Segments Sponsored by
The bath and body segment has been one of the most susceptible to consumer trade down during the recession, with one of the highest levels of private label penetration in the entire beauty industry. Yet despite the threat from less expensive brands, positive growth overall is still forecast for the coming years, with Euromonitor International predicting an average 2008–2013 annual global growth rate of 2% in constant value terms. How exactly is the sector managing to maintain growth in these difficult economic times, and where do future opportunities lie?
Even in the most developed regions, bath and body products still put in a respectable performance. Western Europe posted 2% value growth in 2008, which is impressive given the maturity of the sector in the region and the fact that consumer usage is already at a maximum. The answer to this lies in the continuing trend in the key regions of North America and Western Europe where consumers are moving away from less expensive bar soap toward higher-priced liquid soap and body wash/shower gel. In both regions, bar soap has been in decline for several years—although, interestingly, 2008 was the first year for a return to growth for the category in North America. As the recession hit the U.S. particularly hard, consumers began to look for ways to cut back on spending. This compares unfavorably with the fate of other areas of personal care during the global economic slowdown, such as facial skin care. Growth of nourishers/antiagers, for example, has remained virtually unchanged in Western regions. In Western Europe, sales of nourishers/antiagers dropped from 8% in 2007 to 7% in 2008, an indication that, for many consumers, bath and body just about tops the list of the types of products with which they are willing to make sacrifices.
In body care, prior to the recession, a pattern of trading up from standard products to value-added body moisturizers was seen in mature Western markets. Growth of firming/anticellulite body care consistently outperformed general purpose body moisturizers globally over the past few years, and this continued in 2008, even as the economy took a turn for the worse (6% compared to 5% for general purpose). A kind of polarization in body care is becoming evident. On the one hand, there are some consumers who are unwilling to cut back on their (often premium-priced) body care products, which explains why growth is still slightly outpacing standard body care. On the other hand, a more dominant trend for buying lower-priced baby moisturizers and private label products has emerged among another segment of consumers who feel that they do largely the same job as standard branded moisturizers. This has had a rather negative impact on sales of both general purpose body care (growth declining from 7% in 2007 to 5% in 2008) and firming/anticellulite products (down from 9% value growth in 2007 to 6% in 2008), according to Euromonitor International.
Growing consumer skepticism about the efficacy of anticellulite products is set to dampen sales further in the coming years. This is a result of comparatively poor media coverage. Unlike facial care, where new products are frequently and enthusiastically reviewed, most of the market-directing fashion press take the position that firming and the reduction of cellulite require exercise and diet improvements, rather than creams. As a result, sales are set to slow 2008–2013 to 3% globally, and, even worse, decline by 3% in the key North American region.