PARSIPPANY, N.J. — The U.S. cosmetics and toiletries market posted 3.4% growth in 2012, with sales signifying success for both key and niche industry players, according to the recently published Cosmetics & Toiletries USA report by global consulting and research firm Kline & Co. However, it is at the macro level that the flourishing personal care market is offering the most promise.
Procter & Gamble maintains its lead in the U.S. personal care market; however, its market share across multiple categories is being challenged. With the exception of P&G, major companies — in particular, L'Oréal and Estée Lauder — are enjoying steady growth. Of particular note, smaller companies are making strong headway and highly viable impressions, according to Kline.
Smaller companies are increasingly attractive acquisition prospects by larger, cashed-up, and savvy players. For example, earlier this year, L’Oréal’s CEO Jean-Paul Agon announced that he was ready to make acquisitions to maintain growth, and this has already been borne out by the recent acquisition of Interconsumer Products, one of Kenya’s largest manufacturers of personal care and beauty products.
“Clearly, companies continue to emphasize growth agendas and make significant funding available — both strategic and financial sponsors — to realize such aspirations. Such an improving environment is increasingly attractive for M&A and a growing number of smaller, often privately-held cosmetic and toiletry companies are contemplating, developing and/or executing exits. As such, 2013 portends to offer even greater deal flow as many companies look to invest in new growth opportunities,” stated Eric Vogelsberg, SVP at Kline’s M&A Advisory.
In terms of the overall cosmetics and toiletries market performance, the nail polishes category claims the most success, shining with 17.4% growth, fueled by continual innovation and high consumer demand, Kline stated. In addition, skin care products for men showed a strong performance in 2012, gaining traction with brands such as Lab Series Skincare for Men by Estée Lauder and Anthony Logistics for Men by Anthony Brands, which posted double-digit growth.