Water-Saving Washers Stir Up Business

The average price of a new washing machine in the United States is $424. Will Americans spend more than twice that to be ecologically correct?

Maytag Corp. is betting yes. Maytag, Frigidaire Home Products and Raytheon Co.’s Amana appliance unit are introducing high-efficiency, horizontal access, agitator-less, water- and energy-saving machines that retail for about $1,000. Germany’s Miele and Sweden’s Asko AS export similar machines to the U.S.

It’s the biggest news in the staid laundry world, but the world’s largest washer maker, Whirlpool Corp., isn’t plunging into the suds. Though it makes these front loaders overseas, Whirlpool scrapped plans to do so in the U.S.

“We found people were very put off by their high prices,” said Whirlpool spokesman Chris Wyse. “They also didn’t like the fact that these machines recommend special detergents that aren’t widely available.” Another negative is that consumers associate front-loading washers with commercial launderettes, Wyse said.

Maytag’s experience to date suggests otherwise. “We’re out of stock and can’t make the new Neptune washers fast enough,” said Lloyd Ward, president of Maytag Appliances.

In addition to providing environmental benefits, Ward said, Maytag’s Neptune treats fabric more gently and cleans many tough stains better than conventional machines.

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Neptune, named after the Roman god of the sea who used water sparingly, and also for the planet, requires 23 gallons, the company said. Conventional machines use 40 to 46 gallons.

Maytag estimates that households laundering an average of nine loads a week, can save $100 a year in electricity bills --and 7,000 gallons of water. That’s the amount an average person drinks in a lifetime.

Maytag research shows that 47% of households don’t change the water-level setting regardless of load size. Washing machines are among the top three indoor water users in the home, along with showers and toilets, said the American Water Works Assn.

The washers clean by rotating clothes in a motion similar to a dryer, only it alternately dips them into water and lifts them out. The tub turns on a horizontal axis like the wheel of a car.

Newton, Iowa-based Maytag is increasing its advertising budget by 20% to promote this product.

Its Maytag repairman, Ol’ Lonely, who for 30 years hammered home the association of Maytag appliances and dependability, will be on hand as a friendly group of blue Neptunians arrive with the washers.

“Ol’ Lonely is a well-loved icon that represents dependability. We’ll use him in surprising ways,” Ward said. The 60-second spot to launch Neptune will air in September, 30 years after Maytag’s first Ol’ Lonely ad. In the original, the lonely man trains Maytag repairmen, but warns them to come up with creative ideas to fill their time.

Originally played by Jesse White and now by Gordon Jump of “WKRP in Cincinnati” fame, Ol’ Lonely has knitted shawls, taught a parakeet to talk, mastered solitaire and snoring while waiting for the phone to ring in almost 100 scenarios over 30 years in ads created by the Leo Burnett agency.

The jowled, sad-eyed man was bored because his brand’s products never break. In one ad, the lonely guy navigated his way to an isolated lighthouse--to discover that the washer needed only a new plug--and that the lighthouse keeper was equally lonely.

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Maytag’s first dependability ad ran in Life magazine in 1961 when a bride testifies: “Married in 1934. Got Maytag in 1936. Both marriage and Maytag still working.”

Dependability is the most important consideration when consumers buy washing machines, Maytag said.

The company’s marketing momentum isn’t limited to advertising. It equipped the entire water-starved town of Bern, Kan. (population 204; 104 washers involved)--so the Department of Energy could monitor the amount of water and energy saved. In later publicity, Maytag implied an endorsement.

Actually, it was the expectation of Department of Energy regulations that sparked 104-year-old Maytag to develop Neptune. Consumer Reports rated Maytag the most dependable washer for years, but in 1989 it lost its edge. In revamping strategy, the prospect of impending energy and water standards directed its course.

The DOE says it won’t issue new standards until after the year 2000.

Amana, which Raytheon is selling to Goodman Holding Co., will introduce its horizontal-axis washer later this year for $999, said Kevin Kacere, marketing director for laundry products. Frigidaire Home Products last summer introduced a new Tumble Action front-load washer for $999, said John Wilson, marketing services director at the Dublin, Ohio, based company.

“In March, sensing consumer resistance, we lowered our price to $799,” Kacere said.

Wilson said sales have been “excellent,” even though many worry “that if they open the door all the water will come out.” Europeans have used front-loaders for decades, he noted.

In some areas, where water is scarce, people have been willing to pay more for the environmental advantages. This has accelerated the traditional 11-year to 13-year buying cycle, Wilson said.

The Assn. of Home Appliance Manufacturers says it expects these new ecologically sound products to encourage consumers to step-up to pricier products, fetching higher margins for manufacturers.

This could help avoid the rampant price-cutting in an industry where consumers haven’t thought there was much of a difference between competitors’ products.

Tina Settecase, Sears, Roebuck & Co. vice president and general manager for home appliances, said customers have shown a willingness to trade up for new products with a real difference--like quieter dishwashers and larger over-the-range microwave ovens that free up counter space.

Whirlpool makes all Kenmore washers sold by Sears. Americans bought 7.167 million washers last year for $2.049 billion.

Susan Gallagher, a Prudential Securities analyst, said commercial sales to launderettes and other big clothes washers are strong because buyers see this as an investment that will reduce operating costs. It’s too soon to tell, though, how mainstream residential buyers will react, she said.

But success in the commercial channel alone will be good for Maytag, Gallagher said. In July, Maytag reported a 1.1% drop in second-quarter earnings as increased costs offset a 7.9% increase in sales.

Based on consumer feedback, Maytag reconfigured the machine. It tilted Neptune’s washtub 15 degrees to appeal to American sensibilities and instead of the usual sub-compact size, increased the capacity to an oversized washtub.

Earlier this year, Frigidaire advertised its Tumble Action washer as the “first to remove the agitator in a washer so advanced it gently tumbles the dirt out, using 40% less water.”

Wilson acknowledged, though, consumers aren’t tuned into to the concept of more efficient washing.

“We’re looking forward to Maytag bringing focus here,” he said. “And Frigidaire, with a less expensive price tag, can get the aura.”