Battle of the Batteries

The battery market may be getting a jolt this year, as the top two players push new products in hopes of gaining an edge in the increasingly competitive $2.6 billion battery business.

No. 2 player Energizer, for instance, last month launched a new premium-priced, longer-lasting battery called e² that could give market leader Duracell a run for its money. Energizer says the new product will last 40 percent longer and cost around 30 percent more on average than regular Energizer batteries.

Duracell, the pioneer in the premium battery segment, is also stepping up its efforts to lure the growing number of people fond of using battery-eating products such as digital cameras. The company will begin shipping the latest incarnation of the company’s successful long-lasting Duracell Ultra battery in September — the Duracell Ultra with M3 technology.

Duracell says the upgraded brand will last 180 minutes longer than a regular alkaline battery in a high-drain toy and give 150 more pictures in a flash camera. The product will also sell for about a 20 to 25 percent premium to regular Duracell batteries.

Duracell Maintains Lead

While the industry is seeing more promotional activity, smaller, value-priced producers like Rayovac are gaining market share.

“Duracell is the leading battery brand, and when you’re that big, you get shot at from a number of locations,” says Rick Anderson, vice president of existing products for Duracell’s global business management group.

And Duracell’s results of late have reflected competitors’ sniping. The unit of Gillette saw its sales fall 3 percent and its profits decline 19 percent in the most recent quarter, reflecting aggressive competitive activity, softness in the European battery market and sharply higher marketing expenses in North America.

Anderson says some of Duracell’s competitors have stepped up their promotional activity of late, offering deep discounts and free products to induce purchases.

Despite those pressures, Duracell has managed to stay on top, ringing in $1.15 billion in sales for the 52-week period ending June 18, according to Information Resources, Inc. Duracell Ultra also posted an impressive 126 percent growth during the same period with sales of $208 million.

Anderson vowed that the company would maintain its No. 1 position with some aggressive promotions in the second half of this year, which will include promotional tie-ins with the VH1 music channel. Anderson would not say how much the company plans to spend on promoting the new Ultra.

Will e² Equal Sales? Meanwhile, Energizer plans to put $100 million in marketing spending behind the e² brand, which is the biggest new product launch in the company’s history. The new brand could also give Energizer a much-needed boost to sales.

Even though Energizer only started shipping e² in mid-June, the company said the brand accounted for most of its nine percent sales increase in North America for the quarter ended June 30, 2000.

Apart from e², high inventory left over from the Y2K buildup tempered Energizer’s North American sales, while worldwide sales in the quarter rose only one percent to $402.8 million, partially due to weak foreign currencies.

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