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20160608_141930_resizedINDA, the Association of the Nonwoven Fabric Industry, held its World of Wipes International Conference at the Sheraton Grand Chicago Hotel 7-10 June.

Experts, manufacturers and consultants from various sectors of the wipes industry converged to share their latest insights and discuss future growth in the industry. Below is a recap of several presentations highlighting the trends, issues and overall environment in the wipes industry.

Wal-Mart is keen on American jobs

The opening speaker at the 2016 WOW conference was Joe Quinn, Senior Director, Public Affairs and Government Relations for Wal-Mart. Mr Quinn’s presentation, titled, “Wal-Mart’s US Manufacturing Initiative”, delved into the idea of raising awareness of how Wal-Mart and the wipes industry are committed to creating more jobs in the US. With global retail sales of US$471 billion, Wal-Mart’s decision to spend a concerted amount of time and effort in order to grow more jobs in the US is certainly changing the retailing landscape throughout the country. Mr Quinn specifically cited the example of Rockline Industries, a manufacturer of wet wipes, moving its production from Europe to Springdale, Arkansas. The US$15 million decision to move production was not taken lightly, although the decision by Wal-Mart to commit to purchasing an additional US$250 billion in US products by 2023 in order to support domestic manufacturing and US jobs as a whole certainly played a part in the Rockline decision to open another plant in the US.

Mr Quinn also went on to talk about how Wal-Mart is providing innovative solutions with regard to the distribution of its products to consumers. Wal-Mart has rolled out a hybrid scheme under which it has allowed customers to do the shopping online, and then drive to a location where the products will be immediately available and loaded into the vehicle. This method prevents Wal-Mart from dealing with the delivery costs and also allows the consumer to get the products within a reasonable time on the very same day that they order them. Mr Quinn added that Wal-Mart would continue to roll out this programme to even more stores throughout the US. Additionally, he mentioned even more innovative and cutting-edge aspects of how Wal-Mart is looking to team up with other companies in order to increase distribution and create additional jobs. A pilot programme partnering Wal-Mart with Uber and Lyft in order to deliver groceries is being tested in Denver and should be extended to Phoenix later in June. According to an article on theverge.com, “Under the pilot programme with Uber and Lyft, customers would place an order online and Wal-Mart employees would prepare the items. The employees would then call an Uber or Lyft driver to deliver the order, with the customer paying a US$7 to US$10 delivery charge to Walmart Wal-Mart.” The roll-out of this programme is a direct response to the AmazonFresh grocery delivery service and highlights the ever-growing competition between the giants in the online retail space. The wipes industry must be aware of the changes in the retail channel landscape in order to better understand how the consumer is connecting with its products and how often they are purchasing the products.

North American wipes market continues on an upward trajectory

Brad Kalil, Director of Market Research and Statistics at INDA, presented on the state of the North American wipes market. Overall, growth in the North American wipes market can be attributed to the demand side of the economic equation. This demand is being driven by demographic, economic and technological factors as well innovation, and has been the main reason behind the increased production and capacity growth on the supply side.

Mr Kalil was then able to talk about how the growth in demand has led to an increase in the number of production lines across North America. In 2015, eight new manufacturing lines were added in North America, by the end of 2016 there will be a further nine lines added and an additional six more are planned for 2017. The added production capacity across North America is all dedicated to fulfilling the demand for wipes.

According to Euromonitor International, the North American market for personal wipes reached sales of US$2.2 billion in 2015. With this representing 3% growth on 2014, this category continues on an upward trajectory in the North American market. New technology initiatives and innovative marketing, coupled with consumer demand for access to better hygiene products, will continue to drive this category forward.

* Note: personal wipes as defined by Euromonitor International are the aggregation of general purpose wipes, baby wipes, feminine hygiene wipes and cosmetic wipes

Regulatory concerns continue to plague the industry in the US

It was evident from the beginning of the conference that the overall regulatory environment in the US is a clear concern for the industry as a whole, as the wipes industry has received a lot of criticism in the news due to the fact that various water systems in large cities have been clogged by products that are flushed down the toilet. Wipes are getting most of the attention with regard to being the primary target of the wastewater industry for being the cause of this clogging. As President Dave Rousse mentioned later on in the day during his presentation titled, “Progress through Collaboration but Issues Remain”, the issue derives from the general public’s misunderstanding about which wipes are flushable vs those that are not flushable.

President Rousse maintained that INDA has been quite aggressive in checking that all industry wipes that claim “flushability” are actually flushable and stated that regulators have been misguided in their search to prevent further clogging in sewers and wastewater facilities, as 93% of wipes are simply not flushable, but the public continues to flush the products down the toilet and into the system, where the eventual clogging occurs. One of the main culprits is baby wipes, which simply are not flushable, yet continue to show up in the wreckage of blocked sewers and pipes. With all the confusion about what is flushable and what is not and the fact that some baby wipes are now being marketed as flushable, from an industry standpoint, INDA is considering the possibility of labelling all baby wipes as non-flushable in order to draw a line in the sand and attempt to prevent any consumer confusion. Additionally, President Rousse delved into some of the other issues that the industry is dealing with, such as dispersibility versus disintegration. This comes from better understanding flushable claims on packaging. Dispersibility is a mechanical process that is utilised in order to break the product down, but disintegration can be a mechanical or even biological way in which the products can break apart. Key insights such as this show the level of scrutiny that the industry is undergoing in order to combat the negative press that it has received. President Rousse closed out his presentation by reiterating that reason and science are the only way forward for the industry as well as the regulatory agencies and that fear-mongering will benefit no-one. He emphasised the acronym TANT – Toilets are not Trash Cans – and that breaking this mindset among consumers will go a long way to preventing the flushability issues.

In the spirit of openness and in order to have a healthy debate, INDA invited Claudio Ternieden, Director of Government Affairs for the Water Environment Federation, to speak. In his presentation titled, “The Wastewater Sector Perspective: State of the Flush!”, Mr Ternieden told the INDA members that it is not the flushable wipes that his organisation has an issue with, rather it is the fact that wipes are being flushed that is the issue. Mr Ternieden indicated that there were wipes that were being marketed as flushable that simply weren’t, as well as non-flushable wipes being used in ways that make them more likely to be flushed (eg using baby wipes as a toilet paper substitute and flushing them), and that both of these issues must be addressed in order for the wastewater industry to see that the problem is solved. Mr Ternieden specifically singled out manufacturers, as he believes that manufacturers had done little to educate consumers on what is flushable and what is not. There was a clear divide between his views and those views of INDA and the overall wipes industry, especially over the point of making wipes fall apart as quickly as possible. However, Mr Ternieden welcomed the fact that the wipes industry and wastewater industry were sitting down at the table in order to figure out a solution to the problem and hoped that they could continue to move forward.

Wipes can improve the health of the general public

Dawn Huston, Director of Product Marketing at Berry Plastics, gave an overview of the foodservice towel category and how cleaning solutions have evolved to support overall quality assurance in foodservice. Her presentation reviewed trends in infections, such as norovirus and MERS-COV, and also foodborne illness outbreaks. These issues have increased demand in the foodservice industry for products that can create safer and cleaner environments for both employees and consumers. Utilising Chipotle as an example, Ms Huston was able to directly correlate how an outbreak can lead to a loss of revenue for the foodservice industry. Ms Huston quoted a 2012 Technomic survey that stated that 85% of consumers agree that a restaurant’s cleanliness and sanitation is one of the most important factors in attracting new customers – and in keeping the ones it has already got.

Following the path that Ms Huston laid during her earlier presentation, Phillip Mango, President of Phillip Mango Consulting LLC, implored the audience to think about the future of the wipes industry. His presentation titled, “Disinfecting Wipes: The Next Frontier for Nonwovens”, sought to show that disinfecting wipes are the next big thing in the wipes industry and are set to take off in the market. Arguing that with consumers inundated with reports of global diseases, such as MERS, SARS and H1N1, they want products that make them feel like they are in control. Mr Mango believes that disinfecting wipes are an ideal preventative solution for consumers to use in order to mitigate the spread of disease, and his presentation included some technical specifics that showed how new innovations in the disinfecting wipes space can help both manufacturers and consumers with regard to price and quality.

Lessons learned

The landscape for the wipes category continues to shift fast as both manufacturers and retailers alike are recognising the potential for these products and how they can improve consumers’ lives. Additionally, the developing world still provides opportunities for market expansion. However, as highlighted at the 2016 World of Wipes International Conference hosted by INDA, there are still a number of issues that the industry must address with regard to the environment, premiumisation, price point and flushability if it wants to continue to see growth and opportunity in the global marketplace.

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