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U.S. Cosmetics and Toiletries Market Rebounds in 2010

June 16, 2011

U.S. Cosmetics and Toiletries Market Rebounds in 2010

U.S. Cosmetics and Toiletries Market Rebounds in 2010

• Rising consumer confidence, aggressive promotional activity and technological advances propelled U.S. sales of cosmetics and toiletries by 2.4% to $36.5 billion in 2010 at the manufacturers’ level, according to recently released data from worldwide consulting and research firm Kline & Company.

After experiencing a 0.8% decline in 2009, last year’s increase brought sales back above pre-recession levels. While the industry showed signs of recovery, consumers influenced by economic uncertainties continued to scrutinize their spending, shopped at venues with competitive pricing, and sought out products on sale. The increased willingness to spend was primarily driven by offers that provided extra value. Skin care kits, priced more favorably than individual products, and multi-functional products were among the core trends of 2010.

According to Kline, all trade classes grew in 2010. The specialty trade class, which consists mainly of mall-based retail stores including Bath & Body Works and The Body Shop, posted the strongest gains, and provided a good sign that consumers are back out and shopping again. In contrast, the professional channel, encompassing salons, spas, and physician offices, registered the lowest overall increase of 1.9%.

As consumers continued to hold back from visits at professional beauty outlets, focus has shifted to achieving the best possible results at home. In the skin care segment, a host of products were introduced during the year that compared their results to those obtained from a beautician or doctor. For example, at-home skin care devices used to treat fine lines and wrinkles, as well as tone and cleanse skin, have become very popular with consumers.

“This hunt for additional quality has been spearheaded by marketers’ extensive innovation efforts,” explained Carrie Mellage, director at Kline’s Consumer Products Practice. “Advancements in skin care have included bioelectric technology to help stimulate the natural renewal process of the skin and DNA enhancement formulas found in power-serum products.”

In 2010, skin care remained the largest product class, accounting for 25% of total industry sales. Thanks to the emergence of high-tech facial treatment offerings, the product class has also remained one of the fastest growing segments. The industry front-runner was makeup, which registered 4.4% growth. Lending a strong hand to the success of the makeup category was nail polish, which was up 20.4% in 2010 due to new product activity adapted to achieving at-home salon results and easy application.

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Growing Interest in Biobased,Green Household Products

• New consumer research unveiled by Genencor, an industrial biotechnology company, demonstrates market potential in North America for“biobased” and “green” household products with environmental benefits.

The Genencor Household Sustainability Index found that four in ten American consumers and about a third of Canadian consumers already have heard of the term “biobased” to describe products or product ingredients used in cleaning and personal care products, clothing and fuels such as ethanol and biodiesel.

Most consumers also readily accept that biobased products offer sustainability benefits. According to the survey, more than two thirds of Americans and Canadians said biobased ethanol for vehicles, laundry and dish detergents, and clothing made with biobased enzymes are definitely or likely green. About 8 in 10 consumers in both countries said they would definitely or likely purchase biobased household products instead of non-biobased products if comparable on cost and effectiveness.

In addition, the Genencor Household Sustainability Index also provided a snapshot of recent consumer purchases and attitudes on products perceived to be green. Overall, 71% of consumers in Canada and more than half of American consumers (53%) purchased a household product considered to be green in the past 60 days in categories such as cleaning supplies, personal care, detergents and soaps, recycled paper and energy efficient light bulbs. The survey also found that in the U.S. women are twice as likely as men to purchase green cleaning products, while men are twice as likely as women to purchase energy efficiency bulbs.

The U.S. Department of Agriculture (USDA) estimates that there are 20,000 biobased products currently being manufactured in North America. As part of a new program launched in March, the USDA already has certified dozens of consumer products with its “BioPreferred” label, which designates a product is made with a high percentage of agricultural ingredients. However, while three-quarters of consumers in the U.S. and Canada consider themselves familiar with household green products (those considered better for the environment than comparable products), one-third are not confident that these products are really better for the environment than other products.

Confidence in green products does increase somewhat with level of familiarity, according to the company. In the U.S., consumers who are very familiar with green products are almost twice as likely as consumers overall to say they are very confident that such products are better for the environment (22% versus 12%). This relationship is not as strong in Canada, the company said.

Teens, Young Women Still Tanning—Inside and Outdoors

• Despite repeated warnings from dermatologists on the health dangers of tanning, results of a new survey by the American Academy of Dermatology show that a large percentage of Caucasian teen girls and young women admitted using tanning beds or intentionally tanning outdoors in the past year.

According to the group’s data, 32% of respondents had used a tanning bed in the past year, and of those respondents, 25% used a tanning bed at least weekly, on average. An overwhelming majority (81%) of all respondents reported that they had tanned outdoors either frequently or occasionally in the past year.

“Our survey underscores the importance of educating young women about the very real risks of tanning, as melanoma—the deadliest form of skin cancer—is increasing faster in females 15 to 29 years old than in males of the same age group,” said dermatologist Ronald L. Moy, M.D., and president of the American Academy of Dermatology. “In fact, most young women with melanoma are developing it on their torso, which may be the result of high-risk tanning behaviors such as indoor tanning. In my practice, I have had patients —young women with a history of using tanning beds—who have died from melanoma.”

When survey results were analyzed by age, respondents who reported using indoor tanning noted significant differences. Specifically, 18-22 year-olds were almost twice as likely to have indoor tanned (40%) when compared to 14-17 year-olds (22%).

Although spray tans are considered a safe alternative to UV exposure from the sun and indoor tanning beds, the majority of respondents 86% indicated that they never received a spray tan in the past year.

“Exposure to UV radiation is the leading risk factor for skin cancer, yet—despite this knowledge—droves of teens and young women are flocking to tanning bed facilities and beaches or pools to tan every year,” said Moy. “The challenge is that teens have access to indoor tanning salons on almost every corner.”

In fact, a recent survey of 116 U.S. cities found an average of 42 tanning salons per city, which means tanning salons are more prevalent than Starbucks or McDonald’s, according to Dr. Moy.

“We are very concerned that this tanning behavior will lead to a continued increase in the incidence of skin cancer in young people and, ultimately, more untimely deaths from this devastating disease.”

At current rates, one in five Americans will develop skin cancer in their lifetime. Approximately 75% of skin cancer deaths are from melanoma, and the incidence of melanoma has been rising for at least 30 years – particularly among young, white women in most recent years, according to the group.

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Soap Sells When It Smells…Good That Is

• When it comes to soap and shower products, pleasing scents and a promise to moisturize the skin are paramount attributes, according to a recent survey conducted by market research firm Mintel. According to Mintel, scent and moisturization are among the top attributes consumers look for when shopping for soap, bath and shower products. According to the data, 38% of respondents who have purchased soap said their decision was based mainly on scent, while 35% say they preferred shower products with extra moisturizers.

Meanwhile, 60% of respondents claim that finding soap or body wash products on sale or the cheapest is important/very important to them and 18% of soap-buying consumers say they look for the least expensive brand of soap or body wash.

“Although many top brands have answered demand for these qualities, there are substantial opportunities for private label brands to enter this arena during the slow economic recovery,” according to Kat Fay, senior beauty analyst at Mintel. “The U.S. soap consumer is looking for bargains now more than ever as household budgets remain tight, therefore private label brands need to have a lower price-point and deliver lather, fragrance and significant moisturizing ingredients.”

In addition, men are starting to have a substantial impact in the market. According to Mintel, men between the ages of 18-34 report the highest usage of body wash at 58%, compared to 50% of those ages 35-54 and 42% of those who are 55+.

“Men represent a key demographic for sales of body wash products and marketers of these products should attempt to gain the attention of men to boost their sales,” added Fay. “Having said that, a whopping 74% of women buy liquid body soap or wash compared to 50% of men—so women are still the key purchasers.”

With the growing trend of body wash, sales of scrubbers and massagers rose nearly 10% in 2010 and Mintel expects this segment to continue growing by 63% between 2010 and 2015.

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