CleanWave – When the Suds Settle

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The candidate should start with a profitability tree:
 

From the Exhibit, expected candidate observations are:

• Tabs are the core profit pool
• Tabs EBIT collapsed from €180m → €10m
• Liquids and Other are small and structurally low-margin
• Profit decline is almost entirely Tabs-driven
• Very strong candidates should also observe that during covid consumer behaviour was different (more people stayed at home) so naturally more cleaning liquids were needed
   

Key takeaway:
This is not a general demand problem — it is a Tabs problem.

Expected candidate observations:

• Prices increased and then remained stable
• Revenue decline is entirely volume-driven
• Tabs lost disproportionate volumes post-Covid
• Liquids: Stable volumes, Slight price uplift, No structural issue
   

Key takeaway:
CleanWave executed pricing well — the problem is structural volume loss in Tabs.
 

Expected candidate observations:

• Covid drove a temporary expansion of the total market (2020–21)
• Branded volumes over-indexed during Covid (availability, trust)
• Post-Covid, total market normalised close to baseline
• Private label gained structurally, accelerating from 2022 onwards
• Branded volumes fell below pre-Covid levels
   

Key takeaway:
Covid masked a structural shift from branded to private label.
 

EXPECTED BRAINSTORM DIMENSIONS: A strong candidate should cover most of the following buckets.
 

1. Pricing & Commercial Strategy

Possible ideas:

• Reduce prices on Tabs to defend volumes
• Introduce targeted promotions
• Create “fighter SKUs” at lower price points

Expected insight:

• Matching private label prices would significantly erode margins
• Requires unrealistic volume uplift in a mature market
   

2. Portfolio & Product Innovation

Possible ideas:

• Launch premium Tabs (eco, low-temperature, convenience)
• Introduce differentiated formats (multi-chamber, faster dissolve)
• Improve sustainability (packaging, formulation)

Expected insight:

• Innovation allows selective premiumisation
• Particularly relevant in drugstores and mainstream retail
   

3. Private Label Participation

Possible ideas:

• Start producing private label Tabs for retailers
• Focus on premium private label tiers rather than entry-level
• Use private label to stabilise volumes and utilise capacity

Expected insight:

• Private label can stabilise volumes
• Must manage cannibalisation and brand dilution carefully
   

4. Business Model / Go-to-Market Changes

Possible ideas:

• Shift capacity from branded to co-manufacturing
• Focus branded business on fewer, stronger SKUs
• Exit unprofitable “Other” products

Expected insight:

• Portfolio simplification can reduce complexity and costs
• Co-manufacturing can improve fixed-cost absorption
   

5. Cost & Footprint Measures

Possible ideas:

• Reduce fixed costs built up during Covid
• Improve manufacturing efficiency
• Rationalise product(s) and production lines

Expected insight:

• Cost actions are necessary but not sufficient alone
• They do not solve the structural volume problem
   

A strong candidate should:

• Recap the situation & insights (market → company → segment)
• State the root cause clearly
• List the prioritised initiatives
• Close with a confident recommendation
   

Example, Short Summary:
“In summary, we found that Covid temporarily inflated branded demand in a mature dishwashing market, but post-Covid volumes normalised and private label gained structurally. CleanWave’s profit decline is driven almost entirely by dishwashing tabs, where volumes fell sharply despite stable pricing. To respond, CleanWave should defend its brand through differentiated innovation, selectively participate in private label to stabilise volumes, and simplify its portfolio and cost base to reflect the new market reality.”