The disposable paper products market divides into three sectors: disposable tissue products, which comprise toilet tissue, baby wipes, facial tissue and kitchen roll; disposable nappies and trainer pants; and sanitary protection products. The largest sector within the disposable paper products market is that of disposable tissue products, the value of which is estimated to have accounted for 59.2% of retail sales in 2008, with sales of toilet tissue accounting for a similar percentage within the sector. Distribution of all disposable paper products is divided into: retail channels, as covered in
this Key Note Market Report; and away from home (AFH), which covers industry, institutions and hotels and catering.
Percentage penetration of some of the sectors is high, with little opportunity to increase volume sales except on the back of demographic factors such as an increasing and ageing population. Unlike in many other disposable paper product sectors, demographics are on the side of manufacturers in the incontinence sector and there has been considerable and ongoing promotion of these products. Reliability is a priority for consumers across the entire disposable paper products market and there is a high level of branding, with consumers willing to pay more for a trusted brand — especially in the category of sanitary protection. However, retailers' own brands also claim
a significant slice of the market, particularly in the tissue sector, and this share is likely to be strengthened in times of financial hardship.
Faced with difficulties of significantly increasing volume sales across the market and the fact that heavy discounting curtails potential value growth, manufacturers concentrate on new product development (NPD) to increase value share. Any innovation from one of the big players in the market is generally followed by a similar move from another in fierce competition to gain share in the mature market. With growing consumer concern about
`all things green', companies involved in the sector are also keen to prove their environmental credentials in order to improve their image and to provide some product differentiation from competitors.
The UK market for disposable paper products is dominated by Procter & Gamble, Georgia-Pacific, Kimberly-Clark and SCA Hygiene, all of which are also leaders in the European market. In fact, the European market for the production of disposable paper products is characterised by ongoing consolidation, with the largest six companies accounting for significantly more than half of production capacity. With the markets for some of the products covered by the leading companies at saturation point in Western Europe, manufacturers increasingly look further afield for expansion opportunities in, for example, Asia and South America. Highly populated countries such as India, Bangladesh and Pakistan currently have low consumption levels of disposable paper products, with demand polarised between wealthy and poor.
Key Note anticipates annual growth no higher than 4.2% over the next
5 years in the UK. Some products will fare better than others, notably incontinence products and — owing to the rising birth rate — nappies and trainer pants.
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