ReportsnReports | Tissue and hygiene in canada

ReportsnReports | Tissue and Hygiene in Canada
Saturation, the weak economy and demographic trends affect the performance of the market

In 2010 tissue and hygiene saw a modest increase in current value terms, as many key categories
continued to be affected by saturation, slow population growth, unfavourable demographic trends in
terms of the ageing population and the slow pace of economic recovery, which saw consumers
watching their budgets. Retail tissue remained amongst the most affected by saturation, reflected in
slow volume gains, whilst slow movement in nappies/diapers/pants and sanitary protection reflected
the shrinking consumer base and the growing proportion of older people. Bright spots, however,
included home care wipes and incontinence products, with sales of the former driven by healthy
demand for convenient cleaning options, whilst the latter benefited from the growing proportion of
older people.

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Price increases are mitigated by promotional activities and bulk purchases
In the conditions of a mature market and unfavourable demographic trends, manufacturers sought
to add value by increasing prices through product development and premiumisation. However, weak
economic recovery, continuously high unemployment and strong retail competition for consumer
dollars led to price increases being mitigated by retailers’ reluctance to increase prices. In addition,
there was a high level of promotional activity to maintain customer flow, and consumers opted for
bulk purchases, either in the form of larger rolls or multipacks. Consequently, despite attempted
premiumisation, value growth remained modest in 2010.

Sales remain fairly consolidated, with a sizeable private label presence
Retail sales of tissue and hygiene products in Canada remained fairly consolidated in 2010; led by
Procter & Gamble, Kimberly-Clark and Kruger Products. All of these companies remained active in
terms of marketing and product development to maintain a high degree of brand awareness, with a
focus on key flagship brands, and attention also paid to eco-friendly trends. However, private label
also retained a sizeable presence in the Canadian tissue and hygiene market, with products
marketed towards various price tiers – from economy to premium – as well as green products. Aside
from attracting consumers seeking value, private label has become one of the key components of
revenue growth in a highly competitive retail environment in Canada.

Grocery retailers lead, and price wars intensify
Overall, grocery retailers remained the leading distribution channel in retail tissue and hygiene in
Canada in 2010, with supermarkets/hypermarkets accounting for the largest share of sales. The
latter also saw an increase in share, as the hypermarkets format continued to expand in Canada (not
least through the ongoing expansion of Walmart Supercenters). Within grocery retailers the
competition is intense, also reflected in retailers’ pricing strategies, with some, such as Sobeys,
announcing that prices would not go up, and others, such as Walmart Supercenters, featuring strong
promotions and price discounts. The competition is likely to intensify further as Target moves into

Canada. Due to the strong degree of promotional activity and the consumer quest for value, retailers
which did not compete well on pricing saw their shares of sales decline, such as small grocery
retailers and health and beauty retailers (drugstores being the key channel in the latter).

Modest growth ahead, as volume sales have little room for organic growth
Over the forecast period the issues of market saturation and demographic shifts will remain on the
agenda; thus only modest increases in constant value terms, and slow/marginal growth in volume
terms are projected for the next five years for many key categories in tissue and hygiene. Whilst
incremental product innovation and further attempts at premium positioning, chiefly through
marketing, will be seen once again, these will have limited opportunities to drive significant growth.

Table of Contents
Tissue and Hygiene in Canada - Industry Overview
EXECUTIVE SUMMARY
Saturation, the weak economy and demographic trends affect the performance of the market
Price increases are mitigated by promotional activities and bulk purchases
Sales remain fairly consolidated, with a sizeable private label presence
Grocery retailers lead, and price wars intensify
Modest growth ahead, as volume sales have little room for organic growth

KEY TRENDS AND DEVELOPMENTS
Demographic trends remain a challenge for some, and an opportunity for others
The focus on value continues as economic recovery is slow
Green is still on the agenda
Marketing and presentation are in the spotlight
Retailers battle for share in the conditions of slow recovery

MARKET INDICATORS
Table 1 Birth Rates 2005-2010
Table 2 Infant Population 2005-2010
Table 3 Female Population by Age 2005-2010
Table 4 Total Population by Age 2005-2010
Table 5 Households 2005-2010
Table 6 Forecast Infant Population 2010-2015
Table 7 Forecast Female Population by Age 2010-2015
Table 8 Forecast Total Population by Age 2010-2015
Table 9 Forecast Households 2010-2015

MARKET DATA
Table 10 Retail Sales of Tissue and Hygiene by Category: Value 2005-2010
Table 11 Retail Sales of Tissue and Hygiene by Category: % Value Growth 2005-2010
Table 12 Tissue and Hygiene Retail Company Shares 2006-2010
Table 13 Tissue and Hygiene Retail Brand Shares 2007-2010
Table 14 Penetration of Private Label by Category 2005-2010
Table 15 Retail Sales of Tissue and Hygiene by Distribution Format: % Analysis 2005-2010

Table 16 Retail Sales of Tissue and Hygiene by Category and Distribution Format: % Analysis 2010
Table 17 Forecast Retail Sales of Tissue and Hygiene by Category: Value 2010-2015
Table 18 Forecast Retail Sales of Tissue and Hygiene by Category: % Value Growth 2010-2015
DEFINITIONS
Summary 1 Research Sources
Tissue and Hygiene in Canada - Company Profiles
Cascades Inc in Tissue and Hygiene (Canada)
STRATEGIC DIRECTION
KEY FACTS
COMPANY BACKGROUND
PRODUCTION
PRIVATE LABEL
Fempro Inc in Tissue and Hygiene (Canada)
STRATEGIC DIRECTION
KEY FACTS
COMPANY BACKGROUND
PRODUCTION
PRIVATE LABEL
Irving Tissue Corp in Tissue and Hygiene (Canada)
STRATEGIC DIRECTION
KEY FACTS
COMPANY BACKGROUND
PRODUCTION
COMPETITIVE POSITIONING
Summary 6 Irving Tissue Corp: Competitive Position 2010
Kruger Products Ltd in Tissue and Hygiene (Canada)
STRATEGIC DIRECTION
KEY FACTS
COMPANY BACKGROUND
PRODUCTION
COMPETITIVE POSITIONING
Summary 8 Kruger Products Ltd: Competitive Position 2010
Away-From-Home Tissue and Hygiene in Canada - Category Analysis
HEADLINES
TRENDS
In 2010 demand for AFH tissue and hygiene products remained somewhat slow. This was particularly
the case with tissue products, which continued to be affected by the slow pace of recovery, including
still high unemployment, the slow pace of foodservice recovery and the slow pace of recovery of
business activity. In 2010 total sales of AFH products reached C$553 million, with an increase of 3%
in current value terms.
PROSPECTS
Over the forecast period, AFH tissue and hygiene is expected to see a CAGR of 2% in constant value
terms. Volume sales are expected to see modest increases across various product categories, falling
behind value growth, which is indicative of further price increases for tissue and hygiene products, as
manufacturers will pass higher production costs along the supply chain.

CATEGORY DATA
Table 19 Away-From-Home Sales of Tissue and Hygiene by Category: Value 2005-2010
Table 20 Away-From-Home Sales of Tissue and Hygiene by Category: % Value Growth 2005-2010
Table 21 Away-From-Home Sales of Tissue and Hygiene by Distribution Format: % Analysis 2005-
2010
Table 22 Away-From-Home Sales of Tissue and Hygiene by Category and Distribution Format: %
Analysis 2010
Table 23 Forecast Away-From-Home Sales of Tissue and Hygiene by Category: Value 2010-2015
Table 24 Forecast Away-From-Home Sales of Tissue and Hygiene by Category: % Value Growth
2010-2015

Cotton Wool/Buds/Pads in Canada - Category Analysis
HEADLINES
TRENDS
In 2010 retail sales of cotton wools/buds/pads in Canada reached C$63 million, increasing by 2% in
current value terms, whilst remaining largely flat (slight positive trend) in volume terms. These
products have nearly universal household penetration, and are used for a variety of purposes.
COMPETITIVE LANDSCAPE
Although Unilever Canada and its Q-Tips brand remained the leading branded product in 2010, with
a 36% share of value sales, it was private label which controlled sales overall, with a 50% share of
value sales in 2010 in GBO terms.
PROSPECTS
Over the forecast period, cotton wool/buds/pads is projected to reach sales of C$67 million, with a
CAGR of 1% in retail constant value terms and a CAGR of 1% in volume terms.
CATEGORY DATA
Table 25 Retail Sales of Cotton Wool/Buds/Pads: Value 2005-2010
Table 26 Retail Sales of Cotton Wool/Buds/Pads: % Value Growth 2005-2010
Table 27 Retail Sales of Cotton Wool/Buds/Pads by Type: % Value Breakdown 2007-2010
Table 28 Cotton Wool/Buds/Pads Retail Company Shares 2006-2010
Table 29 Cotton Wool/Buds/Pads Retail Brand Shares 2007-2010
Table 30 Forecast Retail Sales of Cotton Wool/Buds/Pads: Value 2010-2015
Table 31 Forecast Retail Sales of Cotton Wool/Buds/Pads: % Value Growth 2010-2015

Incontinence in Canada - Category Analysis
HEADLINES
TRENDS
Whilst other hygiene products, such as sanitary protection and nappies/diapers/pants, were
unfavourably affected by demographic shifts in Canada, these shifts were good news for incontinence
products. The trend towards an ageing population stood behind the healthy demand for incontinence
products, which increased by 6% in current value terms and 4% in retail volume terms in 2010.
Retail sales of incontinence products remained fairly concentrated in 2010, with Kimberly-Clark
leading with a 58% share of value sales. SCA Hygiene Products Canada was in second position with a
30% share. Procter & Gamble had a small presence, with a 3% share of value sales, and private
label accounted for a 6% share of value sales in GBO terms in 2010.

PROSPECTS
Over the forecast period retail sales of incontinence products are expected to continue to experience
healthy growth, with a projected CAGR of 5% in constant value terms over 2010-2015, to reach
C$194 million. Healthy growth is also expected in volume terms, reflecting actual consumer demand
for these products.
CATEGORY DATA
Table 32 Retail Sales of Incontinence by Category: Value 2005-2010
Table 33 Retail Sales of Incontinence by Category: % Value Growth 2005-2010
Table 34 Incontinence Retail Company Shares 2006-2010
Table 35 Incontinence Retail Brand Shares 2007-2010
Table 36 Forecast Retail Sales of Incontinence by Category: Value 2010-2015
Table 37 Forecast Retail Sales of Incontinence by Category: % Value Growth 2010-2015
Nappies/Diapers/Pants in Canada - Category Analysis

HEADLINES
TRENDS
Similar to other hygiene products, demand for nappies/diapers/pants in Canada is largely driven by
the expansion or contraction of the respective consumer base of children of nappy/diaper-wearing
age. Overall, nappies/diapers have nearly universal penetration in households with children in the
country. Canada, however, continues to experience an ageing population. Although a small baby
boom did occur in 2007 and 2008, on the whole the birth rate in the country remains low to
declining.

Kimberly-Clark and Procter & Gamble remained the two principal marketers of nappies/diapers/pants
in Canada in 2010, with a combined value share of 74%. Kimberly-Clark maintained its lead over
Procter & Gamble, with the former holding a 44% share and the latter a 30% share of value sales. A
high level of consolidation, and active marketing and promotional activities on the part of both
companies are behind the negligible share moves between the two contenders on an annual basis.

PROSPECTS
Over the forecast period retail sales of nappies/diapers/pants are expected to be almost static in
constant value terms, and are projected to decline by a CAGR of 1% in volume terms. In actual value
terms, retail sales are expected to reach C$630 million.

CATEGORY DATA
Table 38 Retail Sales of Nappies/Diapers/Pants by Category: Value 2005-2010
Table 39 Retail Sales of Nappies/Diapers/Pants by Category: % Value Growth 2005-2010
Table 40 Nappies/Diapers/Pants Retail Company Shares 2006-2010
Table 41 Nappies/Diapers/Pants Retail Brand Shares 2007-2010
Table 42 Forecast Retail Sales of Nappies/Diapers/Pants by Category: Value 2010-2015
Table 43 Forecast Retail Sales of Nappies/Diapers/Pants by Category: % Value Growth 2010-2015
Retail Tissue in Canada - Category Analysis
HEADLINES
TRENDS

In 2010 retail tissue in Canada showed a modest increase of 2% in current value terms, against a
1% gain in volume terms, to reach a total of C$1.7 billion. In constant value terms, the growth trend
was in most parts consistent, with slow growth of retail tissue in Canada seen during the review
period. These products are household staples, with practically universal level household penetration
for products such as toilet paper, which creates a challenging environment for manufacturers and
retailers to grow sales any further. Price increases and attempts to move consumers to higher-priced
premium-positioned products were key components of value growth in 2010.

Retail sales of tissue products are quite consolidated in Canada; essentially, five manufacturers and
private label accounted for a 95% share of value sales in 2010. Private label in fact led with a 32%
share of sales in GBO terms. For the rest, Kruger Products, Procter & Gamble, Irving Tissue,
Kimberly-Clark Canada and Cascades accounted for a combined 63% share of value sales in 2010.

PROSPECTS
Over the forecast period, retail tissue is expected to grow only modestly, with a CAGR of 1% in retail
constant value terms, to achieve sales of C$1.8 billion in 2015. Volume sales are also only expected
to see a modest CAGR of 1%. Although some products are indispensable (such as toilet paper),
tissue products are staples in Canada which have been available for many years, and have by now
mostly reached the limit as far as product development and innovation are concerned. The
combination of these factors stands behind the projected slow increase in demand and sales.

CATEGORY DATA
Table 44 Retail Tissue Sales by Category: Value 2005-2010
Table 45 Retail Tissue Sales by Category: % Value Growth 2005-2010
Table 46 Retail Tissue Company Shares 2006-2010
Table 47 Retail Tissue Brand Shares 2007-2010
Table 48 Forecast Retail Tissue Sales by Category: Value 2010-2015
Table 49 Forecast Retail Tissue Sales by Category: % Value Growth 2010-2015
Sanitary Protection in Canada - Category Analysis

HEADLINES
TRENDS
In 2010 retail sales of sanitary protection in Canada saw a modest increase of 2% in current value
terms, to reach C$385 million. The modest increase was largely in line with the growth trend seen in
Canada over the review period. Volume growth in most categories fell behind value growth; once
again indicative of price increases as a driving force behind value growth.
Overall, sanitary protection in Canada remained fairly consolidated in 2010, and was led by Procter &
Gamble, Kimberly-Clark Canada and Johnson & Johnson (Canada). Together these three companies
accounted for an 80% share of value sales. Both Procter & Gamble and Kimberly-Clark saw share
gains in 2010 over the previous year, whilst Johnson & Johnson experienced a slight decline due to
strong competitive activity from the former two players.

PROSPECTS
Sanitary protection in Canada is expected to reach retail sales of C$391 million in 2015, and over the
forecast period is it expected see a negligible positive CAGR in constant value terms and a marginal
decline in volume terms in most categories. Sanitary protection products are necessities, with
purchases and use driven by demographic shifts in the female population. These trends are expected
to remain negative in Canada, with the number of post-menopausal women increasing, whilst the
proportion of girls and women in the age group 10-54 is expected to see a further decline, from 31%
in 2011 to an estimated 30% in 2015.
CATEGORY DATA
Table 50 Retail Sales of Sanitary Protection by Category: Value 2005-2010
Table 51 Retail Sales of Sanitary Protection by Category: % Value Growth 2005-2010
Table 52 Retail Sales of Tampons by Application Format: % Value Analysis 2005-2010
Table 53 Sanitary Protection Retail Company Shares 2006-2010
Table 54 Sanitary Protection Retail Brand Shares 2007-2010
Table 55 Forecast Retail Sales of Sanitary Protection by Category: Value 2010-2015
Table 56 Forecast Retail Sales of Sanitary Protection by Category: % Value Growth 2010-2015

Wipes in Canada - Category Analysis
HEADLINES
TRENDS
On the whole, convenience remained a prevailing trend which crossed all wipes products and stood
behind healthy demand in Canada. In 2010 retail sales of wipes saw an increase of 5% in current
value terms, with positive growth recorded in volume terms across many product categories.

Retail sales of wipes remained highly consolidated in 2010, with Procter & Gamble by far the
principal player in the country, with a 56% share of value sales. Kimberly-Clark was a distant
second, with a 14% share of value sales in 2010. Unlike in many other tissue and hygiene
categories, the share of private label remained small, with no significant gains over the review
period, including in 2010.

PROSPECTS
Over the forecast period, wipes overall is expected to see a CAGR of 2% in retail constant value
terms, to reach C$523 million in 2015. Convenience will remain the key driving force behind demand
for and sales of wipes, as they have increasingly become indispensable in many Canadian
households.

CATEGORY DATA
Table 57 Retail Sales of Wipes by Category: Value 2005-2010
Table 58 Retail Sales of Wipes by Category: % Value Growth 2005-2010
Table 59 Wipes Retail Company Shares 2006-2010
Table 60 Wipes Retail Brand Shares 2007-2010
Table 61 Forecast Retail Sales of Wipes by Category: Value 2010-2015
Table 62 Forecast Retail Sales of Wipes by Category: % Value Growth 2010-2015

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