Battery market seeks recharge; rechargeables to generate sales surge - discount store sales

Battery Market Seeks Recharge

Nationwide DSN Report

The $2.6 billion battery market may be recharged with the introduction this spring and summer of several one-hour rechargeable battery systems.

To date, Eveready, GE and Panasonic have announced introductions, and others will undoubtedly follow.

These introductions, according to the manufacturers, will be significant in that they will serve to overcome a major stumbling block to growth in the rechargeable category: Most Americans do not think seven to 14 hours in advance, and consequently find traditional rechargeable batteries unsuited to their lifestyles.

"Our research showed that consumers were much more concerned with the time factor than with cost," said an Eveready spokesman. "They were clearly willing to pay more for added convenience."

That might be an under-statement in at least one area--personal audio, where some 40 percent or so of alkaline batteries now go. While the relatively inexpensive, powerful alkaline batteries will probably maintain their strong position in the market, a truly convenient rechargeable system could make significant inroads.

That, evidently, is GE's thinking. At the winter CES in Las Vegas, Nev., the company was showing a prototype of a pocket-sized charger that fast-charges a set of AA batteries. According to a spokeswoman, the product, which will debut sometime in the second half of 1989, is aimed at upscale consumers and will be priced accordingly.

The Eveready Generator battery and charger system will also carry a high price tag, perhaps twice as much as conventional seven-hour systems, and will be more flexible than the GE charger. It will handle C, D and AA cells, and automatically differentiate between new one-hour Generator cells and older trickle-charge models.

According to an Eveready spokesman, that distinction will be important. "No one will want to keep two chargers around for different types of batteries," he said.

The GE spokeswoman also noted that its product will recharge any existing rechargeable battery.

With or without the new one-hour products, the rechargeable market is a growth area. With major players ranging from Panasonic and Saft to GE and Eveready, other major manufacturers like Sanyo are also playing significant parts.

The popularity of newer, battery-eating products like camcorders, power zoom 35mm cameras, laptop computers, cellular telephones and boom boxes, has built demand for rechargeable cells to a record level, and the peak is nowhere in sight. Projected sales in this area are expected to exceed $550 million by the end of 1991, according to Eveready.

Saft, which has carved out a chunk of the business with its full line of camcorder, computer and camera battery packs, is in the process of developing a quick-charge product, which should reach the market by the end of the year. However, a spokesman for the company noted that faster-charging systems will appeal mainly to a select group of consumers. "The bulk of the business will be in less expensive products," he said.

A buyer for a major CE chain essentially agreed with that assessment, at least for the near future. "These will be specialty items at first," he said of the rechargeable market, "but I see them becoming the standard rather quickly." The impact will probably be felt most in personal audio products, which generally use AA batteries, he added.

"This market has grown steadily, and at times spectacularly, over the last 10 years," said an Eveready spokesman. "But there hasn't been anything new in the area in 20 years. This [the Generator system] could really stimulate the market."

A secondary factor may also stimulate rechargeable business. Legislation pending in several states, including New York, may restrict or outright ban traditional alkaline and carbon zinc batteries. Environmentalists contend that the products are unnecessarily pollutive, and are pressuring legislators to restrict their usage.

If this campaign assumes national proportions, it could force consumers into the rechargeable market. According to Eveready research, less than 30 percent of all homes now own rechargers, and it can be assumed that many of those have consigned them to closets and attics because of the relative inconvenience of waiting seven to 14 hours for batteries to charge.

Such a switch over would produce, at best, mixed emotions among retailers, who now have a moderately profitable, consistent business in disposable batteries. The higher margins and price points of rechargeable batteries (as well as the add-on sale of chargers) would be a boon, but the drawbacks of selling a product that only has to be replaced once every five or 10 years are self-explanatory.

Even without that impetus, rechargeables are expected to become the second-largest segment of the battery market within a year or two, displacing carbon zinc. The reusable aspect of the product seems to strike a chord with consumers, and use has mainly been limited not by price (which works out to far less per battery hour than with alkaline), but by the fact that present technology just doesn't match up with the way people actually live.

If, as expected, the one-hour charge systems remove that deficiency, rechargeables may be the place to be in the '90s.

TABLE : Estimated Growth of Rechargeable Batteries

PHOTO : CE at Auchan, Houston: The popularity of battery-eating boom boxes has increased demand for rechargeable cells.

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