Volume 80, Number 3
CENEAR 80 3 pp. 21-26
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Innovation is the lifeblood of the household cleaning products business, but its not without its risks. Some productssuch as the Purex Advanced laundry detergent launched in 2000 by a joint venture of Henkel and Dialgo down in flames. Others, such as the home dry cleaning kits introduced with great fanfare by Procter & Gamble and Henkel, survive, but only as niche products. And still othersthe Wisk with Wrinkle Reducer detergent promoted by Unilever, for exampledont live up to the hype and give a brand and a category a black eye.
Yet consumer product makers continue to roll out new products, and specialty chemical companies continue to supply them with the ingredients that make these products possible.
Launching premium products with innovative additives is still a priority for most of the laundry and cleaning product development houses," says Herman Mihalich, vice president of Rhodia's home care business.
Philippe Maigrot, global head of Rohm and Haas's home and fabric care business, says household product makers keep coming back to innovation as the only surefire way to create the differentiation that leads to lasting competitive advantage. He points out that the big household product firms can spread out the cost of innovation by leveraging technology developed for a market such as home care into segments like personal or floor care.
So, the new product development efforts continue. In June, still smarting from the Purex Advanced debacle and the dissolution of its venture with Henkel, Dial created an innovation group charged with identifying new opportunities and getting them to market quickly. Chief Executive Officer Herb M. Baum called the group a signal that Dial is changing from a fast follower in the marketplace to a leader in new product development.
Procter & Gamble has had its share of flops, too, but they aren't stopping the firm from spending $100 million on a new fabric and home care innovation center in Cincinnati. According to Keith Grime, P&G's vice president of R&D for fabric and home care, the center will centralize North American R&D resources--now spread among three Cincinnati-area locations--when it opens in January 2003.
"The investment underlines P&G's commitment to continued innovation in our big brands and market-leading businesses," Grime says. "We anticipate that this consolidation of researchers and resources will increase both the speed and capacity of our global innovation capability while reducing costs."
Although the commitment to innovate is still there, consumer product makers responded to the difficult economic climate in 2001 by raising the hurdles their new product ideas must clear before becoming a reality, according to Mike Cheek, Ciba Specialty Chemicals' North American marketing manager for home and fabric care.
One of these hurdles, Cheek says, is "the magnitude of the effect delivered." Potential users of a new home care or fabric care ingredient now want to be sure the effect it imparts is noticeable and significant before they will incorporate it into a new product.
Cheek says this attitude is partly their reaction to unhappy experiences with new products that don't live up to the expectations of consumers. The products "do what the manufacturer says they will do, but perhaps not to the extent that the consumer expects of them," he says.
Other sources point to the Wisk liquid laundry detergent with a wrinkle-reducing claim that Unilever launched in the U.S. in 2000. The new Wisk promised fewer wrinkles, particularly with cotton and cotton blends, but in tests by newspapers and Consumer Reports magazine, it didn't live up to this promise. "Now no one wants to jump into antiwrinkle without being sure," one observer says.
It's no surprise, then, that P&G is backing its Bold Easy Iron detergent with fabric softener, sold in Western Europe, with strong consumer research and an endorsement by Braun, a leading European manufacturer of irons. Grime says P&G achieves the wrinkle reduction effect through a combination of the softening technologies already present in Bold with the cellulosic Liquifiber technology in both Tide WearCare and Cheer with Liquifiber powdered detergents.
Kevin Beairsto, who directs detergent marketing and technology development at Alco Chemical, a division of ICI's National Starch & Chemical, expects antiwrinkle to be an area of strong growth for ingredient suppliers during 2002. At the same time, he seconds Cheek in cautioning that "technical claims are not as powerful as they once were. Today, consumer-perceivable benefits are the key measure."
Beairsto says the company had success in 2001 with its polymeric ironing aid, a blend of an antiwrinkle moiety and a synthetic polymer that is designed to give fabric a crisp feel while reducing the occurrence of wrinkles as the clothes are worn. The material also forms a clear barrier between stains and the fabric, aiding stain removal during subsequent washes.
P&G's Bold Easy Iron--it's called Dash 2-in-1 in some countries--was launched in Europe last March. Thomas Mueller-Kirschbaum, vice president of R&D for Henkel's laundry and home care business, says notable European laundry detergent launches for his company last year include a product-line-wide incorporation of a novel antigraying formula that is based on new polymers and cobuilders, and Black Magic, a detergent for fine washables that contains a cationic dye fixative intended to prevent color fading.
IN CONTRAST, 2001 was a relatively quiet year in the U.S. laundry detergent market. This is partly because consumers were still digesting several big innovations launched in 2000, notably the wrinkle-reducing Wisk, Tide Deep Clean Formula liquid, Tide WearCare powder, and laundry tablets from all the major soapers.
Ciba's Cheek says the dearth of new laundry products was also because of higher scrutiny of another hurdle to new product introduction: the cost of the launch. "Capturing even 1 to 2% of a big market like laundry is a significant expense," Cheek says, and producers are hesitant to spend in a sluggish economy.
Additive suppliers are divided on the impact of the slowing economy on sales of additive-rich premium laundry detergents. Cheek cites figures from J. P. Morgan that show a slight increase in U.S. "value brand" market share over the past year. Figures from Information Resources Inc. paint a mixed picture, with both Tide and some value brands gaining market share.
Regardless of the trend, Rhodia's Mihalich comments that "consumers downgrading to economy brands will typically only switch short term if a minimum performance and care level is not achieved." Looking on the bright side, he points out that sustained use of performance additives by premium brands can improve the economics of making the additives enough that they come within reach of value brand makers.
Value brands can also be targeted with value additives. Beairsto notes that Alco is now launching Alcosperse 747, a hydrophobically modified copolymer that "will allow liquid value-brand detergents to perform very similarly to premium brands, in terms of keeping clothes whiter and brighter, for a very minimal extra cost."
In contrast to the high-stakes game of launching new laundry detergents, introducing a new product into smaller home care categories such as hard surface cleaners and cleaning wipes is less expensive. "The hurdles for success are much lower," Cheek points out.
Indeed, Carl Shervin, North American market manager for Rohm and Haas's home and fabric care business, says much of the innovation in North America in 2001 occurred in nonlaundry categories. "We've now seen the third generation of Swiffer"--P&G's novel cloth-based dusting system--"and we're seeing wipes move from babies to personal care to household uses such as glass, furniture, and floor cleaning," he says.
P&G's use of cyclodextrins is a textbook example of the power of a leveraged technology. Cyclodextrins are ring-shaped molecules based on six, seven, or eight glucose monomers that can entrap smaller compounds. P&G, which has a strong cyclodextrin patent estate, first employed them in the early 1980s as a fragrance delivery vehicle in its Bounce fabric softener. But the firm had its greatest success using cyclodextrins as an odor-removing vehicle in its Febreze spray, launched in 1998.
In 2000, the company expanded the technology to Febreze for the Wash, a liquid laundry additive that helps remove unwanted odors from clothing and baby items. Last year in Canada and Japan, Grime says, P&G launched Febreze Antibacterial, a new cyclodextrin-containing spray that also kills 99.9% of bacteria.
Henkel's Mueller-Kirschbaum says applying technology across several products is nothing new for his company, one of Europe's leaders in household product innovation.
As an example, he points to proprietary gel technology that started in Henkel's laundry and home care business and migrated throughout the company over the past five years. The technology was launched in 1996 in a new gel-based toilet rim block that is touted as being easier to refill than a solid block. Soon after, he says, "there was a cross-fertilization in the direction of detergents, and we started gel detergents in 1996 and '97."
Meanwhile, Mueller-Kirschbaum says, scientists from Henkel's toiletries and cosmetics business used the gel technology to develop toothpaste in a special no-drip stand-up bottle with the opening at the bottom. "They made use of the technology and experience from the first phases to get the right thickening," he says. The product hit the market in 1998.
While such cross-fertilization has no doubt gone on for years, Alco's Beairsto says he's noticed an increase in the phenomenon. "I think a lot is due to the globalization of the business," he says. "The big soapers have a lot better communication among R&D groups than they ever did before."
Beairsto cites the example of an experimental product sample that Alco's development team recently sent to the powdered laundry group at one of the big cleaning product makers. "Historically, functions used to be very pigeonholed," he says. "But surprisingly we got a call back from an autodish [automatic dishwasher detergents] researcher, so clearly these companies are talking internally."
As a result of such experiences, Alco is "focusing more on functionality and less on the end application," Beairsto says. "We are polymer specialists, and we don't know all the product ideas that our customers are working on."
According to Cheek, Ciba has responded to the need to leverage technology across markets by creating the position of chief technology officer (see page 15). The CTO's responsibility, he says, is to ensure that new technology and ideas flow across Ciba's business segment lines, regardless of their original intent.
Plus, as part of Ciba's home and personal care business segment, Cheek's home and fabric care unit is involved in innovation management teams that are being set up with key customers. "The teams explore our core technologies, some of which might not have been used in home and fabric care before," Cheek says.
Cognis, the specialty chemicals company recently spun off from Henkel, also puts home and fabric care and personal care in the same business group, called care chemicals.
Richard Ridinger, vice president of the group, says there is frequently cross-fertilization between these two branches of his group. "We have organized care chemicals to combine both because we see an overlap in technologies," he says. "We see in both markets trends for more convenience, more efficacy, and more friendliness to the environment."
Ridinger notes that there are many similarities between fiber--the object of fabric care--and hair, one of the main targets of the personal care industry. And in both markets "we are talking more and more about delivery systems."
Rita Köster, Cognis' global marketing manager for home care, says Cognis products often cross over from one market to the other. She cites the company's line of Gluadin vegetable-derived proteins, which were first used in hair rinse applications but have since jumped the fence and are being incorporated into delicate fabric wash products.
Cognis is somewhat unusual among personal and home care chemical companies in that it supplies both surfactants and higher value active ingredients. Other companies that fall into this category include Rhodia--although less so now that it has sold its European surfactants business to Huntsman--and Degussa's Goldschmidt unit.
Ridinger says this dual participation is a clear strategy for Cognis. "Our target is to complete our portfolio as much as possible, because there is consolidation among our customers and we want to be recognized as a strategic supplier," he says. Putting together basic surfactants with value-added ingredients allows Cognis to be a "reliable supplier as well as an innovative partner."
For specialty chemicals companies looking to leverage technologies across multiple markets, there's probably no better example than the growth of the enzymes business, notably its expansion beyond the realm of laundry products, where enzymes were first introduced almost 20 years ago.
Laundry is still the dominant outlet for enzymes, as evidenced by a five-year, $600 million sales agreement recently signed between P&G and Genencor for the supply of protease enzymes. Genencor and Novozymes are the two biggest enzyme manufacturers, and both do business with P&G as well as the other big detergent makers.
Tom Pekich, group vice president for bioproducts at Genencor, points to the rise of enzymes in autodish products as a successful example of technology leveraging. "Five years ago that market was virtually nonexistent," he says. Today, enzymes are in many of the top brands and, Pekich points out, were in each of the top five autodish detergents surveyed in May 2001 by Consumer Reports magazine.
Pekich claims that enzymes have played a key role in the proliferation of autodish tablets, where manufacturers must "pack a lot of cleaning power in a small dose that's convenient to the consumer."
However, the market potential for enzymes doesn't stop at fabric and dish cleaning. For example, Genencor has a less publicized deal with P&G to develop enzymes for skin care applications. "The skin care collaboration is a good indication of the trend consumers will be seeing: low allergenic enzymes that can be used in applications ranging from skin to household to hair to oral care," Pekich says.
FURTHER DOWN the road, Genencor plans to leverage the biotechnology that's behind its enzymes into a new field it calls silicon biotechnology. It's the subject of a $35 million alliance the company formed in October 2001 with Dow Corning, the leader in silicon chemistry. Although the alliance has a wide materials science mandate, Pekich predicts that it will be "a positive development for the cleaning industry."
The fruits of this alliance won't hit the market for many years. But just because 2001 was a relatively quiet year for new cleaning products doesn't mean that the research labs at the major manufacturers were not active. Grime at P&G notes that even after products are launched they are continually refined and adjusted. "These changes are typically undertaken without any changes to labeling, unless the benefit or consumer habits required have changed significantly," he says.
And even without a big new product launch, R&D activity never slows down, Grime says. "We are committed to innovation as a means to differentiate our products and provide value to the consumer, so the R&D 'discover and development' process and the filling of the innovation pipeline is a never-ending process."
Not surprisingly, Grime and Mueller-Kirschbaum aren't willing to provide a peek into that pipeline at their respective companies. As Mueller-Kirschbaum says, "We sell our products via the shelves and not via publications."
But he does make a promise: "This year will be a year of a lot of innovation from Henkel. Our pipeline is filled, and we will start early."
Its a controversy that, right now, seems to be waiting beneath the surface. Just a couple of years ago, the use of antimicrobial agents in cleaning products made big news as the American Medical Association and some consumer groups began to wonder if these agents are contributing to the increase in antibiotic resistance around the world (C&EN, Aug. 10, 1998, page 9).
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