SCA takes on Kleenex with Velvet facial tissue brand extension

SCA’s Velvet brand, which accounts for 10% of the UK toilet paper sector, is expanding into the facial tissues category.

SCA believes that the move is the next logical step for the brand and that the launch will entice customers loyal to the Velvet toilet tissue range to also buy into its facial tissue products.

Velvet facial tissues, which will also be launched in Ireland, will be available in major supermarkets in three size variations – compact, classic and large – and three colours – blue, pink and purple. Running alongside the launch will be an introductory on-pack promotion of 50p off the next purchase.

The launch will be supported by a marketing campaign that will include television advertising, in-store and on-line promotional activities as well as direct mail, with SCA planning to spend £8.5 million on marketing the brand as a whole during 2010.

Private label decline provides prime opportunity for brands

The UK facial tissues category is currently worth £1.7 billion and registered 3% growth in 2009, a marked increase on the previous year, remarkable given the difficult economic climate that prevailed. During the last year, the category has also seen a small decline in private label share, which fell by half a percentage point to just short of 45%, continuing a three-year trend that in total has seen private label’s share decline by seven percentage points since 2006.

Despite holding the second largest share in value terms, the current trend in UK tissues is currently against private label manufacturers, demonstrating that branded manufacturers are still able to benefit from their innovation when it comes to tissues in the UK, and that this innovation pays off even during the most difficult economic circumstances.

Given this trend, the expansion of Velvet into facial tissues certainly comes at an opportune time, and SCA will clearly be hoping that its latest launch can also take some share from private label products.

Velvet takes on the might of Kleenex

Despite this optimistic environment for branded tissue products, the launch of SCA Velvet facial tissues will by no means be without challenges. While SCA already produces pocket facial tissues under its Tempo brand, the new launch brings Velvet into direct competition with market leader Kimberly-Clark’s Kleenex in boxed facial tissues.

Kleenex currently holds 49% of the UK tissue sector and to date has only been rivalled by the private label segment. Despite losing share in 2005, in particular as a result of private label competition and consumers opting for toilet paper as a substitute for tissues, continued innovation and savvy campaigns, such as the re-branding of Kleenex for Men to Kleenex Mansize, have enabled the brand to regain and even improve upon its original share.

Similar tactics with a focus on softness

Adding to the challenge facing the SCA launch is that the manufacturer has chosen a similar tactic to that of a Kimberly-Clark initiative in its marketing of Velvet facial tissue. Velvet is being marketed as “soft, soft, soft”, with the manufacturer claiming that the tissue is softer, stronger and more absorbent than any other product in the facial tissue category.

Just three months ago Kimberly-Clark re-launched its Kleenex Ultra Soft tissue – the third biggest selling Kleenex variant – and also focused on increasing the product’s softness.

The manufacturer was reported to have invested ‘significant sums’ in manufacturing to increase the softness of the tissue, which carries the strapline “Feel me, I’m gorgeous”, while an additional £2.5 million is to be invested in marketing support.

Kleenex will put up a fight

While the recent decline of private label products has provided a real opportunity for branded manufacturers in UK facial tissues, upon which SCA is no doubt looking to capitalise, forecast value growth for the UK tissue sector (1% CAGR to 2014) will be slower than that of the review period.

However, it is possible that a fresh challenge to Kimberly-Clark’s dominance could inject dynamism into the category and provoke consumer interest, in turn providing a boost to value growth.

While the effect of the new rivalry on the category as a whole can only be estimated, one thing, however, is certain – Kimberly-Clark, which withdrew its Kleenex toilet paper products in 2008 to concentrate solely on Kleenex as a tissues brand, will not allow Velvet to muscle in on its market without putting up a fight.