In 1968 Uniross pioneered the development of rechargeable batteries in the UK. Single-life throwaway batteries were available at the time but Uniross - maker of micro components and switches - had the foresight to come up with a reuseable option with long life.
Uniross marketing controller, Simon West, comments: “The company created the market sector from a zero base. It had to convince the retail trade and consumers of the benefits of a battery that could be recharged 500 or more times. The early rechargeables held less power capacity than they do today and took many hours to recharge. It took time for the groundswell to begin.
“Today rechargeables are the growth sector, with a 30% year on year increase, and account for 10% of the battery market. Uniross currently has 80% of the re-chargeable sector.”
This is an impressive level of growth, particularly when compared with single-use alkaline batteries, which grew by 1% in the last 12 months. Even so, the rechargeable share of the battery sector remains small in volume terms at 1-2%.
The battery market is currently worth £321m in the UK, with the popular AA and AAA single-life batteries the best sellers. As the established end of the market, there will always be a strong demand for these batteries.
Conversely, rechargeable batteries are largely uncharted waters for consumers, but manufacturers are confident that this is about to change. West says: “Consumers are much more knowledgeable about battery power today because there are so many more products that use batteries. A survey revealed that the average household has 25 products driven by batteries, which means an awful lot of batteries are bought and thrown away if disposables are used. Disposables are a costly business. By using rechargeable batteries in the family digital camera, with average use during the year, a saving of £260 can be made against the cost of using disposable batteries.”
West also points out that consumers are more “green and environment conscious” and therefore favour the rechargeable option. “Billions of throwaway batteries are dumped every year and they have to go into landfill. Using rechargeables is making a small but significant difference and it’s down to every individual to make the switch to this far more environmentally-friendly battery.”
Equally, the speed at which rechargers work has made the technology more viable: five years ago it took an average 6-10 hours to recharge a set of AA or AAA batteries. Today, batteries can be charged in just 15 minutes.
New digital technology is clearly the driving force behind the rechargeable revolution. Varta’s trade marketing manager, Laura di Bonaventura, says: “The popularity of MP3 players, DVD players and games, camcorders and digital cameras is helping grow the market, as are kids’ toys. Consumers are moving to more intelligent alternatives to power their equipment more economically.”
She believes consumers are slowly catching on to the financial benefits of rechargeables. “The initial investment in rechargeables is high, but there are good returns in the long run. Consumers have seen the potential savings. The market is complicated and I think consumers are quite confused, but they’re slowly coming around to the idea of rechargeables.”
Varta is attempting to improve the profile of rechargeable batteries with a new battery range and charger due to launch at the end of September. According to Di Bonaventura, the range is more consumer and design orientated, with state of the art chargers in bold colours and attractive shapes.
She continues: “We’ve developed two categories of charger which are being marketed to different consumer groups. ‘Easy Energy’ is designed for families with children. There are two chargers available in this category: a pocket charger for AA and AAA batteries alone and a multicharger to charge any size of battery. The ‘Power Play’ charger is aimed at the more high-tech user.”
The 15-minute charger is a new innovation designed to appeal to consumers. Varta launched a 15-minute charger last year and Uniross now has two similar chargers on the market.
Uniross’ West says: “Such products are designed to stimulate greater interest in rechargeables and their adoption by consumers. The trade makes more sales and the consumer saves money on battery power. Since today’s products consume a lot of battery power it makes sense to produce batteries which can hold that power for a greater length of time.”
ON THE BANDWAGON
Not wanting to be outdone, Panasonic, Duracell and Memorex are also making waves in the rechargeable sector.
Duracell recently relaunched its range of ‘advanced’ rechargeable products with eye-catching packaging and better performance. Senior business manager, Flavio Palumbo, comments: “The rechargeable category is performing well on the back of digital camera sales and is growing at a very rapid rate. We expect to see a large number of consumers buying into this area of the battery market.”
Panasonic is following suit this month. Its relaunch programme includes the introduction of what it says is the highest capacity rechargeable battery on the market, at 2,600 milliamps. Panasonic marketing and communications manager, Tim Clark, says: “There is competition among developers to produce the highest capacity rechargeable battery. We’re also introducing a lower capacity 1,600 milliamp battery to offer customers a value for money, lower-priced option. These two will complement the existing 2,100 milliamp battery already on the market.”
Meanwhile, Memorex is set for its rechargeable launch in the next couple of months. Although better known for its compact discs and audio and video accessories, Memorex is entering the rechargeable market to offer customers a complete service.
Memorex’s share of the battery market in the UK is very modest, and it has no ambitions to go ‘head to head’ with the major players. European product manager Chris Hardwick explains: “It’s a natural progression for us and completes our product portfolio. We are developing according to our customers demands. The timing is also right - it’s the back to school period so there’s a big demand for batteries.”
The company is limiting its rechargeable range to the biggest selling AA and AAA batteries, and will build on the range in the future. A charger will be launched by the end of the year. Hardwick says: “The specification of the batteries is very good because of their high rating capacity. Because they’re at the higher end of the technology spectrum we should be able to compete with the other major brands. Also, our brand heritage and customers’ awareness of our products should carry us through.”
Despite the confidence of its competitors, Uniross expects to maintain its UK market lead for the foreseeable future. West says: “The battery business is still wrapped up in disposables and to our competitiors rechargeables is still a very small proportion of the business. They must divert funds away from the primary battery business to make inroads into rechargeables and are probably willing to allow their rechargeables to grow slowly until the sector accounts for 20-30% of the total market.
“Uniross has the lion’s share of rechargeables and will benefit from sector growth as market leader. Its points of difference are quite simple: Uniross only makes rechargeables and is ahead of battery technology by virtue of its dedication to rechargeables.”
Retailers are quids-in with rechargeable batteries due to the high profit margin, as Varta’s di Bonaventura explains: “The product has a higher price point than alkaline batteries, so the margins on rechargeables are much better. It’s a very healthy category.”
But Panasonic’s Clark isn’t sure that this is enough from the point of view of c-strores: “It’s questionable whether chargers and rechargeable batteries are suitable for c-stores. They’re not really impulse items. The batteries themselves could possibly meet c-store customers’ needs, but chargers less so. I think that independent retailers would be better advised to focus on a core range of disposable batteries.”
At the end of the day of course it’s up to retailers to make their own choice.
A rechargeable battery can be recharged 500 times or more before it reaches the end of its life. This is the equivalent of using 500 or more single-life, throwaway batteries.
It only costs 1-2p in electricity to recharge 4 AA or AAA size batteries.
The annual cost saving of using two rechargeables in a digital camera, with average family use, compared with disposable batteries, is about £240.
A comparable number of throwaway camera batteries giving 500 uses would cost £875 (£1.75 for two throwaways x 500).
Sales of rechargeable batteries are growing at circa 30% a year and now account for 10% of the UK battery market.
SINGLE LIFE POWER
Rechargeable batteries may be a real growth area but battery manufacturers continue to invest in high-drain, single-life batteries.
Panasonic has launched oxyride batteries that are said to provide three times more energy than the typical alkaline batteries when used in MP3 players and digital cameras.
Marketing and communications manager, Tim Clark, admits the launch may well cannibalise existing Panasonic batteries as it competes head-on with other AA and AAA high-powered alkaline and rechargeable batteries, but believes oxyrides will find their own niche. “Alkaline batteries are good for general use but new technologies require higher powered specification batteries, like oxyride,” he says.
Duracell has launched a ‘new and improved longer-lasting formula’ across Duracell Plus and Duracell Ultra M3 battery ranges. Senior business manager Flavio Palumbo comments: “Duracell’s premium Ultra M3 batteries are designed to offer longer-lasting premium power for high-tech devices. This trend has also seen rapid growth in the smaller size batteries such as AAA.”
Energizer is keeping up the launch momentum with Energizer Ultimate Lithium which is being dubbed as ‘the world’s longest lasting battery in high tech devices’. Available in AA and AAA sizes, the batteries are said to be 33% lighter than comparable standard alkaline batteries.
BATTERIES AND THE CONSUMER
Nearly half of all households have bought batteries in the last three months.
More than half of all domestic battery purchases are made in supermarkets, 6% each in local convenience stores and department stores, 5% each in DIY and in electrical stores and 3% each in newsagents and hardware stores.
In 70% of homes children are the heaviest users of batteries.
Half of all adults agree that buying a set of rechargeable batteries is more convenient than frequently buying single-life batteries.
Nearly 90% of used batteries are disposed of with the household rubbish while circa 10% are taken to a recycling or disposal collection point.
Around 60% of adults agree rechargeable batteries are better value for money than disposable batteries.
At least 70% of adults agree rechargeable batteries are more environmentally friendly.
THE BATTERY MARKET
The UK battery market is worth around £750m a year and growing.
The increase in battery-powered products, in particular high-drain appliances like digital cameras, MP3 players and so on, is growing the market value. Mintel research shows that from 2002 to 2003 sales of digital cameras increased by 70%, while MP3 player sales grew by 64%.
The average number of batteries per buyer grew by 5.7% between January 2004 and January 2005.
60% of all volume sales come from the AA- size batteries.
Alkaline batteries dominate sales, and the main growth areas are rechargeable and specialist, ie lithium, batteries.
Around 75% of batteries are bought on impulse.