Retail Tissue in Peru

2021 DEVELOPMENTS

Demand for napkins and facial tissues lags behind paper towels and toilet paper in 2021

Sales of retail tissue were impacted by the pandemic in different ways, with 2021 seeing further differentiation in terms of performances. Paper towels recorded another year of significant growth following dynamic demand in 2020 due to home seclusion and an increase in cleaning habits by local households.

Performance factor changes dynamics of toilet paper and paper towels with longer rolls offering a lower price

The dynamics of toilet paper and paper towels have changed significantly in the last two years of the review period, driven specifically by the pandemic, as local consumers increasingly placed a value on retail tissue offered at more affordable prices. In this sense, different brands have expanded their offer of longer rolls of toilet paper and paper towels, and a higher number of rolls per pack, so that consumers have access to products that will last longer at a more competitive price, a trend generally witnessed in the dominant traditional grocery retailers.

Difficulties in operating small neighbourhood restaurants significantly impact sales of napkins, hindering its recovery

Within retail tissue, napkins has been one of the most negatively impacted categories as a result of the pandemic. One contributor to its weak performance has been the significant drop in demand from small neighbourhood restaurants, which offer menus or lunches at very low prices and tend to serve mainly workers, students and employees.

PROSPECTS AND OPPORTUNITIES

Significant growth predicted for paper towels due to improving penetration

Paper towels is expected to continue to record further significant growth over the forecast period, although the rate of growth will gradually soften year-on-year. Nevertheless, paper towels offers significant development potential given that it is a product with low penetration in Peru, meaning that players can still expand their consumer reach by attracting new users.

Low but stable growth expected for toilet paper over the forecast period

Toilet paper is mature in Peru since it is an essential product and therefore dominates sales of retail tissue, which is why growth is estimated to remain stable but low over the forecast period. Any future dynamism depends on the marketing efforts and innovations offered by leading brands, as already noted by the introduction of longer roll formats at affordable prices that generated significant interest amongst local consumers.

Slow recovery expected for facial tissues due to being underdeveloped with limited potential

Facial tissues is underdeveloped in Peru and was strongly impacted by the pandemic as its demand decreased significantly due to home consumption, and therefore consumers did not require these products as often. This was particularly the case for pocket handkerchiefs, which are traditionally carried by consumers in a bag or pocket when outside of the home, but usage was impacted by restrictions on mobility.