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State of the Industry

By: Carrie Lennard, Euromonitor International
Posted: June 3, 2010, from the June 2010 issue of GCI Magazine.

Growth in the global beauty market slowed to 4% in 2009, down from 5% in 2008, a result of increased price sensitivity and spending cutbacks among consumers, fueling demand for less expensive brands and private label, according to Euromonitor International. Despite some regional bright spots—namely emerging markets, which put in strong performances—sharp declines in major beauty markets, such as Japan, dragged down overall growth globally. Discretionary categories suffered most, with growth in premium cosmetics and fragrances taking a hit in key markets, notably the U.S.

Baby Care; Deodorants Maintain High Growth

There were some notable category performances in 2009. Baby care and deodorants were the star performers 2008–2009, and both proved to be very resistant to the downturn, with global value growth of 7% each. The baby care category actually posted better growth in most regions in 2008–2009 compared to 2007–2008. Natural and organic baby care products continue to be a significant trend. Consumer demand for organic and natural products in packaged and adult personal care translated into increased demand for natural baby care products as well. Many consumers are unwilling to trade down from products that are perceived as being of a high quality for their children.

Deodorant sales were boosted by increased uptake in Asia and Africa/Middle East, coupled with Latin American’s love for using deodorants and body sprays as a fragrance substitute. (See “BRIC Key for Future Growth” on Page 18 for more information.)

Basic Segments Hold Their Own

Bath and shower had unexpectedly high growth of 6% 2008–2009, fueled by liquid soap and hand sanitizers booming in markets impacted by the H1N1 flu (Latin America saw 20% growth, for example), and trade up from bar soap to shower gel and liquid soap in emerging regions such as Asia and Africa/Middle East. Oral care also proved to be surprisingly resilient; the category maintained its value growth of just over 4% 2008–2009, and sales in all regions, excluding Eastern Europe, remained virtually unchanged from 2007–2008—a result of consumers buying into value-added products, such as those with teeth-whitening and enamel protection benefits.

Skin Care Hit, but Antiagers Remain a Priority