The cosmetics and toiletries market grew only 2% in 2002. It’s the second consecutive year of low single-digit growth for the industry after posting 5% annual gains the previous five years, according to Kline & Company, Little Falls, NJ. Company executives said that while some blame the stalled U.S. economy, this is only one factor contributing to the slowed growth.
“Over the past few years, there has been a real lack of big product launches in all the C&T categories,” said Carrie Bonner, project manager for Kline & Company’s consumer products practice. “Lots of companies are holding off on introducing new products to avoid compounding losses. But innovation and heavy promotion of new products are critical in this industry, and companies that cut spending in these areas risk getting caught in a downward spiral of declining sales.”
Successful brands such as cK One, Colgate Total and Biore added new excitement to the industry in previous years and created new segments, although some were short-lived, company executives noted. Kline executives commented that the recent dearth of “mega-launches” has contributed to the problem.
A Cosmetics & Toiletries USA survey revealed that new product launches increased 20% in 2001, but in this case, “more has not meant better,” executives said.
“Consumers are always looking for innovation and originality in C&T products, and recent launches just haven’t provided anything too different from what was already out there,” said Ms. Bonner.
However, by bringing products that are already established elsewhere to the U.S. market, companies can offer novelty without the costs of additonal product development. Examples of this trend include L’Oréal’s Garnier Fructis and Unilever’s Dove hair care, which are already successful in Europe.