Lack of Noteworthy Launches Stifles C&T Market

The cosmetics and toiletries market only grew 2% in 2002, the second consecutive year of low single-digit growth after averaging roughly 5% annually over the previous five years, according to data recently released by Kline & Company, Little Falls, NJ. Executives said that while some blame the stalled U.S. economy, this is only one factor contributing to sluggish growth.

“Over the past few years, there has been a real lack of big product launches in all the C&T categories,” said Carrie Bonner, project manager for Kline’s consumer products practice. “Lots of companies are holding off on introducing new products to avoid compounding losses. But innovation and heavy promotion of new products are critical in this industry, and companies that cut spending in these areas risk getting caught in a downward spiral of declining sales.”

Blockbuster brands like cK One, Colgate Total and Biore pumped new excitement into the industry in the past and created new segments, although some were short-lived. Kline executives said the recent dearth of “mega-launches” have not been able to fill a void in the market.

The Cosmetics & Toiletries USA survey indicated new product launches increased 20% from 2001. But in this case, more has not meant better. “Consumers are always looking for innovation and originality in C&T products, and recent launches just haven’t provided anything too different than what was already out there,” said Ms. Bonner.

However, by bringing products that are already established elsewhere to the U.S. market, companies can offer newness without the costs of additional product development. Examples include L’Oreal’s Garnier Fructis and Unilever’s Dove hair care, which are successful in Europe.