KN24054

KEY NOTE TOILETRIES PLUS : JUNE 2004

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This report covers: toiletries, personal washing and bathroom toiletries, hair care, products, skincare, oral care, shaving, an ageing population, men's market technology versus nature, manufacturing, retailers, direct selling, multiple grocers, high-street stores, trade associations, shampoos, and,conditioners, hair styling aids, hair product ranges, Own Label Suppliers, hair sprays, men's skincare, suncare, tanning products, personal wash, deoderants, body sprays, soaps, shower gels, wipes, bath, beauty, ranges, bath additives, oral hygiene, toothpaste, polishes, sponsorship, sampling, charitable work, Americas, Asia Pacific,

Companies/Brand Names covered include: Avon European Hldings, The Body Shop, Boots, Colgate-Palmolive UK, Gillette UK, l'Oreal UK, Proctor and Gamble, PZ Cussons, Superdrug, Unilever, Johnson & Johnson, King of Shaves, Lux, Sara Lee Corporation, Schwarzkopf Live, Sunsilk, Tresemmé, Wella, Cosmoprof, in-cosmetics, Alberto-Culver, Accantia, Ceuta Healthcare, SYmex, Beirsdorf, Lynx Touch, Nina Ricci, Pears, Reckitt Benckiser, XCD, Impulse,

TABLE OF CONTENTS

Executive Summary

1. Market Definition

Report Coverage

MARKET SECTORS

Personal Washing and Bathroom Toiletries

Hair Care Products

Skincare Products

Oral Care Products

Shaving Preparations

MARKET TRENDS

An Ageing Population

Technology Versus Nature

Outsourcing

The Men's Market

Economic Trends

Population

Table 1: UK Resident Population Estimates by Sex (000), Mid-Years 1999-2003

Gross Domestic Product

Table 2: UK Gross Domestic Product at Current and Annual Prices (£m), 1999-2003

Inflation

Table 3: UK Rate of Inflation (%), 1999-2003

Unemployment

Table 4: Actual Number of Unemployed Persons (million), 1999-2003

Household Disposable Income

Table 5: Average Household Disposable Income (£ and %), 1998-2002

Market Position

The UK

Table 6: Consumer Expenditure on Miscellaneous Goods and Services for Personal Care (£m), 1999-2003

Overseas

2. Market Size

THE TOTAL MARKET

Table 7: The Total UK Toiletries Market by Sector by Value at Current Prices (£m at rsp), 1999-2003

by MARKET SECTOR

Personal Wash and Bathroom Toiletries

Table 8: The UK Personal Wash and Bathroom Toiletries Sector by Subsector by Value at Current Prices (£m at rsp and %), 2003

Hair Care Products

Table 9: The UK Hair Care Products Sector by Subsector by Value at Current Prices (£m at rsp and %), 2003

Skincare Products

Table 10: The UK Skincare Products Sector by Subsector by Value at Current Prices (£m at rsp and %), 2003

Oral Care Products

Table 11: The UK Oral Care Sector by Subsector by Value at Current Prices (£m at rsp and %), 2003

Shaving Preparations

Table 12: The UK Shaving Preparations Sector by Subsector by Value at Current Prices (£m at rsp and %), 2003

Overseas Trade

Overview

Table 13: UK Imports and Exports of Toiletries (£m), 1st January 2003-30th September 2003

Imports

Table 14: Intra-EC Arrivals and Extra-EC Imports of Toiletries by Category (£000), 1st January 2003-30th September 2003

Intra-EC Arrivals

Extra-EC Imports

Exports

Table 15: Intra-EC Dispatches and Extra-EC Exports of Toiletries by Category (£000), 1st January 2003-30th September 2003

Intra-EC Dispatches

Extra-EC Exports

3. Industry Background

RECENT HISTORY

Industry Synopsis

number of companies

Manufacturers

Table 16: Number of UK VAT-Based Enterprises Engaged in the Manufacture of Perfumes and Toilet Preparations by Turnover Sizeband (£000), 2003

Retailers

Table 17: Number of UK VAT-Based Enterprises Engaged in the Retail Sale of Cosmetic and Toilet Articles by Turnover Sizeband (£000), 2003

Employment

Manufacturers

Table 18: Number of UK VAT-Based Local Units Engaged in the Manufacture of Perfumes and Toilet Preparations by Employment Sizeband (number of employees), 2003

Retailers

Table 19: Number of UK VAT-Based Local Units Engaged in the Retail Sale of Cosmetic and Toilet Articles by Employment Sizeband (number of employees), 2003

Regional Variations in the Marketplace

Distribution

High-Street Stores

Multiple Grocers

Direct Selling

HOW ROBUST IS THE MARKET?

LEGISLATION

European Cosmetics Directive

Other Legislation

Key Trade Associations

The British Aerosol Manufacturers' Association

COLIPA

The Cosmetic, Toiletry & Perfumery Association Ltd

4. Competitor Analysis

THE MARKETPLACE

Market Leaders

Avon European Holdings Ltd

Company Structure

Current and Future Developments

Financial Results

The Body Shop International PLC

Company Structure

Current and Future Developments

Financial Results

Table 20: UK and Republic of Ireland Financial Results for The Body Shop International PLC (£m and %), Years Ending 1st March 2003 and 28th February 2004

The Boots Company PLC

Company Structure

Current and Future Developments

Financial Results

Colgate-Palmolive (UK) Ltd

Company Structure

Current and Future Developments

Financial Results

Gillette UK Ltd

Company Structure

Current and Future Developments

Financial Results

L'Oréal (UK) Ltd

Company Structure

Current and Future Developments

Financial Results

Procter & Gamble Ltd

Company Structure

Current and Future Developments

Financial Results

PZ Cussons PLC

Company Structure

Current and Future Developments

Financial Results

Superdrug Stores PLC

Company Structure

Current and Future Developments

Financial Results

Unilever Group

Company Structure

Current and Future Developments

Financial Results

Table 21: Financial Results for Unilever PLC (em), Years Ending 31st December 2002 and 2003

OUTSIDE SUPPLIERS

Research and Development

Raw Materials, Chemicals, etc.

Processing Machinery, Packaging and Components

Own-Label Suppliers

Outsourcing

Marketing Activity

Main Media Advertising Expenditure

Table 22: Main Media Advertising Expenditure on Toiletries (£000), Years Ending December 2002 and 2003

Hair Care Products

Shampoos and Conditioners

Table 23: Main Media Advertising Expenditure on Shampoos and Conditioners Only (£000), Year Ending December 2003

Table 24: Main Media Advertising Expenditure on Other Shampoos and Conditioners (£000), Year Ending December 2003

Hair Colourants

Table 25: Main Media Advertising Expenditure on Hair Colourants (£000), Year Ending December 2003

Hair Styling Aids

Table 26: Main Media Advertising Expenditure on Hair Styling Aids (£000), Year Ending December 2003

Hair Product Ranges

Table 27: Main Media Advertising Expenditure on Hair Product Ranges (£000), Year Ending December 2003

Hairsprays

Table 28: Main Media Advertising Expenditure on Hairsprays (£000), Year Ending December 2003

Skincare

Women's Facial Skincare

Table 29: Main Media Advertising Expenditure on Women's Medicated Facial Skincare (£000), Year Ending December 2003

Table 30: Main Media Advertising Expenditure on Women's Non-Medicated Facial Skincare (£000), Year Ending December 2003

Women's Body Skincare

Table 31: Main Media Advertising Expenditure on Women's Body Skincare (£000), Year Ending December 2003

Men's Skincare

Table 32: Main Media Advertising Expenditure on Men's Skincare (£000), Year Ending December 2003

Suncare and Tanning Products

Table 33: Main Media Advertising Expenditure on Suncare and Tanning Products (£000), Year Ending December 2003

Personal Wash Products

Deodorants and Body Sprays

Table 34: Main Media Advertising Expenditure on Deodorants and Body Sprays (£000), Year Ending December 2003

Soaps, Shower Gels and Wipes

Table 35: Main Media Advertising Expenditure on Soaps, Shower Gels and Wipes (£000), Year Ending December 2003

Bath and Beauty Ranges

Table 36: Main Media Advertising Expenditure on Bath and Beauty Ranges (£000), Year Ending December 2003

Bath Additives

Table 37: Main Media Advertising Expenditure on Bath Additives (£000), Year Ending December 2003

Men's Fragrances and Toiletries

Table 38: Main Media Advertising Expenditure on Men's Fragrances and Toiletries (£000), Year Ending December 2003

Shaving Products

Table 39: Main Media Advertising Expenditure on Shaving Products (£000), Year Ending December 2003

Oral Hygiene

Toothpastes and Polishes

Table 40: Main Media Advertising Expenditure on Toothpastes and Polishes (£000), Year Ending December 2003

Other Oral Hygiene Products

Table 41: Main Media Advertising Expenditure on Other Oral Hygiene Products (£000), Year Ending December 2003

Company Activity

The Boots Group PLC

Johnson & Johnson

King of Shaves

Lux

Revlon

Sara Lee Corporation

Schwarzkopf Live

Sunsilk

Tresemmé

Wella

Other Marketing Activities

Sponsorship

Sampling

Websites

Charitable Work

Exhibitions

Cosmoprof

In-Cosmetics

Other Exhibitions

Publications

5. Brand Strategy

INTRODUCTION

research Findings

Consumer Survey

Table 42: Usage of Toiletry Brands (% of respondents), 2004

Usage of Toiletry Brands by Age

Table 43: Usage of Toiletry Brands by Age (% of respondents), 2004

Usage of Toiletry Brands by Social Grade

Table 44: Usage of Toiletry Brands by Social Grade (% of respondents), 2004

Companies' BRANDS

Leading Brands

Table 45: Leading Global Brands of Cosmetics and Toiletries by Value ($bn and %), 2003

Brands by Company

Alberto-Culver

Avon European Holdings Ltd

The Boots Group PLC

Colgate-Palmolive (UK) Ltd

Gillette UK Ltd

Johnson & Johnson Ltd

L'Oréal SA

Procter & Gamble Company

PZ Cussons PLC

Unilever PLC

6. Strengths, Weaknesses, Opportunities and Threats

STRENGTHS

WEAKNESSES

OPPORTUNITIES

THREATS

7. Buying Behaviour

HOUSEHOLD EXPENDITURE

By Gross Income Decile Group

Table 46: Average Weekly Household Expenditure on Toiletries and Soap, Cosmetics and Hair Products, and Hairdressing and Beauty Treatments by Gross Income Decile Group (£), 2002/2003

By Age of Head of Household

Consumer Penetration

Hair Care Products

Table 47: Penetration of Hair Care Products by Sex and Type of Product (% of men and women respondents), 2003

Type of Hair Care Products Used

Table 48: Type of Shampoo Used by Sex (% of men and women respondents), 2003

Penetration of Shampoos by Sex, Age and Social Grade

Table 49: Penetration of Shampoos by Sex, Age and Social Grade (% of respondents), 2003

Penetration of Conditioners by Sex, Age and Social Grade

Table 50: Penetration of Conditioners by Sex, Age and Social Grade (% of respondents), 2003

Penetration of Hairsprays by Sex, Age and Social Grade

Table 51: Penetration of Hairsprays by Sex, Age and Social Grade (% of respondents), 2003

Penetration of Hair Gels, Mousses, Sprays, etc. by Sex, Age and Social Grade

Table 52: Penetration of Hair Gel, Mousses, Sprays, etc. by Sex, Age and Social Grade (% of respondents), 2003

Penetration of Hair Colourants, Lighteners and Bleach Among Women by Age and Social Grade

Table 53: Penetration of Hair Colorants, Lighteners and Bleach Among Women by Age and Social Grade (% of respondents), 2003

Frequency of Hair Care Products Usage

Other Toiletries

Table 54: Penetration of Other Toiletries by Sex and Type of Product (% of men and women respondents), 2003

Penetration of Bath Oils, Liquids and Additives by Sex, Age and Social Grade

Table 55: Penetration of Bath Oils, Liquids and Additives by Sex, Age and Social Grade (% of respondents), 2003

Penetration of Shower Gels by Sex, Age and Social Grade

Table 56: Penetration of Shower Gels by Sex, Age and Social Grade (% of respondents), 2003

Penetration of Talcum Powder by Sex, Age and Social Grade

Table 57: Penetration of Talcum Powder by Sex, Age and Social Grade (% of respondents), 2003

Penetration of Deodorant by Sex, Age and Social Grade

Table 58: Penetration of Deodorant by Sex, Age and Social Grade (% of respondents), 2003

Type of Deodorant Used

Table 59: Penetration of Deodorant Used by Sex and Type of Product (% of respondents), 2003

Penetration of Suntan Lotions, Oils and Creams by Sex, Age and Social Grade

Table 60: Penetration of Suntan Lotions, Oils and Creams by Sex, Age and Social Grade (% of respondents), 2003

Penetration of Shaving Foam, Gel, Cream and Sticks Among Men by Age and Social Grade

Table 61: Penetration of Shaving Preparations Among Men by Age and Social Grade (% of respondents), 2003

Frequency of Other Toiletries Usage

Bath Oils, Liquids and Additives

Shower Gels

Talcum Powder

Deodorant

Suntan Lotions, Oils and Creams

Shaving Foam, Gel, Cream and Sticks

Face Creams and Lotions

Penetration of Face Creams by Sex, Age and Social Grade

Table 62: Penetration of Face Cream Among Men by Age and Social Grade (% of respondents), 2003

Table 63: Penetration of Cleansing Creams, Lotions and Wipes Among Women by Age and Social Grade (% of respondents), 2003

Table 64: Penetration of Body Creams and Lotions Among Women by Age and Social Grade (% of respondents), 2003

Table 65: Penetration of Hand Cream Among Women by Age and Social Grade (% of respondents), 2003

Frequency of Face Creams and Lotions Usage

Dental Care Products and Soap

8. Current Issues

CLOSURES, MERGERS AND ACQUISITIONS

Accantia Ltd

The Boots Group PLC

Ceuta Healthcare Ltd

Epic Brand Investments

L'Oréal SA

Procter & Gamble Company

Symex

BOARD AND SENIOR MANAGEMENT CHANGES

The Body Shop International PLC

The Boots Company PLC

Colgate-Palmolive Company

The Gillette Company

Johnson & Johnson Ltd

L'Oréal (UK) Ltd

PZ Cussons PLC

Revlon Group Ltd

Sara Lee Corporation

Unilever PLC

NEW PRODUCTS

Alberto-Culver

Beiersdorf

Clinique

Duchy Originals

Gillette

Impulse

John Frieda

Johnson & Johnson

Lever Fabergé

Lynx Touch

Nina Ricci

Pears

Proctor & Gamble

Reckitt Benckiser

XCD

9. The Global Market

GLOBAL MARKET Size

SELECTED GLOBAL COMPETITORS

Avon Products Inc

Table 66: Global Sales for Avon Products Inc by Geographical Region (%), 2003

Table 67: Global Net Sales and Operating Profit for Avon Products Inc ($m), Years Ending 31st December 2001, 2002 and 2003

Beiersdorf AG

The Body Shop International PLC

Americas

Table 68: Americas Financial Results for The Body Shop International PLC (£m), Years Ending 1st March 2003 and 28th February 2004

Europe, Middle East and Africa

Table 69: Europe, Middle East and Africa Financial Results for The Body Shop International PLC (£m), Years Ending 1st March 2003 and 28th February 2004

Asia Pacific

Table 70: Asia Pacific Financial Results for The Body Shop International PLC (£m), Years Ending 1st March 2003 and 28th February 2004

Colgate-Palmolive Company

Table 71: Worldwide Net Sales for Colgate-Palmolive Company by Business Segment by Geographic Region ($m), 2001-2003

The Estée Lauder Companies Inc

Table 72: Sales for The Estée Lauder Companies Inc by Geographic Region ($m and %),Year Ending 30th June 2003

The Gillette Company

L'Oréal SA

Table 73: Operating Profit for L'Oréal SA by Geographical Region (%), Years Ending 31st December 2002 and 2003

Procter & Gamble Company

10. Forecasts

Introduction

The Economy

Gross Domestic Product

Table 74: Forecast UK Gross Domestic Product in Real Terms (%), 2004-2008

Unemployment

Table 75: Forecast Actual Number of Unemployed Persons (million), 2004-2008

Forecasts 2004 TO 2008

Table 76: The Forecast Total UK Toiletries Market by Sector by Value (£m at rsp), 2004-2008

Market Growth

Figure 1: The Forecast Total UK Toiletries Market by Value (£bn at rsp), 1999-2008

Future trends

Economic Climate

Population

Table 77: Projected UK Population by Age Group (000), 2003, 2004 and 2007

11. Company Profiles

Avon European Holdings Ltd

The Body Shop International Plc

the Boots Company Plc

Colgate-palmolive (uk) Ltd

Gillette Uk Ltd

L'oréal (uk) Ltd

Procter & Gamble Ltd

Unilever Plc

12. Company Financials

13. Further Sources

Associations

Publications

General Sources

Government Publications

Other Sources

Bonnier Information Sources

EXECUTIVE SUMMARY

This Key Note Market Report on toiletries covers the market for hair care and skincare products (excluding cosmetics), personal wash products, oral care and shaving preparations, including wet razors and depilatories. Key Note estimates that, in 2003, the total UK toiletries market (including depilatories) was worth £3.59bn, a rise of 6.4% on 2002 (although depilatories are excluded from 2002 data). Between 1999 and 2003, the skincare products sector experienced the strongest growth, of 27%, driven by premium-priced products, particularly anti-wrinkle and anti-ageing creams, and by men's skincare products.

Penetration levels are high in the majority of product categories, with UK consumers considering many toiletry items as necessities. However, weekly expenditure on toiletries and soap varies considerably with household disposable income levels. In 2002/2003, the 10% of households in the highest gross income decile group spent an average of £3.50 a week on toiletries and soap, compared with a weekly average of 70 pence in the lowest 10%. In addition, brand awareness in the market is high; for example, a BMRB Access survey, which was commissioned for this report, indicates that 72% of respondents used the Colgate toiletry brand in 2004.

Companies involved in the toiletries market spend vast amounts on advertising and, as such, market leaders (with the exception of some niche operators) tend to be huge multinationals. These companies have ample funds available and are often involved in a diverse range of fast-moving consumer goods (FMCG). The nature of the toiletries industry means that the safety and efficacy of products are continually under scrutiny, so operators must also make heavy investments in research and development (R&D).

The toiletries industry is not immune to the growing trend across all UK manufacturing operations to move production to Eastern European countries. For example, Gillette UK Ltd has announced plans to close facilities in Hemel Hempstead, Hertfordshire, and Isleworth, Middlesex, in order to move production to a newly-built facility in Poland by 2007. In addition, such transference of production is likely to be made easier following the enlargement of the EU in May 2004.

Between 2004 and 2008, Key Note forecasts that the UK toiletries market will continue to grow steadily. With interest rates forecast to continue to rise and many consumers already having unmanageable credit, a decrease in the level of consumer expenditure seems likely. However, there is a high level of discounting in the toiletries market, particularly with grocery multiples intent on increasing market share, and this is set to become fiercer still. In addition, the wide range of prices in the market means that, despite a high degree of brand loyalty, consumers are able to trade down in times of economic hardship. Between 2003 and 2007, the UK population is forecast to increase by 1.3% and, given that many toiletries are regarded as necessities, this growth is likely to benefit the market. In addition, the ageing population will contribute to growing sales in some product categories, while the rising demand from young consumers will stimulate sales in other areas as children become interested in their appearance and hygiene at an earlier age

Text © 2004 Key Note

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Last updated by Amanda Porteous July 2004