Beauty is back, according to market research providers The NPD Group and SymphonyIRI Group. The pair announced the first quarter 2011 results of their partnered product, the Beauty Cross Channel Monitor, the beauty industry’s only point-of-sale tracking product that looks at sales performance in department stores (prestige) and the food, drug, and mass market, excluding Walmart (FDMx).
Total US beauty sales in the prestige and FDMx channels are trending similarly in first quarter 2011, up 5% and 4%, respectively. Makeup sales, while also trending similarly, tell a slightly different story with FDMx faring better than prestige due in part to the double-digit sales gain in the $127 million nail segment.
“Despite the current economic situation, the beauty industry continues to trend upward showing growth for the fourth consecutive quarter in both the food/drug/mass and prestige channels,” said Diane Nicholson, president, beauty, The NPD Group. “After a positive, yet cautious 2010, it’s encouraging to see consumers continue to embrace newness and innovation in the beauty space.”
According to NPD’s Economy Tracker, 35% of consumers planned to maintain or increase their spending in cosmetics and fragrances for the first quarter of 2011, up two percentage points from last year. This is despite the fact that consumers are also dedicating a larger percentage of their wallets to gas and groceries, as prices of these categories rise. In fragrance, the prestige market (roughly five times larger than FDM) grew 6% during the first quarter of 2011 versus flat sales in the FDM sector. The increase in prestige fragrance is due to the positive performance in top existing brands, as well as strong sales from 2010 introductions, according to NPD and SymphonyIRI.
Conversely in skin care, FDM is triple the size of the prestige channel, yet prestige is trending better, up 6% versus 3% in FDM. The face, sun care, and gift set segments were key drivers in the growth of prestige skin care.
“Now more than ever, as the beauty consumer evolves and channel shifting continues, the Beauty Cross Channel Monitor is a valuable resource for understanding beauty trends across the prestige and mass markets,” said Victoria Gustafson, vice president, beauty vertical, SymphonyIRI Group. “Capitalizing on the dynamics between these channels is a critical component to maximizing brand strategies.”
Americans Have Access To Plastic Bottle Recycling
A study released by Moore Recycling Associates Inc.—sponsored by the American Chemistry Council (ACC)—has found that a much larger portion of the US population has ready access to recycle commonly used plastics than previously believed. Researchers found that 94% of Americans have access to recycle plastic bottles and 40% of the population also can recycle other types of plastic containers, such as yogurt cups, dairy tubs and lids.
Although the study surveyed nearly 2,500 US communities, it found that within the 100 largest cities, the percentage of the population with access to recycle plastic containers in addition to bottles has nearly doubled since 2008.
ACC sponsored this study as part of a cooperative effort with the Sustainable Packaging Coalition, a project of the nonprofit GreenBlue, which is working to launch a new voluntary labeling system for the recycling of packaging. The study also noted that it is more effective to communicate which plastics are recycled in various communities by listing shapes (e.g., bottles, tubs, trays, lids, etc.) than by listing resin codes.
Pucker Up! Prestige Lipcolor Sales on the Rise
Prestige lip segment (lipcolor, liner, gloss and applicators) sales grew 7% to $185.2 million in US department stores and 4% in units to 9.8 million from January through April 2011. The real star of the segment was lipcolor, as dollar sales rose 11% ($92.1 million), compared to January through April 2010, according to The NPD Group, a Port Washington, NY-based market research firm.
After almost a decade of declining sales, lipcolor sales began to grow again last year. Since February 2010, lipcolor has experienced 15 months of steady dollar growth, with seven of those months posting double-digit increases, including April 2011 (+30%), noted NPD. Last year’s results marked the first time since 2002 that lipcolor unit sales increased (8%) the highest increase since 1998.
“What is particularly noteworthy of the trend in lipcolor is that we are seeing these significant increases in sales at a time when overall usage of lipcolor appeared to be dropping off. Coming out of the recession, it seems that the consumer’s thirst for color and play was reawakened,” said Karen Grant, vice president and senior global industry analyst, The NPD Group. “In 2010, we saw the preference for rich as well as retro colors and in 2011 we are seeing new neutrals come to the fore. As the fashion industry increasingly features bold as well as understated lip statements on the runway and in advertisements, lipcolor appears to be getting its groove back.”
According to NPD Group/Beauty Trends, MAC rules the roost in the category, Here is the list of the best-selling lip color (dollars sold) January-April 2011.
1. MAC Lipstick
2. Lancôme L’Absolu Rouge
3. Clinique Long Last Soft Shine Lipstick
4. Estée Lauder Pure Color Lipstick New
5. Chanel Rouge Coco Shine
Global Green Brands Study Finds Packaging Matters with US Consumers
According to findings from the annual ImagePower Global Green Brands Study, when it comes to current usage of green products or services, the household products and grocery categories have the highest consumer adoption rates in all countries except China, where packaged goods/beverages and personal care are the most used categories, and in Brazil, where household products and personal care dominate. In all countries, consumers indicate that in the coming year they are less likely to buy green packaged goods and beverages, grocery and household products.
According to the study, while personal care, grocery and household products are the industries with the greatest representation among the top 10 brands list, consumers in the US indicate that they intend to spend more on green technology, energy and automotive products or services in the next year.
The seventh annual Green Brands study polled more than 9,000 people in eight countries—including the US, UK, China, Brazil, India, Germany, France and Australia—and was conducted by WPP agencies, Cohn & Wolfe, Landor Associates and Penn Schoen Berland Associates (PSB), as well as independent sustainability strategy consulting firm Esty Environmental Partners.
“We’re seeing a shift in the ‘In Me, On Me, Around Me’ mentality when it comes to purchasing green products,” said Russ Meyer, chief strategy officer of Landor Associates. “Consumers have a good understanding of how green choices in personal care, food and household products directly affect their families, and they are now seeing benefits like cost savings that attract them to higher cost items like cars and technology.”
Consistent with last year’s study, more than 60% of consumers globally want to buy from environmentally responsible companies. Respondents in all eight countries surveyed indicate that they are willing to spend more on green products. In developed countries such as the US and the UK, roughly 20% of those surveyed would spend more than 10% extra on a green product.
In developing countries, however, consumers say that green products have a higher inherent value, as 95% of Chinese consumers say they are willing to spend more on a product because it’s green—with 55% of them willing to spend between 11-30% more. Similarly 29% of Indian consumers and 48% of Brazilians say they are willing to spend between 11-30% more on green products.
LEADING US GREEN BRANDS
For the first time since the inception of the ImagePower Green Brands Study in 2006, the four brands perceived to be the greenest are “born green” companies. The full list includes:
3.Tom’s of Maine
6.The Walt Disney Company
10.Starbucks, Microsoft (tied)
“When we analyzed the approach of the top 10 brands companies, using our Esty Environmental Scorecard, it was clear that the winners achieve a product-value-information trifecta,” said Amy Longsworth, partner at Esty Environmental Partners. “The top brands offer clear price value through co-benefits: a great innovative product that meets my functional needs plus green attributes that meet my values needs. These companies also tend to have robust life-cycle insight and complete sustainability strategies across their value chains, which enable them to draw from rich experience and data for their consumer communications.”
Packaging continues to be a matter of great concern for US consumers. According to the report, 71% of respondents said companies use too much material in product packaging—though only 34% of US consumers say they consciously purchase products that use less packaging. Almost half of Americans feel that packaging that can be recycled is more important than packaging made from recycled or biodegradable materials.
Packaging also plays a critical role in communicating product benefits to US consumers. More than 50% of Americans say on-pack information helps them understand a product’s “greenness.” Additionally, 40% say that packaging is their primary source for information on environmental issues regarding products.
“Other than price, the two biggest influences on purchase decisions are on-package messaging and prior experience with the product, both of which satisfy the consumer need to understand a benefit beyond‘saving the world,’” said Annie Longsworth, global sustainability practice leader for Cohn & Wolfe. “It’s critical for green brands to communicate the real and tangible benefits of their products in addition to being green, which still feels like luxury to many consumers.”
Perception v. Reality In Sustainability
Brandlogic, in partnership with CRD Analytics, has released the inaugural version of its “Sustainability Leadership Report: Measuring Perception v. Reality,” a report which provides quantitative analysis of actual, versus perceived, performance around environmental, social and governance (ESG) factors for 100 leading companies. One of the key findings in the report is the large number of firms—66 in total—whose perceived performance exceeds their actual performance.
To generate raw data for the Sustainability Perception Score (SPS) index, the survey asked a series of questions related to ESG factor, including equality, business ethics, resource management and environmental impact, and commitment to measuring and reporting corporate ESG performance. For each statement, respondents were asked to rate up to seven companies on a five-point scale indicating how well the statement described the company. As with the SRS, separate environmental, social and governance indicators were calculated, then weighted using regression analysis and aggregated to generate the total SPS. The report provides a framework that plots each of the 100 companies across four quadrants: Challengers, Leaders, Laggards and Promoters.
How did HBA and household care and related companies fare? Here are a few that were listed in the 100 “prominent” brands analyzed in the report:
Johnson & Johnson 54.8 59.0—Leader
Colgate-Palmolive 54.3 48.7—Leader
Henkel 54.3 46.6—Leader
L’Oréal 45.3 57.3—Challenger
Avon 45.0 5.3—Laggard
Nivea 45.2 34.7—Laggard
Tesco 39.6 37.6—Laggard
Walmart 38.6 35.4—Laggard
In the study, when asked about the importance of good corporate citizenship in respondents’ decision making, an overwhelming majority (88%) state that it is “important.” In fact, almost half (45%) view it as “extremely important.”
“We want the 100 companies, as well as firms who were not analyzed, to look at the report and ask key questions about any reputational risks they may be facing and identify potential opportunities for improvement,” said Brandlogic’s senior partner of strategy and research James Cerruti. “Our goal is to help companies achieve results by better aligning their branding, communications, reporting and stakeholder engagement processes around these emerging priorities.”