Short-term future for US personal care looks sluggish

By Simon Pitman

- Last updated on GMT

Related tags Personal care products Personal care

The US personal care market looks set to remain stagnant over the next two years, but is expected to pick up afterwards as the downturn wears off.

A new study from Kline & Company predicts that overall growth for the next five years will be ‘moderate’, as sales pick up again by the end of 2010.

The study points to the fact that sales of US personal care products grew by only 0.3 percent in 2008 to reach a total of $35.6m, due mainly to the onset of a sharp downturn throughout the US retail segment during the second half of the year.

Consumer confidence takes a nose dive

The impact of this decline means that consumer confidence has been sharply dented and that as a result sales of personal care products are not expected to rise during the course of 2009 – 2010.

However, by 2011 things are expected to pick up for the next three years, with a negative impact from increased legislation on ingredients claims expected to be counterbalanced by increased product innovation, combined with merger and acquisition activity in the industry.

The study points out that during 2009 - 2010 consumers will continue to shy away from expensive luxury personal care products and go for competitively priced mass and direct trade classes instead.

Luxury care shows negative growth in 2008

Demonstrating this trend, the study found that during 2008 luxury personal care showed negative growth, whereas mass and direct trade were the segments that showed the highest levels of growth.

“Many people have traded down on certain products, and as they get accustomed to buying some lower-priced or private-labels products, and shop more in the lower-priced channels, they might well continue with those habits after the tough times have subsided,”​ said Nancy Mills, manager of consumer products practice at Kline.

The study also reveals that this trend is creating opportunities for companies to develop products that target the growth areas in the mass market and direct trade segments.

Skin care and oral care still winners

Looking at product categories, Kline believes that the largest segment – skin care – is likely to continue the steady growth pattern it still experienced in 2008, driven in particular by the sun care category.

Likewise, oral care, the fastest growing category, is also likely to enjoy continued growth in the short-term, helped by the launch of new and innovative products, that combine tooth and gum care with whitening properties.

Related topics Market Trends

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