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Big Lots Objective
Big Lots would like to offer its customers a private label store brand offering on an (NBE) to
Cottonel...
PCI’s Approach to Contract Manufacturing
As a young emerging Wet Wipe manufacturer, we know first-hand about the need to
d...
Raw Material Supplier Reduction in Nonwoven Substrate Weight
Nonwoven raw material suppliers are focused on delivering inn...
INDA/EDANA Definition of Flushable
•

Flushable products are tested in accordance with trade association guidelines. When
...
Nonwoven Substrates that Demonstrate POTENTIAL to meet all of the current
INDA/EDANA Requirements for Flushability
The (3)...
•

Brands Using Suominen Hydaspun – Kimberly-Clark’s (EU) Cottonelle Brand Label,
Target’s Up & Up Brand Label , Walmart’s...
Summary of MTT Category Today
In summary, the Nonwoven Industry continues to struggle with defining an industry-wide
stand...
True Flushability
Always
Cottonelle
Pampers Tidy Tikes
Kid Fresh
Pull Ups Just For Kids

Flushable
yes
yes
yes
yes
yes

Di...
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Big Lots (NBE) to Cottonelle Adult Moist Toilet Tissue Store Brand Opportunity

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Repositioned product offering by changing target markets (i.e., Big Lots) understanding of the product attributes and led bid process on Big Lots (NBE) to Cottonelle store brand opportunity for two Adult Moist Toilet Tissue SKU's: 48ct. Adult Flushable-Dispersible Wipe in Plastic Tub with Pop-Up Lid and 84ct. Adult Flushable-Dispersible Refill Wipe in Zipper Lock Bag. The pipeline business equaled $1.2MM.

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Big Lots (NBE) to Cottonelle Adult Moist Toilet Tissue Store Brand Opportunity

  1. 1. Big Lots Objective Big Lots would like to offer its customers a private label store brand offering on an (NBE) to Cottonelle 48ct Flushable Pop-Up Plastic Tube and 84ct Flushable Zipper Lock Bag. The private label program will start out as an In/Out Program and eventually transition to a Never/Out Program when stores are reset. Big Lots expects to sell approximately 168,000 – 210,000 units of the 48ct Flushable Pop-Up Plastic Tub and 672,000 – 630,000 units of the 84ct Flushable Zipper Lock Bag. Situation Analysis When we last spoke you mentioned that Big Lots is considering using a thicker grade substrate then the substrates received from us and the other suppliers, and that product performance and finger penetration (i.e. Poke Through) were the drivers that prompted the change in direction. As it stands, Big Lots is waiting on 3 rd party test results on the Flushable – Dispersible claims being made by the supplier of the proposed thicker substrate material. Fast forward, when we recently contacted our raw material supplier to inform them about the amount of raw material needed should we win part of the bid or all of the bid, we were told they would not be able to supply us on since it would be in violation of the supplier agreement in place with Rockline Industries. (NBE) Point of Parity vs. Point of Difference Claims While it is important to establish a Point of Difference, it is equally important to nullify the competition (i.e. National Brand and Other Brands) by matching Point of Parity. The assessment of customer desirability criteria for Points of Difference should be assessed against the following: • Relevance • Distinctiveness • Believability And, the assessment of the deliverability criteria for Points of Difference looks at the following: • Feasibility • Communicability • Sustainability 1
  2. 2. PCI’s Approach to Contract Manufacturing As a young emerging Wet Wipe manufacturer, we know first-hand about the need to differentiate in order to survive and grow in today’s highly competitive business environment, and we understand the logic behind an (NBE) or Better Then (NBE) marketing strategy. However, as a contract manufacturer of private label store brands and other company own brands, it is up to us to perform the necessary due diligence before entering into a strategic partnership. Being fully informed enables us to proactively recommend solutions that best meet each individual retailer’s needs. PCI’s Position on Thicker Substrate Claim We strongly disagree with the other suppliers claim that a thicker grade substrate decreases the chance of (poke through), and therefore, is a better performing product. The grade, thickness, size and weight of a substrate are considered distinguishing technical factors and have no relevance whatsoever on (poke through) strength and product performance. Product performance relative to (poke through) strength is directly associated with the way fibers, binders and other raw materials interact within the application process during manufacturing. More importantly, the thicker grade substrate claim doesn’t qualify as a legitimate Point of Difference since it fails to meet the desirability and deliverability criteria outlined above. Finally, the concept of using a thicker grade substrate in a Flushable product is counter intuitive to the way moist toilet tissue is made since this type of product has the problem of Dispersibility being inversely proportional to strength in-use; meaning if you make it stronger, it becomes less Dispersible. PCI’s Position on Raw Material Supplier Agreement Apparently, the supplier agreement in place with Rockline Industries prohibits the raw material supplier from selling us. Since Rockline Industries is the contract manufacturer for the Walmart Equate Brand, and since they use the same substrate that we intended to use in the Big Lots Brand, we SPECULATE that somehow, someone found out that Big Lots intended to go-tomarket with their own (NBE) to Cottonelle Store Brand Label that would be priced lower than the Walmart Equate Brand Label at retail. Also, the sheer volume of raw material needed to manufacture 840,000 units is significant enough to get people’s attention. (See below.) As a result, they have decided not to supply us with the substrate material for this opportunity. It seems like the course of action we outlined for Big Lots completely turned direction the moment the vendor that raised the thicker substrate claim became involved, and that’s the reason I asked you if Rockline Industries was the other vendor. Raw Material Substrate Big Lots Raw Material Substrate Formula 48ct Plastic Tub with Pop-Up Lid = 1.555 sq yards per unit X 210,000 = 326,667 sq yards. 84ct Refill in Zipper Lock Bag = 2.722 sq yards per unit X 630,000 = 1,715,000 sq yards. Total = 2,041,667 sq yards. 2
  3. 3. Raw Material Supplier Reduction in Nonwoven Substrate Weight Nonwoven raw material suppliers are focused on delivering innovative products that deliver better performance with reduced resource use and reduced environmental impact–all at an affordable price. An increase in thickness of an MTT substrate for any reason is contradictory to the industry’s movement towards sustainability and point of concentration of nonwoven raw material substrates environmental impact throughout its entire life cycle from cradle to grave. Research is currently being done on the following: • Lighter-weight materials that use less polymer • Polymers made from renewable materials • Biodegradable polymers for use in Flushable products that provide more flexible disposal options • Use of recycled polymers Valid (NBE) Claim to the National Brand Cottonelle In order to make a valid (NBE) Claim to Cottonelle the product offering must first meet all of the competitive Points of Parity of the national brand outlined below: • Flushable • Breaks Apart When Flushed • Sewer-and Septic-System Safe • Alcohol Free INDA/EDANA Technical Assessment for Flushability The industry guidelines for testing Flushability is a straight-line technical assessment using 7 core tests, all of which must be passed to support a Flushable claim. (See below.) 3
  4. 4. INDA/EDANA Definition of Flushable • Flushable products are tested in accordance with trade association guidelines. When used as directed, the wipes clear properly maintained toilets, drain lines, sewers and pumps, and are compatible with on-site septic and municipal wastewater treatment systems. INDA/EDANA Definition of Dispersible • Dispersible products are tested in accordance with trade association guidelines. When used as directed, the wipes do not clog service lateral pipes, and when passing through service laterals do not get hung up on closely-spaced cross bars that serve to filter out solid waste entering the facilities. (NBE) Use of Safe Flush Icon The Safe Flush icon on the Cottonelle brand label acts as a visual reminder to the customer that Cottonelle Wipes are Flushable and Sewer-and Septic-System Safe. The icon can only be used on (NBE) product offerings that receive a favorable (NBE) comparison rating to Cottonelle Fresh Flushable Moist Wipes from a recognizable and approved third party regulatory agency. NSF International Certification NSF International’s Flushable Consumer Products Program utilizes the INDA/EDANA Flushability Guidelines as a basis for testing under this program. Although, the INDA/EDANA Guidelines determine which tests should be conducted, all products must generally undergo the following tests. These tests encompass all of the various U.S. size pathways that a Flushable product may follow in the wastewater system. It’s the responsibility of the raw material supplier to test claims they are espousing prior to commercializing their product. • Toilet Bowl and Drain Line Test • Dispersibility Test • Column Settling Test • Aerobic and Anaerobic Disintegration Test 4
  5. 5. Nonwoven Substrates that Demonstrate POTENTIAL to meet all of the current INDA/EDANA Requirements for Flushability The (3) commercial nonwoven substrates that demonstrate POTENTIAL to meet all of the current INDA/EDANA requirements for Flushability are as follows below: • Kimberly Clark’s – Ion Triggered Latex Bonded Airlaid • Suominen’s – Hydraspun Spunlaced Wetlaid Base Web • Buckeye’s – Airspun Non Triggered Airlaid Overview of Kimberly-Clark’s Nonwoven Flushable Substrate • Substrate Name – Ion Triggered Latex Bonded Airlaid • Brands Using Kimberly-Clark Airlaid – Cottonelle Brand Label, Pull Ups Just For Kids Brand Label, Other Kimberly-Clark Brand Labels • Advantages – Market leader in N.A. with Ion Triggered Latex Bonded Airlaid, highest “inuse” wet strength of any commercial nonwoven • Disadvantages – Only available to Kimberly-Clark, produced at one site globally, slow to disperse. Overview of Suominen’s Nonwoven Flushable Substrate • Substrate Name – Hydraspun Spunlaced Wetlaid Base Web • Approved N.A. Suppliers – Proctor & Gamble, Rockline Industries 5
  6. 6. • Brands Using Suominen Hydaspun – Kimberly-Clark’s (EU) Cottonelle Brand Label, Target’s Up & Up Brand Label , Walmart’s Equate Brand Label • Advantages – Cost, limited exclusivity, multiple production sites • Disadvantages – Product is acceptable for current flushable wipe products, but wet strength “in use” is much lower than Kimberly-Clark’s Ion Triggered Latex Bonded Airlaid Overview of Buckeye Technologies Nonwoven Flushable Substrate • Substrate Name – AIRspun Flushable • Approved N.A. Suppliers – Nice-Pak Products, Inc. • Brands Using Buckeye Airspun – Costco Kirkland Signature Brand Label, CVS P/L Adult Incontinent Wipes Store Brand Label • Advantages – The product is new and needs some fine tuning, but functional for the current flushable wipes markets • Disadvantages – Products potential for higher strength wipe markets is uncertain; has issue of dispersibility being inversely proportional to strength in use; if made stronger, it is less dispersible Retailers Need to Ask the Question? Wipes such as moist toilet wipes, baby wipes and personal care wipes are a growing category since they meet the consumer’s need for personal hygiene, convenience and a clean healthy environment. Flushable wipes are a great example, but how do you know, as a retailer, if the Flushable claim made by the manufacturer is substantiated? How can you continue to perform your role as good stewards of the environment and supporters of the local community? We encourage you to ask your suppliers “Do you use the INDA/EDANA Flushability Guidelines to assess Flushability?” and “Have you adopted the accompanying Code of Practice and follow the labeling guidelines for products that should not be flushed?” If the answers are yes, then as a retailer, you have confidence in knowing the wipe is indeed flushable and will not harm the wastewater stream or the environment. 6
  7. 7. Summary of MTT Category Today In summary, the Nonwoven Industry continues to struggle with defining an industry-wide standard (or at least "guideline") for Flushability. Industry experts describe the dispersible products currently available on the market as not optimal, with either slow Dispersibility, low wet strength or high cost; however, they are adequate for the current moist toilet tissue segment of the market not because they are Dispersible, but because they fit through the plumbing fixtures, and will probably make it through unencumbered sewer mains to the waste treatment plant. The consensus is that of the dozen or so products on the market today, they all are basically standard wipes in smaller sizes that don’t disperse in water in any real time-frame (other than perhaps geological), have varying biodegradability, and essentially maintain their structure throughout their entire lifetime in the waste water system. Despite all of this, flushable sells! Consumers rave about the convenience. Consumers love to "flush" germs rather than store them in in-home waste receptacles. Even the size is welcomed for its toddler friendliness and waste minimization. Amazingly, these flushable wipes seem just as strong as their larger non-flushable counterparts (amazing to the consumer; obvious to the nonwoven raw material suppliers who know the difference is a few inches trimmed off of each side.) PCI’s Suggestions to Big Lots Since there are no hard and fast standards today for Flushability, let alone Dispersibility, and because there are no government or regulatory agency imposed standards in place, Big Lots needs to ask themselves the following questions in order to gain a true perspective of the MTT opportunity in front of them. • Why worry about regulations or restrictions until they exist? • Why react to pressures that may never come? • Why pay today for tomorrow's potential problems? • Until an agreed to definition of Flushability can be reached by the Nonwoven Industry; why not go-to-market with an offering that meets the informal Flushability standard such as Kimberly-Clark has done with Cottonelle, Walmart has done with Equate and Costco has done with Kirkland Signature? 7
  8. 8. True Flushability Always Cottonelle Pampers Tidy Tikes Kid Fresh Pull Ups Just For Kids Flushable yes yes yes yes yes Dispersible no no no no no Biodegradable 75% 85% 75% 75% 85% Rodman Publishing No portion of this article can be reproduced without the express written permission from the copyright holder. PCI’s Recommendation to Big Lots There are two solid materials today that by all definitions are truly flushable, they are solid human waste and toilet tissue. Toilet Tissue wetlaid wood pulp is the most conservative model for a truly flushable wipe. The physical characteristics of the PCI nonwoven substrate tested by Bureau Veritas and that compared FAVORABLY as an (NBE) to Cottonelle is white, translucent, embossed airlaid; perforated at the ends. The airlaid we tested is a thermally bonded nonwoven substrate material consisting of natural wood pulp and additives which is the same base composition found in toilet tissue. That said, we strongly believe we have met all of Big Lots (NBE) requirements, and we recommend MOVING FORWARD on the basis that we can deliver an (NBE) or Better Than (NBE) to Cottonelle 48ct Adult Flushable Wipe in Tub with Pop-Up Lid (With Safe Flush Icon) and an 84ct Adult Flushable Wipe in Zipper Lock Bag (With Safe Flush Icon.) PCI’s Contingency Plan Recommendations to Big Lots • Create a brand name that is exclusive to Big Lots Stores • Introduce Big Lots customers to Premier Care’s (NBE) Control Label to Cottonelle tested by Bureau Veritas • Continue to offer industry closeouts to Big Lots customers 8

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