Monday, May 7, 2001

P&G, Kimberly-Clark set for
wet toilet paper wars


NEW YORK, May 7 (Reuters) - Procter & Gamble Co. on
Monday made an acquisition that will allow the U.S. consumer
goods giant to challenge rival Kimberly-Clark Corp.'s line of
pre-moistened toilet paper, the industry's latest attempt to
boost stagnant sales.

Cincinnati-based P&G bought the patents and rights to Moist
Mates, which it calls "America's first moist bath tissue on a
roll," from privately held Moist Mates LLC for an undisclosed
amount.

P&G plans to relaunch the product under the Charmin Fresh
Mates brand in July in the mid-Atlantic and Southeast United
States, where it will compete directly with the launch of
Kimberly-Clark's Cottonelle Fresh Rollwipes in the same
month.

It is the second time this year that P&G, which also makes
Bounty paper towels and Pampers diapers, has acquired
another firm's product and relaunched it under a better-known
P&G brand. Earlier this year, it bought the maker of Dr. John's
Spinbrush and dubbed the brush a Crest product.

The company said the Charmin Fresh Mates starter kit will
include one roll of moist tissue with 99 sheets, and a
dispenser that fits on most existing toilet paper spindles by
hanging just below the regular dry-tissue roll. P&G expects the
starter kit to retail for somewhere between $2.49 and $2.99.

The refills will cost about $1.99.

At $3.99 for four refill rolls, Cottonelle Rollwipes will cost less
on a per-roll and per-sheet basis. But the Rollwipes starter kit,
which will include a dispenser and four rolls, will cost about
$8.99, a higher hurdle in this race to consumers' bathrooms.

"I think to get folks to try something that new you're going to
want the lower price for entry," said industry analyst Ann
Gillin-Lefever of Lehman Brothers.

P&G also has the advantage of greater brand strength,
Gillin-Lefever said. In dollar sales, Charmin toilet tissue
commands 29 percent market share, while Cottonelle
commands only 12 percent, she said.

Dallas-based Kimberly-Clark, which also makes Kleenex
tissues and Huggies diapers, has been touting Rollwipes as
one of the new products that will help it drive revenue growth. It
expects $125 million in sales in the first year, growing to $500
million in the sixth year, and has budgeted $40 million in
advertising support for the launch, according to company
spokesman Dave Dickson.

MoistMates were on the market for about five years but did not
have the shelf penetration of a product launched by one of the
larger companies.

Both Procter & Gamble and Kimberly-Clark believe that with
sufficient marketing, pre-moistened toilet paper can not only
drive revenue growth but change the way people address
personal hygiene.

"We think 60 percent of consumers use moist tissues" in the
form of dry toilet paper sprinkled with water or baby wipes or
wet washcloths, said Wayne Randall, global franchise
manager for Charmin.

"There are times when dry bath tissue alone just doesn't do
the job," Randall said in a statement.

When Kimberly-Clark announced the roll-out in January, Moist
Mates' founder, John Marino, challenged the assertion that
Rollwipes were "America's first and only dispersible
pre-moistened wipe on a roll," but Kimberly-Clark insists, as it
did then, that it holds the bragging rights for innovation
because MoistMates are not dispersible, or do not break
apart in water.

"We've done extensive testing, protocol we have to confirm
that a product is flushable," P&G's Randall said. "What's
important to consumers is that you can flush it and forget it,
and we know you can," he said.

An ever higher hurdle than the fear of clogged toilets may be
consumers' reluctance to add another product to their daily
routines.

As Gillin-Lefever said, "bidets never took off here."