P&G and the Incontinence Category: Updated Sept 15, 2015

1 Year In-Market Update:  Firm Hold on 2nd Place

Always Discreet has been in the market in the U.S. 1 year - since September 2014

    • As of the latest 4-week period ending August, P&G's dollar share nationally is 9% of the entire incontinence category.  If you consider they don't compete in the male market or within heavy end products like briefs, their share is more like 13% to 15%.  If you just look at branded light to moderate incontinence products for women, where Always Discreet competes, their dollar share is closer to 20%.
    • Their annualized sales are $140 million, growing at 9%.  Always (+9%) and Poise (+7%) are clearly driving double digit category growth of 12% the past 52-weeks.  Depend is down over 1% while SCA's TENA, as anticipated 15 months ago, is the big loser, down 12%.  Sales of Always Discreet are at least 50% above the TENA brand which competes in segments that P&G does not.  SCA brought in a new marketing leader who may replace the current President.
    • When P&G launched last year, they promised a 3 year sustained marketing effort with print, TV and digital and heavy coupons.  Lately, we've seen $3 trial oriented coupons running nationally in Sunday papers.
    • In June 2015, P&G announced that more than 500,000 women in the U.S. have tried Always Discreet underwear.  Women like the security, protection, flexibility and soft fabric which make them feel confident and secure.  For their pad segment, they are now claiming that more women prefer Always Discreet over Poise pads.  They are comparing only the moderate regular version and the statistics are among only those women with a preference.  This is not much of a claim.
    • K-C's persistent claim is that Poise works better than Always... but they aren't talking about Always Discreet, just the Always products intended for feminine protection use, not incontinence.  To a degree its a misleading claim (or at least confusing).  Since its technically truthful, P&G hasn't been successful getting them to cease and desist. 
    • Meanwhile, TENA continues with more marketing happy talk such as 'the TENA proven personal protection system', 'TENA technology, 'Fearless Protection' and 'Unexpected Leak'.  Their product point of difference has pivoted to 'odor protection' (something all brands have).  This, while K-C continues rolling out innovation after innovation (Depend Silhouettes and Real Fit, Poise Impressa, Poise Thin Shapes and Depend seat covers and bed protectors).   At the same time K-C and P&G have really stepped up their couponing activities with monthly $2 and $3 coupons delivered via full page Sunday coupon sections.  Meanwhile, TENA continues with an occasional $1 half page coupon.  It is a losing strategy no matter how you view it.  And that's exactly what's happening.
    • In April, P&G announced a number of awards for their Always Discreet brand.
      • The Good Housekeeping Seal
      • Product of the year in the bladder protection category 
      • Better Homes and Gardens Best New Product Award 
      • Product of the Year in the bladder protection category for 2015 (40,000 consumers voting) 
      • Best New Adult Incontinence Product for 2015 (70,000 consumers voting – study by BrandSpark)
    • In early March annualized sales were tracking as high as $198 million during March 7th (a weekly share) driven by a $3 trial coupon. At the same time, the Always Discreet share reached a 17.7 unit share (11.6 dollar share).
    • As predicted, P&G's Always Discreet is making inroads in the disposable incontinence products category and helping to expand it.  On January 27, P&G's CFO made the following comments regarding the product launch:
      • 1 of 3 of women suffer with incontinence; only 1 of 9 use an incontinence product
      • Women trust and prefer the Always brand for fit and protection
      • Always Discreet is beating targets with a 7% value share in the U.K. and U.S.
      • The introduction in the U.K. (July 2014) has helped grow the category double digits - now growing 50% faster than before the introduction.
      • In the U.S. (August 2014 launch), the category growth rate has more than doubled to 9%
      • Germany, Switzerland and Austria are the next expansion markets during Feb 2015.
    • On January 30, SCA CEO Jan Johansson told a news conference that "so far we have been reasonably successful in defending our position versus P&G in the incontinence market".   Note: The numbers below through November 2014 do not seem to support that.  As of March 2015, it appears SCA is in a serious situation.  There has recently been another round of management changes.  Its uncertain what will be able to turn things around with no new product plans or aggressive marketing to match rivals K-C and P&G.  K-C just introduced consumer preferred Depend Silhouette Active Fit for women and may expand the revolutionary Poise Impressa, a bladder support which prevents, rather than absorbs urine.
    • During November, P&G's reported retail revenue on Always Discreet nearly overtook the entire TENA brand with sales of $8.5 million versus $8.6 million for SCA's TENA.  TENA's sales dollars declined 16.2% during the period.
    • Always Discreet is helping drive category growth which increased 9% in November and 6% for the 52-week period ending November 29.  A portion of this is likely accounted for from incremental pantry loading as consumers take advantage of purchase incentives.
    • Kimberly-Clark's Depend and Poise brands are holding their own, up 3.7% in November and +6.1% the past 52-weeks (sales dollars).
    • Always Discreet is now the #2 branded competitor in the heavy end segment of the category, more than doubling TENA's retail sales volume.  The TENA heavy end segment declined 25% during November alone.
    • Based on an analysis of consumer marketing spending and product plans over the next 6 months, we believe Always will take the #2 position away from TENA and TENA's share loss will accelerate as they lose more distribution points.  TENA has less than half the retail distribution compared to TENA in the latest 4-week period ending November 29.
    • P&G is now taking square aim at Kimberly-Clark's Depend and Poise brands with ad claims that Always Discreet absorbs faster than the leading brand (Depend) and that Always Discreet pads are preferred over Poise.  TENA is also taking aim at Poise with their line of pads. 
    • Most people I talk to inside and outside the industry have been surprised by the 'me too' nature of the Always Discreet product line, its positioning and marketing execution.  There is no denying the incredible shelf space and distribution P&G achieve. 
    P&G is emailing consumers links to a host of brand videos on YouTube

     This video (1:17) has two women talking about 'no smell'.  As discussed below, P&G is bombarding women with a litany of features and benefits.  The core brand positioning is unclear.
    Original Article - September 2014

    P&G formally announced the first phase of its global introduction of its Always brand into the incontinence category in the U.K., North America, France, Belgium and the Netherlands.  I initially reported this in April 2014.

    40% thinner and can absorb more than 2 times what is typically needed
    Procter & Gamble (ticker #PG) is re-entering the disposable incontinence category, a category they helped create in 1978 along with Kimberly-Clark (Depend and Poise).  Their brand was Attends.  Today it is Always Discreet.  The product was  introduced in the U.K. in July 2014 and will start shipping into North America in August; France, Belgium and the Netherlands will ship in September.

    By P&G's own admission, incontinence is an attractive $7 billion global category growing 7% annually.  The U.S. market is $1.7 billion with Western Europe at $1.6 billion and Asia at $2.4 billion.  These regions represent 80 percent of the global market and have been growing 5 to 9 percent the past few years.  Looking ahead, growth in North America and Western Europe is forecast at 7% with 9% in Asia - at least over the next few years. Compared baby diapers, feminine care products and tissue, incontinence is the fastest growing. 

    Their product is touted as having a litany of features and benefits including...
    • Being consumer preferred and trusted due to the Always branding
    • Offering a significant consumer benefit driven by its superior performance characteristics including being thinner (40% thinner than leading brands) and softer (translating to more comfortable)
    • Absorbing two times more than a woman may need
    • Being the only product with unique dual leak guards (which can make pull-on underwear appear more 'diaper-like', but do provide a functional benefit
    • Having patterns on the cover to appear more feminine and less clinical
    • Absorbing leaks and odors in seconds 
    • More convenient disposal of pads
    • Having patent protection relating to how varying needs are met and its unique construction
    P&G will be leveraging its know-how from Always panty liners and Pampers diapers to make a smaller, more comfortable but more absorbent line of liners, pads and underwear.

    The products appear to be designed nicely and well made (excellent fit and finish).  Most that have seen it didn't notice an obvious point of difference or consumer benefit - it lacked a WOW factor.  Product is currently being bench tested to better understand the new Always performance characteristics in terms of rate of acquisition, re-wet and retention capacity. 

    Standardize, Simplify and Synchronize
    This introduction is occurring as P&G rolls out their new standardize, simplify and synchronize strategy to better focus on big brands with a point of difference, big customers, new channels and new marketing (i.e. digital).

    P&G's First Attempt In The Incontinence Category
    On April 3, 1998, P&G threw in the towel on their Attends incontinence line in the North America to focus on its ‘bigger brands’ according to Scott Betts, the then general manager of P&G’s U.S. Adult Incontinence business. This decision was made after a failed attempt to relaunch the Attends brand.  The amount they invested in  marketing during the relaunch year was actually more than their sales.  After that, they sold the brand.  Domtar, the current owner has been able to keep the business going, albeit as a price brand with no real marketing support.

    The current effort is being led by Steve Bishop, group president of P&G's global feminine and family units.  He wants to build a billion dollar brand and claims that P&G has the right to this based on their proposition and what consumers are telling them.

    10,000 Boomers Turn 65 Everyday.  For The Next 20 Years.
    P&G can't ignore the incontinence category.  They know how to make products that absorb (Pampers, Always) and they have a very strong (global) sales and marketing team.  What other category can they enter with such strong growth metrics over the next 20 years that leverages their core strengths?

    While the baby diaper category is nearly 3 1/2 times larger than adult incontinence products, the long term trends are certainly in favor of incontinence products which have grown 20% since 2009 while baby diapers have declined 8%.

    Adult incontinence offers 20 years of significant growth

    Most in the incontinence business have been asking:  "What took them so long?"
    The big dilemma for the current manufacturers is that P&G usually doesn't introduce me-too products and they aren't going to settle for a small share.  They are now shipping with a full line of 26 items (liners, pads and pull on underwear for women in different pack counts) plus some club packs.  While they'd like market share leadership, I expect they will target at least 25% of the market and may obtain 15% by the end of year one in the U.S.  Ali Didaj (an analyst at Sanford C. Bernstein) estimates that if P&G could obtain 11 percent, Always Discreet could be a $575 million brand in a few years (globally).   

    "In The Next Six Months, We're Entering a New Category"
    In a June 18, 2014 presentation at the Duetsche Bank Global Consumer Conference, P&G CFO Jon Moeller said that in the next six months P&G will be entering a new category.  He didn't divulge the category but also eluded to the fact that they will introduce a new and far superior method of addressing a chronic consumer issue.  Here is a link to his presentation - see slide 14.

    As predicted, P&G  announced their re-entry into incontinence during their earnings call on August 1, 2014.

    Branding Under Always Umbrella
    The brand name is Always Discreet.  The use of Always branding precludes marketing the line to men, but we think its smart.  Women represent about 86 percent of the market and the Always and Tampax brands are a $5 billion business for P&G.  Always branding is a strength for P&G.  The feminine care section is where women want to shop (if they shop in a store, that is).  Being in the feminine care isle helps address the discretion issue.  However, we believe P&G has recommended placement in the existing incontinence section.

    According to a competitors consumer research, 40% of Always maxi pad volume is already being used for light bladder leakage so the transition to a targeted product (Always Discreet) will be easier for a woman using a period only pad.

    For years, Poise advertising has promoted the notion of ‘1 in 3 like me’ referring to the fact that one out of three women older than 18 have recurring bladder issues.  P&G believes women don’t like current products (i.e. Poise, TENA, store brand pads) and that’s why only one in nine buy products to address them.  That is the sweet spot P&G is targeting.  P&G claims women want a more feminine and discreet solution and that Always Discreet will bring more normalcy and femininity to the category.  Being able to transform household penetration will provide the growth that P&G is targeting. Kimberly-Clark's strategy has been to convince women that Poise is superior to 'period only pads' because they absorb three times more and are 'crazy thin'. 
    There may be a downside to branding this incontinence line Always.  It is possible that P&G could risk alienating the 15-25 year old target by associating it with incontinence products.  It may serve to tarnish the equity they've built since the mid-1980's as the modern brand in feminine care.  My daughter Nicole, who is a marketing expert in her own right at General Mills made me aware of this potential.

    Manufacturing Synergies & Efficiencies
    CFO Jon Moeller announced a concerted effort in the area of Innovation & Productivity which will be driven by sales growth, margin improvement and asset efficiency.  In turn, these will drive total shareholder returns.  This will be accomplished with fewer, multi-category plants and common manufacturing platforms.  This plays well into manufacturing Always feminine care pads and new Always Discreet in the same plant(s) and perhaps on the same converting equipment.  Baby diapers and pull-on incontinence products share many of the same materials and processes.  Manufacturing talent can be utilized across all the product lines. 

    Driving Revenue Growth
    This introduction may drive growth in the light end segment as an increasing number of women transition from period only pads to a targeted product.  This will serve to drive more revenue dollars per unit into the incontinence category, at the expense of the feminine care category.  Comparable products targeted for incontinence sell at prices 50% to more than two times the comparable sized feminine care pads.  If P&G is able to trade up current maxi pad customers to new Always Discreet, that will help drive their overall revenue growth.

    The Always branding strategy helps solve the issue of identifying shelf space as well, although at least one big box store says that space in the incontinence section is an issue (hence the comment about TENA's ability to hold onto any shelf space in the U.S.).  Inventory requirements for retailers will be steep as P&G is introducing 26 SKU's in light, moderate and heavy absorbencies. Certainly, not all retailers will stock all SKU's.

    In the U.K. P&G has been selling Always Discreet pads for 'sensitive bladder' on their super savvy me website. They claim they are up to 40% thinner and can absorb more than two times the average woman's need.  They are encouraging women to "just get on with their lives".  The advertising show women dancing in a range of situations with their friends and "enjoying life to the fullest".  This is a far cry from the breakthrough advertising by Poise.

    Other product features include a unique DualLock core, exclusive OdourLock (tm) technology that neutralizes odors instantly and continuously (lots of happy talk).  They are lightly scented, have full length leak guards, are thin and flexible even when wet and fit discreetly.  They come individually wrapped for discreet disposal and have been dermatologically tested.

    40% thinner and can absorb more than 2 times what is typically needed
    The U.K. is the lead market for Always Discreet and will be followed in August in North America with shipments commencing the week of August 11.  France, Belgium and the Netherlands are follow on markets in the early fall.

    Globally, P&G will may market this new line under the brand names of Whisper (Japan, Singapore, India, China, South Korea, Philippines, Thailand, Hong Kong and Taiwan; Lines (Australia and Indonesia); Orkid inTurkey and Evax and Ausonia in Spain and Portugal.

    Dialoging satisfied customers in the incontinence category can be tricky - they need a strong sales pitch (a highly differentiated positioning with a tangible benefit) and millions of trial incentives. In the U.S. P&G will gain share with a uniquely positioned brand and bombardment level awareness and trial generating advertising and promotion of a reported $125 million year one, reportedly the largest outlay in P&G's history.  They will continue shifting the marketing mix into digital, social and mobile media in addition to the usual TV, print and in-store. The roll out will occur in phases over a period of time, perhaps up to three years as they introduce their original line up and follow on with other products such as a pessary.  

    Pessaries: A New Segment In The Incontinence Category?
    Up to 50% of women occasionally leak urine involuntarily, and approximately 25% of women will seek medical advice at some point in order to deal with the problem.  P&G has been filing patents on a new technology - a disposable incontinence pessary.  The product is designed to help stop light bladder control due to stress incontinence.  It is inserted with an applicator like a tampon and its benefit is comfortable insertion and removal.  The patent filing refers to the product being easy and discreet to use, transport and dispose of.  At least one analyst believes pessaries will be the product form P&G leads with, but The CareGiver Partnership feels that they must enter the category with known product forms before introducing a new to the world product style.

    Drawing from one P&G filing on a pessary

    Kimberly-Clark Introduction of Poise Impressa Pessary (Bladder Support)
    New Poise Impressa bladder supports were introduced just two months after Always Discreet.  Read a detailed review of this new product.

    Poise Impressa may change the basis of competition within the light end incontinence market - namely stress incontinence. The largest and growing segment of the category. It adds an innovative halo to the Poise brand as being the category innovator and leader.

    Poise Impressa also speaks volumes about Always Discreet being just another ordinary, absorbent product. However, we believe that with Poise Impressa in the market, P&G's may hasten their pessary efforts.

    The big loser will be SCA if they don't respond.

    Who Wins.  Who Loses?
    The result? Its impossible to know if P&G will be able to achieve 25% of the market after the first year or two. However, if they do, Depend and Poise will lose 10 to 15 share points (in total, not each).  Most in the industry feel that SCA's TENA and Serenity brands will be all but extinguished in the U.S. as retailers use the TENA and Serenity shelf space for Always Discreet.

    The TENA brand has suffered a major loss of retail distribution in the U.S after six months (as of April 2015) . Some stores no longer offer any packs. There is only room for two brands and private label.

    Jan Johansson, CEO of SCA seems quite cavalier about the threat saying "there was no innovation that we didn't know about." The market has reflected its concern into SCA's stock price which has fallen 16 percent since The CareGiver Partnership broke the news about P&G's introduction back in April. One analyst says SCA could lose 30 percent of their incontinence operating profit in 2016.

    Johansson says they will defend with product upgrades and innovations. After six months, there has been no evidence of this.  There is a lack of sense of urgency.  By his own admission "we knew about this before the market did".  Yet nothing has been done.

    There is nothing in the pipeline that we at The CareGiver Partnership are aware of.  On October 29, Johansson said he is also counting on P&G increasing category penetration and SCA picking up some of that growth. He went on to say it could take a year or two to see how consumers respond. SCA has $1.4 billion at stake globally (about a quarter of the market).

    Private label and store brands may lose some share temporarily, but P&G's line up will likely be premium priced (to store brands) and not attract those who primarily purchase on price. Further, over the past quarter century, the share of private label just hasn't changed much in either good and bad economic times.

    More Deals and Lower Prices For Consumers... At Least For a While
    For customers of The CareGiver Partnership, this may be good news with more competition resulting in more incentives and lower prices, at least initially.  As of April, we're seeing coupon values which have increased from $1 to now $2 or even $3 off a pack.

    Unfortunately... More Consumer Confusion
    A major issue with incontinence products is consumer confusion.  Research shows that new category entrants waste on average $130 in trial and error mode trying to find the right product for their needs. That means that 8 to 10 bags of product are purchased before the best option is identified.  This is caused by a lack of standardized naming nomenclature for product styles and absorbencies.  The incontinence category is a clear example of the Paradox of Choice.

    That's why The CareGiver Partnership created the Incontinence Product Finder, a free tool to help simplify the decision process for consumers.  With it, a consumer can sort through over 650 incontinence products in under a minute and pinpoint the ones that will best meet their needs.  Or, they can call 1-800-985-1353 and talk to a knowledgeable product specialist who all happen to be women.  They can also take advantage of our Try Before You Buy Sample Service.

    Further Reading
    Kimberly--Clark's Poise Fires First Shot at P&G's Always Discreet 
    Pessaries.  P&G's Next Incontinence Frontier

      By Tom Wilson, former global president of Kimberly-Clarks feminine care and adult care business sectors.  He also Co-Founded and is President of The CareGiver Partnership and is Managing Partner of CenterBrain Partners, Inc. a 25 year old management consultancy specializing in brand positioning.  He consults in the personal care space with investment houses, equity firms, suppliers of raw materials to the industry, market intelligence firms, start-ups and others.  You can reach him at tomw@caregiverpartnership.com or by calling 920-729-7091. 


    Anonymous said...

    As a woman in her 50's - I like Always products, but until incontinence seems less stigmatized, I'll continue to shop in the feminine hygiene aisle....

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