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Deodorant Market Smelling Rosy

By: Carrie Lennard, Euromonitor International
Posted: July 31, 2009, from the August 2009 issue of GCI Magazine.

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There is a small but significant private label deodorant segment in Western Europe that accounts for a 4% share of total sales. Value-added branded products managed to stave off competition from private label in 2008, and these brands’ shares in the region remained stable despite the recession. Even Germany, notorious for being Europe’s biggest fan of private label beauty products, actually saw its private label share fall by one percentage point to 6% of total sales in 2008. Rising production costs made it harder for private label to pioneer new products, and competing with the research and development budgets of multinationals, such as Unilever, made growth for private label all the more difficult.

Natural Deodorants Immune to Consumer Cutbacks

As with other segments of the beauty industry, where premium-priced natural and organic products are booming, the natural deodorants segment is showing signs of being, for the most part, recession-proof. There have been consumer concerns about the chemicals contained in standard deodorants, such as aluminium, which has been linked to breast cancer. Despite Cancer Research UK issuing a statement saying that “there is no convincing evidence that antiperspirants and deodorants cause breast cancer,” ongoing consumer concern means that sales of previously niche aluminium-free deodorant brands such as Jason and Tom’s of Maine are growing and increasingly available in mainstream retail outlets. As these natural, free-from-aluminium deodorants typically retail at approximately twice the price of their standard counterparts, the natural segment will be an increasingly important area of growth.

Innovation; Clever Marketing Strategies Keep Sales Fresh

In the fight to increase market share by creating value-added products, it is becoming more common to see products that combine several of the unique selling propositions typically used to market deodorants. Mitchum’s Clear Gel combines one of the key trends in deodorants, the promise of no white marks, with long-lasting body odor control. Dove’s Invisible Dry is marketed as “anti-white marks” and “black dress friendly.” On top of this, Dove claims to offer 24-hour antiperspirant protection, as well as containing moisturizing cream. These kinds of value-added products are likely to become more commonplace through 2013 in order to try to discourage consumers from trading down to less-expensive brands. Hair minimizing products are also on the rise, with brands such as Sure and Dove both launching aerosol and roll-on formats. Sleek product designs and exciting ingredients appeal to the many consumers who are happy to pay a premium for both. Consumers are willing to pay a premium for clear packaging where they can see the product, or a curvy “feminine” shaped can (such as Soft and Gentle Eden). Luxurious sounding ingredients, such as pearl extracts, also convinced shoppers to spend more on deodorants in 2008.

Healthy Sales of Men’s Deodorants

Men worldwide are taking more interest in personal care than ever before, and this triggered an 8% rise in 2008 in the men’s deodorant segment, surpassing the healthy 7% growth seen in the men’s sector overall. Globally, in men’s deodorants, a strong marketing emphasis continues to be placed on masculinity, physical activity and sport. Unilever’s Axe brand leads male deodorants, and launched several high-profile new products in 2008—including Dark Temptation, a chocolate-scented deodorant. Axe’s tongue-in-cheek marketing, which focuses on increasing the user’s attractiveness to the opposite sex, has struck a chord with its 15–30 year-old target audience. Procter & Gamble, the second-ranked company in the global market, also has a strong presence in the men’s deodorant segment with its Old Spice brand, which is particularly popular in Western markets among the 40–65 year-old male demographic.

Multinationals Dominate Global Market

In 2008, Unilever was one of several companies to make a strong play into clinical strength deodorants, with Degree Clinical Strength for Men and Women launched in the U.S. While less than 5% of people actually suffer from excessive perspiration, a significant portion feel that they perspire more than what is considered normal. From a manufacturer’s standpoint, this is a great opportunity because margins are considerably higher on clinical strength deodorants.