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Private Label Groomed to Take on Personal Care Brands

By: Mark Whalley
Posted: May 4, 2011, from the May 2011 issue of GCI Magazine.

page 3 of 5

Between 2004 and 2009, private label personal care products enjoyed a 6.6% year-on-year growth across the 20 countries surveyed by Datamonitor. With increasing efforts being made to innovate and compete on quality and not just price, national brand owners can no longer sit back and expect their brands to outperform private label products in their categories.

Feminine care products are expected to make the biggest gains in the personal care space during the coming years, with a forecasted 12.6% annual growth between 2009 and 2014. This will mean shrinking market share for national brands in this space.

Additionally, this points to a key trend in private label personal care: Consumers are more willing to purchase certain private label items than others. Feminine care products and oral hygiene, for instance, fare better than fragrance and hair care products. In fact, a Datamonitor consumer survey in May 2009 found fragrances and facial skin creams enjoy a greater amount of brand-consciousness among consumers than any other personal care items.

Personal care brand owners can take some comfort from this. Although private labels are undoubtedly growing in popularity, the perception that branded products are of a better quality still persists. And even with shrinking market share, national brands dominate their categories.

National and global brand owners can also take comfort from the probability that they will have a slightly easier time staving off the private label threat than their counterparts in food and groceries or household care. There is more of an emotional attachment to personal care purchases than in these other categories, meaning consumers will always feel the need to “treat” or “pamper” themselves with their favorite premium-branded products. Retailer brands and private labels have to work very hard to elevate their products to this status, although it is possible.

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