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Regardless of the state of the economy, innovations go further when they are spread across multiple markets

Antibiotic Resistance Still Hot Topic In Personal Care

Laundry Detergent Forms Multiply Once More

Acquisitions have changed the industry landscape, but not its profitability

Related Stories
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[C&EN, Jan. 15, 2001]

Additives: Where All The Magic Is
[C&EN, Jan. 15, 2001]

SDA reorganizes for the future
[C&EN, Jan. 15, 2001]

Novozymes Emerges
[C&EN, Feb. 19, 2001]

[C&EN, Aug. 10, 1998]

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Rohm and Haas

Ciba Specialty Chemicals

Akzo Nobel

American Medical Association

Soap & Detergent Association

Cosmetic, Toiletry & Fragrance Association (CTFA)

Procter & Gamble

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January 21
, 2002
Volume 80, Number 3
CENEAR 80 3 pp. 21-26
ISSN 0009-2347
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Innovation is the lifeblood of the household cleaning products business, but it’s not without its risks. Some products—such as the Purex Advanced laundry detergent launched in 2000 by a joint venture of Henkel and Dial—go 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 others—the Wisk with Wrinkle Reducer detergent promoted by Unilever, for example—don’t 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.

IN SILICO Alco Chemical researchers use molecular modeling to predict the action of additives in detergents.
"THE MARKET LEADERS still need to differentiate their products," Maigrot says. "It's getting tougher and tougher, but the major way they can innovate is by adding new benefits and new product forms. Product forms get copied quickly, so it really comes down to new benefits that come from an innovative ingredient they add to their product."

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.

WASH DAY Testing detergent additives at Alco Chemical's Chattanooga, Tenn., facility.
OBSERVERS SAY wipes have become the fastest growing category in both home and personal care. The way in which they fanned out from an initial niche use in infant care is telling of a concept that is becoming increasingly important to both household product makers and their ingredient suppliers: the leveraging of ideas, technologies, or functionalities across multiple applications.

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. 

"MORE OFTEN the crossover is from personal care to home care, but not always," she says. For example, cationic ester quaternary active ingredients that Cognis developed for fabric softeners are now finding use as emulsifiers for personal care 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."

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Antibiotic Resistance Still Hot Topic In Personal Care

It’s 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).

But while the debate seems to have died down, at least for now, the Soap & Detergent Association and other trade groups representing personal care product manufacturers are not letting up on keeping their members informed and telling the public that there are advantages to the use of antimicrobials in consumer products.

The issue is important enough that SDA will have an “issues briefing” for its members at this week’s annual convention in Boca Raton, Fla. SDA has also set up a website, along with the Cosmetic, Toiletry & Fragrance Association (CTFA), to address consumer concerns about the use of antimicrobials.

The issue of antibiotic resistance has been addressed by a number of health groups for some time, and most, including the Centers for Disease Control & Prevention and the Food & Drug Administration, place the onus on the overprescription and overuse of antibiotics, including those in animal feeds, which enable bacteria to develop a resistance to the drugs.

However, the issue was underscored in 2000 when AMA called for a “public discussion” of the role antimicrobial cleaning products play in the development of resistance. AMA’s call seemed to try to shift at least some of the blame to the use of antimicrobials in cleaning products.

SDA and CTFA were quick to issue a joint statement in which Ernie Rosenberg, president of SDA, said: “The tangible solution to this problem of antibiotic resistance is in the doctors’ hands. Putting the burden on consumers—and taking away effective defenses against disease-causing bacteria—is not the answer.”

SDA’s position has not changed since it issued that statement. Richard I. Sedlak, SDA’s vice president for technical and international affairs, says: “The issue did pick up steam when AMA had its public discussion about two years ago. But, as we have indicated, we have not seen real-life evidence that antibacterial products—as they are normally used in hospitals and in people’s homes—contribute to bacterial resistance. The evidence is clear—you might even say overwhelming—that the overprescription and misuse of antibiotic drugs has led to the explosion of antibiotic resistance.”

Sedlak notes that some confusion in the public mind may arise “when articles lump together the overuse of antibiotic drugs causing resistance—a known fact—and the theory that the use of antibacterial cleaning products may lead to antibiotic resistance, which again, hasn’t been demonstrated under conditions of real-world use.

“What we [at SDA] don’t want to see happen is for people to stop using products that are a part of good hygiene based on selective headlines,” he says. “We also should remember that if antibiotic resistance continues to reduce our ability to treat and cure infection, then preventing infection—in which antimicrobials, disinfectants, and antiseptics play a vital part—becomes even more important.”—WILLIAM STORCK

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Laundry Detergent Forms Multiply Once More

At the same time that they are equipping their laundry detergents with new bells and whistles, the leading household cleaner companies are multiplying the physical forms in which these products come.

The latest of these is the sachet or pouch, a pre-portioned liquid detergent that made its debut in Europe last April. Irina Barbalova, an analyst with the London-based market research firm Euromonitor, says the sachets were first marketed in the U.K. because detergent tablets were very successful there.

Unilever was the first to come out with tablets in Europe, Barbalova says, so its arch-rival, Procter & Gamble, made sure it was first with the sachet, launching it under the Arial name. Since then, other companies—including Henkel, the other big European laundry product maker—have come out with the sachet, and the products have spread to the Continent, most recently in Germany.

According to Thomas Mueller-Kirschbaum, Henkel’s vice president of R&D for laundry and home care, Henkel’s Persil Liquits line is a water-free liquid detergent packed into a polyvinyl alcohol skin. Because polyvinyl alcohol is water soluble, the skin dissolves in the washing machine within a few minutes, he says, completely and without residue. He calls the pouches a more convenient form for delivering a liquid or gel detergent.

Joel H. Houston, president of the consulting firm Colin A. Houston & Associates, puts both the pouches and the tablets in the category of unit-dose products. “The European consumer had a positive experience with unit dosing of automatic dishwasher detergents,” Houston says, “and as a result laundry tablets have been pretty successful.” In some countries, laundry tablets command a market share of 25%, and automatic dishwasher tablets, an even higher share. European autodish tablet makers have followed up with new two-in-one products that contain a rinse aid and three-in-one products with a rinse aid and salt for hard-water treatment.

In contrast, liquid laundry pouches have yet to be introduced into the U.S., and they may not be, if the lukewarm reception consumers have given so far to laundry tablets is any guide. These tablets now command about 4% of the U.S. market, according to Herman Mihalich, vice president of Rhodia’s home care business. Autodish tablets have fared somewhat better.

Their lackluster reception in the U.S. aside, unit-dose products, particularly tablets, present an opportunity for specialty chemical firms that supply ingredients to laundry detergent makers. Rohm and Haas, for example, has had success selling its Acusol 771 disintegrant as an ingredient in autodish tablets. The product is a cross-linked acrylate polymer that swells upon contact with water, causing rapid dissolution of the tablet.

According to Philippe Maigrot, global head of Rohm and Haas’s home and fabric care business, the company is marketing 771 to laundry detergent tablet makers as well, but it has also come out with a new grade, Acusol 772, designed specifically to meet the demanding disintegration requirements of laundry tablets. “We are focusing on reduced dissolution time and full dissolution in the washbath,” Maigrot says.

Alco Chemical, a competitor to Rohm and Haas in the polymer business, also has a new product targeted at dissolution in laundry tablets.

Kevin Beairsto, who directs detergent marketing and technology development at Alco, says the new hydrophobically modified polymer being launched this month is designed to speed the rate at which surfactants go into solution, especially in the relatively short North American wash cycle. According to Beairsto, the consumer may be focused mainly on the dissolving of the tablet, but tablet manufacturers are just as concerned about getting surfactants to dissolve and to their targets on time.

Autodish tablets are also fertile ground for specialty chemical suppliers. Maigrot says the new two-in-one and three-in-one tablets have revived what in Europe was not historically a very innovative business. “Autodish was a pretty stable market in the past,” he says, “but we’ve been pleasantly surprised to find a huge growth in innovation and new product introductions.”

For these multitasking products, Rohm and Haas has launched Acusol 587 and 587D, polymers that Maigrot says are designed to help prevent the films that can form on glasses and cutlery under European automatic dishwasher conditions.

Although chemical companies are doing their part to help make all these new product forms work as advertised, that doesn’t mean they will all succeed in the marketplace. “There are too many products, and there is a risk of the consumer becoming confused,” cautions Euromonitor’s Barbalova.—MICHAEL MCCOY

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