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Hair Care Lacks Luster

By: Briony Davies, Euromonitor International
Posted: October 7, 2008, from the August 2007 issue of GCI Magazine.
According to Euromonitor International’s latest data, hair care—despite sales of $53 billion and status as the second-highest ranked cosmetics and toiletries category in 2006—is succumbing to the challenges of maturity; challenges that include high penetration, private label pressure and discounting. Growth of 4.8% on 2005 is well below the cosmetics and toiletries average, indicating that manufacturers are having to get creative to maintain a competitive edge.

Health and Wellness Trends

Natural and organic hair care products are growing in popularity as consumers become mindful of the health and environmental risks of chemical ingredients. This is a trend seen across cosmetics and toiletries sectors. Response from manufacturers of hair care products, however, has been slower than in other areas because some ingredients, such as peroxides and ammonia, are difficult to substitute.

Despite this, natural brands are becoming increasingly available. The Estée Lauder Companies, for example, has been particularly successful with the natural position of its Aveda brand, which is currently available in more than 20 countries. In colorants, ammonia- and peroxide-free variants are appearing.

Natural ingredients are in particular demand in developed markets, where consumers are more conscious of the health and wellness trend and have more disposable income to spend on higher-priced natural products. However, the trend is also strong in Latin America and Asia-Pacific, where there is a tradition of using herb-based products. Reibi Hair Care Series, launched by Utena, features four products that make a connection with seven traditional Japanese herbs, such as peony, carrot and iris, believed to bring out the best in Asian hair.

In addition, the market presence of natural and organic hair care is likely to expand rapidly during the next five years, in keeping with the growing consumer trend toward health and wellness, and ingredients trends across cosmetics and toiletries sectors.
The increased presence of natural ingredients in hair care products will help niche brands forge a place for themselves in a crowded environment. The natural label can provide a point of differentiation. Also, as questions still hang over what constitutes a natural brand, niche natural and organic labels, such as Burt’s Bees and Kiss My Face, will have more credibility than mainstream lines.