Retail Tissue and Hygiene: Half-Year Update H1 2023

Delivery

This report comes in PPT.

Key Findings

Volume setbacks

Volumes are expected to see either downgrades or limited growth across markets in retail tissue and hygiene. The higher prices of tissue and hygiene goods are leading to consumers rationalising spending, down trading (where possible), out trading and seeking alternatives. Meanwhile, structure shift such as birth rate decline, which has partially been exacerbated by cost-of-living crises, adds stress to volume growth of baby nappies/diapers, particularly in China, a top tissue and hygiene market.

Supply chain optimisation

With moderating input costs still above historical levels, tissue and hygiene manufacturers must strengthen their brands’ supply chain efficiency through, for example, capacity expansion, manufacturing technology upgrades and vertically integrated acquisitions, to ensure they are bracing themselves for potential future uncertainties and adapting to the relevant consumer needs more efficiently.

Value creation reinforced

With price sensitivity stretching into the second half of 2023, sustained long-term growth in market share will continue to be underpinned by tangible value creation centred on quality, performance, health benefits, usage occasions, as well as marketing reiterating cost-benefit advantages. Sustainability remains a key pillar, given cost pressure on supply networks and observable growing consumer interest in new materials and alternative solutions.

Heightened social aspect

With hygiene products such as menstrual care goods now more closely associated with social equality, culturally and legally, businesses need to pursue social endeavours and seek new go-to-market channels to enhance product accessibility and brand awareness, as a part of their value- building strategy. Such moves may further prevail within the hygiene sector, meaning that many categories will transcend FMCG status with implications for business models and social contract.