Rayovac 2006 Annual Report Download - page 38

26 SPECTRUM BRANDS | 2006 ANNUAL REPORT
In North America and Europe, the majority of consumers pur-
chase alkaline batteries. The Latin American market consists primar-
ily of zinc carbon batteries, but is slowly converting to higher-priced
alkaline batteries as household disposable income grows.
Within the hearing aid battery category, we believe that we
continue to maintain a leading global market position. We believe
that our close relationship with hearing aid manufacturers and
other customers, as well as our product performance improve-
ments and packaging innovations, position us for continued suc-
cess in this category.
We also operate in the shaving and grooming and personal
care product category, consisting of electric shavers and accesso-
ries, electric grooming products and hair care appliances. Electric
shavers include men’s and women’s shavers (both rotary and foil
design) and electric shaver accessories consisting of shaver
replacement parts (primarily foils and cutters), pre-shave prod-
ucts and cleaning agents. Electric shavers are marketed primarily
under one of the following global brands: Remington, Braun and
Norelco. Electric grooming products include beard and mus-
tache trimmers, nose and ear trimmers and haircut kits and
related accessories. Hair care appliances include hair dryers,
straightening irons, curling irons and hair-setters. Europe and
North America account for the majority of our worldwide prod-
uct category sales. Other major markets include Japan and other
Asia/Pacifi c countries.
Our lawn and garden business is focused in the North
American market, where we manufacture and market lawn and
garden care products including fertilizers, herbicides, outdoor
insect control products, rodenticides, plant foods, potting soil
and other growing media and grass seed. We operate in the U.S.
market under the brand names Spectracide, Garden Safe and
Schultz. We also have exclusive brand arrangements for our
Vigoro brand at The Home Depot, Sta-Green brand at Lowe’s
and Expert Gardener brand at Wal-Mart. In Canada, we compete
using the Wilson, So-Green, Greenleaf and Green Earth brands.
Our marketing position is primarily that of a value brand,
enhanced and supported by innovative products and packaging to
drive sales at the point of purchase. Our primary competitors in
the lawn and garden category include The Scotts Miracle-Gro
Company and Central Garden & Pet Company.
The household insect control category comprises household
insecticides as well as personal insect repellents. Our primary
competitors within this category are S.C. Johnson & Son, Inc., The
Scotts Miracle-Gro Company and Henkel KGaA. We compete in
this category under the Cutter, Hot Shot and Repel brands.
Our pet supplies business comprises aquatics equipment
(aquariums, fi lters, pumps, etc.), aquatics consumables (fi sh
food, water treatments and conditioners, etc.) and specialty pet
products for dogs, cats, birds and other small domestic animals.
The pet supply market is extremely fragmented, with no competi-
tor holding a market share greater than 20%. We believe that our
brand positioning, including the leading global aquatics brand in
Tetra, our diverse array of innovative and attractive products and
our strong retail relationships and global infrastructure will allow
us to remain competitive in this fast growing industry.
The following factors will contribute to our ability to succeed
in these highly competitive product categories:
•
Strong Diversifi ed Global Brand Portfolio. We have a global port-
folio of well-recognized consumer product brands. We
believe that the strength of our brands positions us to extend
our product lines and provide our retail customers with
strong sell-through to consumers.
•
Strong Global Retail Relationships. We have well-established
business relationships with many of the top global retailers,
distributors and wholesalers, which have assisted us in our
efforts to expand our overall market penetration and pro-
mote sales.
• Expansive Distribution Network. We distribute our products in
approximately 120 countries through a variety of trade chan-
nels, including retailers, wholesalers and distributors, hearing
aid professionals, industrial distributors and OEMs.
• Innovative New Products, Packaging and Technologies. We have
a long history of product and packaging innovations in each
of our seven product categories and continually seek to
introduce new products both as extensions of existing prod-
uct lines and as new product categories.
• Experienced Management Team. Our management team has
substantial consumer products experience. On average,
senior management has more than 20 years of experience at
Spectrum, VARTA, United and other branded consumer
product companies such as General Electric, Gillette,
Braun, Newell Rubbermaid, Heinz and Procter & Gamble.
Seasonal Product Sales
On a consolidated basis our fi nancial results are approxi-
mately equally weighted between quarters; however, certain of
our products experience seasonal sales fl uctuations. The battery,
shaving and grooming and personal care businesses, particularly
in North America, tend to be seasonal, with purchases of such
products by consumers concentrated in the December holiday
season. Demand for lawn and garden products typically peaks
during the fi rst six months of the calendar year (Spectrum’s sec-
ond and third fi scal quarters). Pet supplies sales remain fairly
constant throughout the year. The seasonality of our sales during
the last three fi scal years is as follows:
2006 Form 10-K Annual Report
Spectrum Brands, Inc.