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    GROCERY: Laundry: Dollars and scents

    Ahold and Pathmark are among the grocers sniffing out the brands, fragrances, price points, and merchandising tactics that sell more laundry care products to Hispanics.

    By Bob Gatty

    Their families are typically larger, and cleanliness and appearance matter a lot to them: These two factors alone should persuade grocers, as well as laundry detergent and laundry care product vendors, to target Hispanics more aggressively. Bilingual packaging or a Cinco de Mayo promo alone doesn't comprise an effective strategy to draw the attention and spending of this rapidly growing population segment, however.

    Hispanics can be dream shoppers for the laundry detergent and product categories, say retailers and manufacturers that are trying to mine the potential for sales in targeting Hispanics. But they shop it with all their senses and appreciate a good bargain, so you'd better be ready to satisfy those expectations.

    If you do satisfy, the payoff in maximized laundry product sales and profits can be substantial. According to the U.S. Census Bureau, the U.S. Hispanic market is now 37 million consumers, and is projected to reach nearly 59 million by 2025. The number of Hispanic households increased by 2.86 million, or 30.7 percent, between 2000 and 2005, with Hispanics projected to account for nearly one-third of all minority citizens in the United States by 2010. Inside those numbers lies great opportunity for the laundry industry. Typically, Latino families are larger, with more children and, thus, more clothes to wash. Households average 3.34 people, compared with 2.57 overall, with more than 43 percent of those homes having four or more people, vs. 21.9 percent of non-Hispanic households.

    "You can't ignore those numbers, and the buying power involved," says James Sturgis, director of supplier diversity at Ahold USA. "That's caused us to look at our consumer base and develop a strategy to specifically meet the needs of our Hispanic shoppers."

    Quincy, Mass.-based Ahold USA operates 575 Stop & Shop and Giant Food stores and 220 Giant and Tops supermarkets, all in the Northeast and Mid-Atlantic regions -- not in the South and Southwest, where the influx of Latinos into the United States is most prevalent. Still, the company realizes the opportunities and challenges this Latino population growth represents.

    Today 6 percent of Giant Food and 9 percent of Stop & Shop customers are considered Hispanic in their approach to merchandising. "We're under-represented by Hispanics in our shopping area, but we recognize that it's a growing trend," admits Sturgis. So the company is now factoring in these consumers when determining laundry category shelf sets, including brands like Suavital, a Colgate-Palmolive product specifically formulated for Hispanic preferences, and Heritage Brands' Solo, a favorite of Latino customers.

    Stop & Shop and Giant Food also produced Spanish-language radio and television ads as part of the banners' new product pricing rollout, which includes laundry products.

    Sturgis is well aware of trends reported last September by the Selig Center for Economic Growth at the University of Georgia's Terry College of Business, which projects Hispanic buying power will reach $863.1 billion by the end of this year, up by 8.1 percent over 2006, while African-American buying power will reach $847 billion, a 6 percent increase.

    It will be the first time that Hispanics will outpace blacks in terms of buying power in the United States. The Selig Center also estimates Asian buying power to have the second-fastest projected growth rate, at 434 percent between 1990 and 2011 (vs. 457 percent for Hispanics during that period).

    "Hispanic consumers are a dream come true for the supermarket industry, spending far more on groceries each week than their Anglo counterparts," noted Jim Wonderly, Ahold's v.p. of GM/HBC, in a sales and marketing conference presentation in early May, adding that while the average U.S. consumer spends $91 per week on groceries, the average Hispanic spends $133.

    Pathmark makes "sense"

    A proprietary research study conducted for Unilever by PMG, Inc., a Hispanic marketing agency with offices in San Antonio and Chicago, found that while many non-Hispanic mothers typically view laundry as a necessary evil, many Latina mothers approach laundry in a markedly different way.

    "A Latina mother equates how good a mom she is by the appearance of her family's clothes to the outside world," says the New York-based Promotion Marketing Association (PMA) in a marketing overview of an award-winning laundry product merchandising campaign at Pathmark stores in the mid-Atlantic region, developed by PMG for Unilever's All Liquid Laundry Detergent and Snuggle Fabric Softener brands.

    PMA's case study summary of the Pathmark program says that for Hispanics, the laundry process is complete only when laundry looks clean and smells great. Since Hispanics are naturally "scent seekers," fresh-smelling clothes and product fragrance are major parts of their laundry experience, according to PMA.

    From 10 percent to 20 percent of Pathmark's shoppers are Hispanic, and that proportion is increasing, says Rich Savner, spokesman for the Carteret, N.J.-based chain, which operates 141 stores in New Jersey, New York, Pennsylvania, and Delaware. Savner says the grocer was looking for a program that would increase category sales, but not erode profit margins, and that would provide its Hispanic shoppers with an engaging experience to create a point of difference.

    At the same time, All Liquid Laundry Detergent and Snuggle Fabric Softener were looking for a way to create awareness and drive sales among Hispanic consumers in Pathmark stores.

    Employing PMG, Unilever and Pathmark joined forces to create a campaign last August and September at 40 Hispanic-dominant Pathmark stores in New York, New Jersey, and Pennsylvania. The "Recarga Tus Sentidos" ("Load up Your Senses") campaign included mobile laundry demonstrations in which a shopping cart was transformed into a mobile washing machine with a colorful cardboard shell, designed to travel throughout the store and engage consumers.

    The chain sold the products at various high-traffic touchpoints such as the entrance, laundry care aisle, targeted center store aisles, and perimeter areas.

    The campaign theme combined the clean benefit of All Liquid Laundry Detergent and the scents of Snuggle Fabric Softener. The program partners integrated the theme across all campaign elements, "presenting a sensorial delivery of fragrance -- visually through colorful flowers wafting out of the washer and through the sense of smell via a scratch-'n-sniff scent card and product sampling," the PMA case study summary says.

    Trained bilingual All/Snuggle "ambassadors" informed consumers about brand attributes and benefits, while distributing samples and other campaign marketing materials. Each ambassador received training on how to set up the demonstration, interact with customers, sell more products, and enhance the overall execution.

    Consumers were even given the opportunity to play a "Load Up Your Senses" interactive game while they learned about the brands. If they reached into the "washing machine" and pulled out a detergent bubble, they'd win prizes such as international phone cards and themed magnet picture frames.

    The campaign won a Silver Reggie award in the Account-Specific Promotions Category from PMA in March. More to the point, according to PMG, it produced these results:

    --Increased sales of All Liquid Laundry Detergent by 27 percent, and Snuggle Fabric Softener during the promotional period by 127 percent, compared with the prior year.

    --Generated over four times the number of consumer impressions during the event, due to the mobile capability.

    -- Provided Pathmark with a unique "retailtainment" activity to create a point of differentiation within the laundry aisle.

    --Secured two weeks of incremental end cap and side stack displays by participating brands.

    While Savner won't reveal further details on results, he says there was enough of a lift in sales "to say that the program was worthwhile."

    Dominick Catena, Pathmark's category manager for laundry detergent, credits Unilever for its efforts with the campaign, but says other manufacturers are also effective in meeting the needs of Hispanic consumers in the laundry category.

    Colgate-Palmolive's highly fragranced Suavital is a good example, according to Catena. In addition, he notes, Procter & Gamble has recently launched a new Downy fabric softener with Spanish-language packaging.

    "Just about every manufacturer has developed products with very pronounced fragrances, like lavender and flower scents," he says. "Tide is coming out with more highly fragrant SKUs in August, and Gain has a new lime-mango-scented product. We do very well with it here."

    Even with bleach, new scents are the rage. "We carry a large amount of scented bleach SKUs, both Pathmark and Clorox," observes Catena. "We're just now adding a lavender SKU. In fact, we have scents that go right through the entire wash load. When I first took this job, I had no idea there were so many different bleaches. I thought bleach was bleach."

    P&G's fresh take

    Procter & Gamble says it has made a significant companywide commitment to understanding and meeting diverse consumer needs and designing brands that appeal to consumers with different lifestyles and habits. Seven years ago Cincinnati-based P&G created the North American Multicultural Business Development Organization (NA MBDO), dedicated to strengthening the company's efforts in U.S. ethnic markets, and mainly targeting Hispanic and African-American consumers.

    "The MBDO is focused on driving our ethnic business in some of our most important brands in North America," explains Anelsie Ramos, P&G's external relations supervisor, who is stationed in Puerto Rico. The brands she includes in that list are Pampers, Bounty, Charmin, Always, Tide, Downy, Gain, Dawn, Pantene, H&S, and Crest.

    Ramos says P&G has gained insights into the needs and desires of U.S. Hispanics through extensive research, and especially by talking with the Latina consumer "about who she is, what motivates her, her laundry habits and preferences."

    According to Ramos, that knowledge is reflected in the products, including such specially tailored versions as Tide with Febreze Freshness, Tide Simple Pleasures, Gain White Water Fresh, Gain Fabric Softener, and Downy Tropical Bloom, which all incorporate product and packaging attributes that meet the preferences of Hispanic consumers.

    "We have learned that while she buys a slew of scent products for her home, and the scent experience is intrinsically important in how she rates the detergent she uses, she's really motivated by freshness, and goes out of her way to provide it," continues Ramos.

    It was this insight that led P&G to introduce Tide with Febreze Freshness, which Ramos says provides the level of cleaning effectiveness expected from Tide, but with the "Febreze freshness they love." The product is specially formulated to help target and remove common odors that get trapped in fabrics, and then deposit "freshness actives."

    To launch the product, P&G's MBDO created a holistic Hispanic marketing plan that included elements such as TV commercials, print ads, radio, sampling, and an online campaign.

    According to Ramos, ACNielsen data shows Tide as the leader of the U.S. Hispanic laundry category, followed by Gain. P&G is the U.S. Hispanic laundry category leader in dollar share, she adds, holding more than 60 percent of the Hispanic food and drug markets, fiscal year to date.

    "Demography is our destiny," she says. "Never before has this realization been so critical to our success."

    Ahold's Sturgis, meanwhile, cites ACNielsen Spectra numbers for the first quarter this year that show Palmolive light liquid detergent with a 29.01 percent Hispanic household penetration, and a demand index of 128, leading the top 20 detergents in terms of household penetration. In his data Purex follows, with 18.83 penetration and a demand index of 116, and Ajax light liquid is third, with 18 percent penetration and a demand index of 137.

    "Brand choices appear to be heavily influenced by such factors as family size and income," adds Sturgis.

    As David Morris, an analyst at Mintel International Group, Ltd., who edited a home laundry products study published in June 2006, sees it, income is key. "Hispanics have made great strides with their household income, but they're still lower than the average, so price point continues to be important," he says, adding that larger families also seek out larger-size containers providing a better value.

    Mexican imports

    The growing Hispanic population in the United States has encouraged Latino-owned companies to increase their focus on sales north of the border.

    AlEn Americas, a subsidiary of Industries AlEn, a household cleaning product company in Mexico, began exporting its leading brands to the United States 25 years ago, and today services the nation from corporate offices in Houston.

    The company's laundry products include Clolex, a bleach, and Ensueno, a fabric softener.

    "The same way our food is different -- we like spicy food -- we also like stronger fragrances in our products, and very specific fragrances, too," says Pedro Somarriba, AlEn president. "Your clothes end up smelling like the fabric softener."

    Somarriba urges U.S. retailers to pay more attention to the needs of the Hispanic consumer. He credits Wal-Mart with a solid strategy to provide specific brands and products desired by ethnic shoppers, but he adds that many of the large national chains are lagging far behind. A number of regional chains, particularly those in the Southwest, are doing a good job, notes Somarriba.

    "This country is changing very rapidly; that is a fact," he says. "There are 37 million Hispanics in the U.S. today, and by 2050 one of every three people in the U.S. will be of Hispanic descent. It's a trend that can't be ignored, and it's an opportunity for those who respond."



    Culture of clean

    When it comes to laundry products, ethnic trends show distinct preferences for format and brand.

    In general, non-Caucasians index quite high in packaged (powdered) detergents, and in inexpensive heavy-duty (liquid) brands such as Sun, Xtra, Purex, Solo, Method, and Ajax (these are also the higher-indexing powdered brands).

    Hispanics, when compared with the non-Caucasian group, index higher in both powdered and liquid detergent (most likely due to larger household sizes, which are more common within this ethnicity). Brands such as Sun, Xtra, Purex, Solo, Method, and Ajax index high with Hispanics.

    African-American purchasing patterns in this category are similar to that of Hispanics. They index high in both powdered and liquid detergent, but not quite to the levels observed in the Hispanic group. Brands such as Sun, Xtra, Purex, and Trend are most common, indexing extremely high among these consumers.

    Asians index much lower in both packaged (powdered) and liquid detergents, when compared wth African-Americans and Hispanics. They prefer packaged over liquid, and some of the brands they most commonly use are Method, Dreft, Seventh Generation, Ajax, Ivory Snow, and Tide.



    EXCLUSIVE WEB CONTENT: How they buy

    Hispanics demonstrate strong brand loyalty and are more apt to purchase based on a friend’s recommendation or a celebrity endorsement



    According to a study undertaken by Mediamark Research, Inc. in 2005, when it comes to laundry detergent buying styles, Hispanics are often on the lookout for new and interesting products, as evidenced by the statement "Change brands often for the sake of variety and novelty," which scored a Hispanic household penetration number of 3.94 and a demand index of 141, indicating a demand 41 percent above the norm.

    Latinos are also highly influenced by what people they know have tried and liked, as shown by 3.08 Hispanic household penetration and a demand index of 140 in answer to the statement "Prefer to buy things my friends or neighbors would approve of."

    Impulse purchases are frequent among this group: A statement regarding this tendency received 7.01 Hispanic household penetration and a demand index of 126.

    Star quality also has an effect on Latinos' laundry detergent purchases, as the statement, "A celebrity endorsement may influence to consider or buy a product," garnered 3.08 Hispanic household penetration and a demand index of 125.

    Perhaps in keeping with Latinos' reliance on friends, neighbors, and sometimes celebrities to introduce them to new products, the statement "Wait until other people have tried things before trying product" had Hispanic household penetration of 6.08 and a demand index of 118.

    Finally, brands are important to this group, who responded to the statement "Brand name is the best indication of quality" with 6.10 Hispanic household penetration and a demand index of 118.

    By Bob Gatty
    • About Bob Gatty Bob Gatty is a Washington, D.C.-based freelancer who specializes in covering the food and convenience industries.

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