AWAY-FROM-HOME TISSUE AND

HYGIENE IN THE PHILIPPINES

Euromonitor International
October 2012
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LIST OF CONTENTS AND TABLES

Headlines ..................................................................................................................................... 1
Trends .......................................................................................................................................... 1
Competitive Landscape ................................................................................................................ 2
Prospects ..................................................................................................................................... 3
Category Data .............................................................................................................................. 3
Table 1 Away-From-Home Sales of Tissue and Hygiene by Category: Value
2006-2011 .................................................................................................... 3
Table 2 Away-From-Home Sales of Tissue and Hygiene by Category: %
Value Growth 2006-2011 ............................................................................. 4
Table 3 Away-From-Home Sales of Tissue and Hygiene by Distribution
Format: % Analysis 2006-2011 .................................................................... 4
Table 4 Away-From-Home Sales of Tissue and Hygiene by Category and
Distribution Format: % Analysis 2011 .......................................................... 4
Table 5 Forecast Away-From-Home Sales of Tissue and Hygiene by
Category: Value 2011-2016 ......................................................................... 5
Table 6 Forecast Away-From-Home Sales of Tissue and Hygiene by
Category: % Value Growth 2011-2016......................................................... 5

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AWAY-FROM-HOME TISSUE AND

HYGIENE IN THE PHILIPPINES
HEADLINES
 AFH products sees 6% current value growth in 2011, reaching Ps5.9 billion
 Strong demand for products is observed despite the economic slowdown
 Unit prices of both AFH tissue and AFH hygiene products increase in 2011
 Kimberly-Clark Philippines is the largest player in AFH products in 2011
 AFH products is expected to expand further in the medium term, with a constant value CAGR
of 2% expected in the forecast period 2011-2016

TRENDS
 AFH products registered 6% current value growth during 2011, driven by the increased
consumption of these products by horeca and hospitals/healthcare. Unfazed by the economic
slowdown which hit the Philippines during 2011, demand for AFH products remained strong,
as middle-income consumers increased the frequency of dining out, as well as demand for
better services from hospitals/healthcare. In 2011 sales of AFH products reached Ps5.9
billion.
 Compared with 2010, when AFH products saw 5% current value growth, 2011 saw a slightly
more dynamic performance, despite the slower economic growth in the economy in the
Philippines. Most businesses remained optimistic during the year, as major developers
continued with their planned shopping mall openings in different parts of the country. Chained
consumer foodservice brands in fast food and street stalls/kiosks also launched new outlets
nationwide, with the public increasing their frequency of dining out. Local tourism, or Filipinos
travelling to tourist destinations, also stimulated growth.
 AFH incontinence products saw stable growth during 2011, posting 4% growth in volume
terms and 6% growth in current value terms. Sales reached Ps2.2 billion during 2011, making
it the largest category in AFH tissue and hygiene. Generated mostly from more upscale
tertiary hospitals such as St Luke’s Medical Center and Makati Medical Center, which provide
incontinence products to their patients, the category also benefited from the upgrading of
private hospital facilities, especially those located within Metro Manila and key cities
nationwide.
 During 2011 AFH toilet paper continued to account for more than a quarter of sales in AFH
tissue and hygiene. The performance of the category remained stable during the year, with
volume sales jumping by 4% and current value sales by 5%. This growth was supported by
the still dynamic performance of industry and the services sector, which pushed up
expenditure on this product. Another factor was the opening of more shopping malls which
also provide free toilet paper in their public toilets. It should be noted that business/industry
accounted for a 45% share of value sales in AFH toilet paper in 2011, followed by horeca with
a 30% share.
 AFH wipers reported slightly slower growth during 2011, with volume sales inching up by 1%
and current value sales increasing by 2%. The category remains very small, contributing only
Ps20 million in retail sales. Most institutions stick to using traditional materials such as all-
purpose cleaners, mops and rags for cleaning surfaces. Only a few companies, most of which
are in hospitals/healthcare, use these products. These establishments often require more

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stringent sanitation practices in order to ensure the safety of their patients and curb the
spread of germs and viruses.
 Similarly, AFH boxed facial tissues remained quite a small category in 2011, with slower
growth compared with other categories. During 2011 sales of AFH boxed facial tissues
reached Ps519 million, expanding by 1% in volume terms and 4% in current value terms. This
growth was driven by the robust performance of local tourism in the Philippines, coupled with
the larger number of transactions in full-service restaurants. Horeca accounted for a 32%
share of sales in AFH boxed facial tissues in 2011.
 Growth in AFH paper tableware in 2011 was buoyed by the increasing frequency of eating out
in the local market, as well as the expansion of both local and multinational fast food and full-
service restaurant chains. Increasing disposable incomes in Metro Manila and key cities
nationwide provided fertile ground conducive for the growth of consumer foodservice. During
2011 AFH napkins, which accounts for 100% of sales of AFH paper tableware, expanded by
4% in volume terms and 6% in current value terms. The entry of local manufacturers and
some importers in this category was noted in 2011, as some players opted for the cheapest
products in the market.
 AFH paper towels maintained the fastest growth in AFH tissue and hygiene during 2011,
registering volume growth of 6%. Current value sales, on the other hand, increased by less
than 6%, indicating consumers’ preference for lower-priced products. The robust performance
of paper towels was still buoyed by the increasing hygiene concerns in the country, pushed by
AFH manufacturers and the public sector. Horeca accounted for a 63% share of value sales
in the category in 2011.

COMPETITIVE LANDSCAPE
 Kimberly-Clark Philippines, the local arm of the multinational Kimberly-Clark, dominated AFH
products in 2011. The company’s leadership was secured through its long-standing presence
in both retail and institutional trade, allowing it to establish very good brand equity and
develop good relationships with its clients. The company is known to be the leading supplier
of AFH products to well-known hotels, shopping malls and consumer foodservice brands, both
local and international. Kimberly-Clark Philippines has a wide range of products which are
known for their good quality. These products are complemented with good after-sales service
from the company.
 Local suppliers are also known to cater to the AFH channel, especially those institutions
which are seeking low-priced solutions. Amongst these companies are JJED Philippines and
Quanta Paper Corp, whose strategies are focused on providing cheaper alternatives to
clients. Other companies which are present in AFH products are also key retail players. These
include Sanitary Care Products Asia and Papertech. Despite the leadership of Kimberly-Clark
Philippines, these smaller players and manufacturers continue to improve their shares in the
channel.
 Price remains one of the key factors in the purchasing decision within AFH tissue and
hygiene. This is especially true amongst smaller establishments and institutions, which see
these products as homogenous. Thus, the most affordable choice seems to be the most
logical and efficient. It should be noted that this mentality amongst smaller users secures the
shares of local players and importers, which compete mainly on price.
 However, the focus on price becomes less significant for larger companies who also value
maintaining a strategic relationship with their suppliers. It should be noted that larger local
organisations often prefer suppliers which offer a complete line of solutions to cater to all their

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product needs. As these contracts are often longer term, after-sales service becomes
essential in building loyalty and good relationships.

PROSPECTS
 The performance of AFH products in the medium term will be pushed by the expected
recovery of the economy in the Philippines in 2012, which in turn will boost confidence in
business and industry. Another factor will be the expected increase in the number of tourist
arrivals, buoyed by the more intensive campaign by the Department of Tourism and the
availability of better deals via Groupon sites. In horeca sales will be stimulated by the
expansion strategies of consumer foodservice competitors in fast growing municipalities
nationwide.
 Growth in AFH products is expected to remain stable during the next five years. A constant
value CAGR of 2% is projected in the forecast period 2011-2016. This is faster than the
negligible CAGR experienced during the review period, thanks to the better forecast economic
situation. By 2016 AFH products is expected to reach sales of Ps6.6 billion in constant terms.
 The economic performance in the country will be amongst the most significant factors
influencing growth in AFH products. However, institutional goals and strategies became
equally significant in recent years. Consumers of AFH products are mostly concerned about
maintaining more sizeable margins and lower operational costs, especially as they are
challenged to show growth during economic downturns. In turn, the usage of tissue and
hygiene products in some establishments is often limited, or budgets often remain the same
despite the expansion of operations. In large fast food chains, the provision of napkins has
become more limited, and outlets often do not provide them unless customers ask. These
strategies to keep businesses afloat might serve as a threat to growth in AFH products in
2011, despite the expectation of a better economic performance and upbeat confidence from
businesses and institutions. Another threat will be the transfer of job opportunities from the
Philippines to other cheap labour providers, such as China.
 AFH paper towels is expected to remain the brightest spot in AFH products during the
forecast period. In volume terms, the category is expected to post a CAGR of 4%. By 2016
sales are expected to reach Ps791 million. The increase in the number of establishments
such as shopping malls, restaurants and hotels will secure growth in the category.
 Securing consumers’ loyalty will become a strategy pushed by larger companies in AFH
products during the forecast period. Aside from competitive pricing, relationships between
providers and their customers will become more important in order to avoid share moving to
the proliferation of economy brands.

CATEGORY DATA
Table 1 Away-From-Home Sales of Tissue and Hygiene by Category: Value 2006-
2011

Ps million
2006 2007 2008 2009 2010 2011

Away-From-Home Hygiene 1,616.0 1,696.8 1,832.6 1,942.5 2,068.8 2,192.9

- AFH Incontinence 1,616.0 1,696.8 1,832.6 1,942.5 2,068.8 2,192.9
Away-From-Home Tissue 3,021.1 3,179.0 3,325.5 3,419.9 3,571.0 3,755.8
- AFH Boxed Facial 445.5 458.8 470.3 477.4 498.8 518.8
Tissues

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- AFH Paper Tableware 676.8 728.9 776.3 815.1 868.1 920.1

- AFH Paper Towels 491.2 523.1 551.9 585.0 623.0 657.3
- AFH Toilet Paper 1,390.2 1,450.0 1,508.0 1,523.0 1,561.1 1,639.2
- AFH Wipers 17.5 18.2 19.1 19.4 19.9 20.4
Away-From-Home Tissue 4,637.1 4,875.8 5,158.0 5,362.4 5,639.8 5,948.7
and Hygiene
Source: Euromonitor International from official statistics, trade associations, trade press, company research,
trade interviews, trade sources

Table 2 Away-From-Home Sales of Tissue and Hygiene by Category: % Value Growth

2006-2011

% current value growth

2010/11 2006-11 CAGR 2006/11 Total

Away-From-Home Hygiene 6.0 6.3 35.7

- AFH Incontinence 6.0 6.3 35.7
Away-From-Home Tissue 5.2 4.4 24.3
- AFH Boxed Facial Tissues 4.0 3.1 16.5
- AFH Paper Tableware 6.0 6.3 36.0
- AFH Paper Towels 5.5 6.0 33.8
- AFH Toilet Paper 5.0 3.4 17.9
- AFH Wipers 2.3 3.2 16.8
Away-From-Home Tissue and Hygiene 5.5 5.1 28.3
Source: Euromonitor International from official statistics, trade associations, trade press, company research,
trade interviews, trade sources

Table 3 Away-From-Home Sales of Tissue and Hygiene by Distribution Format: %

Analysis 2006-2011

% away-from-home value
2006 2007 2008 2009 2010 2011

Business/industry 18.5 18.9 18.5 18.2 17.9 17.8

Horeca 27.7 29.1 29.3 29.3 29.5 29.8
Hospitals/healthcare 41.4 41.1 42.2 43.0 43.5 43.8
Public 12.4 10.9 10.1 9.6 9.1 8.5
Total 100.0 100.0 100.0 100.0 100.0 100.0
Source: Euromonitor International from official statistics, trade associations, trade press, company research,
trade interviews, trade sources

Table 4 Away-From-Home Sales of Tissue and Hygiene by Category and Distribution

Format: % Analysis 2011

% away-from-home value
AH AT

Business/industry 0.0 28.2

Horeca 0.0 47.3
Hospitals/healthcare 100.0 11.0
Public 0.0 13.5
Total 100.0 100.0
Source: Euromonitor International from official statistics, trade associations, trade press, company research,
trade interviews, trade sources
Key: AH = away-from-home hygiene; AT away-from-home tissue

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Table 5 Forecast Away-From-Home Sales of Tissue and Hygiene by Category: Value

2011-2016

Ps million
2011 2012 2013 2014 2015 2016

Away-From-Home Hygiene 2,192.9 2,247.7 2,301.7 2,354.6 2,406.4 2,457.0

- AFH Incontinence 2,192.9 2,247.7 2,301.7 2,354.6 2,406.4 2,457.0
Away-From-Home Tissue 3,755.8 3,852.8 3,940.3 4,014.7 4,073.9 4,120.6
- AFH Boxed Facial 518.8 526.6 533.9 540.9 547.4 553.4
Tissues
- AFH Paper Tableware 920.1 943.2 962.0 976.4 989.1 999.0
- AFH Paper Towels 657.3 685.6 713.0 740.1 766.0 791.2
- AFH Toilet Paper 1,639.2 1,676.9 1,710.4 1,736.1 1,750.0 1,755.2
- AFH Wipers 20.4 20.7 21.0 21.3 21.5 21.7
Away-From-Home Tissue 5,948.7 6,100.6 6,242.0 6,369.3 6,480.4 6,577.6
and Hygiene
Source: Euromonitor International from trade associations, trade press, company research, trade interviews,
trade sources

Table 6 Forecast Away-From-Home Sales of Tissue and Hygiene by Category: %

Value Growth 2011-2016

% constant value growth

2011-16 CAGR 2011/16 TOTAL

Away-From-Home Hygiene 2.3 12.0

- AFH Incontinence 2.3 12.0
Away-From-Home Tissue 1.9 9.7
- AFH Boxed Facial Tissues 1.3 6.7
- AFH Paper Tableware 1.7 8.6
- AFH Paper Towels 3.8 20.4
- AFH Toilet Paper 1.4 7.1
- AFH Wipers 1.3 6.7
Away-From-Home Tissue and Hygiene 2.0 10.6
Source: Euromonitor International from trade associations, trade press, company research, trade interviews,
trade sources

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