Competition blows through tissue market
Garro founded the facial and toilet tissue company Soft & Easy with around $100,000. His strategy: to introduce an affordable tissue, tailored-made for the newly-opened Polish market.
A few years ago, the market was dominated by the rough, so-called "niche grade" tissue produced at state-run factories, while better quality imports were out of the reach of most shoppers. Garro aimed mid-stream.
"I saw there was a very big lack in the paper products industry," Garro explains. "There were imports - good quality - but they weren't adapted to the Polish market and to the Polish need. Mostly because at the beginning there was no market."
Garro sees himself as a pioneer in the tissue conversion business, which entails buying jumbo rolls of tissue from paper mills and simply cutting and packaging it for sale. More important than introducing a higher grade tissue at an affordable price, he created brand name identity for a market ruled by anonymous producers.
"When you buy tissues made by some of the state-owned firms you never know where it's coming from - it's just toilet paper or facial tissue," Garro says. "But when you buy Soft & Easy, you know what you're buying."
"This was a real marketing work," Garro continues. "Nobody had done it before in Poland."
Garro is ambitious but cautious. While sticking faithfully with the name as his most valuable asset, he's flexible when it comes to the tissue itself: first producing in Italy to test the water and see what would float, adding and cutting product lines when demand dictated.
"We started just to see what the market was like and we saw that there was a market for the high-quality product," Garro explains. "But you have to adapt it to the market. We couldn't sell 300-sheet rolls of toilet paper, so we were the first to introduce 200-sheet rolls - we reduced the quantity, but gave you the quality, and people bought it."
"The trouble with importers," Garro adds, "is that they just have some product in Europe and so they bring it here and try to sell it as well. But they never think of what the Polish market will accept."
Once business began to pick up, Garro left Italy - the tissue conversion capital of Europe - and moved his operations to Poland. But rather than buy his own machine, Garro found a state-owned Polish paper factory - Klucze - which had an under-used machine producing a lower grade product. "They were only producing 20,000 boxes of tissue per month," Garro recalls. "They would work for two days, and the other 28 the machine would just sit there."
That's when Garro approached the factory and offered to buy all its output if it would produce according to his specifications.
"They thought we were crazy or something," Garro said. "We can only sell 20,000 and you want us to put out 400,000? But finally they said, OOK.'"
To get the right tissue consistency, he hired a chemist who worked on various cellulose combinations until he came up with a strong multi-purpose tissue and started production. That's when he created one of his biggest competitors. "They saw that there really was a market for the product and wanted to do it on their own," Garro said of his former partner. "So they ended the contract and we bought our own machine." Soft & Easy is now located in Konstancin-Jeziorna outside of Warsaw in an old factory building which Garro bought and renovated for the firm's purposes.
While Garro may be a pioneer in Polish tissue conversion, he's definitely not alone anymore. Competition is growing on all sides: from state-owned factories with greater capacity which are improving their quality; from small start-ups that, like Garro, bought a converting machine and buy the jumbo rolls of tissue from local producers; and from the big multinationals like Kimberly-Clark, James River or Procter & Gamble, which are scouting around for an easy entrance into Poland's growing market.
"I'm sure other people are coming onto the market, which is why we have to develop ourselves very quickly," Garro says.
Part of Garro's development includes the purchase of new paper converting machines. A machine that can put out 14,000 boxes of tissues in eight hours costs around $150,000.
Garro's company started with its basic Soft & Easy multi-use tissue and has already introduced the more exclusive Royal Collection - which was imitated by competitors, including Klucze - and the Silver Line, which is sold mostly to hotels. The company has an exclusive contract to supply the Warsaw Marriott, which uses 13,500 rolls of toilet tissue and 1,000 boxes of facial tissue monthly. Soft & Easy is also introducing new scented tissues, and there are also plans to expand into feminine hygiene products.
"This is so we can say to some of the bigger warehouses that now you've got Soft & Easy, Royal Collection, Silver Line - there's no reason to take any other brands," Garro explains, adding that they plan to move from their current distribution of 2,000 points of sale throughout Poland to supplying around 200 big clients, preferably on an exclusivity basis.
Garro said that the next year will probably make or break his business as the competition looks for openings in a market that is expected to see tissue consumption almost double over the next five years, according to a report prepared by Anders Ljunggren of the PI-Group, consultants to the Ministry of Industry on the paper industry.
"Now everyone has opened their eyes and are starting to register their trademarks," Garro said with a touch of prideful frustration. "We are very sure of ourselves, but we're not sure of the market. Everyone is studying each other, seeing what move they'll make."
"After a year I won't have this problem anymore," Garro adds. "But I have to prove myself first."
A few years ago, the market was dominated by the rough, so-called "niche grade" tissue produced at state-run factories, while better quality imports were out of the reach of most shoppers. Garro aimed mid-stream.
"I saw there was a very big lack in the paper products industry," Garro explains. "There were imports - good quality - but they weren't adapted to the Polish market and to the Polish need. Mostly because at the beginning there was no market."
Garro sees himself as a pioneer in the tissue conversion business, which entails buying jumbo rolls of tissue from paper mills and simply cutting and packaging it for sale. More important than introducing a higher grade tissue at an affordable price, he created brand name identity for a market ruled by anonymous producers.
"When you buy tissues made by some of the state-owned firms you never know where it's coming from - it's just toilet paper or facial tissue," Garro says. "But when you buy Soft & Easy, you know what you're buying."
"This was a real marketing work," Garro continues. "Nobody had done it before in Poland."
Garro is ambitious but cautious. While sticking faithfully with the name as his most valuable asset, he's flexible when it comes to the tissue itself: first producing in Italy to test the water and see what would float, adding and cutting product lines when demand dictated.
"We started just to see what the market was like and we saw that there was a market for the high-quality product," Garro explains. "But you have to adapt it to the market. We couldn't sell 300-sheet rolls of toilet paper, so we were the first to introduce 200-sheet rolls - we reduced the quantity, but gave you the quality, and people bought it."
"The trouble with importers," Garro adds, "is that they just have some product in Europe and so they bring it here and try to sell it as well. But they never think of what the Polish market will accept."
Once business began to pick up, Garro left Italy - the tissue conversion capital of Europe - and moved his operations to Poland. But rather than buy his own machine, Garro found a state-owned Polish paper factory - Klucze - which had an under-used machine producing a lower grade product. "They were only producing 20,000 boxes of tissue per month," Garro recalls. "They would work for two days, and the other 28 the machine would just sit there."
That's when Garro approached the factory and offered to buy all its output if it would produce according to his specifications.
"They thought we were crazy or something," Garro said. "We can only sell 20,000 and you want us to put out 400,000? But finally they said, OOK.'"
To get the right tissue consistency, he hired a chemist who worked on various cellulose combinations until he came up with a strong multi-purpose tissue and started production. That's when he created one of his biggest competitors. "They saw that there really was a market for the product and wanted to do it on their own," Garro said of his former partner. "So they ended the contract and we bought our own machine." Soft & Easy is now located in Konstancin-Jeziorna outside of Warsaw in an old factory building which Garro bought and renovated for the firm's purposes.
While Garro may be a pioneer in Polish tissue conversion, he's definitely not alone anymore. Competition is growing on all sides: from state-owned factories with greater capacity which are improving their quality; from small start-ups that, like Garro, bought a converting machine and buy the jumbo rolls of tissue from local producers; and from the big multinationals like Kimberly-Clark, James River or Procter & Gamble, which are scouting around for an easy entrance into Poland's growing market.
"I'm sure other people are coming onto the market, which is why we have to develop ourselves very quickly," Garro says.
Part of Garro's development includes the purchase of new paper converting machines. A machine that can put out 14,000 boxes of tissues in eight hours costs around $150,000.
Garro's company started with its basic Soft & Easy multi-use tissue and has already introduced the more exclusive Royal Collection - which was imitated by competitors, including Klucze - and the Silver Line, which is sold mostly to hotels. The company has an exclusive contract to supply the Warsaw Marriott, which uses 13,500 rolls of toilet tissue and 1,000 boxes of facial tissue monthly. Soft & Easy is also introducing new scented tissues, and there are also plans to expand into feminine hygiene products.
"This is so we can say to some of the bigger warehouses that now you've got Soft & Easy, Royal Collection, Silver Line - there's no reason to take any other brands," Garro explains, adding that they plan to move from their current distribution of 2,000 points of sale throughout Poland to supplying around 200 big clients, preferably on an exclusivity basis.
Garro said that the next year will probably make or break his business as the competition looks for openings in a market that is expected to see tissue consumption almost double over the next five years, according to a report prepared by Anders Ljunggren of the PI-Group, consultants to the Ministry of Industry on the paper industry.
"Now everyone has opened their eyes and are starting to register their trademarks," Garro said with a touch of prideful frustration. "We are very sure of ourselves, but we're not sure of the market. Everyone is studying each other, seeing what move they'll make."
"After a year I won't have this problem anymore," Garro adds. "But I have to prove myself first."
