Soaps and detergents
Ingredient disclosure top consumer demands
This is written by Rebecca Coons and was first published on January 21st, 2019 in Chemical Week. It has been republished here with permission from Chemical Week.
The cleaning products industry is shrugging off an iffy economic forecast for 2019, choosing instead to focus on what it can control—delivering new product benefits and sustainability claims with more natural formulations.
“We are concerned about the economy in general in 2019,” says Eric Peeters, global business director, home and personal care for Dow Chemical. “But the home care and personal care markets are a little bit more resilient to the economic climate than some other markets. Demand for our products will be relatively stable and not too different from 2018 despite economic weakening.”
IHS Markit forecasts global demand for soap, cleaning, and cosmetic products to grow 3.5% annually through 2022, with growth in China, at 7–7.5%/year, outpacing other emerging markets growing at 3.5–5.0%
Jeff Jirak, vice president Americas at Nouryon—formerly AkzoNobel Specialty Chemicals—expects the North American cleaning products market to see reasonable growth this year. “We expect GDP-like growth, maybe one percentage point above GDP. That’s a bit less than what we saw a year ago, but it’s still pretty good for this industry.” He acknowledges there was a bit of a “hiccup” in demand in the fourth quarter as a reaction to China tariffs and stock market decline, but that has since stabilized. “Everybody got really cautious, and drew down inventories.”
BASF acknowledges that slowdowns will impact any industry, but says the company is shielded to some extent. “We partner with our diversified customers to ensure that they are equipped with the formulation and ingredient capabilities that are necessary to meet varying consumer needs and price points,” the company adds. “While we do not classify ourselves as a commodity business, hygiene and cleanliness are more insulated from recessions/depressions than luxury goods markets.”
Peeters notes that, while the home care market is expected to be relatively flat in North America in 2019, innovations that enable new formulation and formats present an opportunity to expand the addressable market and gain market share. “Customers want products that bring benefits to the fabric that go beyond cleaning and they want products that are safe for them and safe for the environment,” says Peeters. New formats include unit dose-packaging detergents, stain remover sticks, super-concentrated formulations, and fragrance boosters, Peeters says. “These are growing much faster than the average detergent powder or liquid.”
One demographic prized by soapers, and thus their suppliers, is millennials. Defined as individuals born from 1981 to 1996, millennials now surpass baby boomers in numbers but have different cleaning habits and brand loyalties. They are also important as trendsetters, with their habits often adopted by other demographics.
“Consumer preferences are changing, giving rise to new, fast growing segments and forms,” Jon Moeller, Procter & Gamble (P&G) CFO told attendees of the company’s November 2018 investor day. These preferences include high-performing, natural, and sustainable products, he adds. “Ingredient sourcing and perceived safety are taking on increasing importance. Objective safety is no longer the only priority.”
Millennials want more information about what is in the products they use and will scour labels for ingredients considered undesirable, whether that designation is based on science or conjecture.
P&G participates in the online SmartLabel system, where you can find information about its Fabric Care products. “Today, we working to incorporate more of this information onto our packaging to further our transparency efforts and enable [consumers] to make informed choices,” P&G tells CW.
Millennials also favor brands that include natural ingredients or environmentally friendly claims. Since such demands can make or break a brand, companies need to move faster to respond and reformulate than in the past.
“Consumers want more information and have more power to dictate what they want and don’t want in the products that they use,” says Vincent Gass, Head of Global Marketing Industrial & Consumer Specialties at Clariant. “In the past, this education was mostly the turf of technical experts. Now, transparency is driving a switch from ingredients that have become questionable to the benefit of ingredients that are preferable, such as renewable ingredients.” Clariant has been getting more requests to formulate products without selected preservatives, phosphates, or sulfates in home and personal care markets, he adds. “These requests got to such a volume that we decided to challenge ourselves into formulating 15 products for use in personal care without a single questionable ingredient.” To promote the new line, dubbed Essence, Clariant turned to a relatively new marketing channel: “influencers” and vloggers. “The outcome was extremely successful,” Gass says. “We demonstrated that we can formulate without a single questionable ingredient without compromising on performance. And we actually overachieved in terms of new product concepts. In 2019, we will do the same with home care.”
Products with renewability claims are already growing faster than conventional products. P&G says the natural detergent segment is growing 15% annually, and its Tide purclean detergent has outpaced this, growing by 30% annually since its launch two years ago. Purclean has 65% plant-based content and is produced using 100% renewable power in a zero-waste facility. In 2018, P&G expanded its plant-based offerings to include Gain Botanicals and Dreft purtouch. Unilever has made similar claims, saying its most sustainable brands grew 46% faster in 2017 than the rest of its business and delivered 70% of its incremental revenue growth.
“Over the last 2–3 years we’ve focused on designing more plant-based products and we have gone much deeper into sustainability and the sourcing of materials,” P&G says. “Determining where this material comes from and what the sustainability profile looks like has always been important, but becomes even more critical as our plant-based portfolio continues to expand.” The company wants to enable sustainable behaviors like short cycles with cold water, but doesn’t want consumers to compromise on performance. If the detergent fails to get clothes clean, people end up compensating by repeating the wash, adding more product, or turning up the temperature—all behaviors that will reduce sustainability. “We believe you shouldn’t have to choose between clean clothes and a plant-based detergent,” which is why the company formulated purclean to have same cleaning power of Tide.
Nouryon, whose products include amine-based surfactants and chelates, is positioned to meet millennial demand for natural ingredients because many of its products are made from renewable oils and fats. Earlier this month, Nouryon also signed a supply deal with biobased polymers maker Itaconix (Stratham, New Hampshire). Under terms of the agreement, Itaconix will produce and supply polymers with chelating properties that Nouryon will market to customers in household, institutional, and industrial detergent and cleaner applications. In addition, the companies will work together to transition many of Itaconix’s current detergent customers to Nouryon.
Dow plans to announce a bioderived ingredient for the personal care market in 2019, Peeters says.
The trend for renewable ingredients and sustainable formulations also favors the use of enzymes, as does the increased popularity of hard-to-clean synthetic fibers, says Ole Kirk, vice president of household care application research at Novozymes, the world’s largest enzyme producer. “Enzymes are found in nature and are produced by biological means with renewable raw materials,” Kirk says. “They are as natural as an ingredient can get.”
E-commerce, and the corresponding need to further compact products, also favors enzymes usage. “Enzymes create a lot of performance per volume, which makes them ideal for the ultra-compact formulations demanded by e-commerce channels,” Kirk says.
According to P&G, e-commerce sales are growing globally at 18% per year, while mass market channel growth has slowed to just 1% per year. The emergence of e-commerce—which provides low prices and free shipping—has challenged the economic model of retail. It has enabled the proliferation of small and niche players, some of which circumvent brick and mortar retail altogether. This is creating pressure on P&G to differentiate. “[W]e won’t win with our old ways of operating,” Moeller admits.
In personal care, Peeters says e-commerce is enabling increased customization. “YouTube videos and blogs are influencing consumer buying decisions in personal care but is not as much of a factor in the home care market,” Peeters says. “But I expect we will see a growing trend there as well. Oftentimes trends in personal care become trends in home care after some time. I think consumers are very influenced by what they read on the web.”
E-commerce is also forcing some creative packaging solutions. Tide recently unveiled an Eco-Box package containing an ultra-concentrated formula. The packaging uses 60% less plastic and 30% less water than the current 150 oz Tide press-tap, doesn’t require any secondary re-boxing or bubble wrap, and is lighter because of its ultra-compacted formula. It is the first product launched by P&G fabric care’s e-commerce innovation group. “E-commerce isn’t a trend anymore, it’s a reality, and we’re excited to keep innovating for it,” says Isaac Hellemn, brand manager for e-commerce innovation in P&G’s fabric care group.
How about less laundry to begin with?
Meeting consumer demand for convenience is now going beyond asking Alexa to have detergent delivered to your front door. Millennials want to do less laundry in general—both to save time and reduce water and energy consumption—driving a push at the supplier level for ingredients that “refresh” gently worn clothing.
“If you look at most detergents today, they are in some ways more powerful than they need to be,” Gass says. “They are formulated for clothes that get super dirty, and for many consumers that is not the norm. Consumers are more and more looking for products that can refresh their clothes and do not necessarily need a heavy-duty clean every day.” To meet this need, Clariant is working on textile care polymer solutions that have a fabric care effect and also prevent dirt incrustation. “The past 1–2 years, we have seen the paradigm in laundry and cleaning has shifted from stain-busting to more fabric care and clothing hygiene. This means we need to have a much more preventative approach from a fabric standpoint, instead of remediation.”
Unilever recently launched Day 2, a spray product that dewrinkles and refreshes lightly soiled clothes that really don’t require a wash. While news reports quickly mocked the launch as proof millennials are lazy, Unilever noted that 40% of the clothes that are washed could be worn again and that overwashing is bad for both the clothing and bad for the environment.
Suppliers are also quick to point out that formulators continue to create affordable, sustainable, and effective products for consumers—with sustainability at the heart of many of these demands. “They know that consumers are becoming less willing to compromise on sustainability—having a sustainable product offering has become something millennials expect,” BASF says. “As the increasing population is choosing urban living, the need for compact and multi-purpose solutions remains high.”
P&G points out that one its biggest challenges is tackling some of the myths and realities about what really drives sustainability in laundry. “For example, there is a common belief that sustainability is all about the ingredients that go into the product, and that using fewer ingredients drives sustainability. In reality, having high product performance is incredibly important on enabling sustainability,” the company says. “For example, more and more people are moving towards energy-efficient washing habits, which is great. But, if you’re washing in shorter, colder cycles, you need a detergent designed to clean in that setting. If you’re using a lower performing product and your clothes don’t come clean, chances are you’ll compensate for that by washing it again in hotter water, using more product, or if it’s really bad, throwing the garment away. All of these things drive your footprint up—so we believe the product has to be designed to perform if it’s going to deliver the sustainability benefit.”
Enzymes are a category that has been particularly proficient at meeting formulator needs. A staple of detergent formulations since the late 1960s, Kirk says the number of enzyme classes—and product benefits—has expanding beyond the initial use of proteases for protein stain removal. “You can say the technology palette has been expanding. We now have enzymes that provide softness for cotton textiles and preserve colors,” and are developing enzymes that help address odor challenges in synthetic fabrics during cold-water washing. “We see a growing demand for enzymes that provide freshness benefits,” Kirk says.
The push to create consumer benefits is also blurring the line between categories, such as dish detergents with skin-care claims. Clariant’s GlucoPure product, a surfactant based on sunflower oil for hand dishwashing liquid that leaves a superior moisturizing feel on the hands after its use. GlucoPure can address challenges such as irritant labelling and non-tropical ingredient sourcing while achieving comparable performance to traditional surfactants, Gass says.
Meeting demands for new functionalities does require some nimbleness, however. “Millennials drive a much faster prototype and development curve, which means we must move faster to screen and develop new products,” Gass says. “To facilitate this, we have invested in a digital initiative called Chemberry, an online tool that mainstreams the connection between buyers and suppliers in the chemical industry. It’s basically a search engine where you can input any type of claims or features that directly leads to content that has relevance. This makes it much easier for buyers to find the right chemistries, even if they are not a chemical expert.” The search engine so far covers about 10,000 chemistries for the personal-care market, but home care is on the short list for the next Chemberry roll-out, he adds.
Spending power in rapidly growing emerging markets also remain a priority for formulators and suppliers.
A shift from powder to liquid detergents in China, and to a lesser extent, other emerging economies, is opening up a very large, and quickly growing, new market for detergent enzymes, Kirk says. Growth will come from a low base—penetration has been limited until recently—but Novozymes has increased its sales force in China and other emerging markets to tap into these new opportunities.
The shift from powder to liquid in China creates formulation challenges, Gass says. “There are stability issues for some key ingredients like enzymes, so you need a chemistry gentle enough for enzymes to stay stable, but at the same time the list of ingredients you can use in countries like China is limited. And you also need to understand the benefits this product needs to provide. For example, in China clothing is dried outside. So, if you can make a claim for faster-drying as well as resistance to malodor absorption, you can provide value. The stain profile in China is also different from the stains you would see in North America or Europe, and requires different solutions.” In the end, liquid detergent formulators looking to capitalize on this shift need to take a holistic approach. “You cannot just translate a powder into a liquid format,” Gass says. “And my sense is Chinese consumers aren’t just looking for a basic liquid formulation. They are looking for new technologies, new claims, and new benefits to support this move into liquids.”