If hygiene companies can break down barriers of social and cultural consumption sensitivity, there is significant new business to be won in the adult incontinence market. Euromonitor International explains.
The age of longevity
Retail sales of adult incontinence products will be worth US$5 billion globally in 2010, according to the latest forecast data from Euromonitor International. And to 2014, compound annual growth is projected at 6%, higher than in any other tissue and hygiene sector. In fact, growth could be even stronger if companies were to enact bolder investment initiatives in three key areas: product innovation, segmentation and marketing.
Demand for adult incontinence products has never been higher for the simple reason that people are living longer in the world’s major developed markets. This is less to do with healthy lifestyles and more to do with huge advances in medicine, which, in effect, keep people alive and active for longer. Angina, for example, is an increasingly common condition, especially in men.
In the UK, angina now affects 14% of men aged 65 to 71. And globally, cases of angina are rising, concurrent with trends in obesity and diabetes. The key point is that these conditions are now much easier to treat on a user-friendly daily basis, extending life expectancy quite significantly.
As people live longer the likelihood of requiring some form of incontinence aid increases. The problem, and the biggest challenge for the industry, is that vast numbers of sufferers are too embarrassed to raise the problem of incontinence with their health practitioner, or worse, even buy available products at a retail outlet. In that sense, incontinence is as much a social problem as a health issue.
The commercial opportunity here is for the big international hygiene players to humanise (or even Viagra-ise) incontinence, making products as accessible, consumer friendly and embarrassment-free as, for example, women’s sanitary protection.
The risk of complacency
To be clear, significant advances have already been made in the field of retail incontinence. SCA and Kimberly-Clark, notably, have performed well with their portfolio of brands. For both players, the category’s retail value is now worth around US$1 billion a year.
There is a risk, however, that attractive growth curves together with lack of competition could breed over-confidence, if not complacency. It is remarkable, for example, that Kimberly-Clark remains virtually unchallenged in the US incontinence market, the biggest in the world, except from private label. It is almost as though hygiene companies themselves are too embarrassed to stake a claim in the market.
Like any consumer market, tougher competition would raise the bar on innovation, segmentation and marketing, the three key strands to achieving more robust growth. Segmentation needs to be high on the strategic agenda because incontinence affects people in multiple ways, from the mildest of cases to the severest. And innovation is critical because products are still often unreliable. Adult diapers, for example, are often too bulky or uncomfortable, depending on the gender, size, weight and activity level of the consumer.
Consider also that adult incontinence is not a condition unique to old people. On the contrary, there are estimated to be millions of young sufferers worldwide, for whom the embarrassment factor is often even more acute.
Women who have experienced difficult pregnancies are especially vulnerable. Once again, the social failure here is that the condition has not been sufficiently demystified and there are too few types of products on the market that cater in a consumer-friendly way for a specific demographic. This is a marketing and NPD opportunity going begging.
A safe bet for growth
Going forward, if hygiene companies fail to put the right level of strategic investment into incontinence they could miss out on a huge windfall of new business. Indeed, in an era of global economic uncertainty it makes no sense whatsoever to act timidly in a market that has virtually guaranteed growth prospects.
Yet strikingly, incontinence is still a nascent market in vast areas of the world. While the US and Japan each stand out with their U$1 billion retail values, sales in the third-ranked market, France, summed only US$285 million in 2009, according to Euromonitor International. And globally there are only five additional markets with an incontinence retail value worth more than US$100 million. Those figures alone should be enough to convince hygiene companies that they are missing out on a huge untapped opportunity.
Make money and improve lives
Perhaps most surprising is the lack of penetration in China, which has by far the biggest elderly population in the world, with some 128 million people over 65 in 2009 compared with 40 million in the US. Last year, the value of China’s retail incontinence market was a paltry US$60 million, less even than in Portugal, which has an elderly population almost 100 times smaller.
Kimberly-Clark has made tentative inroads in China since 2008, and, as a result, could be best positioned to reap a massive upside if it commits more heavily to the market. Other companies ought to be looking to secure their own market foothold, too.
Japan, the world’s second-ranked incontinence market, continues to be an obvious contender for growth because it has, in effect, the oldest demographic in the world. Specifically, the mean age in Japan was 44 in 2009, higher than any other country.
According to Euromonitor International’s latest projections for incontinence, Japan is top of the pile in terms of absolute growth, with some US$600 million of new business slated to come on stream to 2014. Germany, the country with the world’s second highest mean age, also looks a safe bet for growth, albeit from a lower base.
Kimberly-Clark and SCA will doubtless be thankful, if not surprised, that competition from big-hitting multinationals is so weak in this market. But, polarisation must surely come to an end if the growth story for incontinence becomes decisively bigger over the medium term.
In fact, it is highly likely that both companies would benefit from a new lease of competitive vitality. Quite simply, there is plenty of upside to go around. The industry’s leading players would be wise, therefore, to take a long and hard look at this market. It could prove an unmissable growth opportunity to enhance value, while doing some good, too.