Like North America and Western Europe, many countries in the Eastern European region are already witnessing high penetration rates for diapers, femcare products and wipes. While less developed parts of the region show some potential for growth, economic factors can come into play.

Svetlana Uduslivaia, head of Home & Tech Americas at Euromonitor International says not all markets in Eastern Europe are attractive from a future growth perspective, as many already have high per capita consumption of disposable hygiene products. “Value-added products to drive revenues become quite important, but they can face challenges from financial instability and consumer shaky confidence levels, especially in view of rising private label in some of the markets,” she explains.

According to Euromonitor, Eastern Europe overall has an estimated unmet potential of more than $2 billion, but nearly half of it comes from less developed markets with a sizable population base, like Russia and Ukraine.

“But even these markets are getting to the point where per capita consumption is already quite high, especially in baby diapers and sanitary protection/menstrual products (pads in particular),” Uduslivaia says. “Therefore, on the whole, the growth in the region is no longer as impressive as it is in other developing regions. Economic and political instability also adds to ongoing risks, coupled with more competition and pricing pressures.”

In this region, especially when economic troubles arise, consumers will turn to more affordable private label products.

Private label already has a strong presence in some markets, with private label shares as high as 50% in Poland and 28% in Hungary, Uduslivaia explains. “In Russia, private label, while still a smaller portion of the disposable hygiene market, has seen a rapid rise over the past five years, with significant spike in particular during the downturn of 2015.”

Add to this competition coming from local and more affordable brands entering the Russian hygiene market. This has created a more challenging environment for key international brands, she adds. “It is also more worrying considering that Euromonitor lifestyle surveys on future shopping priorities indicate that more consumers in Russia are planning to turn to private label.”

Drylock’s Expansion Program Near Completion
One company finding success throughout Europe is Drylock Technologies, a manufacturer of baby diapers, feminine care products and adult incontinence solutions.

Earlier this year the Belgian company completed an expansion in the Czech Republic, adding a second production site in Hradek nad Nisou. In addition to baby diapers, the plants in Czech Republic produce incontinence products, which are supplied to both retailers and healthcare providers.

This expansion was part of a robust European investment program announced by Drylock in April 2018, which also included the construction of a new site in Segovia, Spain. The €200 million investment was largely prompted by the success of its Magic Tubes channel technology, which is now available in all regions.

“We invested in new equipment in Russia, Czech Republic, Spain, the U.S. and Brazil,” says CEO Bart Van Malderen. “The investment program over the last 16 months included the installation of 17 new lines in the different regions. The last machines are being installed as we speak, and that program is about to be finalized.”

Speaking on the private label market in Europe, Van Malderen believes store brands have an edge. “Private label is just as good as the branded products today,” he says. “And, as we have more and more of the major European chains in these countries, it goes along with the private label policy of those chains.”

EcoWipes Focuses on Flushability, Sustainability
Early last year Polish private label wipes manufacturer EcoWipes, which also produces its own nonwovens, ordered its third nonwovens production line. The WLS (wetlaid spunlacing) production line supplied by Trützschler Nonwovens and Voith will produce flushable wipes as well as biodegradable products.

The line construction is at its finish and production will start during the first quarter of the new year, according to Marta Jabłonska-Kubow, product marketing manager, EcoWipes. “With this nonwoven line, EcoWipes will be able to produce its own flushable nonwoven, but what is more important, an innovative, cellulose-based Tricell nonwoven, which will be a real alternative for current viscose/polyester market standard,” she adds.

EcoWipes’ Tricell is a cellulose pulp-based nonwoven with performance characteristics of cotton, which the company calls a true alternative for standard quality wipes. It uses less chemical input and energy than viscose wipes. “It is a true milestone in the wipes industry,” Jabłonska-Kubow says. “Production of cellulose-based nonwovens on the third nonwoven line will reinforce EcoWipes’ competitive position as a producer of high quality biodegradable and flushable products.”

EcoWipes is quickly developing flushable wipes offerings such as intimate wipes, baby wipes and toilet cleaning wipes. “It is a booming market with a lot of potential,” says Jabłonska-Kubow.

In addition to expanding its flushable wipes converting operations, EcoWipes is also increasing its capacities for a full range of cosmetic and hygienic products including dry wipes, cosmetic pads and cotton buds.

The company is also developing recyclable packaging. “With the EU plastics strategy reduction, we are ready to offer fully recyclable and plastic-limiting packaging for all groups of our products,” Jabłonska-Kubow announces.

Another area of innovation for EcoWipes is the development of water-based lotions for wipes, which more consumers are desiring. The company has developed several 99% water-based lotions, including an offering with COSMOS-standard organic certification.

The private label market is growing, and from EcoWipes’ point of view, private labels have the ability to react more quickly and offer a wider diversity of products. “Chains no longer position their products as a cheaper alternative for brands, but as exclusive brands available only on their shelves,” says Jabłonska-Kubow. “Private labels are faster in adaptation to new regulations (e.g. SUP directive) and market demands (eco-awareness). This is why private labels focus more on sustainable and biodegradable products, and are capable of introducing such products at a much faster pace than brands, which with their market position, prefer to slowly evolve than to revolutionize.”

The wipes market, especially in private label, has a big demand for natural wipes, she says, adding that EcoWipes is one of the few companies in Europe ready to globally switch to fully biodegradable offerings. In fact, the company aims to cease production of polyester based wipes in 2020. “We have the capacity not only to replace but to increase our production of natural, high performance products,” she concludes.  

Hygienika: Made in Poland
Based in Lubliniec, Poland, Hygienika has been producing and selling diapers, sanitary towels and panty liners for over 25 years. The hygiene manufacturer develops products both under its own brands and under private label brands for its customers.

In the past two years, Hygienika has been focused on the production of baby diapers mainly for export, centered on the quality of materials and the absorbency of the product to meet the expectations of its customers, according to Elzbieta Kazimirska, product manager.

Another recent focus has been investments in its personnel. Its high-class specialists are working on innovative technologies that are expected to launch in the market in the coming months. Hygienika has also strengthened its sales department, which, within a short period of time, resulted in winning several contracts for the production of diapers under the own brands of clients in Poland as well as international trade chains, Kazimirska says.

According to Kazimirska, Polish-made products are of the same high quality and advanced technology as products in manufactured in Western Europe. “Our market is extremely competitive, mainly because of Biedronka, the biggest Polish [discount] retail chain (about 3000 stores only in Poland), but also very demanding because of Lidl and a very strong Polish supermarket chain Dino, haves grown very quickly during the last few years,” she explains. “Our demanding customers expect the highest quality products, competitive in every respect to products of the leading A-brand producer, Procter & Gamble, both in the baby and feminine hygiene categories.”

Regarding natural products, the company initially saw growing interest in the feminine hygiene category, and later in baby care. While the initial products of this kind on supermarket shelves were very expensive, Kazimirska says prices have become more affordable over time as competitiveness has increased. “We expect that this trend will not stop, and step by step will be a leading one in Europe due to the fact that [ecological] awareness and care for the environment has increased in society,” she adds.

Hygienika expects the sustainability trend to follow a little bit later in Eastern European countries than it has in Poland, but the company has received several inquiries for more sustainable diapers or packaging in this region. “We see that the European trend comes there slowly, but due to the fact that this market is huge, there is also potential for such producers as Hygienika,” Kazimirska says.

The Eastern European absorbent hygiene market is really worth observing, and it should not be forgotten or omitted in development plans, she adds. “This is a great market but quite difficult, for example, because of cultural differences or the wealth of societies. However, we know that every child and every woman, regardless of their religion or social status, deserves great quality hygiene products – in good quality and price affordable.”