The continued rise of non-food items, such as electrical goods, in supermarkets has been well documented, but to see the more traditional categories, such as health and beauty, growing faster than food is quite something. The UK’s toiletries market is now worth £4.2bn. IRI’s coverage of the toiletries markets increased in 2003 and now includes depilatories, rechargeable toothbrushes and children’s wipes. But even without these new additions, the like-for-like growth figures show the total sector up by 4.7% on 2002.
The premium nature of products, and especially of new products, has contributed significantly to the increase in value sales in the health and beauty market. Topline toiletries prices showed a reasonably significant positive change in 2003 having been more or less stable since 1999, demonstrating that there are more premium-priced products in the market. However, in addition a noticeable increase in volume sales suggests that more product is being sold overall.
Toiletries sectors by value
The majority of the largest toiletries’ categories continue to show steady growth, led by shower products. For a relatively mature market the short and medium term growth of shower products, in both volume and value, is very impressive. Value can be partly explained by the ‘premiumisation’ of the category. The volume increase is due in part to the increasing time pressures on today’s consumer, who has less time for baths and as a result is more likely to shower. In addition, market leader Radox from Sara Lee was relaunched last year, adding further value to the market.
Skin care remains a key market for consumer, supplier and retailer alike. And with new, niche sectors regularly being created, this trend looks set to continue. Interestingly, and contrary to many other health and beauty markets, the premium facial skin care sector is the only one in decline. This is in part due to trade promotions as manufacturers battle for share of the market.
Data from TNS reveals that in the two and a half years since March 2001, there has been an increase of 23% in women using anti-ageing products. Predictably, the amount being spent on this category is also increasing. In 2003, around £74m was spent, compared to £64m in 2002. Considering that the amount spent as recently as 1998 was just over £2m, this is clearly one of the most dynamic markets within health and beauty.
Own label presence diminishing, major players continue to dominate
In contrast to a number of grocery categories, own label within health and beauty is being crowded out of the market by the branded manufacturers, both big and small. It is the smaller manufacturers who are growing faster than the top 12, although this is not surprising given the smaller base from which they are starting. In fact, the big manufacturers have retained about two-thirds share of the health and beauty market over the past six years, while the smaller products are eroding own label’s increasingly loose grip on the sector.
The major players in health and beauty continue to grow steadily, with minimal changes in overall value share. Procter & Gamble and Lever Fabergé dominate with almost a quarter of all sales between them, while Gillette and L’Oreal/Laboratoires Garnier are the next biggest manufacturers. For the second successive year, Beiersdorf is the fastest growing name in the sector.
New product contribution rises
The percentage of sales accounted for by new products in 2003 was 4.7%. In real terms, consumers spent £189m on new products in 2003, worth £280m on an annualised basis. On average, the new products in toiletries were at a premium of 49% to other branded products. In contrast, in 2001 the average premium of new products was only 14% and in 2002, 43%.
Razors and blades flexed their selling muscles with £43m of new products sales, more than double the amount that the shampoo and deodorants categories created. With new product sales accounting for 17.4% of all razors and blades sales, the impact of innovation in the category is clear. Other categories with significant contributions from new products include sun care (11.6%), medicated skin care (10.1%) and conditioners (7.7%).
Of the major players, Lever Fabergé, Gillette and L’Oréal account for the vast majority of new product sales. As in 2001, Gillette launched the most successful new product of last year, this time with Mach3 Turbo razors and blades. Sales of £39.1m made it the clear winner in the race for the best-selling new product. Lever Fabergé claimed the next two spots with Sunsilk shampoo and conditioner and Lynx anti-perspirant deodorant. Previously available exclusively as a bodyspray, the Lynx brand successfully crossed over to this new format thanks to its already strong branding and popular status. Wilkinson Sword also made it into the top five with its four-bladed razor, Quattro. Three new hair products in positions six to eight in the top ten give a good indication of where the nation’s beauty interests lie.
More specialised variants in all areas of health and beauty are now commonplace and it usually takes the big names to push a niche market into the forefront of the public consciousness.