Ian Bell manages the research
program for the global home care
industry at Euromonitor International. He has direct re-
sponsibility over the content and quality of Euromonitor’s
home care research, which provides strategic analysis
of the global market, as well as in-depth coverage of
80 countries worldwide. Euromonitor International is the
leading provider of global strategic intelligence on con-
sumer markets with offices in London, Chicago, Singa-
pore, Shanghai, Vilnius, Dubai, Cape Town and Sydney,
and a network of 600 in-country analysts worldwide.
IS ‘PERSIL USA’ A TACTICAL
PRIVATE LABEL FOR WALMART?
MARCH 2015 came with the some- what surprising news that Henkel is introducing its Persil
brand into the US market through an exclusive deal with Walmart. While the story
in home care has typically revolved around
multinationals jockeying for position in
faster-growing developing and emerging
markets, this has sometimes belied the
opportunities offered in slower-growing
and often saturated developed markets,
such as the US.
The development of Tide Pods, a decade in the making, was a clear sign that
there are opportunities to develop categories in the upper pricing range.
Early reports illustrate that Persil is be-
ing positioned as a premium product and
in liquid tablet format (Persil Power-Caps),
even at a price in excess of Tide Pods, the
category instigator and current leader in
terms of value sales. So we have premium
Persil going head to head with Tide in
4,000 or so Walmart stores across the US.
This is a story in itself, one that highlights
the ever-evolving brand owner/retailer
tussle over supply and pricing. Also an
interesting story for Henkel, with a fairly
unique (at least in the world of home care)
supply agreement that could realistically
earn the Persil brand $100 million (retail)
in revenue through 2015, given current
levels of support and Walmart’s likely en-
thusiasm to give its“new kid on the block”
prime positioning on its shelves.
Low Risk, High Pressure
In any other circumstance the launch of
a new detergent brand in the US would
come with high risk attached to it—how
does one compete with the orange wall
that is Tide? In this instance, Henkel appears to be risking very little, even though
it is going head to head with the local
champ. Persil in the US is a fascinating example of a tactical product launch which,
with the backing of the world’s largest
grocery retailer, has every chance of succeeding, not least due to the retailer’s motivation to make it a success. Walmart lives
and breathes its“Productivity Loop”—buy
for less, sell for less, grow sales, operate
for less; within this system the balance of
the retailer/supplier relationship is crucial
and Persil can be seen as a lever in this on-going“discussion” with Procter & Gamble
and its Tide brand in the context of laundry care.
Laundry care in the US is a strong suit
for Procter & Gamble, for all intents and
purposes it “owns” the mid-upper price
tiers of laundry care, and for every retailer,
not stocking Tide is simply not an option.
Looking around the world there are very
Walmart execs hope that there’s room in US washing machines for Henkel’s Persil brand.