The Ethnic Hair Care Market

November 9, 2005

Experts say African-American women buy three times as many hair care products as the general population.

For African-American women, hair has always been a top priority. The texture and consistency of black hair, which is frizzy, dry and fragile, has has often been troublesome for these women who value their hairstyle as the most important aspect of their appearance. “For a black woman, her whole attitude begins with her hair,” said Jolorie Williams, senior product manager, Texture & Tones, one of Clairol Professional’s ethnic hair care lines. “She’s going to spend money on her hair because she won’t go anywhere unless her hair is done. It’s not socially acceptable. She can be overweight but her hair must look good.”

As this segment of the population continues to grow at a faster pace than the general population, the ethnic hair care market is increasing in importance as companies which once ignored black consumers now try to attract them. The tendency among African-Americans, who account for 30% of all hair care purchases, to buy more hair care products than other consumers has fueled this interest.

“The ethnic market is going to outstrip the general market in growth by so much, it’s going to be scary,” said Darryl Mobley, co-founder and chief executive officer of beautyandsoul.com, an e-commerce site devoted to the sale of ethnic beauty products. “The population is rising and so is its purchasing power.”

According to Information Re-sources Inc., Chicago, African-American hair care product sales comprised 83% of the $308.6 million ethnic personal care market, rising 1.9% to $257.3 million during the 52-week period ended Jan. 9. Chemical products were the biggest part of this segment with $81.6 million in sales while hair color sales rose 33.4% to $35.7 million.

These figures are impressive enough for the major personal care companies which are beginning to take this segment seriously. Now these companies are faced with the task of not only developing suitable products but also garnering consumer trust.

“An African-American woman is only comfortable buying a product that she feels has been designed with her needs in mind, even if that product is designed for the general population.” Mr. Mobley said. “Brand loyalty is very important to the black market because so many non-black brands have ignored it. There is a much deeper connection with good brands. If you can acquire one of these deeply positioned brands, that’s the best bet. It’s hard to develop a brand that consumers trust.”

Buying Up the Competition
In recent years, the ethnic hair care market has been transformed by a rash of acquisitions and mergers that are proof of the growing importance of the black consumer. Large multinationals such as Revlon, L’Oréal and Alberto-Culver have been increasing their stakes in this market by acquiring companies that cater to the special hair care needs of African-Americans.

The trend started a few years ago when L’Oréal bought Chicago-based Soft Sheen, Revlon snatched up African Pride and Carson acquired Johnson Products from IVX. In the past few weeks, this trend seems to have been revitalized with L’Oréal’s acquisition of Carson and Alberto-Culver’s purchase of Dallas-based Pro-Line Corporation.

Industry watchers told Happi the ethnic hair care market will flourish as a result of these new acquisitions as more research and development and marketing dollars are focused on this segment. “All of this focus on the ethnic hair care market only means good things,” Beautyandsoul.com’s Mr. Mobley said. “The big company money is going to lead to some real technological breakthroughs that will address some real world needs. A hair relaxer that doesn’t burn the skin. If that gets developed it will be the answer to a lot of prayers.”
“The ethnic marketplace is booming,” said Ellen Beth Van Bruskirk, vice president of corporate communications for Cosmair, L’Oréal’s wholly owned U.S. subsidiary. “African American consumers tend to use three times as many hair care products as a typical consumer.”

L’Oréal announced last month that it would further increase its commitment to this market through the acquisition of Carson Inc., the global leader in beauty products for black consumers. Carson sells its products in 60 countries under the brand names Dark & Lovely, Gentle Treatment, Magic Shave and Ultra Sheen. The company reported that sales totaled approximately $176 million for the year ended Sept. 30, 1999.

“Our work in ethnic hair care with Soft Sheen has been a very positive experience and has encouraged us to continue our investment in this market,” said Guy Peyrelongue, president and chief executive officer of Cosmair. “Cosmair believes in the ethnic hair care market and is committed to the African-American customer. Carson will be a fine complement to our company and its existing portfolio.”

Both companies benefit from these acquisitions. The large multinational gets a ready-to-order ethnic hair care line complete with a loyal consumer base while the ethnic company reaps the financial and technological resources of a large company. Soft Sheen president Terri Gardner said her company was able to upgrade its infrastructure, boost its research and development budget and get products to the stores more quickly L’Oréal acquired it.

Alberto-Culver will become the No. 2 marketer of hair care products to the African-American consumer through its acquisition of Pro-Line, according to Howard B. Bernick, president and chief executive officer. “The African-Amer-ican market is growing in both size and purchasing power. We are very pleased to add to the depth of our lines with the quality of Soft & Beautiful and Just for Me products,” he said in a statement. “We are also very pleased to be able to strengthen the Alberto-Culver management ranks with the key people who have been guiding Pro-Line’s growth and creating their market-leading products.”

Pro-Line’s current management team, headed by president Eric Brown and executive vice president Renee Cottrell Brown will continue to lead Pro-Line Corp. as an independent business unit of Alberto-Culver.

With 1999 sales in excess of $45 million, Pro-Line manufactures and markets products under the brand names of Soft & Beautiful and Just for Me. In fact, Just for Me children’s relaxer products are the No. 1 brand in the category. Alberto-Culver has had a strong presence in the African American hair care market for more than 20 years, marketing such brands as TCB and Motions. The two brands together account for more than $50 million in global sales.

Don’t Break Up
Soft Sheen will cash in on the huge research and development resources of its adoptive parent L’Oréal with its upcoming launch, Breakthru, a line of premium hair maintenance products designed for African-American hair. The products contain L’Oréal’s patented Ceramide anti breakage technology to strengthen hair. “Our research shows that hair breakage is really one of the main concerns among black women,” Ms. Gardner said. “Hair becomes damaged and breaks. This gives the perception that it is not growing.”

The line includes Everyday moisturizing lotion, an oil moisturizer that makes hair resist breakage; Fortifying moisturizing shampoo; Revitalizing deep conditioner and Heat style protective foam, a leave-in foam with moisturizing protectants which add shine and guard against heat damage. All four products contain ceramides, a natural hair ingredient that bonds the outer layers of the hair together. The ceramide technology in Breakthru penetrates the cuticle to reduce cuticle loss, improve resilience and protect hair from breakage and split ends.

“This is a real first,” Ms. Gardner said. “We are applying ceramide technology to vehicles our consumers are using.”

As is the case in the general hair care market, color is the fastest growing category in the ethnic hair care segment. The growth in this category may be what’s behind L’Oréal’s recent acquisition of Carson. Carson and L’Oréal were the top brands in the category last year with $10.9 million and $9.9 million, respectively, according to IRI data. L’Oréal is quickly catching up to its future subsidiary, however; brand sales shot up 165% compared to a year ago. “Hair color is L’Oréal’s core competency,” Ms. Van Buskirk said. “We provide products that are used by all hair types. Anyone is our audience.”

Black women have traditionally been more apt to change hairstyles from day-to-day than other women and this fickleness has extended to color. During the past five or six years, more women have been using hair color as a fashion accessory, not just to cover unwanted gray hair.

“The use of hair color is increasing,” said Carolyn John, marketing director of Revlon Professional’s ethnic division. “Women are much more willing to experiment because they are much more confident of themselves. Also, they have more faith in the products.”

Revlon’s African Pride brand entered the color category last year when it launched HiLites, the first at-home highlighting kit created with the African-American woman in mind. The semi-permanent hair color is gentle for delicate African-American hair and available in a variety of shades that appeal to black women. This month, the company launched HiLites Color Boost which allows at-home highlighters to rejuvenate their hair color at home. Available in a 3.75-oz. tube that contains enough to provide two applications, HiLites Color Boost is formulated with African Miracle ingredients so it conditions hair while it colors.

Clairol Professional is launching its Beautiful Collection Gentle Créme Permanent Color, the first low-ammonia créme permanent hair color specifically designed for relaxed hair. The collection is available in eight shades ranging from light ash blonde to black.

Beyond the Borders
While the African-American population in the U.S. is growing in both size and spending power, ethnic hair care marketers recognize the importance of international markets too. Beautyandsoul. com’s Mr. Mobley said that 50% of purchases made on his web site are from consumers outside of the U.S. “Women in the Caribbean, women in Africa, women all over the world are coming onto our site and saying they need these products,” he said. “These women are vital consumers to us and to marketers of ethnic hair care products.”

Clairol Professional has extended its Textures & Tones line of ethnic-oriented hair care products, ranging from relaxers to colorants, to the Caribbean where 95% of the population is black. The brand, which entered the region is August, is already the No. 1 brand there and the company expects more growth to be achieved through its new ad campaign featuring Miss Universe Mpule Kwelagobe.

The technology behind the Textures & Tones line is a complex of conditioning and fortifying ingredients, including Brazil nut oil, panthenol and wheat protein, called Elasticom. “The products offer extra conditioning, they’re gentle and they don’t damage hair,” said senior product manager Ms. Williams. “African-American women are constantly looking for things to put in their hair that moisturize it.”

As the competition increases in the ethnic hair care category, companies, both large and small, will look for unfilled niches in the U.S. and abroad to capture audiences and grow their market share. The larger companies will most likely find their entry by continuing to snap up well known, trusted consumer brands to enter this brand loyal market. These companies will benefit from the large research and development budgets of their parent companies, adding their technology to products with ethnic dress. But smaller companies will not be ignored. Their knowledge of the intricacies of the black consumer will help them develop the innovative hair care products African-Americans are seeking to help them achieve healthy hair.

“Size is not a predicator of success. The reality is that the company with the most innovation will equal success,” said Soft Sheen’s Ms. Gardner. “As consolidation continues some battles will be won by the smaller companies which are much more nimble and others will be won by the larger companies which will benefit by sheer size and mass. The real challenge is to continue to respect the consumers, derive products through innovation and deliver quality products.”

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