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Back to the February 2007 Issue
With global sales of $5.6 billion in 2005, sun care remains one of the smaller categories of cosmetics and toiletries. However, booming sales, averaging 7% growth each year since 2000, indicate that huge potential for development exists—especially in emerging markets where penetration is currently low. Euromonitor International explores key trends over the past year and recommends strategies for maximizing opportunities and avoiding possible barriers to success.
Although Western Europe, North America and Australasia currently show strong growth in spite of being developed markets, price discounting and increasing penetration will subdue progress looking forward to 2010. Manufacturers with plans for global ascendancy need to look outside of these mature markets to realize the sector’s full potential. Forecast increases in absolute value terms for Western Europe and North America to 2010 is smaller in actual terms than that predicted for Latin America and, especially, Asia Pacific—where figures are buoyed by China and South Korea manufacturers keen to ignite growth.
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The Latin American sun care sector enjoyed a second successive year of double-digit growth in 2005, due to improved economic conditions in Argentina and Colombia, and increased awareness of the dangers of exposure to the sun in the region’s dominant market—Brazil, accounted for two-thirds of regional value sales in 2005. As a result, the sector recovered all of the ground it lost in the region following Argentina’s economic collapse in 2001.
Sun protection sales were boosted by a growing educational network of government bodies, health charities, sun care manufacturers and the media. Multifunctional products also drove sales in Brazil in 2005, with a major trend toward incorporating skin care benefits such as hydration, antiaging and exfoliation into sun care products. Relatively low volume per capita consumption in the region can be boosted through increased sun safety awareness and more affordable products. Basic product lines and small unit sizes are central to putting sun care within reach of this generally low-income region. Self-tan innovation may also provide a long-term route to growth, although such products remain in their infancy in the region and will have to compete with an abundance of low-cost artificial tanning salons.
Also in 2005, Asia-Pacific confirmed its status as a key region to watch in sun care, recording value growth of more than 15% to account for almost 18% of global sales (double the region’s share in 2001).
South Korea, Japan and China are the key markets, although demand in Asia-Pacific is almost entirely confined to sun protection. Because pale skin is perceived as a mark of beauty in the region, there is limited demand for self-tanning and after-sun products. Rather, consumer trends are largely toward sun protection products with high SPFs and long-lasting coverage. In South Korea, the largest sun care market in the region, sales increased by almost a third in 2005, driven by a trend toward year-round application of sunscreen. In China, sun protection is becoming more mainstream, and products now are available in a wide array of retail channels.
Manufacturers looking to sustain growth in this market target specific consumer groups. Currently, the sun care consumer base in Asia-Pacific is dominated by women and children. Expanding this to include older consumers and to men will be fundamental to attaining success.
Euromonitor International observes that increasing consumer awareness of the risks of sun exposure is the key to driving demand for sun care. Australia is a case in point; the Australian Cancer Council has been vigorous in its attempts to encourage consumers to “slip slop slap.” Skin cancer prevention messages are broadcast on television and national radio; outdoor sports and recreation facilities have been urged to provide shade for participants; and Australians are warned to stay out of the sun during the “danger hours” between 10 am–2 pm. Such efforts have made Australia one of the most dynamic markets for per capita expenditure on sun care, with growth of 75% between 2001 and 2005.
The latest awareness drives have focused on the dangers of sun exposure—even on cloudy, cold days—and the effects of UVA rays that do not burn the skin but cause long-term damage that manifests in aging skin. Awareness is most developed in the mature markets, hotter countries and markets where skin tones are more obviously impacted by the effects of UV radiation. However, as governments become more concerned with mounting health issues and manufacturers look to boost worldwide penetration rates, consumer education campaigns are spreading globally.
Manufacturers are not just working to raise awareness of sun overexposure, they also have begun to make it easier for consumers to protect themselves. A major barrier to sun protection use is the inconvenience of many products. Portable products, continuous sprays, longer-lasting formulations and even sun protection pills are just some of the innovations coming onto the market. These products are designed to leave consumers with no excuses to not protect their skin. Johnson & Johnson’s Piz Buin 1 Day Long, for example, claims to be water- and sweat-resistant and to provide UVA and UVB protection for up to 10 hours.
Similarly, educating consumers to use self-tanners as a safer alternative to sun bathing or sun beds will only work if self-tanning products are quick and easy to use in addition to achieving even, natural-looking results.
According to Euromonitor International, Boots saw its global share increase in 2005 due, in part, to the success of its Soltan Back Applicator, launched in the U.K., which made it easier to apply self-tanner to hard-to-reach parts of the body. Other new convenience formats in self-tanning include air-brush sprays for streak-free, fast-drying color; sponge petals that provide an even tan for the face; and moisturizing self-tans that can be incorporated into the daily beauty regimen and build-up of a slow, gradual tan. These developments are more prominent in the mature markets, where the role of sun protection is better understood and where consumers can afford to trade up—although it is spreading into emerging countries too. Convenience formats encourage both initial usage and continued application, something that will spur repeat purchases and volume sales. These formats also will give products a unique selling point in a crowded market and help justify higher unit prices.
Players who need a boost in volume sales should consider ways to hit the hardest to reach consumers—men, older age groups and, in some markets, children, tweens and teens. Encouraging men to use sun protection could be achieved by linking its usage to sports. That men and women require different UV protection also is an important fact that manufacturers could bring out and use in the development of formulations created especially for male skin. A focus on the aging effects of the sun should make older consumers understand the importance of sun care, especially given that antiaging is the biggest driving force behind skin care sales. Dual-action sunscreens, after-sun products and self-tans that offer antiaging benefits could appeal to this group.
For children, the issue is about ensuring usage when parents are not around. The key here is to offer fun packaging and easy-to-use formats, such as sprays and wipes. Long-lasting formulations, such as Piz Buin’s 1 Day Long, could also work—enabling parents to apply block on their children in the morning for all-day protection.
Another consumer group that is already beginning to gain attention from sun awareness advocates is the ethnic category. Those with darker skin tones do not always realize that they are as much at risk from skin cancer and premature aging as Caucasians. Ethnic sun care provides opportunities for growth in multicultural societies and in markets where darker skin tones dominate.
Euromonitor International’s latest research indicates the demand for more effective sun protection is leading consumers toward sunscreens that provide both UVA, which causes discoloration and aging, and UVB, which causes burning and can lead to skin cancer. While there are an increasing number of sun blocks on the cosmetics and toiletries market that purport to shield the skin from both types of radiation, medicated sunscreens often are perceived as more effective. Mexoryl-containing sunscreens are sold over-the-counter throughout the EU and in many other sun care markets, and pose an increasing risk to sales of standard sun care. The U.S., the world’s largest sun care market, also has approved the sale of mexoryl in L’Oréal’s Athelios SX.
Standard sun protectors could up their competitiveness against this emerging threat by seeking endorsements with health charities—New Zealand’s biggest selling sun care brand is produced by the Cancer Society. Teaming up with high-profile dermatologists to create physician brands, a method commonly used in skin care, could also boost credentials. Restricting distribution to pharmacies, drugstores and specialist retailers is another tool sun care brands could use to give themselves a more efficacious image.
Eventually, a more regulated sun care market will mean all sun protection products will provide an adequate defense against UVA radiation. While leveling the playing field between medicated and standard brands, this new environment will pose its own threats. If all products are equally as efficacious, then private label becomes a real cost-effective alternative—something that could erode value gains. It could also put the power in the hands of the multinationals—those best equipped to reformulate and repackage brands to meet new laws, to the detriment of local and niche suppliers.
As consumers increasingly demand dollar value and convenience products, dual-purpose sun care that offers skin care benefits are beginning to proliferate. Added functionality also is a way for manufacturers to find a competitive edge in an increasingly crowded market and to beat back competition from other cosmetics and toiletries sectors—including skin care and color cosmetics, which are increasingly straying into sun care with self-tanning or SPF-containing products.
Antiaging and anticellulite products are probably the most common added-benefit sun care, although hydrating and skin whitening formulations also exist. This trend is being seen right across the sun care sector, with after-sun products, in particular, using extra benefits as a way of differentiating from standard moisturizers.
Added benefits and the trend toward categorization will lift both value and volume sales, allowing manufacturers to justify higher prices and enabling them to boost usage by targeting new consumer groups. It also will contribute to the already growing perception of sun care as a year-round product, something that will protect sales against the unpredictability of seasonal demand and boost volume sales generally. However, this increased crossover between sun care and other sectors also poses a threat, with skin and hair care and color cosmetics just as likely to look to expand their sales by offering added sun protection or self-tanning benefits. It is likely that at high-need times, such as in summer and prime vacation times, consumers will continue to opt for dual-benefit sun protection, but at other times of the year, SPF-containing skin care or color cosmetics could win out. The challenge is for manufacturers to offer products that are as effective in skin or hair care as they are in sun care.