Double-digit growth forecasted
The highly saturated and competitive hair care category has experienced only modest increases in recent years, but industry observers predict the category will grow double-digits through 2017, thanks in large part to niche items and products that target emerging segments.
(For the full category review, including sales data, click here.)
After experiencing a sales lift of just 7% between 2007 and 2012, likely due to a weakened economy, the hair care category is projected to grow by about 13% through 2017, reaching an estimated $7.9 billion, according Mintel Group’s April 2013 research report on shampoo, conditioners and styling products in the United States.
Driving growth are such niche items as shampoo alternatives and hair oils, as well as products that target such emerging segments as anti-aging and men’s grooming.
“Consumers are motivated by value in the hair care category, but they are willing to pay for improved performance, as well as compelling new product benefits,” Mintel stated. “Driving growth and encouraging consumers to ‘trade up’ in the category will likely revolve around niche items and emerging segments.”
Shampoo — the largest segment in the category — will likely see future growth stem from price increases and value-added benefits, like anti-aging. There’s also been a rise in hair care solutions that target women experiencing hair loss.
Shampoo alternatives also are generating great interest, as some women look for time-saving solutions and less damaging alternatives to shampooing, such as dry shampoo and cleansing conditioners.
In fact, earlier this year Mintel reported that in 2008 dry shampoo introductions accounted for just 1% of global shampoo launch-activity. But by 2012 the segment accounted for 3% of global shampoo launch-activity, and 2013 was on track to surpass 2012 levels.
Conditioner is the strongest-performing segment within the category, according to Mintel, but opportunities exist to further grow the segment by successfully targeting men. Today, women are the biggest users of conditioner.
The styling products segment, on the other hand, has experienced weaker sales likely due to a trend toward more natural hairstyles, as well as limited discretionary spending among shoppers.
Promo Watch: Creating a balanced approach to store brands
The growth of store brands continues to outpace national brands. However, there is a role for both national brands and store brands at retail. Today, many retailers and manufacturers are struggling to understand what is the right combination of national brands and store brands, what should the price gap be between the two and how do the various national brand and store brand strategies impact the retailers’ total gross margin, market share and category growth.
DSN has partnered with Competitive Promotion Report and IRI to create a series of exclusive reports. This month the analysis explores national brands and store brand optimization to better understand how the retailer can create a “balanced” approach to national brands and store brands that drives overall business results. In this analysis, we looked at the major national brands and store brands in the drug channel for the laxatives tablets category over the past two years. The following are just a few of the key findings from this study:
- The average price gap percentage between store brand and national brands for the category at a little more than 10% is lower than expected, but has been trending up over the past two years;
- In most cases, as the average price gap between store brand and national brands increases, total gross margin decreases and the overall category growth rate declines;
- Additional store brand SKUs did not drive proportional increases in margin dollars;
- As might be expected, average retailer margin percentage was highest for store brands at 58%, followed by the national brands at 45.2% (Colace), 41.4% (Dulcolax), 40.2% (Ex-Lax), 39.1% (Phillips) and 21.9% (Metamucil).
- The retailer margin generated by store brands in this category ($186 million) is more than double the retailer margin of the top five national brands combined, yet there are opportunities for growth in the category with the national brands;
- Store brand average percentage of promoted units consistently is higher than national brands, with the gap between the two widening over the past year;
- Although Phillips has the lowest overall market share of the five leading national brands at 2.9%, store brand dominates the category at 46.8%;
- Phillips, Colace and Dulcolax have shown the greatest average annual market share growth at 6.7%, 3.9% and 3.6% respectively, while store brand is at 1.4%; and
- The average percentage of units on promotion by brand for store brand at 38.5% is almost double that of Dulcolax, the highest national brand at 20.9%.
Coty partners with Chalhoub Group, Jashanmal to expand UAE presence
NEW YORK — Cosmetics maker Coty has entered a new joint venture that it said would expand its footprint in the United Arab Emirates.
Coty announced a deal with U.A.E.-based luxury goods distributors Chalhoub Group and Jashanmal to form Coty Distribution Emirates. Coty said the joint venture, developed in connection with its longstanding partnership with the Chalhoub Group, would expand its go-to-market capabilities in the United Arab Emirates and provide consumers in the region with better access to its brand portfolio, in addition to allowing it to consolidate the distribution of its products and ensure a cohesive market strategy there.
"The United Arab Emirates has enjoyed steady growth over the past decade and is a key emerging market for Coty and the beauty industry," Coty CEO Michele Scannavini said. "Both Chalhoub and Jashanmal have proven to be exceptional partners to Coty in the Middle East and through our new joint venture. We look forward to further growing our business in this important market."