The Baby and Youth Care Market

November 7, 2005

Whether six months, 6 or 16, the purchasing power of kids today is having a tremendous impact on the personal care market, according to industry experts.

The Baby and Youth Care Market

Whether six months, 6 or 16, the purchasing power of kids today is having a tremendous impact on the personal care market, according to industry experts.

Girl Power. It was in full force at last month’s Women’s World Cup tournament, which drew record crowds of boisterous, rollicking girls to stadiums across the U.S. Less noticeable, but even more impressive to executives in the cosmetics industry is the power girls possess when it comes to making purchasing decisions.

Last year teenagers (girls and boys combined) spent $141 billion, according to Teenage Research Unlimited, Northbrook, IL. That’s a 16% increase over 1998. Multinational cosmetics manufacturers, eager to tap into this growing consumer spending pool, are acquiring brands that have a special connection to teens and even younger age groups. More than a year ago Estée Lauder acquired Jane Cosmetics and earlier this year LVMH bought Hard Candy. Girls born between 1980 and 1992 have become a lucrative target for these and other marketers thanks to their tremendous purchasing power and insatiable desire to stay on the cutting edge of cool.

“The teen consumer is obsessed with Hollywood, glamour and celebrity,” noted Kristin Penta, creator of Fun Cosmetics, Hillside, NJ. “The trends are changing faster and faster, the Hollywood starlets are changing their look more frequently and teens are spending money to keep up with them.”

Teenage and adolescent girls aren’t the only ones spending more money on personal care products. A mini boomlet of births during the 1990s has boosted demand for baby care products. But for many modern moms, baby powder from the local grocery store just isn’t up to snuff. They’re opting for prestige brands from such well-known cosmetics marketers as Bobbi Brown and Origins. This flight to quality has also enabled smaller independent companies to carve out a niche by introducing upscale lines of their own. Many of these brands aren’t cheap, but executives who spoke to happi said that, for many parents, higher price points are not a barrier to closing the sale.

Missy Chase said she created her own baby care line, Baby Spa, when she decided that nothing presently on the market was good enough for her baby. “Our products don’t contain mineral oil, sodium lauryl sulfate or artificial colors or fragrances,” said Ms. Chase. “I’m part of a different generation. We’re discerning about ourselves and our children. After all, I wouldn’t buy mineral oil for myself, so why should I buy it for my baby?”


Keeping Up with Twisting, Turning Trends
Winning parents over may be as easy as loading your product with natural ingredients, but appealing to teens can be quite an adventure for many white-collar executives. With fashion trends that fade practically overnight, companies that compete in the teen personal care market must react quickly if they wish to capitalize on the next Big Thing. As a result, smaller companies have been able to compete successfully against large multinationals in the teen segment by tracking teen trends.

“Estée Lauder has tons of money to spend on market research,” said Solar FX president Marc Beckman. “We don’t have that kind of budget so we go out into the marketplace and hang out in the same night clubs, movies and concerts that teens go to. We do all the things high school kids do to find out what the trends are.”

Solar FX, New York, NY, got its start just two years ago when it introduced a clear nail enamel that changes color in sunlight. Since then the nail enamel range has grown to include more than 30 different shades and includes shades that change from sand to red. The company now offers nearly 200 SKUs including tattoo kits, body crayons and lip colors. Individual items retail for $12 and most kits cost $25. “Our uniform price system appeals to a girl who may enter a store with $50,” said Mr. Beckman. “This way she knows exactly what she can afford.”

The strategy appears to be working. According to Mr. Beckman, sales are up 400% this year and should reach $10 million (wholesale) by the end of the year. Solar FX is available in 400 doors and the company is getting ready to launch Glam FX, an upscale cosmetics line that Mr. Beckman said will add fun to what he called the traditional, stodgy department store atmosphere.

“Solar FX is all about fun and entertainment. We bring something new to the marketplace and we bring it quicker than the bigger companies,” said Mr. Beckman. “It really goes beyond Gen Y consumers. A lot of adults want to lighten up. Even a woman who shops at Bergdorf Goodman and spends her weekends in the Hamptons sometimes wants to wear a nail polish that changes color.”

Can Bigger be Better?
It should come as no surprise to hear executives at smaller companies insist that their size enables them to react to trends more quickly than larger corporations, but big firms can remain nimble too. Since Jane Cosmetics was acquired by Estée Lauder in 1998, the brand has enjoyed a surge in sales. Jennifer Balbier, senior vice president, new product development, said the company has a whole new roster of products ready for fall. “We can’t just offer another shade promotion, we’ll leave that to other brands,” said Ms. Balbier. “Our products are value oriented, fun and good for you.”

A lipstick that’s good for you? That’s the idea behind Jane’s launch of LipKick, which is billed as an “energizing liquid lipstick with natural botanicals.” LipKick contains ginseng and ginko and was inspired by the raft of sports drinks and vitamin supplements that are so popular with teens.

“Kids are very much into health these days, many of them are vegetarians or drink herbal teas,” said Ms. Bal bier. “We’re positioning LipKick as an energy kick for your lips.”

The Jane executive hopes LipKick records the same success as MegaBites, its spring lip color launch. According to Ms. Balbier, Jane scored a major hit this spring with

MegaBites lipsticks. “We were totally shocked,” recalled Ms. Balbier. “We think it could grow to become one of the top five lipsticks in drugstores and mass merchandisers.”

Jane’s customers appear willing to pay more for the products they want. All Jane cosmetics now retail for $3.49 each, up from $2.99 a year ago. “We didn’t have a price increase for five years,” recalled Ms. Balbier. “At some point everything increases in price and our consumer research found there was no customer resistance to an increase.”

Also new for fall is Radiation All Over Glimmer, which can be used to give skin a glow or can be added to makeup shades to boost glimmer. The product is available in eight shades. Another new item from Jane is In-A-Swoosh Make-It-Snappy nail color. It dries in two minutes and is available in 16 shades.

Looking further down the road, Ms. Balbier predicted that the glittery look will be replaced by shine in the future and organic colors such as earthy tones and deep greens will prevail. She added that sheerness will continue to gain in popularity. “We’re looking at new ways to make product lighter,”


said Ms. Balbier. “Long-wearing lipsticks are heavy and tend to dry lips. Girls want products that look good and feel good.”


Giving Kids Value for Their Money
Jane isn’t the only company tapping into the health trend. For back to school, Fun Cosmetics is offering Lip Potions, lipcolor pots that contain ingredients such as jasmine, kava kava and allspice. Another new product is Lotsa Loot. The $4.99 change purse, decorated with frogs and ladybugs, contains lip gloss and nail enamel. Also new for back to school is Animal Eyes. Teens can use these shimmer pencils to define eyes and create a glamorous look.

For the holiday season, Fun will introduce Glitzy Ball, a silver ball that contains shimmer glosses or nail enamel. The product can also be used as a holiday ornament. “Every product must have a dual purpose,” said Ms. Penta. “We don’t want to be just another cosmetics company. We want to be a teen lifestyle company.”


Packaging is Important
With so many companies introducing personal care products for teens and pre-teens a unique package is often needed to attract the consumer’s attention, noted Abe Sasdieh, president and chief executive officer, Townley Cosmetics. “The market’s fantastic growth has been driven by novel products, cases and components,” Mr. Sasdieh remarked.

For example, Townley’s body glitter is available in three different jars, with each cap featuring a roulette-type wheel with cute answers to any question a teenage girl might ask it. “Right now, there’s not a lot of new things going on in cosmetics,” noted Mr. Sasdieh. “If we put a body glitter out, everybody can copy it. But when we add a special cap, they can’t copy our product without the molds.”

Mr. Beckman agreed that packaging plays an integral role in Solar FX’s success. “All of our packaging is unique. We use paint cans and mirrors and even our boxes come in hot pink and zebra stripes. It’s real cutting-edge stuff.”

This fall Townley is introducing All Grown Up, a line of products that includes lip lacquer, lipstick, nail polish, lip gloss and lip liner. “Kids want fashion that’s easy to understand, fun and fresh,” noted Mr. Sasdieh. “Our products are cute, harmless and fun.”


From Vamp to Vampire
Most of today’s teens tune into Hollywood to get the latest looks for makeup. But not everybody’s a Jennifer Love Hewitt watcher—more than a few teenagers prefer the darker, gothic look. In the past, these alternative kids had to be content with dark shades such as Chanel’s Vamp nail enamel, but now these mistresses of the dark have their own brand, Vampire Cosmetics.

The Los Angeles-based company was founded less than a year ago by aesthetician Kerry Hite, who said women striving for the “goth” look had to create their own colors before heading out to the goth clubs in Los Angeles. “They would pick and choose products from different lines or use blush to create red eyeshadow,” recalled Ms. Hite. “Or worse, they’d use cheap makeup that was of poor quality.”

Vampire Cosmetics’ prices range from $5 for nail enamel to $16 for eyeshadow compacts. “I can’t say how big demand is for gothic cosmetics, but there’s a large underground goth scene in every major city,” insisted Ms. Hite. “The gothic scene used to be dominated by teenagers, but now there’s a large group of women in their 30s who are still into the look.”

Ms. Hite is trying to get Vampire Cosmetics distributed through industrial-type boutiques such as Hot Topic in Canada and Sanctuary in New York. For now, however, she’s content to sell the line through her web site (www.vampirecosmetics.com).

Ms. Hite is starting small, but said she allows herself to daydream about hitting the big time some day. “I was walking through the Nordstrom cosmetics department surrounded by all the white and pastel counters and I thought to myself, ‘Wouldn’t it be great to have a counter dedicated to cosmetics lines like Vampire?”


Appealing to ’Tweens
Marketers have catered to the needs of teens and babies for years, but too often kids aged 6-10 have been left out of many marketers’ plans. The tremendous success of L’Oréal’s Kids line of hair care products changed all that, forcing companies to reevaluate their commitment to kids in this age group. Coty is one of the new players in the segment.

“We found a lot of girls thought they were too sophisticated for Tinkerbell products, but too young for Bonne Bell,” noted Teri Siegel, vice president of marketing, Coty. “There was a gap in the market because there were no products appropriate for this age group.”

Coty is trying to fill that gap with the fourth quarter launch of The Kids Garden, an extension of the company’s The Healing Garden line of aromatherapy products. The Kids Garden includes 2-in-1 shampoo and detangler, gentle bubble bath and body mist. The line also features gift sets which include nail polish and flavored lip balm. The products are a fourth quarter promotion, but initial retailer response has been positive and Coty is considering making The Kids Garden a permanent fixture on mass market shelves.

“The children’s mass market toiletries segment totals $200 million,” noted Ms. Siegel. “Once L’Oréal became successful, a lot of companies became aware of the market’s potential. We’re trying to capitalize on a brand that’s already doing well for us in mass by extending it into the kid’s market.”

Coty isn’t the only company focusing on kids these days. Bristol Myers Squibb’s Redmond unit has launched Aussie Land hair care products with fragrances such as blueberry muffin, cherry vanilla and grape bubblegum (see happi, April, p. 58). Other new entries include Suave for Kids, from Unilever’s Helene Curtis division. Suave for Kids includes 2-in-1 conditioning shampoo in regular and extra conditioning formulas and detangling spray. Each has a suggested retail price of $1.79 to $1.99.

J&J executives don’t want to see their customers slip away once kids reach the age of five. To hold on to them, J&J has introduced Johnson’s Kids, a five-item line of shampoos and detanglers with fragrances such as blueberry bash and watermelon madness.

While J&J and Unilever expand their presence into the kids segment, one long-time brand has a new owner. Late last year, Belae Brands, Phoenix, AZ, acquired several personal care lines including Kid Care, Claire Burke and Vitabath, from Tsumura International. In the past, the Kid Care range of shampoos and other personal care items relied heavily on movie and cartoon licenses to build sales. The only problem with that approach, according to Andrew Patti, president of Belae Brands, is that once a film cooled off, demand for products slipped.

“It was short-term growth,” noted Mr. Patti. “Now we’re focusing on our Rugrats, Barney and Barbie licenses. We can invest in these licenses and properly support them because they’re not short-term movies.”

This fall, Belae will introduce a Rugrat line in unique character bottles that should appeal to children for their toy-like quality. “If you invest in these kinds of molds you must have large runs,” noted Mr. Patti. “You can’t do that with a movie that’s going to be around for six months or less.” Mr. Patti said Belae Brands will spend more money on joint promotions and displays to call attention to the product. Although he wouldn’t provide specifics, Mr. Patti said the company will dedicate 10% of Kid Care revenues to support the brand.


Bringing Up Baby
The baby care market was once dominated by Johnson & Johnson and Colgate-Palmolive’s Baby Magic, which is now owned by Playtex Products. But a host of new competitors is trying to grab a slice of this multimillion dollar market. There are new lines from such familiar brands as Origins and Bobbi Brown, as well as entries such as Baby Spa and Bedtime Rituals.

The BabySpa line includes BabyMassage oil ($15, 4-oz.), FussyTime calming aromatherapy baby bath ($15, 2-oz.), BabySoft body lotion ($15, 8-oz.), BabyBubbles bubble bath ($20, 16-oz.) and BabyWash ($15, 8-oz.), the best-selling product in the line. BabySpa encourages parents to massage their babies on a regular basis. According to researchers, frequent massage strengthens the respiratory, digestive and circulatory systems.

The company, which is located in Secaucus, NJ, plans to introduce Diaper Jelly this fall and will add a baby powder later on. Ms. Chase said she has been encouraged by retailer response and noted that Bloomingdale’s has reordered BabySpa several times. She projected first year retail sales will fall in the $1-2 million range—much higher than her initial projection.

“When we launched the company I didn’t realize that Bobbi Brown and Origins were launching their own baby care products,” recalled Ms. Chase. “Nevertheless, we’re holding our own against Estée Lauder and I feel good educating parents about the power of massage and what it can do for babies.”

The power of touch and aromatherapy plays an important role in other new lines as well. The new eight-item Origins line was introduced in March and includes Bare Hugs massage cream ($12.50), Baby Shower hair and body wash ($13.50), Short Cakes cleansing bar ($7.50), Love Me Tender baby lotion ($13.50), Smooth Baby baby oil ($11), Powder Puff baby powder ($12.50), Diaper Service baby bottom balm ($10) and First Sun SPF 25 sun block ($14).

“Origins is a lifestyle brand dedicated to total well-being,” said Daria Myers, senior vice president, global marketing, Origins in a statement. “We felt that it was a logical next step for us to expand our philosophy to include every member of the family.”

All the products in the line include natural ingredients such as sweet almond oil, soy bean and shea butter. To promote the brand and drive home the importance of massage, Origins offered baby massage classes at all Origins stores during the initial launch.

Essence of Vali’s Bedtime Ritual includes bath gel ($12), massage lotion ($12) and spray mist ($10). Kits with all three products are also available. The line is designed to help kids get a good night sleep, explained company president Valerie Benis.

“Kids today have a very regimented, very stressful life,” noted Ms. Benis. “Many parents don’t spend a lot of time with their kids, but when they do they can share the nurturing experience of massage. Bedtime Ritual is a pleasurable bonding experience in a world where it can be hard to find quality time.”

Bedtime Ritual is available at Bath Island, a retail store in New York as well as through massage therapists. Although the company’s annual sales are less than $100,000, Ms. Benis said she is encouraged by the growing interest in holistic medicine and especially aromatherapy.

No matter where baby or youth care products are sold, marketers say there’s no end in sight when it comes to demand for these items.

“All the demographic data suggest the market will keep growing to 2010,” noted Mr. Sasdieh. “We expect the market to grow by leaps and bounds as kids’ spending habits increase and we want to be the company that meets their demands.”

Related End-User Markets:

Related Raw Materials:

Related Packaging, Equipment and Services: