With approximately one in three Australians having an allergy in 2014, according to the National Asthma Council, Australia has one of the highest prevalence of allergies in the developed world. This proved fertile ground for home care manufacturers, with the major global players releasing a range of new anti-allergen products suitable for children and adults with skin sensitivities under the “sensitive” banner in Australia in 2014. In doing so, they are exploring a niche monopolised by locally produced eco-friendly brands.
Local players in a sensitive niche no longer
A relatively new entrant, Aware Environmental Ltd was formed by the merger of two green brands, Orange Power and Aware, with a vision to be Australia’s most ethical manufacturer of eco-friendly household consumer products by producing Australian-made accredited and endorsed products that help consumers to live a greener lifestyle. The company is an industry leader in producing environmentally responsible products that are formulated without the use of palm oil. All of the Aware products are endorsed by Planet Ark and the Aware Sensitive range is especially formulated to be free from ingredients that irritate the skin, such as optical brighteners, fragrances, dyes and enzymes, and is independently approved by the Asthma Council of Australia’s Sensitive Choice Program (marked with a blue butterfly). However, with a 0.3% share of the home care market in Australia in 2014, the company is not well positioned to take on the industry leaders Unilever, Procter & Gamble or Reckitt Benckiser as they launch hypoallergenic home care products into the mainstream.
This situation isn’t unique to Aware Environmental Ltd. Throughout home care, local players are struggling to keep up with the leading multinational companies in Australia. The largest local player, Natures Organics, with its distinct organic proposition, had a 4% value share in home care in 2014. Within laundry products, Natures Organics relaunched its entire Earth Choice range of laundry liquids in April 2014, which contained a sensitive option, to meet changing consumer preferences. With an improved formula, this relaunch focused on adding greater value through an ultra-concentrate formula, increased wash performance, greater functionality through dual top-and-front loader formats and pack sizes catering to the needs of changing household sizes; all the while being gentle on the skin and the environment. This may not be enough to compete against multinational players, however, as they have effectively pushed a previously niche market into the mass market.
Products labelled as sensitive attract a following
For many people, allergies are more than an annoying inconvenience, as they can seriously impact on quality of life. Australians are therefore increasingly searching for products that address personal allergies. Increasingly, this is not the sole reason for sensitive products, as consumers consider products labelled as “sensitive” as being gentler on the skin and in the best interests of the family. This was particularly evident in laundry care as, in 2014, every brand owner had appended a product for sensitive skin to its range, including private label. According to industry sources, products labelled as sensitive account for approximately 10% of total value sales. With the addition of Colgate-Palmolive’s Dynamo Sensitive, Coles Sensitive All Machine Types Laundry Powder and Reckitt Benckiser’s Vanish Napisan Sensitive, Australian consumers are faced with a broader hypoallergenic range of products on the shelf. Whilst expanding the laundry care range, these products take focus away from local brands, such as Aware Environmental’s Aware Sensitive range, which, prior to the release of sensitive products, had provided consumers with a unique value proposition.
A temporary snag for local players or are the multinationals likely to capture the new-age “sensitive” and eco-friendly market?
Local players, such as Aware Environmental and Natures Organics, are unable to compete with the marketing budgets of the leading multinational companies. Unilever spent A$2.2 million in the first six months of 2014, for example, in support of the launch of Omo Ultimate laundry detergent. What the local players can do, however, is leverage their marketing efforts and compete at the grassroots level by reaching out to the goodwill of Australians. For example, Natures Organics is readily associated with offering cruelty-free and greywater-safe products in 100% recycled and recyclable packaging; and the major players can’t claim the same. Local players have also found it increasingly difficult to compete in a field with heavy discounting by more dominant brands (advertised at half price or less than half price). Nevertheless, as local brand owners can be quick to move, it is a strength they can exploit to be innovative and drive value growth. For example, Aware Environmental was the first player to launch a 3x concentrate product in laundry detergents. Local players also have a distinct advantage, as consumers perceive them as having strong social values. To this end, we can expect local players in home care to rise and develop new-age products that will broaden the eco-sensitive market. That is, they will deliver effective cleaning solutions that contain natural formulations, have a low impact on our environment and are safe in terms of our health. In this way, local players will continue to be competitive and challenge the status quo of home care products in Australia.
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