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The global retail market for men’s grooming products is forecasted to reach $31 billion in 2011, according to data from Euromonitor International. At constant prices, that’s $3 billion more than in 2008, a year when the global economy went into meltdown, triggering significant erosions in discretionary spending power. How has the category managed to cope so resiliently, and how will it fare in the event of new, potentially more acute, global economic challenges?
Brazil’s body-conscious male population, particularly in the southeast, is a key growth driver of men’s grooming products, fueling approximately one-third of the category’s total incremental retail value over the 2008–2011 period, according to Euromonitor International. China—and the burgeoning wealth of its coastal cities—is another important growth engine, posting compound annual growth of around 12% in U.S. dollar value since 2008.
Growth in men’s grooming products is not restricted to the world’s first-tier emerging markets, however. The U.S., Germany and the U.K—the first, fourth and fifth biggest markets in the world for male grooming, respectively—each put up resilient performances despite the downward pressure of weaker consumer buying power. Men’s shaving products, notably razors and blades, are at the frontline of growth, fueling more than $1 billion of new retail business between 2008 and 2011 globally, with Brazil, Germany and the U.S. at the sharpest edge of the performance. Far from leaking value in the aftermath of the recent global financial crisis, brand leader Gillette has continued to grow, generating around $451 million of incremental retail sales between 2008 and 2010.
The comparative bullishness of men’s grooming can be explained in part by the staple value of shaving products, deodorants and hair care. But there are also other key drivers at play. Firstly, brand leaders have become increasingly competitive, fueled in turn by the increased visibility of private label players in Western European markets. Secondly, there has been savvy innovation; Unilever, for example, extended Dove, which has strong brand equity in women’s beauty, into the male category. And thirdly, a new culture of male pampering has emerged.
The latter trend is indicative of a new propensity to spend by men in the 17–34 age bracket, often referred to as Generation Y. When the world economy slipped into recession, this was the generation that likely lost the most in terms of jobs and disposable purchasing power. Yet a fundamental lack of confidence in the concept of saving, or in conventional investments such as real estate, means a growing number of these young people prefer to maximize their spending today, rather than invest for tomorrow.