Tissue and Hygiene Quarterly Briefing Q4 2019

Key Findings

The industry still in the red, but only a marginal negative adjustment signals relative stability of consumer tissue and disposable hygiene demand

The fourth quarter update across consumer tissue and disposable hygiene indicated yet another overall global downgrade, indicative of macroeconomic challenges and deteriorated global outlook in the second half of the 2019. However, once again the downgrade is fairly marginal, as in developed markets tissue and hygiene products are part of regular hygiene routines, and some of the key growth markets have been forming habits to use these products on a regular basis, thereby making them more resistant to economic downturns.

China shows marginal downgrade for the first time in 2019 but remains an attractive market

While still an attractive market in terms of consumer preferences for higher quality products and a still significant unmet potential for long-term volume and value growth, for the first time China is seeing a slight downgrade to projections across all categories but adult incontinence. Expected slowdown in GDP growth is among the key reasons.

Premium products resonate with some consumers, but globally affordability remains on the agenda

With the unmet potential mainly among low-income consumers in developed and developing markets, along with the pressure from private label, affordable quality products must remain a focus to drive consumption. However, premium products do touch a sweet spot with some consumers, mainly in developed regions, gaining traction and taking sales away from mainstream brands.

Smart nappy/diaper is here, despite challenging consumer environment, but wider adoption is likely to be fraught with challenges

Despite challenging environments, especially in developed markets, key brands moved ahead with the launch of smart nappies/diapers as a way to beef up value-added propositions to consumers. There are, however, a number of challenges to the adoption of smart nappies/diapers, including among others high costs as well as consumer perception of technology, impact baby health.