ARTICLE:
Monday, May 31, 1999 Published at 13:56 GMT 14:56 UK
Business: The Company File
Soap war froths up
Washing powder and liquids are facing fresh competition in tablet form
The battle is frothing up for control of Europe's laundry baskets, as two global soap giants lock horns over the latest innovation to feed the washing machine.
Automatic powders, liquids and concentrated powders are all an established part of the washing day routine.
Now the battleground for Lever Brothers and US group Procter & Gamble is shifting to a new innovative product - tablets.
Just as Lever celebrates the first anniversary of its solid detergent tablet launch and claims great success in rolling them out across 15 European countries, P&G is lumbering into action with its own tablets.
Tablet takes off
But Lever, the soap detergents division of Anglo-Dutch consumer products group Unilever, has built up quite a lead in winning over British households, who use their washing machines more than five times a week.
Europe's soap detergent market is worth �5.5bn
Lever launched its flagship British brand Persil in tablet form a year ago, and the product already accounts for nearly one in 10 of the nation's washes.
Tablet forms of Lever's other European brands Omo and Skip soon followed.
Retailers' own brands entered the British tablets market nine months later, not a particular surprise given the strength of supermarket brands in Britain.
The surprise was that the world's largest soap maker is still to enter the market.
Better late than never
P&G is now moving into action, saying its product may be late but it will be better and hence more expensive.
Its tablets will flow into Britain with a marketing launch costing �17.5m ($28m), and then roll out across Europe.
Lever stole a march on its rival by persuading households bemused by the choice of standard bulk powders, liquids and concentrated powders that what they really needed was another product that would take the hassle out of wash day.
Lever dominates the UK washing tablet market
Since Lever says that most washing machine users overdose with detergent, what could be more simple than tablets.
Two for a normal load, three if it is extra dirty.
The move worked a treat in Europe's �5.5bn soap detergent market, and tablets soon gobbled up a 5% share with Lever holding 60% of that, or some 25m weekly washes in Europe conducted with Lever tablets.
Sebastian Lazell, Lever's European fabric brands development director, forecasts tablets will account for 20% of the European market soon.
So far the only challenge comes in continental Europe from German Henkel which sells more tablets in Germany and Italy, while Lever leads elsewhere.
In Britain, the impact is more dramatic.
Tablets take 10% of the �900m annual market, and Unilever holds 90% of that with the remainder made up by own-label brands.
Powerful setback
It was not always that rosy. Back in the mid-1990s Lever suffered the ultimate setback when its Power range was found to damage clothing in the wash.
Lever was forced to withdraw a new Power formulation for its Persil, Omo and Skip brands after a patented "accelerator" ingredient was found to weaken fabrics and leave colours faded.
Lever is determined to put the Power fiasco behind it, build up its lead in tablets and stay there. But its record on innovations is not good.
In the early 1980s, Lever pipped P&G by a few months to launch the first liquid detergent, but the US giant bounced back to pinch first place.
Then in the late 1980s, P&G was first to launch concentrated powders and Lever never caught up.
Now there is a difference, says Mr Lazell, at the group's main British manufacturing centre in northwest England.
This time Lever has a one-year lead over P&G, it has rolled out tablets in 15 countries, and has already launched its secondary brands Radion and Surf in tablet form.
US rival fights back
But P&G is fighting back hard. Its new tablets will be available in British shops from the beginning of June.
Lever's round white tablets are placed in a special net dispenser in the washing machine drum but P&G's square, green and white square tablets can be placed in the machine dispenser drawer or direct in the drum with no need for a dispensing net.
P&G delayed its tablet launch by one month to make sure stocks were high enough to meet what it believes will be high demand, but it has priced its product 20% above Lever's counterpart.
The company has to convince its customers that "superior" performance is worth paying for if they are to triumph in the hard-fought soap war.
