Sluggish growth projected in the U.S. cosmetics market
New York, NY - 2009
The U.S. cosmetics & toiletries market should witness two more years of sluggish growth - as consumers continue to spend less - followed by three stronger years, predicts Kline & Company
2008: lowest growth since 1991
U.S. sales in the cosmetics and toiletries market grew only by 0.3% in 2008, the lowest since 1991, according to the latest study completed by research and consulting firm Kline & Company. The new data available in Kline’s latest report - Cosmetics & Toiletries USA 2008 - indicates that sales have reached a total of US$35.6 billion at the manufacturers’ level.
Kline projects that consumer concerns about the recession may ensure that these levels do not rise higher during 2009-2010.
Nancy Mills, Industry Manager, Consumer Products practice, at KlineUpgrading the mass segment?
In the recession context, consumers are showing a preference for competitively-priced products from the mass and direct trade channels. Premium products sales are being affected heavily by these negative market conditions. In fact, salon, specialty, and luxury trade classes all demonstrated negative growth in 2008, whereas mass and direct trade classes turned out to be the fastest growing segments.
“Many people have traded down on certain products, and as they get accustomed to buying some lower-priced or private-label products, and shop more in the lower-priced channels, they might well continue with those habits after the tough times have subsided. To be successful, companies will likely continue to infuse the mass segment with more sophisticated products to compete with luxury products,” notes Nancy Mills, Industry Manager, Consumer Products practice, at Kline.
Innovation drives skin care growth
Skin care, the largest product class, was also the second-fastest growing category during 2008, spurred by the sun care category. Although consumers have curtailed spending, they are not ignoring innovative and sophisticated new products. Marketers propel growth with product development, albeit the rate of new launches slows down in 2008.
Some brands that did very well in the previous years such as Bare Escentuals, had slower growth in 2008, whereas, some mass brands like Garnier skin care and Neutrogena sun care showed very strong growth. Some luxury brands did buck the trend with great results — such as La Prairie.
Trends in Packaging Design
A recent survey of brand owners conducted by EskoArtwork, Adobe, and the International Packaging Institute (IPI) revealed a number of important trends in packaging design, many of which are driven by changes in materials, computer technologies, and consumer expectations.
Respondents from across Europe, of which 62% worked in companies with 500 or more employees globally, cooperated to the survey of brand owners conducted by EskoArtwork in partnered with Adobe and the International Packaging Institute (I.P.I.) with the aim to gain a better understanding of emerging market demands.
“While most of the respondents represented global companies, half are operating in small marketing workgroups and are senior managers or professionals. We believe their responses provide an accurate portrayal of the current state of mind for most brand owners,” says Dieter Janout, Global Director Brand Owners at EskoArtwork.
The survey reaffirmed the growing popularity of and demand for, private labelling, with 54% of respondents reporting that their private label business accounted for up to 25% of revenues.
Other key survey findings included the following:
Respondents strongly believed that the packaging’s ability to make a product stand out on the shelf is paramount. Equally strongly held is a belief that packaging will increase in importance in its role in the marketing mix.
56% expect a significant increase in the use of digital prototyping either ‘definitely’ (12%) or ‘probably’ (44%).
However, only 15% said that providing sustainable packaging solutions was critical to or already addressed in their businesses today. Key drivers for sustainable packaging identified by respondents included consumers (70%), regulations and legislation (64%) and retail requirements (57%). 84% thought that ‘environmental and sociological constraints’ would require ‘significant change’ (63%) or ‘new ways required’ (21%).
50% thought that packaging design will adapt to the opportunities presented by the Internet as online shopping becomes more prevalent.
Respondents gave a score of 7.8 out of 10 to the assertion that ‘right-sized or optimized packaging sizes’ will increase in importance over the next few years.
