PREP-P3 PRESENTATION TO STAKEHOLDERS

1. PREP-P3 PRESENTATION TO STAKEHOLDERS 12.12.2013 SLOVAK ASSOCIATION FOR BRANDED PRODUCTS - SZZV

2. AGENDA • Introduction to the Association. • Introduction to A.I.S.E. • A.I.S.E. Laundry Sustainability Project No 1 (LSP-1) • A.I.S.E. Laundry Sustainability Project No 2 (LSP-2) • PREP-P3 overview • How does the Industry Association communicate compaction to consumers? • How to Inform Consumers Properly about Detergent Price (per wash)?

3. SLOVENSKÉ ZDRUŽENIE PRE ZNAČKOVÉ VÝROBKY • Date of SZZV establishment: 1.1.2005 • Members: HENKEL SLOVENSKO, PROCTER&GAMBLE, UNILEVER SLOVENSKO • As a member of A.I.S.E. -main activities: • - In the field of sustainability • - Participation in Code/LSP1/LSP2 and other sustainability initiatives

4. A.I.S.E. is the International Association for Soap, Detergents and Maintenance Products. Its vision is to benefit society by contributing to the sustainable improvement of the quality and comfort of life through hygiene and cleanliness, in a free, competitive and innovative way. The A.I.S.E. mission is to communicate effectively and objectively the values embodied in the industry vision and in related policies to all appropriate stakeholders, whilst taking these stakeholders' views in to account. .Members: 35 National Associations in 40 Countries. 9 direct member companies (Colgate-Palmolive, Ecolab, Henkel, McBride, Procter & Gamble, Reckitt Benckiser, SC Johnson, Sealed Air-Diversey Care, Unilever) About 900 companies (60% SMEs) Based in Brussels. http://www.aise.eu A.I.S.E.International Association for Soap, Detergents and Maintenance Products

5. 1) Regulatory and technical activities Ensure proper information sharing with members for facilitating full compliance; Enable dialogue with stakeholders based on solid technical and scientific credentials to influence the shaping of the operational framework for our industry; 2) Voluntary sustainability initiatives Fostering sustainability through voluntary action; Encourage sustainable production and consumption of our products; Enhance consumer’s and customer’s confidence in our products and stakeholder’s trust in our industry; Support and promote the sustainability profile of our industry. A.I.S.E. engagement in sustainability is through an association-led approach to drive voluntaryindustry initiatives Key Areas of A.I.S.E. Activities

6. Objectives Deliver a step forward in Sustainability via a better utilization of resources Guide the Industry towards a better understanding and engagement in Sustainability Encourage consumers towards a more sustainable consumption A.I.S.E Initiatives for Sustainable Development

7. Laundry Sustainability Project # 1 (LSP-1)

8. LSP-1 Laundry Sustainability Project #1 • Period: Launched by A.I.S.E. in 2006 and completed in 2008 (31/12) • Scope: Low suds powder detergents • Objective: Voluntary Industry Association initiative aiming at minimizing the environmental impact of Heavy Duty Low Suds powder detergents for household laundry • Geographical scope: LSP-1 was a direct follow-up of the A.I.S.E. “Code of Good Environmental Practice”. As the Code was focused on the 15 EU countries, LSP-1 was successful in new EU countries, mainly Central Europe and was opened also to Albania, Bosnia & Herzegovina, Croatia, Republic of Macedonia - FYROM, Moldova, Montenegro and Serbia • Compaction: ≥ 33% in weight; ≥ 25% in volume

9. IMPLEMENTATION OF LSP-1 • In total 17 companies in 12 countries joined the project representing around 85% of the market in the target region. • Each company that joined LSP-1 had to commit to reduce the recommended dosage for a standard washing machine load by a minimum of 33% in weight and 25% in volume whilst maintaining at least the same washing efficiency. • Companies that joined committed to put the following logo on their packs to signal their support of the initiative: • As consumers had to change their washing habits, non-branded educational campaign “Clean up your laundry habits” was carried out by National Associations to educate them on the changes on the market and the new way of dosing less than previously. • In addition to consumer campaign, stakeholders both on the European level and local level were informed about the project and their support ensured.

10. RESULTS OF LSP-1 • At the beginning of the project various calculations showed that the planned initiative had the potential to save close to 300,000 tons of detergents over the three-year lifetime of the project and would enable a decrease of ca 15,000 tons in the use of packaging materials. • The results exceeded expectations and environmental savings generated over 3 years were as follows: • 387,000 tons in terms of chemicals saved; • 21,300 tons in terms of packaging materials saved. To add more perspective environmental savings in product consumption equaled: • ca 54,000 tons in the launch year 2006 (this is equivalent to the consumption of low suds powder detergents of the Czech Republic in that year). • ca 156,000 tons in 2007 (this is equivalent to the consumption of the Czech Republic + the three Baltic countries + Bulgaria + Hungary in that year). • ca 177,000 tons in the final year 2008 (this is equivalent to the consumption of the Czech Republic + the three Baltic countries + Bulgaria + Hungary + Croatia in that year)

11. Laundry Sustainability Project # 2 (LSP-2)

12. LSP-2 A.I.S.E. second Laundry Sustainability voluntary project launched after the successful implementation of LSP-1. Timing: Jan 1, 2009 – March 31, 2012. Objective: to continue to deliver significant benefits concerning the aspects of sustainability in the field of heavy duty laundry detergents for household use. Compaction level: not greater than 85 g/wash and 135 ml/wash. Geographical scope: Europe (EU 27 + Iceland, Liechtenstein, Norway and Switzerland). Potential savings:After its full implementation, the LSP2 Project is estimated to save per year (actual savings are still being calculated): • 200,000 Tonnes of Powder Detergents • 5,000 Tonnes of Packaging • 10,000 Truck journeys

13. The A.I.S.E. Product Resource Efficiency Project for Laundry Powder Detergents (#3)“PREP-P3”A sector initiative towards more sustainable Laundry Detergents

14. PREP-P3 Project Details • Principles: • Follow-up to the A.I.S.E. “Code of Good Environmental Practice” (1997-2002), LSP-1 (2006-2008), LSP-L (2009-2011) and LSP-2 (2009-2012) • Objectives: • Objective is to continue to deliver significant benefits concerning the aspects of sustainability in the field of the household laundry process. • Regional Scope: • EU + Iceland, Liechtenstein, Norway and Switzerland • Croatia and Moldova were added recently • Companies can decide in which countries they will join with all their brands • Product Scope: • Heavy Duty Low Suds (HDLS) powder detergents used for household laundry • Project open to all companies placing household laundry powder detergents in the region (members and non-members of A.I.S.E. and/or its National Associations) • Compaction level: • recommended dosage ≤75 g/wash and ≤115 ml/wash.

15. After its full implementation, PREP-P3 is estimated to deliver the following potential environmental load reductions per year (versus 2011): 116,000 tons of raw materials 8,300 tons of packaging materials 5,900 truck journeys Furthermore there is a more efficient/ effective use of shelf space. Shelf space can be utilized better via larger assortment using the same space or reducing the actual space for an unchanged assortment A.I.S.E. undertakes to publish a close-out report at the end of the project, (mid 2015) which it will make available to all stakeholders. This report will present the results obtained through this project. Potential environmental load reductions

16. Companies’ Commitment • To compact / concentrate their laundry powder detergents, reaching a recommended dosage ≤75 g/wash and ≤115 ml/wash for a normal washing machine load, delivering at least the same performance as before. • To optimize the usage of packing materials, committing to a reduction by ensuring a high fill level, remaining at least overall in line with current filling levels. In particular, for individual rigid containers, effective filling ratios should continue to be no less than 70% of the maximum filling ratio. • To communicate to consumers about the correct use of compact products through on-pack communication, using the A.I.S.E. non-branded material.

17. Participation Criteria The project addresses both branded products and private labels. It is open to companies manufacturing and/or placing on the market within the defined geographical scope HDLS laundry powder detergents: • companies active in the markets within the geographical scope; • members and non-members of A.I.S.E.; • members and non-members of the National Industry Associations of the countries within the geographical scope; • manufacturers, distributors, and importers where applicable; • companies established within and/or outside of the geographical scope; • companies intending to come on the market within the geographical scope with products meeting the project’s requirements.

18. Signing up for the Project Companies that want to join the project, must sign A.I.S.E. “Letter of Commitment” directly with A.I.S.E. on a confidentiality basis listing the countries they will compact in with all their brands in the respective country. Deadline is 31st of March, 2014.

19. Project Timings The key dates for the PREP-P3 project are as follows: • Opening date: 01 July 2012 • Activation date: 01 July 2013 • End of industry preparation*: 31 March 2014 • Closure date: 30 June 2014 • Beginning of "Exhaustion" period 31 December 2014 • End of "Exhaustion" period 30 June 2015 • * last date at which companies can still sign up

20. How can the Industry Association Communicate Compaction to Consumers?

21. Key Messages of the Campaign The objective of the communication campaign is to inform consumers about the project, its objectives, the changes it brings to dosing, explain the reasoning behind the project, as well as provide information about environmental and consumer benefits. This will be done through communicating to the consumers the following key messages: 1) Powder detergents are becoming more compact. 2) Compact powder detergent packs may become smaller. The right way of comparing pack sizes is looking at the number of washloads (not the kilograms). 3) Compact means convenience for consumers (less to carry from the store, smaller storage place is needed). 4) Education on right dosage: Compact means, you can dose less powder to wash the same amount of laundry. 5) Less impact on the environment.

22. Elements of the Consumer Communication Campaign Communication campaign consists of the following three elements: 1) New icons on the packs of detergents. 2) Industry Association non-branded TVC and tag-on. 3) Industry Association PR campaign.

23. New Icons on the Detergent Packs A.I.S.E. provided guidance on communication strategy to accompany the product changes and encourage sustainable consumption by consumers, inviting them to adapt their habits vis-à-vis the new recommended dosages. It is strongly recommended for companies joining PREP-P3 initiative to place on their detergent packs the following types of non-branded communication patches developed by A.I.S.E. to signal that products are more concentrated: 1) “Top of the pack” patch 2) “Dosing table” patch

24. Top of the Pack Patch No. of washesprovided by the product in the pack (50 is just an example) Clear signal that the dosing needs to be changed Clear information onwhat has changed

25. Dosing table patch This back-label patch will be positioned close to the dosage instructions panel. “115 ml” (as an example) Clear indication of the new dosage

26. Industry Association Non-Branded Advertising Campaign The Industry Association will carry out a non-branded advertising campaign which will consist of the following elements: 1) 30” TV advertising TVC clearly explaining the changes taking place. 2) 5’’ tag on which can be used by participating companies at the end of their branded TV copies. 3) Key visual based on the TVC 4) Educational leaflet for consumers 5) Online campaign 6) Trade promotional leaflet

27. Industry Association PR Campaign Alongside the advertising campaign, the National Industry Association will carry out a non-branded PR campaign consisting of the following elements: 1) PR conference with the participation of project supporters. 2) Press release to media. 3) Other press materials including interviews with supporters of the project, pictures, articles explaining the project and other materials.

28. How to Inform Properly Consumers about Display of Detergent Price (per wash) on shelves

29. Unit Pricing Directive • EU Directive 98/6/EC governs the indication ofthe selling price and the price per unit of measurement ofproducts offered by traders to consumers in order toimprove consumer information and to facilitate comparisonof prices. • Unit price means the final price, including VATand all other taxes, for one kg, one litre, onemetre, one square metre or one cubic metre of theproduct or a different single unit of quantity which iswidely and customarily used in the Member State concerned in the marketing of specific products.

30. Detergent Regulation Detergent Regulation (648/2004) prescribes the use of wash load icon on pack and indicates that the packaging must contain the following: 1) the number of standard washing machine loads of ‘normally soiled’ fabrics. 2) the recommended quantities and/or dosage instructions expressed in ml or gr; 3) the capacity of any measuring cup, if provided, indicated in ml or gr. Therefore, it is mandatory to show on each detergent pack how many washes it contains. When buying a pack of detergent, a consumer sees how many washes she can make with one pack, but due to the fact that the price is labeled per kg, she cannot know how much one wash will cost. Thus, labeling price per kg/l is no longer relevant.

31. Price per Wash Implementation per Country

32. Why is it better to compareprice per wash? It is very important that consumers have a possibility to compare prices per wash rather than per kg/l because: • 1) different forms of detergent (powder, liquid, gels, powder tabs and liquid capsules) with different units of measurement (kg, l, pieces and other) exist on the markets. Thus, it is not relevant for the consumer to compare the prices of different forms on kg or l basis. • 2) powder detergents come in different levels of compaction as compaction level today differs from country to country and from manufacturer to manufacturer. Only the minimum compaction levels are requirement by Industry Associations and companies can go beyond that. As a consequence it is not relevant for consumers to compare the prices on kg basis for products which are at different compaction levels. Therefore, the Industry Association is trying to work with authorities to find the way to allow retailers to label the prices per wash rather than per kg/l.

33. Educational Campaign byNational Industry Associations • Before the PREP-P3 PR campaign which will focus on compacted products, National Industry Associations will be carrying out an educational PR campaign. • The objective of the campaign is to educate consumers on the wash load icon and on price per wash. • Timing: October-November.

34. THANK YOU

35. Questions? Discussion