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A Way to Gauge Industry Health?



A Way to Gauge Industry Health?



By Tom Branna, Editorial Director



Published November 30, 2011
Related Searches: aging active care cleaner
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While Western Europe remains mired in a debt crisis that threatens to plunge the region into recession, analysts insist that the US economy will continue to slog its way through tepid growth in 2012. That may be good enough for most industries, but not when it comes to cosmetics. In contrast, the beauty industry, for the most part, appears to be on a roll. Results for Q3 are all in, and nearly every major player—from Procter & Gamble to Estée Lauder to L’Oréal—reported better than expected gains for the period.

When times are tough, pundits like to point to the Lipstick Index, Leonard Lauder’s term to measure the resiliency of the beauty industry in an economic downturn. But new data from The NPD Group suggests that it might be time to measure the industry’s health in a new way. That’s because, despite 9% unemployment, rising energy costs, a plunging housing market and generally gloomy consumer confidence rating, the often-beleaguered fine fragrance industry managed to post a 10% sales gain for the first 10 months of 2011. According to NPD, sales for the period topped $1.7 billion and unit sales rose 6% to nearly 30 million. At a time when many consumers remain guarded, they’re apparently opening their purses at fragrance counters. Maybe it’s time for some sort of spritz index to measure this dichotomy?

Fine fragrance sales may be making a comeback, yet consumer interest in actives has never wavered. As Christine Esposito notes in Fully Loaded (p. 89), demand for effective anti-aging products has kept marketers and suppliers searching for the latest peptides, fruit acids and the like.

It may not be posting double-digit gains, but the multi-billion dollar shampoo and conditioner market appears pretty healthy these days, too. In her article, which begins on p. 71, Melissa Meisel notes that mass market sales of these hair care products now top $2.4 billion in the US and are growing at a rate of 3% a year.

Unfortunately, gains aren’t apparent in the household cleaner segment (See Searching for Answers, p. 57). Industry observers insist that the category won’t resume a growth pattern until marketers roll out truly innovative products.

We hope you enjoy this edition of Happi. As always, we welcome your comments and suggestions. Good luck in the New Year.

tomb@rodpub.com


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