Although the packaged goods giants have been dropping brands in the household cleaning sector – or in one case pulling out entirely – Orange Glo believes it can find a place in the UK’s cupboards. By Sonoo Singh
A family-owned company from Colorado is planning a marketing blitz on the UK household cleaning market, in the hope of snatching market share from key players such as Procter & Gamble and Unilever. But the task ahead could prove to be much tougher than Orange Glo has bargained for – even large players have shed brands or withdrawn from the mature market altogether in recent months.
Orange Glo, which launched some products in the UK last year through Asda stores, is looking for an advertising agency to help it to carve out a share of the market (MW last week). But the company, which also plans to break into the French and German markets, may find that its &£3m advertising budget is not enough.
Industry experts are sceptical about Orange Glo’s prospects, suggesting that, in a market where growth and maintenance of market share relies on a succession of new products, it is unlikely that Orange Glo will be able to make a major impact. One City analyst says: “It is very tough for a new entrant to break into a market as mature as the UK’s, which is dominated by a handful of manufacturers. I am not sure that Orange Glo has the ability to fight the giants in this sector, which boast a portfolio of well-established brands and products.
“Access to deep pockets, research and development and manufacturing capabilities are crucial in a market that is driven by new product development”
Even global giant Colgate-Palmolive recently found itself unable to keep up with the pace of the market. It conceded defeat to the growing dominance of P&G when it pulled out of the detergent market and sold off its “non-profitable” detergent brand Ajax, which was big in the UK in the Eighties. In 2001, Ajax held only a 0.7 per cent share of the UK household cleaning market compared to Unilever brands’ 24.3 per cent, P&G’s 13.5 per cent, SC Johnson’s 8.7 per cent and Reckitt Benckiser’s 8.4 per cent (Mintel).
But Orange Glo UK managing director Linda Appel Lipsius, daughter of company founder Max Appel, says that her company’s products will carve out a niche: “We are not looking to be a flash in a pan. It is not about stealing market share, but building the cleaning goods category. Our focus will be on our products, and we aim to deliver good-quality, innovative products.”
Orange Glo claims that its products are environmentally friendly, with some containing “natural” citrus ingredients and others being “oxygen-powered”.
The company is not alone in offering products that do not contain harsh chemicals and claim to be environmentally friendly. Last year, Unilever launched OX, an oxygen-based bleach under the Domestos brand; and SC Johnson introduced Mr Muscle Orange Action to capitalise on consumers’ desire to use cleaning products containing natural ingredients.
Appel Lipsius, however, insists that Orange Glo, which was launched in the US in 1982, can find success in the UK. The company, which also trades in Japan, has a global turnover of over &£200m. Appel Lipsius says: “We are not just another niche player in the cleaning market. In the US, we are one of the top ten companies in this category.”
Orange Glo is not the only newcomer to the market. Homepride is hoping to develop the hard-surface cleaning category with products such as Kitchenpride and Ovenpride. It is already in negotiations about supporting its products through sponsorship. Managing director Matt Stockdale says: “Our aim is to become the preferred household name and we will go up against the big players and succeed. Unlike others, Homepride is not in the business of launching ‘me-too’ products, but is launching innovative products.”
Neither company is the first to take on the big boys. In 1999, Australian company OzKleen announced that it needed an advertising agency for a major marketing and advertising campaign (MW October 21, 1999). The appointment never materialised and the company, which spends &£430,000 a year, handles advertising in house.
OzKleen has been unable to replicate the success of its Australian business, which – according to international marketing manager Mark Quinn – accounts for 45 per cent of the household cleaning market Down Under. In the UK, he claims, it has a five per cent share. He adds: “I agree that big players, with their sheer size, can drive us out of the market. They run big campaigns to push their products and can put pressure on the retailers to squeeze us off the shelves.”
OzKleen prices its products, which include Bath Power and Carpet Power, at the premium end of the market.
Last year, haircare giant Henkel & Schwarzkopf also tried breaking into this sector, with the launch of its Glist dishwasher detergent and the purchase of the Frish toilet cleaner brand from Buck Chemicals. Henkel has a large detergent business outside the UK, especially in Germany where it owns the Persil brand.
But the going has been far from smooth for Henkel. It called a halt to a series of planned UK launches after failing to secure shelf-space for Glist (MW April 11, 2002). Marketing director Carole Armstrong-Hooper says: “The issue we had was with the competition – rivals were determined not to let us in – and not with retailers, which love our products.” Hooper adds that companies such as Orange Glo, without the backing of a global corporation, will find it tough.
Price will be a key factor in determining Orange Glo’s success. One household goods buyer says that the cleaning market is very price-driven: “A product launch is always welcomed by consumers but, after the trial period is over, they reach for the most competitively priced product on the shelves. Only the big companies can roll out products quickly and cheaply.”
But Lever Fabergé, which is cutting several non-performing brands including Sun detergent, claims that smaller companies help to expand the market. Category strategy manager for homecare Jessica Blanford says: “Clearly, big brands are needed to establish any market; but smaller brands are needed to make categories grow within that sector.”
Orange Glo and Homepride will have to ensure that innovation and competitive pricing are at the core of their business, if they are to have any chance of taking on the big players in the household cleaning market.