| KN24053 |
| KEY NOTE TOILETRIES PLUS : JUNE 2003 |
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This report covers: toiletries,bath oils, liquids and additives, shower gels, talcum powder, deodorant, suntan lotions, oils and creams, shaving foam gel, cream and sticks, testing of cosmetic and toiletry ingredients on animals, potentially hazardous ingredients, labelling, effectiveness of products, personal, wsh and bathroom products, hair care, skin care, oral care, outsourcing, whitening toothpaste, nutraceuticals, use of preservatives, cosmetics directive,
Companies/Brand Names covered include: Avon European Holdings, Colgate-Palmolive (UK), Gillette UK, L'Oréal (UK), Proctor & Gamble, Unilever, The Body Shop International, Boots, Superdrug, Clarins, Insignia, Lacoste, Lynx Pulse, Veet, GilletteUK, PZ Cussons, Own Label, COSi Wales, Schick-Wilkinson Sword, Aveda Corporation, Johnson & Johnson, KMI, Colgate Sensitive, Double Bubble, Elastoplast Footcare, Extreme, FreeGlider, Lynxdry, Nivea, Prostyling, Pure Zone, Regenium XY, The Sanctuary Connections, Speedo Protek Performance, Remington Products,
| Executive Summary 1 |
| 1. Market Definition 11 |
| report coverage 11 |
| MARKET SECTORS 11 |
| Personal Wash and Bathroom Products 11 |
| Hair Care Products 11 |
| Skin Care Products 11 |
| Oral Care Products 12 |
| Shaving Products 12 |
| MARKET TRENDS 12 |
| Outsourcing 12 |
| Use of Preservatives 12 |
| Whitening Toothpastes 12 |
| Nutraceuticals 13 |
| ECONOMIC TRENDS 13 |
| Gross Domestic Product 13 |
| Table 1: Index of Growth in UK Gross Domestic Product at Current Prices (index 1995=100), 1997-2001 13 |
| Inflation 14 |
| Table 2: UK Rate of Inflation ( percent), 1998-2002 14 |
| Population 14 |
| Table 3: UK Resident Population by Sex (000 and percent), Mid-Years 1998-2002 15 |
| Unemployment 15 |
| Table 4: UK Unemployment Rate and Actual Number of Unemployed Persons ( percent and 000), 1998-2002 15 |
| Household Disposable Income 16 |
| Table 5: Index of Household Disposable Income (index 1971=100), 1997-2000 16 |
| Market Position 16 |
| The UK 16 |
| Table 6: Consumer Expenditure on Personal Care Miscellaneous Goods and Services (£m), 1998-2002 17 |
| The European Market 17 |
| 2. Market Size 18 |
| THE TOTAL MARKET 18 |
| Table 7: The UK Market for Toiletries by Sector by Value at Current Prices (£m at rsp), 1998-2002 18 |
| by MARKET SECTOR 18 |
| Personal Wash and Bathroom Products 18 |
| Table 8: The UK Sector for Personal Wash and Bathroom Products by Subsector by Value at Current Prices (£m at rsp), 2002 19 |
| Hair Care Products 19 |
| Table 9: The UK Sector for Hair Care Products by Subsector by Value at Current Prices (£m at rsp), 2002 19 |
| Skin Care Products 20 |
| Table 10: The UK Sector for Skin Care Products by Subsector by Value at Current Prices (£m at rsp), 2002 20 |
| Oral Care Products 20 |
| Table 11: The UK Sector for Oral Care Products by Subsector by Value at Current Prices (£m at rsp), 2002 21 |
| Shaving Products 21 |
| Table 12: The UK Sector for Shaving Products by Subsector by Value at Current Prices (£m at rsp), 2002 21 |
| Overseas Trade 21 |
| Table 13: UK Imports and Exports of Toiletries by Value (£m), 2002 22 |
| Imports 22 |
| Table 14: Intra-EC Arrivals and Extra-EC Imports of Toiletries by Sector by Value (£m), 2002 22 |
| Intra-EC Arrivals 23 |
| Extra-EC Imports 23 |
| Exports 23 |
| Table 15: Intra-EC Dispatches and Extra-EC Exports of Toiletries by Subsector by Value (£m), 2002 24 |
| Intra-EC Dispatches 24 |
| Extra-EC Exports 24 |
| 3. Industry Background 25 |
| RECENT HISTORY 25 |
| Industry Synopsis 25 |
| Table 16: Industry Synopsis for the Manufacture of Perfumes and Toilet Preparations (£000, percent and £) 26 |
| number of companies 26 |
| Manufacturing 26 |
| Table 17: Number of UK VAT-Based Enterprises Engaged in the Manufacture of Perfumes and Toilet Preparations by Turnover Sizeband (number and percent), 2003 27 |
| Retailing 27 |
| Table 18: Number of UK VAT-Based Enterprises Engaged in the Retail Sale of Cosmetic and Toilet Articles by Turnover Sizeband (number and percent), 2003 28 |
| employment 28 |
| Manufacturing 28 |
| Table 19: Number of UK VAT-Based Local Units Engaged in the Manufacture of Perfumes and Toilet Preparations by Number of Employees (number and percent), 2003 29 |
| REGIONAL VARIATIONS IN THE MARKETPLACE 29 |
| Distribution 29 |
| Multiple Grocers 29 |
| High Street Stores 30 |
| Direct Selling 30 |
| HOW ROBUST IS THE MARKET? 30 |
| LEGISLATION 31 |
| Cosmetics Directive 31 |
| TRADE ASSOCIATIONS 32 |
| The British Aerosol Manufacturers' Association 32 |
| The British Fragrance Association 32 |
| COLIPA 32 |
| The Cosmetic, Toiletry & Perfumery Association Ltd 32 |
| Society of Cosmetic Scientists 32 |
| 4. Competitor Analysis 33 |
| THE MARKETPLACE 33 |
| Market Leaders — manufacturers 33 |
| Table 20: Leading Manufacturers Involved in the Toiletries Industry by Turnover (£000), Latest Account Date 33 |
| Avon European Holdings Ltd 34 |
| Company Structure 34 |
| Current and Future Developments 34 |
| Financial Results 34 |
| Colgate-Palmolive (UK) Ltd 34 |
| Company Structure 34 |
| Current and Future Developments 34 |
| Financial Results 34 |
| Gillette UK Ltd 35 |
| Company Structure 35 |
| Current and Future Developments 35 |
| Financial Results 35 |
| L'Oréal (UK) Ltd 35 |
| Company Structure 35 |
| Current and Future Developments 35 |
| Financial Results 35 |
| Procter & Gamble Ltd 35 |
| Company Structure 35 |
| Current and Future Developments 36 |
| Financial Results 36 |
| Unilever PLC 36 |
| Company Structure 36 |
| Current and Future Developments 36 |
| Financial Results 36 |
| Table 21: Unilever Cosmetics International (UK) Ltd and Lever Fabergé Ltd by Turnover and Pre-Tax Profit (£000), Years Ending December 2000 and 2001 37 |
| market leaders — retailing 37 |
| The Body Shop International PLC 37 |
| Company Structure 37 |
| Current and Future Developments 37 |
| Financial Results 38 |
| Table 22: Financial Results for the UK and Republic of Ireland Region of The Body Shop International PLC (£m, number and percent), 53 weeks to 3rd March 2001 and Year to 2nd March 2002 38 |
| The Boots Company PLC 38 |
| Company Structure 38 |
| Current and Future Developments 39 |
| Financial Results 39 |
| Superdrug Stores PLC 40 |
| Company Structure 40 |
| Current and Future Developments 40 |
| Financial Results 40 |
| OUTSIDE SUPPLIERS 40 |
| Research and Development 40 |
| Raw Materials 41 |
| Processing Machinery, Packaging and Components 41 |
| Own Label Suppliers 42 |
| MARKETING ACTIVITY 42 |
| Main Media Advertising Expenditure 42 |
| Table 23: Main Media Advertising Expenditure on Toiletries by Sector (£000), Years to December 2001 and 2002 42 |
| Expenditure by Product Category 43 |
| Personal Wash and Bathroom Products 43 |
| Table 24: Personal Wash and Bathroom Products Receiving the Highest Levels of Main Media Advertising Expenditure (£000), Year to December 2002 44 |
| Hair Care Products 45 |
| Table 25: Hair Care Products Receiving the Highest Levels of Main Media Advertising Expenditure (£000), Year to December 2002 45 |
| Skin Care Products 46 |
| Table 26: Skin Care Products Receiving the Highest Levels of Main Media Advertising Expenditure (£000), Year to December 2002 46 |
| Oral Care Products 46 |
| Table 27: Toothpaste, Polishes and Other Oral Hygiene Products Receiving the Highest Levels of Main Media Advertising Expenditure (£000), Year to December 2002 47 |
| Shaving Products 47 |
| Table 28: Shaving Products Receiving the Highest Levels of Main Media Advertising Expenditure (£000), Year to December 2001 47 |
| Recent Promotions 47 |
| Clarins 47 |
| Insignia 48 |
| Lacoste 48 |
| Lynx Pulse 48 |
| Veet 48 |
| Other Marketing Activities 48 |
| Regional Press Advertising 48 |
| Celebrities 48 |
| Endorsing Products 49 |
| Sponsorship 49 |
| Websites 49 |
| Exhibitions 49 |
| 5. Brand Strategy 51 |
| introduction 51 |
| THE WORLD'S MOST VALUABLE BRANDS 51 |
| Table 29: The World's Most Valuable Toiletries Brands by Rank, Value and Country of Origin ($bn and percent), 2002 51 |
| TOP UK PERSONAL CARE BRANDS BY PRODUCT SECTOR 52 |
| Personal Wash and Bathroom Products 52 |
| Hair Care Products 52 |
| Skin Care Products 53 |
| Oral Care Products 53 |
| Shaving Products 53 |
| BRANDS BY COMPANY 53 |
| Colgate-Palmolive (UK) Ltd 53 |
| Gillette UK Ltd 53 |
| L'Oréal (UK) Ltd 54 |
| Procter & Gamble Ltd 54 |
| PZ Cussons PLC 54 |
| Unilever Group 54 |
| Own Label 54 |
| 6. Strengths, Weaknesses, Opportunities and Threats 55 |
| STRENGTHS 55 |
| WEAKNESSES 55 |
| OPPORTUNITIES 56 |
| THREATS 56 |
| 7. Buying Behaviour 57 |
| HOUSEHOLD EXPENDITURE 57 |
| Table 30: Average Weekly Household Expenditure on Cosmetics, Toiletries, etc. by Gross Income Decile Group (£), 2001/2002 57 |
| CONSUMER PENETRATION 58 |
| Hair Care Products 58 |
| Usage 58 |
| Table 31: Usage of Hair Care Products by Men and Women ( percent of users), 2002 58 |
| Table 32: Types of Shampoo and Styling Aids Used by Men and Women ( percent of users), 2002 59 |
| Penetration by Age and Socio-Economic Group 59 |
| Shampoo 59 |
| Table 33: Users of Shampoo by Age Group and Social Grade ( percent of respondents), 2002 60 |
| Conditioner 60 |
| Table 34: Users of Conditioner by Age Group and Social Grade ( percent of respondents), 2002 61 |
| Hairspray 61 |
| Table 35: Users of Hairspray by Age Group and Social Grade ( percent of respondents), 2002 62 |
| Hair Gel, Mousses, etc. 62 |
| Table 36: Users of Hair Gel, Mousses, etc. by Age Group and Social Grade ( percent of respondents), 2002 63 |
| Hair Colorants, Lighteners and Bleach 63 |
| Table 37: Users of Hair Colorants, Lighteners and Bleach by Age Group and Social Grade ( percent of women), 2002 64 |
| Frequency of Use 64 |
| Table 38: Frequency of Use of Hair Care Products ( percent of respondents), 2002 65 |
| Other Toiletries 65 |
| Usage 65 |
| Table 39: Usage of Other Toiletries ( percent of users), 2002 66 |
| Bath Oils, Liquids and Additives 66 |
| Table 40: Users of Bath Oils, Liquids and Additives by Age Group and Social Grade ( percent of respondents), 2002 67 |
| Shower Gels 67 |
| Table 41: Users of Shower Gel by Age Group and Social Grade ( percent of respondents), 2002 68 |
| Talcum Powder 68 |
| Table 42: Users of Talcum Powder by Age Group and Social Grade ( percent of respondents), 2002 69 |
| Deodorant 69 |
| Table 43: Users of Deodorant by Age Group and Social Grade ( percent of respondents), 2002 70 |
| Type of Deodorant Used 70 |
| Table 44: Type of Deodorant Used by Men and Women ( percent of users), 2002 70 |
| Suntan Lotions, Oils and Creams 70 |
| Table 45: Users of Suntan Lotions, Oils and Creams by Age Group and Social Grade ( percent of respondents), 2002 71 |
| Shaving Foam, Gel, Cream and Sticks 71 |
| Table 46: Users of Shaving Preparations by Age Group and Social Grade ( percent of male respondents), 2002 71 |
| Frequency of Use of Other Toiletries 72 |
| Bath Oils, Liquids and Additives 72 |
| Shower Gels 72 |
| Talcum Powder 72 |
| Deodorant 72 |
| Suntan Lotions, Oils and Creams 73 |
| Shaving Foam, Gel, Cream and Sticks 73 |
| 8. Current Issues 74 |
| CLOSURES, MERGERS AND ACQUISITIONS 74 |
| The Boots Company PLC 74 |
| COSi Wales Ltd 74 |
| The Procter & Gamble Company 74 |
| Schick-Wilkinson Sword 74 |
| Superdrug Stores PLC 75 |
| BOARD AND SENIOR MANAGEMENT CHANGES 75 |
| Aveda Corporation 75 |
| The Body Shop International PLC 75 |
| The Boots Company PLC 76 |
| Colgate-Palmolive 76 |
| COLIPA 76 |
| Cosmetic, Toiletry & Perfumery Association 76 |
| Gillette 76 |
| Johnson & Johnson 77 |
| KMI 77 |
| PZ Cussons PLC 77 |
| Remington Products 77 |
| Superdrug Stores PLC 77 |
| Unilever Cosmetics International 77 |
| NEW PRODUCTS 78 |
| The Body Shop International 78 |
| Colgate Sensitive 78 |
| Double Bubble 78 |
| Elastoplast Footcare 78 |
| Extreme 78 |
| FreeGlider 78 |
| LynxDry 79 |
| Nivea 79 |
| Prostyling 79 |
| Pure Zone 79 |
| Regenium XY 79 |
| The Sanctuary Connections Ltd 79 |
| Speedo Protek Performance 79 |
| MATTERS OF CONCERN TO THE TOILETRIES INDUSTRY 80 |
| Testing of Cosmetic and Toiletry Ingredients on Animals 80 |
| Potentially Hazardous Ingredients 80 |
| Labelling 81 |
| Effectiveness of Products 81 |
| 9. The Global Market 83 |
| PERSONAL CARE PRODUCTS 83 |
| The Global Market 83 |
| The European Market 83 |
| PRINCIPAL GLOBAL COMPETITORS 83 |
| The Body Shop International PLC 83 |
| The US and Canada 84 |
| Table 47: Financial Results for the Americas Region of The Body Shop International PLC (£m), 53 Weeks to 3rd March 2001 and 52 weeks to 2nd March 2002 84 |
| Europe, Middle East and Africa 84 |
| Table 48: Financial Results for The Body Shop International PLC in Europe, the Middle East and Africa Region (£m), 53 weeks to 3rd March 2001 and 52 weeks to 2nd March 2002 85 |
| Asia Pacific 85 |
| Table 49: Financial Results for The Body Shop International PLC in Asia Pacific Region (£m), 53 weeks to 3rd March 2001 and 52 weeks to 2nd March 2002 86 |
| L'Oréal SA 86 |
| Unilever Group 86 |
| Table 50: Unilever Group Turnover by Geographical Area (*m), 2002 87 |
| Estee Lauder Companies 87 |
| The Procter & Gamble Company 87 |
| Avon Products Incorporated 88 |
| Table 51: Avon Products Inc. Sales by Geographic Region ( percent), 2002 88 |
| Colgate-Palmolive Company 88 |
| Remington Products 89 |
| 10. Forecasts 90 |
| introduction 90 |
| Table 52: Average Economic Projections for the UK ( percent and millions), 2003-2007 90 |
| forecasts 2003 to 2007 90 |
| Table 53: The Forecast UK Market for Toiletries by Sector by Value at Current Prices (£m at rsp), 2003-2007 91 |
| Market Growth 91 |
| Figure 1: The UK Market for Toiletries by Value at Current Prices (£m at rsp), 1998-2007 91 |
| future trends 92 |
| The Effect of the Economic Climate 92 |
| Population 92 |
| Table 54: Projected UK Population in the UK by Age Group (000), 2002 and 2007 93 |
| 11. Company Profiles 94 |
| The Body Shop International Plc 95 |
| The Boots Company Plc 97 |
| Estee Lauder Cosmetics Ltd 99 |
| L'oreal (uk) Ltd 101 |
| Procter & Gamble Ltd 103 |
| Superdrug Stores Plc 105 |
| 12. Company Financials 107 |
| 13. Further Sources 109 |
| Associations 109 |
| Publications 110 |
| General Sources 110 |
| Bonnier Information Sources 110 |
| Government Publications 111 |
| Other Sources 112 |
| This Key Note report covers such toiletries as personal wash and bathroom products, hair care products, skin care products (excluding cosmetics), oral care products and shaving preparations (including wet razors). Combined retail sales of toiletries were worth £3.37bn in 2002, having increased by 2.7 percent from the previous year. Penetration levels are high, with consumers considering many products to be necessities. However, expenditure on toiletries, cosmetics, etc. varies considerably depending on a household's disposable income — the 10 percent of households enjoying the highest gross income spend around six times the amount of those on the lowest income. |
| Advertising expenditure is high in order to maintain the profile of well-known brands, of which there are many. Product innovation is continual as manufacturers strive to encourage consumers to try new products while, at the same time, maintaining brand loyalty to established products. Leading competitors in the toiletries industry are the global consumer groups. Most companies have products in more than one sector, but the oral care sector is unusual in that Colgate-Palmolive and GlaxoSmithKline control more than half the sector by value, a share which increases further in the toothpaste subsector, where they own the leading four brands. |
| On the retail side, the grocery multiples continue to make inroads into the toiletries market at the expense of others. Tesco and ASDA lead the field and, in fact, by March 2003, Tesco was claiming to have overtaken Boots as the market leader in toiletries penetration. The latter's problems have been well documented and it is withdrawing from some of its ventures, including its trial of `shops within shops' in Sainsbury's supermarkets and abandoning ambitious plans to expand its Pure Beauty concept. Other developments on the retail side are the planned merger of the two high-street chains Superdrug and Savers, following the sale of Superdrug in October 2002 to AS Watson, an international retailer and manufacturer that is wholly owned by the Hong Kong conglomerate Hutchison Whampoa, which owns the Savers chain. |
| The industry is subject to legislation and directives concerning such issues as the safety of ingredients, labelling and animal testing. However, the media and other bodies are quick to question the safety and efficacy of toiletries and cosmetics, with sunscreen and talcum powder currently in the firing line. According to the European trade association COLIPA, around 5 billion toiletry and cosmetic products are sold every year to 380 million consumers in the EU, but only one in every million results in allegations about its safety. |
| Population estimates have been revised to be significantly higher than previously thought and, given that many toiletries are regarded as necessities, this can only benefit the market. The fact that it is an ageing population is better for some categories than others, but demand is also growing from young people, as ever-younger children become interested in their appearance and hygiene. Key Note therefore anticipates that retail sales of toiletries will continue to steadily increase in value, despite the high level of promotional activity, particularly `buy one, get one free' offers. |
Text © 2003 Key Note
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Last updated by Amanda Porteous July 2003
