Economic downturn packs a punch as US beauty packaging sales take a hit

By Andrew McDougall

- Last updated on GMT

Related tags Personal care packaging Compound annual growth rate Economics

Economic downturn packs a punch as US beauty packaging sales take a hit
The economic downturn has left its mark on the US beauty and personal care packaging market as sales dropped in 2011, according to analyst Companies & Markets.

2011 saw unit volume sales within the US beauty and personal care packaging market decrease by 1 percent, declining to 11.6 billion units, states the report.

The market researcher traced this back to the unstable economic environment as it has had an impact on consumers’ approach to buying beauty and personal care products, thus affecting the packaging market.

The economic downturn has taken its toll on the consumer packaging business in general, with beauty packaging being one of the worst hit, due to weaker demand.

Europe was hit the hardest in the sector, although it would appear this negative trend has also transferred to the US market.

Recovery expected

But it is not all doom and gloom according to MWV president James Buzzard who believes the market will pick up.

“In the personal and beauty care, it's a mix. The high-end, the prestige, fragrance and those sorts of things, are down dramatically and not unexpectedly given the economy. In some of the more masstige end markets, we're doing quite well,”​ he said.

According to the Companies & Markets report there could also be hope in the travel products market.

“Often unwilling to invest in large sizes of unfamiliar products, consumers have turned to travel sizes as a way to limit their investment while experimenting with new products,”​ it says.

Travel products offer a convenience factor to the on-the-go consumers, who can carry small sizes in purses or gym lockers, rather than carry around a full size bottle.

A ray of sunshine

Sun care packaging increased by 8 percent in 2011, with a health-conscious consumer base concerned for skin health and more customers opting for convenient packaging formats.

Companies & Markets claims that despite the economic situation affecting the US market, consumers will continue to seek beauty and personal care products out of a perceived necessity; although they may seek to trade down in price while maintaining the image that they are accustomed to.

Unit volumes are expected to remain relatively stagnant within the US beauty and personal care packaging market through to 2015, although some categories will see growth as manufacturers attempt to differentiate themselves through packaging.

Unit volume sales of flexible aluminum/plastic are expected to grow at a compound annual growth rate (CAGR) of 2 percent through to 2015, while squeezable plastic tubes and PET bottles should each see a CAGR of 2 percent over the same period.

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