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Changing Market Dynamics in North American Beauty

By: Svetlana Uduslivaia, Euromonitor International
Posted: March 2, 2010, from the March 2010 issue of GCI Magazine.

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Men’s skin care and bath and shower products are also fairing well, as both are the beneficiaries of men paying more attention to their appearance and exploring unfamiliar product categories. While the metrosexual fad has passed, American men (especially those in their 20s) have become more knowledgeable of and comfortable with various skin care products than the previous generation.

The outlook for the U.S. is challenging. With high unemployment and foreclosure rates expected to put the brakes on consumer expenditure, the U.S. beauty market has a forecast compound annual growth rate of negative 1% (in real value terms) between 2008 and 2013, to reach $50.5 billion in 2013. Despite the bleak economic outlook, some categories are still expected to grow in the future. Men’s grooming products, in the areas of skin care, bath and shower products, and hair care are expected to continue showing good growth in the 2008–2013 period, with expected real value growth rates of 42%, 21% and 15% respectively.

Canadian Recession Shaping Beauty Industry

Recession was one of the key factors that shaped the performance of the Canadian beauty industry. Although many retailers and brand owners had high expectations for strong consumer demand for beauty care even in tough times, product sales did not quite meet these expectations. The premium segment was particularly affected, and sales of many brands plunged.

However, not all was doom and gloom. Helped by health concerns linked to the H1N1 flu scare, personal care products such as soaps were doing well, and even the stagnating bar soaps saw an improved performance in Canada in 2009. Although premium skin care suffered a setback, mass brands picked up the slack. And in the ongoing battle with wrinkles, antiaging skin care continued to thrive.

Also, while putting off salon visits to attend to their hair care needs, more Canadians were choosing the next best thing—premium and salon quality brands sold through mass retail. On the strength of this trend, brands such as John Frieda and Nexxus were navigating through the recession with sufficient confidence.