Beauty Is Back, Says NPD in Report

Beauty Is Back, Says NPD in Report

• After two consecutive years of declines, it appears that the beauty business is growing again. The NPD Group, Inc., presented the U.S. and global beauty industry’s first look at 2010 year-end results for skin care, makeup, and fragrance at their annual “Hot off the Press” event at the Plaza Hotel in New York City. According to NPD, U.S. prestige beauty sales increased 4% in dollar sales in 2010 vs. 2009, a significant change following back-to-back years of slumping sales.

In 2010, all U.S. prestige beauty categories experienced dollar growth as opposed to 2009, where all the categories declined. Prestige skin care posted the biggest increase, followed by prestige makeup and prestige fragrance.

“What a difference a year makes! If there were any doubts of the continued appeal of prestige beauty products and the tenacity of the beauty industry after the declines of 2009, then 2010 provided a loud, clear, and most encouraging answer,” said Karen Grant, vice president and senior global industry analyst, The NPD Group. “Prestige beauty saw the quick recovery of skin care, which by June, had surpassed pre-recession levels. This was followed by the gradual upturn in makeup, and finally, a late year rally in fragrance. Prestige beauty is well positioned for a positive year in 2011.”

It was a good year for the food/drug/mass channel as well. The channel experienced a 3% sales growth in 2010, versus a flat 2009. Makeup sales posted the biggest increase, followed by skin care. However, fragrance sales declined 1%. Fragrance sales in the national chain sector declined 1% in dollar sales too, according to NPD.

More info: www.npdgroup.com

Hispanics Stick with Brand Names

• When times are tough, it is no surprise to find consumers opting for less-expensive products in order to save money. Equally unsurprising, lower-income households are more likely to trade down. But one group breaks the mold—Spanish-dominant Hispanics. According to research from Mintel, lower-income, Spanish-dominant Hispanics are still buying name brand personal care products at a higher rate than their English-dominant counterparts.

According to Mintel, 64% of Hispanics surveyed who have an income of $25,000-$49,999 say they still buy name brand body soaps or shower gels. Meanwhile, 64% of Spanish-dominant Hispanics, compared to 58% of English-dominant Hispanics, say they continue to buy name brand body soaps or shower gels despite the economic downturn.

“Spanish-dominant Hispanics are most likely to stick to their favorite brand of hand soap, body soap and shower gel, signifying that less acculturated Hispanics remain loyal to the same brand despite the economy,” said Leylha Ahuile, senior multicultural analyst at Mintel. “English-dominant Hispanics tend to have higher household incomes and apparently are less concerned with brand name soaps and more focused on saving money.”

Spanish-dominant consumers are also more likely to stick to their favorite name brand lotions (51% vs. 35% of English-dominant consumers), facial cleansers (27% vs. 20% of English-dominant consumers) and toothpaste or mouthwash (69% vs. 65% of English-dominant consumers), refusing to trade down to more affordable private label personal care products.

“In spite of Hispanics’ lower-than-average household income level, they indexed higher than non-Hispanics in the consumption of personal care products in 2009,” said Ahuile. “Over the last six years, Hispanics have consistently increased their spending on personal care products. And within personal care, Hispanics index higher than non-Hispanics in the subcategories of hair care products and bath products.”

However, lower-income Hispanics are still interested in saving a few dollars with multifunctional products—65% of those who earn $25,000-$49,999 are interested in two-in-one shampoo/conditioners and 83% would be more inclined to purchase toothpaste that can also serve as a mouthwash and whitener.

More info: www.mintel.com

Insights on Anti-Aging

• The NPD Group has release information from its Anti-Aging Facial Skincare and the Female Consumer study, conducted in October. According to the study, about half (48%) of anti-aging users only began using these products in 2007 with less than one-fourth (22%) only using these products since 2009.

Here’s a look at some other stats revealed by NPD:

• 56% of women skin care users are anti-aging seekers, stating they have gone shopping or looked for skin care products with anti- aging benefits. Of these seekers, about three quarters (76%) are currently using these types of products.

• More than half (56%) of current anti-aging facial skin care users say they are not sure if these products really work, but they use them anyway.

• More than doctors/dermatologists, TV advertising, online searches, or best of awards, the No. 1 influence in helping a woman decide which anti-aging products to buy is the recommendation of her friends, family and coworkers, with 3 in 4 women agreeing with this statement.

More info: www.npdgroup.com