Airport Security Regulations Create Growing Opportunities

Corporate America's general stance on government regulation is "less is better." So it's perhaps a bit ironic that helping airline travelers comply with Transportation Security Administration (TSA) regulations is creating a growing number of opportunities for marketers of products ranging from plastic bags to personal care items.

Certainly, makers of storage bags have had unexpected chances to build consumer goodwill, brand awareness and sales since September 2006, when TSA instituted its "3-1-1" rules, limiting carry-on liquids and gels to three-ounce bottles contained in one, one-quart zip-top bag per passenger.

As David Kellis, a spokesperson for the Glad Products Co. division of The Clorox Company, told CNNMoney.com: "It's rare that a new government regulation ends up requiring your product to be used."

Glad and competitor Hefty, in particular, have seized the brand-building possibilities presented by this unique scenario--first and foremost by donating bags to major airports for distribution to confused travelers who find themselves caught bag-less in the terminal.

Pactiv Corp. began distributing its Hefty OneZip one-quart bags to airports that request them 15 months ago, and will have provided a total of 10 million by the time 2008 is over (including more than 1 million during the upcoming long Thanksgiving weekend).

"By the end of this year, this program will have touched the lives of millions of travelers, enabling us to help ease the stresses of air travel," comments John Schwab, senior vice president/general manager for Hefty Consumer Products.

Pactiv spokesperson Lisa Foss describes the free-bag program as a "win-win for all," and adds that the company considers it "a great opportunity to build awareness of the Hefty brand as a whole and our OneZip slider bags."

As for profit opportunities, last February, Hefty launched OneZip Travel bags, seven quart-size slider bags in a flat pack designed to fit easily into the outside pocket of a carry-on, with labeling that emphasizes the bags' 3-1-1 compliance. That launch was supported by Internet banner ads, newspaper FSIs and other efforts, according to Foss. Pactiv also has been getting the word out that Hefty OneZip quart-size food storage and freezer bags meet TSA's requirements (a point noted among the usage tips on the bags' boxes, for instance).

Pactiv does not divulge sales numbers by specific product lines, although Foss confirms that the company is "pleased" with the performance of the travel bags. For the nine-month period ending Sept. 30, Pactiv reported that the full Hefty Consumer Products division saw sales rise by 10%, to $881 million.

Glad, too, has been winning the gratitude of travelers by giving many thousands of bags to major airports (50,000 will go to Dallas/Fort Worth International Airport alone for the holiday season). Glad representatives will be on site at some airports to personally distribute the timely holiday gifts.

The Glad bags line is housed under Clorox's Specialty Group, which also includes Fresh Step cat litter, Kingsford charcoal and other products. During fourth-quarter 2007, that group as a whole saw 1% sales growth, 2% volume growth and a 4% increase in pre-tax earnings.

Bag manufacturers are far from alone in finding opportunities in the 3-1-1 regulations. Procter & Gamble, Unilever and other personal-products marketers quickly recognized the need to fill the demand for three-ounce or smaller versions. After the regulations took hold, NPD Group chief analyst Marshal Cohen predicted that travel-size products' share of the toiletries market would jump from 10% to 25% by year-end 2007.

Entrepreneurs are also jumping in. 311Travel Bag, a Pensacola, Fla.-based company started less than a year ago, is entirely focused on providing travelers with innovative, regulation-compliant travel solutions.

Her own frustration as a post-3-1-1 regulations traveler inspired Linda Padgett-Stinson, the company's founder and owner, to devise the Clear Bag System. The system, available in four configurations, is a vinyl toiletries case with an easy-to-use zipper pull, which holds TSA-compliant, reusable liquid/gel containers. (311 also sells individual dispensers.)

The containers work on an innovative airless pump system that enables mess-free dispensing and does away with leakage, according to Padgett-Stinson, who's now adding an airless pump with sprayer to the line.

Since May, 311 has sold about 15,000 bags online to individuals, plus another 8,000 to corporations, travel agents, conference centers and others ordering them in volume as gifts for clients, Padgett-Stinson reports. (311 can brand the kits with company logos, although some companies choose to do that on their own.)

311 is pursuing discussions with several large retailers that have expressed interest in carrying its products, she adds.

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