Category Update: Retail Tissue

Toilet paper and facial tissues are strongest categories

Toilet paper is by far the largest category within retail tissue, accounting for 71% of total retail tissue consumption in 2016. This is due to the fact that it is the most essential category across all retail tissue products. In terms of growth rates, facial tissues is the standout category, as hygiene habits change and adoption of facial tissue usage increases.

Habit formation vs fundamental growth drivers

As developed markets are near saturation, the majority of the future growth is reliant on fundamental drivers outside of industry control, such as population and GDP growth. On the other hand, there is significant unmet potential in developing markets, as current usage rates are low. This provides manufacturers with the opportunity to tap into this unmet potential by widening distribution to rural areas, using informational marketing tactics to educate consumers, and focusing on product innovation aimed at affordability, since the majority of this unmet potential is from low-income households.

Success of private label brands

As price is a major factor in the purchase decision for retail tissue, value products perform well. This is especially important when focusing on growth in developing markets, where product affordability is an issue. The ability of private label manufacturers to offer quality products at a low price is a threat to branded manufacturers and creates pricing pressure in the market. This can especially be seen in Europe, where private label performs well and continues to grow.

Impact of cultural traditions

Cultural and religious traditions provide a barrier for increased adoption of certain retail tissue products, particularly toilet paper in Muslim-dominant countries. While changing consumer habits can be difficult when they are rooted in tradition, targeted advertising that takes these traditions into account has the potential for success if executed correctly.