Western European tissue consumption has grown in recent years at substantially lower growth rates than in the past, with 2015 the only exception. Tissue consumption grew by 1.2% in 2013, 0.8% in 2014 and an encouraging 2.7% in 2015, but then returned to a lower level of 0.8% in 2016, but recovered to 1.2% growth in 2017.
Our current figures for 2018 suggest that the Western European market expanded by only 0.7%, even less than in the weak years 2014 and 2016. Some smaller revisions in the foreign trade figures are still possible, but even these will not change the fact that market growth was weak in 2018. In 2013-2018, tissue consumption grew by 402,000 tonnes in Western Europe, about 80,000 tonnes per year on average.
Having a slightly longer perspective, the average five-year growth rate (2013-2018) was not more than 1.2% per year, so last year’s development was below trend line growth.
The current outlook is that like the economy, Western European tissue consumption has lost momentum. There are no indications that this slowing growth trend will stop in the near future, and we have adjusted our forecast downward accordingly. The driving forces for tissue consumption are weak, as population growth remains low in Western Europe, and the high average share of retailer labels in the consumer tissue business keeps the consumption structure static as retailers dictate the specifications for their products and there is little room for innovations and new product launches, which are an important driver in the better-performing US tissue market.
Also, one of the important factors in the past was the shift to more plies in toilet tissue and kitchen towels, but this development has now slowed as there is no need to continue on this path, with four – and even five – ply toilet paper being offered in a number of Central European countries, such as Germany.
Retailer labels continue to gain share but rather slowly
One of the main features of the Western European consumer tissue market is the high share of private or retailer labels. Nowhere else in the world have retailer labels gained such high popularity as in Europe. This development began in the 1990s and had its strongest growth phase 10-15 years ago, but there seems to be no absolute limit for the growth. However, it is hard to believe that in any country there would be only retailer labels available, so the 100% private label share may never be reached.