The batteries market is about to see significant changes, with the implementation of the Batteries Directive in early 2010. Distributors of batteries to consumers will see themselves responsible for the collection of used batteries. And this may encourage consumers to look at the growing market of rechargeable batteries.
Under the regulations, all retailers selling more than 32 kilograms of portable batteries per year – typically equating to seven packs of AA batteries per week – will need to provide customers with free drop off facilities for waste batteries, from February 2010 onwards. This should take the form of collection boxes with supporting information. The directive applies to all UK retailers, regardless of the method of selling.
Retailers that import batteries from outside the UK will also be classed as producers. They will be required to fulfil both distributor and producer obligations. So as well as offering free take-back arrangements in-store these retailers will need to join a Battery Compliance Scheme (BCS) or apply to the Environment Agency to ensure that their responsibilities are fulfilled as outlined by the directive.
Retailers have until February 2010 to put the necessary infrastructure into place, however if a retailer is also classified as a producer it will need to be compliant by January 1 2010
Paula Brinson Pyke, trade marketing manager of Varta, says: “Whether a wholesaler is affected will depend on if the wholesaler distributes only to the trade or if it sells to end users. They may also have a producer obligation if they source from outside of the UK.
“It is still not clear what responsibilities a wholesaler will have, but I would recommend having a recycling point in depot even if they only sell to trade.
“If wholesalers have a box and no one puts batteries in then there is no issue. They are only obligated to contact a BCS once it’s full. If it never gets full it just sits there. They could contact any BCS for collection unless they have an agreement with the BCS who provided the box.
“There are regulations applying to distance sellers who sell batteries to end users in the UK. While this refers to retailers, delivered wholesalers may find that it relates to them. Distance sellers need to accept waste portable batteries from end-users free of charge. This can be through local stores, by postal return or by providing the customer with an alternative local route for free take-back (perhaps by working with a BCS).
“Although this can be seen as a challenge, it can also be an opportunity. Don’t forget the bring and buy effect, bring back your old and buy your replacement product. It also boosts the green credentials of the company and if people are coming back for batteries, who knows what else they will buy or trade up to.”
Mike Doole, managing director of Uniross, says: “Uniross will use the high profile government marketing campaign behind battery recycling to highlight the great value and great environmental choice that Uniross rechargeable batteries offer to consumers (which cost as little as 2p per battery to recharge). These products also offer high cash profit margins for wholesalers and retailers compared with single-use alkaline batteries. Many alkaline battery manufacturers may have to increase prices as a result of costs associated with the battery recycling regulations. Uniross prices will stay the same.”
Uniross is currently expanding its range in an aim to meet consumer needs. It has a Multi Usage range which features the Hybrio, a battery that is pre-charged and ready-to-use, but which can then be recharged.
Doole adds: “The wholesale channel is one of the most flexible and thriving areas of UK business at the current time. While the UK and global electronics market remains under pressure, UK customers in this channel are typically fast to react, quick to launch new products and actively promote rechargeable batteries to UK retailers and consumers.”
Varta batteries has revamped its entire range with an aim to make it easier for consumers to pick the right power for the right device. The Tri-Energy, three tier range uses icons, colour coding, POS and imagery to help consumers.
Vince Armitage, divisional vice president of Varta, says: “Having seen the really positive response from retailers where we have previewed the range, we are extremely excited to be bringing the Tri-Energy concept to the UK. As the batteries specialist for the convenience sector, we are proud of the support that we give to traders.
“No other manufacturer targets the unique business requirements of retailers within this sector or devises special programmes to support them. The new improved range not only gives the sector a quality branded product which is great value for money but it also gives the means to add value to the customer experience with very little effort on their part.
“The Tri-Energy range not only offers better performance and greater power but the colour coded approach also educates and helps users pick the right power for the right device.”
Varta has also been developing its rechargeable batteries and has the 15-minute charger which runs from the mains electricity or via an in-car socket. In the rechargeable range is also the Travel Charger and Solar Charger.
Armitage adds: “Rechargables have come a long way in recent years and Varta has driven the development of the category. Our new range of batteries and chargers offer the best performance on the market.
“The wholesale channel is important to Varta as it serves the convenience and forecourt sector which are key markets for Varta moving forward. It is true to say that to date we have not put as much emphasis on this trade channel as we had originally intended but with the revamp we most certainly have the requisite offers for wholesalers and quality of product backed up by competitive pricing and strong POS and so expect to see improvements in the future. Situating battery displays in a prominent location, offering a straightforward range of brands at competitive prices and providing informative POS will all help to increase sales.”
Tim Clark, sales manager UK and Ireland for Panasonic Energy, says: “Following many years of discussion, Panasonic is looking forward to the full implementation of the EU Battery Directive into UK law. However, the new EU Battery Directive puts a number of responsibilities on both the producers and the distributors of batteries, but at this present moment in time we are unaware which compliance schemes will be approved and as such cannot confirm what the cost will be to fulfil our producer obligations. However, this information is expected to be available for communication during October 2009.”
According to Panasonic, in the UK 500 million batteries are sold with an estimated retail value of £254m. Batteries are a heavily promoted category with 38.2% of all volume now sold on promotion. On average batteries are only purchased between three to four times per year and 75% of battery buyers don’t plan to buy batteries so visibility of the battery display is key.
Panasonic’s Xtreme Power batteries are being offered in a 4+4 free promotion. Clark says: “The 4+4 free promotion is the most effective volume driver in the category, and to run this on an already good value battery from one of the top three most trusted battery brands means it is a win win for retailers and their customers.”
Panasonic also has its Evoia AA alkaline battery which has entered the Guinness Book of Records as the World’s number one long lasting AA alkaline battery. The Guinness World Records logo is displayed on the packaging.
James Arnold business leader for sales and marketing at Duracell Professional UK, says: “The batteries industry continues to evolve, with new innovations being developed to deliver longer lasting, more reliable batteries. At Duracell Professional, we recently announced the launch of our new Procell battery range which uses new Super Conductive Graphite (SCG). This contains smaller particles and higher conductivity to make it Duracell’s longest lasting alkaline battery. As the new SCG technology requires less graphite in the battery, it leaves space for more of the active MnO2 component to improve battery efficiency. At Duracell Professional, we are constantly trying to develop our technology and see the incorporation of SCG as an important growth area in the future.
“We have found that wholesalers we work with have traditionally been very good at selling our products and supporting the Duracell brand. From a brand perspective, it is important to understand that every wholesaler is different, and brands need to adopt a tailored approach to ensure each wholesaler has the right range of support for their needs. Wholesalers then need to make sure they stock the recommended range and have access to all of the sales material available, to help drive their business. We’re always trying to find new innovative ways to promote the range in store, and even developed a professional Duracell Bunny to support our latest Procell range.”
Annaliese Reekie, business leader at Duracell, says: “In terms of seasonal opportunities, the batteries market reaches its peak over the Christmas period with approximately 27% of annual sales delivered through November and December. At this time of year, we know that effective display is essential to boosting sales and retailers should aim to increase the visibility of batteries in-store by having incremental multi-location merchandising for batteries around the store and ideally a prominent display position.”
According to Energizer, staying in is fast becoming the new going out and as a result the growth of in-home gaming is providing an opportunity to boost battery sales. Gaming is the fastest growing consumer electronics sector, up 138% in value. According to Energizer, its Ultimate lithium is the ideal battery solution for high powered gaming accessories such as Nintendo Wii gaming accessories and Xbox 360 controllers.
Energizer suggests that co-siting can make a big boost to sales as 46% of shoppers buy batteries on impulse.
l There is further information about the Batteries Directive on the Defra website www.defra.gov.uk/environment/waste/topics/batteries/