On a Roll: The Comeback of Angel Soft®
5 MIN
When GP’s first billion-dollar brand started to unravel, leaders began to look at what customers valued.
There are lots of “rise and fall” stories in business, but not so many about falling and then rising again. The story of Georgia-Pacific's Angel Soft® bathroom tissue is one of them.
When GP introduced Angel Soft® in 1986, it was the first new toilet paper brand to hit the U.S. market in 10 years. GP spent $10 million on TV ads featuring Disney’s voice of Winnie the Pooh saying, “it’s rather amazing that something so down-to-earth could be so soft.” Another $20 million was earmarked for coupon redemptions and product giveaways. At that time, this was the biggest ad budget in its bath tissue category.
All that advertising worked. It took less than two years for Angel Soft® to capture 6% of all bath tissue sales. It became the top-selling item for several major retailers. As momentum increased, production expanded from four sites to eight sites running 35 production lines. In 2008, Angel Soft® became the first GP brand to hit $1 billion in annual retail sales.
Starting to Struggle
But not long after, things began to change. Sales volume peaked in 2009 and began slowly declining as more and more retailers prioritized their own private-label bath tissue at lower price points. Despite efforts to reduce production and distribution costs, the Angel Soft® team struggled to keep it competitively priced and readily accessible on store shelves. “We were improving our margins per roll, but selling fewer rolls,” said Vivek Joshi, president of the group responsible for GP’s bath tissue brands. “We were gradually going out of business.”
In 2018 Georgia-Pacific decided to invest $300 million in new converting lines for Angel Soft® – a necessary equipment upgrade for producing a higher-quality product. It took more than two years to complete all those installations, during which time the pandemic hit and toilet paper sales temporarily spiked. But as soon as COVID was over, decreases in the brand’s sales resumed. This was when the team had a vision change and became hyper-focused on the principle of mutual benefit. In 2021 they decided to dramatically improve the value proposition for Angel Soft®.
“We were gradually going out of business.”
The Comeback Plan
Thanks to extensive research, GP knew that customers choose a bath tissue based on a combination of three things: softness, thickness and affordability. Conventional wisdom says it is impossible to deliver all three at once, because higher quality comes at a higher price. In fact, throughout the product’s history, GP had repeatedly justified price increases by continually adding thickness to the product. But to halt its decline, the Angel Soft® team decided on a counter-intuitive approach. What if consumers were offered a better product without raising the price?
“After doing the research, we believed that consumers – if they saw an added benefit and recognized a greater value – would not only increase their purchases of our product but increase other sales for the retailer as well,” said Andrew Noble, the brand’s vice president at that time. “It would be a win-win-win situation for everyone.”
The first step in making that plan a reality involved adding thickness without increasing the raw material required. With the installation of new converting lines, engineers at the Georgia-Pacific Innovation Center had already succeeded in solving that problem, but in doing so, created a new one: Because each sheet of Angel Soft® was now thicker, there had to be fewer sheets per roll to ensure each roll would fit on a standard-sized dispenser.
To compensate for fewer sheets, GP added more rolls per multipack – but without raising the suggested retail price. In some ways, this created an even tougher challenge. “Several retailers saw this as a great opportunity to justify a higher price,” Joshi admitted. “They couldn’t believe we didn’t want them to charge more.”
But keeping the price the same was a key part of GP’s strategy. Georgia-Pacific feared that higher prices – even for a better product – would further accelerate the decline in demand for Angel Soft®. GP wanted to make the product more attractive without charging consumers more. “That’s a lot to ask of our retail partners,” explained strategy leader Ken Crumley, “because we don’t control the price our retail partners charge. And there was no guarantee our strategy would work.”
GP believed retailers who did not raise the price would likely attract more customers than other retailers and that increased store traffic would then help those retail partners make more money. “Our opportunity to influence retailers depends on the strength of consumer preferences,” explained David Duncan, executive vice president of Georgia-Pacific's Consumer Products Group. “High demand for our product improves our ability to work with retailers on how best to deliver, position and price it. When we help retailers help consumers, we all win. It’s the essence of mutual benefit.”
“When we help retailers help consumers, we all win. It’s the essence of mutual benefit.”
Retailers who agreed to take a chance with Georgia-Pacific’s strategy succeeded in capturing long-term value versus just a short-term gain. Stores began selling the improved Angel Soft® in May 2022. By September, GP’s largest retail partners were confirming sales increases. That was a promising start, but Georgia-Pacific knew it would take several more months of consumer purchasing data to determine if the bet was paying off. Meanwhile, the Angel Soft® manufacturing, sales and supply chain teams worked together to proactively figure out how to supply more units if demand continued to rise.
Success... Again
In less than a year, the verdict was in: The decision to increase thickness without increasing price was translating into increased sales, market share and earnings. Post-purchase feedback also revealed high levels of consumer satisfaction. “Before, our Angel Soft® bath tissue was in about 25 million U.S. households,” said Duncan. “Now, we’re in nearly 30 million homes and some of our largest retailers are putting more of our product on their shelves. There is a shared understanding of how, by creating superior value for consumers, we are benefitting the retailer as well as GP.”
Georgia-Pacific is continuing to refine its product offerings to satisfy consumer preferences by identifying gaps and experimenting with ways to close them. For example, there are now Angel Soft® mega rolls with scented cores (such as lavender) and Angel Soft® Ultra toilet paper, which offers further strength and softness at a competitive price. “The real test isn’t just whether people will buy Angel Soft®,” explained Joshi, “it’s whether they will keep buying it, and that’s what’s happening.”
Give it a Try
The power of these principles happens through application. There’s no substitute for learning as you apply.
- After reading about the principle of mutual benefit, write down three ways you can apply this principle in your work.
- Review your business/team measures. How well do they provide the information and insights needed for current and future success?
- What was different about GP’s strategy to improve the value proposition for Angel Soft®?
- How did partnerships factor in the brand’s rebound?
- What is the difference between mutual benefit and "the customer is king"? Have you ever seen this misapplied?