging middle class and digital-enabled elderly generate new spending
Young consumers have notable spending strength
Population aged 65+ years dominates the top income band
Safety, ease and authenticity remain highly favoured travel features
Longing for travel brightens long-term spending prospects
Widespread travel bans and restrictions dim near-term outlook
Global travel and migration remain heavily disrupted by COVID-19
Pace of recovery for inbound trips and travel spending varies by country
Remote work practice saps business travel…
…but energises the “workcation” boom
Space reconfiguration caters to new mobile workers
Long road back for global foodservice
Full-service restaurant traffic faces a difficult climb
Proliferating “delivery-first” models replace many AFH meal occasions
Delivery usage reinforces grocers’ and restaurants’ “meal solution” role
“Kitchen as a service” a reality as ghost kitchens, virtual brands expand
Opt-in and anti-waste policies foster a circular food economy
Workplaces and stores reopening aids business and public recovery
In-store traffic decline demands space rethinking
E-learning and health wariness reduce physical school attendance
China and US continue to dominate global education industry
Healthcare channel gains via returning visits and ageing trend
Pandemic era ushers in accelerated adoption of automation
E-commerce growth fuels automated fulfilment infrastructure
UV-C disinfecting robots and self-cleaning gadgets cut costs and labour
Automation evolution increases need for specialised wipes

Sustainability Reckoning

Northern Europe and Canada lead global sustainability ranking
Environmental Sustainability Index: Developed/developing divergence
The circular economy is key to making sustainability affordable
Circularity is strongly evident in packaging preferences
Pro-green movements in retail offers a foretaste of AFH shift
Travel industry’s reckoning with sustainability charges green thinking
The path to sustainable AFH tissue
Responsible material sourcing lays the foundation for sustainable journey
Energy-efficient manufacturing curbs invisible waste
Waste-efficient product design and usage tracking on the rise
Kimberly Clark Professional: transitioning towards sustainable packaging

Strategic Recommendations

Key takeaways
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