The industry forecast update for retail consumer tissue and disposable hygiene reaffirms the positive growth trajectory ahead and signals further opportunities for manufacturers of branded and private label products. The report outlines the extent of the upgrade to the industry growth projections, opportunities in select categories, and strategies to improve retail pricing trends in the context of continuing rises in raw material costs that are putting pressure on industry margins.
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The second quarter update indicates positive upgrade across the majority of markets and categories, reaffirming the positive growth trajectory for retail tissue and hygiene. Improved macro-economic indicators in markets like Egypt are among the factors behind the upgrade. However, persistent concerns and significant pricing pressures continue to affect industry revenues in certain markets, such as South Africa, which shows a downgrade in projections.
Ongoing uncertainties about policy changes by the US administration continue to raise concerns over their potential impact on the industry. Euromonitor International’s forecast scenario points to a potentially sizeable negative impact of such policies, especially in US and Mexico. The probability of the full implementation of such policies, however, remains low for now.
As costs of pulp and other materials continue to rise, pricing pressures are becoming increasingly problematic for the industry’s margins, leading some of the players to raise prices in certain markets and regions. Price increases are typically also backed by value-added innovation. Essity has been particularly focused on prioritising profitability, and has succeeded in increasing prices of tissue in Asia Pacific, and is putting up prices in Western Europe.
Essity’s efforts to improve pricing trends might create a positive environment for the industry to implement similar strategies. It is important, however, to consider market-specific consumer preferences when it comes to features consumers are willing to pay for, such as a preference for environmentally friendly features in China but more emphasis on high quality and performance in the UK.