Marketers looking for inspiration about what's to come in the world of skincare, cosmetics and fragrances should look no further than Burt's Bees, the tiny organic brand recently acquired by the
Clorox Co.
"Burt's Bees started a niche trend that is driving the future of skincare," writes Leigh Anne Rowinski, beauty industry trend expert for IRI, in her year-end review of
the beauty industry, predicting that health and wellness will continue to shape consumer demand across all categories of the beauty industry.
Not only did the company have $121 million in sales
in 2007, compared with $71 million in 2006, and just $13.7 million in 2004, it managed what may be considered an even bigger coup. Burt's Bees Lip Shimmer Stick was 2007's fifth-best-selling lip color
product, with $17.8 million in sales, coming after such big names as Cover Girl, L'Oreal, Revlon and Maybelline.
Tracking the health and wellness trend--whether it's consumers embracing natural
products or looking for skincare with added vitamins and sunscreen--is especially important now, she writes, since growth in the beauty industry is definitely cooling after five years of solid growth.
IRI reports that the industry showed only $382 million in growth during 2007, compared to $910 million in 2006.
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Skincare products continue to be the industry's best sellers, with $15.1 billion
in sales--up 2.9% from 2006. Only facial and sun products showed growth, with anti-aging products aimed at Baby Boomers and anti-acne products aimed at teens the best performers. Sales of anti-aging
products gained 10.9%, and anti-acne products gained 2.6%. The product add-ons that sparked the most sales include vitamins, SPF, and oil free.
Sales of men's grooming products amounted to $379
million in 2007--up $7.2 million.
IRI also noticed some retail gaps: For example, a full 50% of households buy facial skincare in mass market outlets, and four out of five households shop at
Wal-Mart. Yet only 22% of households have bought facial skincare products there.
While the market share leaders continue to be Procter & Gamble's Olay (with 25% of the market), Neutrogena (15.7%)
and L'Oreal (7.8%), the top new product launches came from Johnson &Johnson, with its Aveeno, Active Naturals Positively Ageless, with $20 million in sales, and its Neutrogena Acne Stress Control
Treatment, with $17.2 million.
Cosmetics sales were flat, for the third year in a row. While total sales came in at $4.3 billion, up 1.7% from the prior year, unit sales actually fell 3.7%. The
average price of a cosmetic purchase is $5.10, up 6.1%.
Of the top 10 makeup brands, Cover Girl (with 20.2% of the market), Maybelline (18.4%), L'Oreal (14.1%), Sally Hansen (5.2%), Neutrogena
(3.7%), Physician's Formula (3.1%) and Rimmel (2.5%) all made share gains. But Revlon (11.4%), Almay (5.8%) and Max Factor (1.9%) all lost ground.
Overall, eye makeup was the best category, up
6.2%.
The hottest new products included Maybelline's Define-a-Lash mascara ($43 million), Cover Girl Volume Extract mascara ($39.4 million) and L'Oreal Bare Naturale blush ($39.4 million.)
Fragrance sales also faltered in 2007, with the total category declining by 2.2%, and both women's and men's fragrances weakening. One growth spot was women's designer fragrances, which accounted for
20% of sales in 2007, up from 18% in 2006. Celebrity scents slipped a bit, accounting for 27% in 2007, compared with 28% in 2006.
While the top 10 women's fragrance houses account for a 37% share
of the total market, only four of the top 10--Calvin Klein, Jennifer Lopez, Shania, and Baby Phat--made share gains.
For women, the year's best-selling fragrances were White Diamonds, Tommy Girl,
Red Door, and Jovan Musk. For men, the best sellers were Stetson, Bod Man, Curve, and Drakkar Noir.