Bath&Shower Canada

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Bath and Shower in Canada

Euromonitor International

June 2011


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Bath and Shower Canada

Euromonitor International Page i

List of Contents and Tables

Headlines ................................................................................................................................................................. 1Trends ...................................................................................................................................................................... 1

Competitive Landscape .......................................................................................................................................... 2Prospects .................................................................................................................................................................. 3Category Data ......................................................................................................................................................... 4

Table 1 Sales of Bath and Shower by Category: Value 2005-2010 ..................... ..................... ...... 4Table 2 Sales of Bath and Shower by Category: % Value Growth 2005-2010 ...................... ......... 4Table 3 Bath and Shower Premium Vs Mass % Analysis 2005-2010 ..................... ..................... .. 4Table 4 Bath and Shower Company Shares 2006-2010.................................................................. 5Table 5 Bath and Shower Brand Shares by GBN 2007-2010 ......................................................... 5Table 6 Bath and Shower Premium Brand Shares by GBN 2007-2010 ................... ..................... .. 6Table 7 Forecast Sales of Bath and Shower by Category: Value 2010-2015......................... ......... 7Table 8 Forecast Sales of Bath and Shower by Category: % Value Growth 2010-2015 ................ 7Table 9 Forecast Bath and Shower Premium Vs Mass % Analysis 2010-2015 .............................. 7


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Euromonitor International Page 1

BATH AND SHOWER IN CANADA

HEADLINES

Bath and shower products increase 3% in current value terms in 2010 to reach C$878 million

Body wash/shower gel sees most dynamic value growth of 5% to reach C$279 million

Marketing and product development focus on skin care benefits, bath collections and spa experience

Prices increase across all categories, but consumers still seek value and bargains, mitigating price increases

Unilever Canada leads with 15% value share; re-launch of popular Dove line helps share gain

Maturity will cause growth to decelerate, with category forecast to grow only marginally over forecastperiod to reach C$888 million by 2015

TRENDS The decelerating trend in growth that started in 2008 continued in 2010. The value growth of 3%

demonstrated by this category is chiefly a result of higher pricing. The upsurge seen in 2009 was mainly aresult of the H1N1 scare, and thus did not continue into 2010. A high rate of household penetration and theprice sensitive nature of many products in this category, especially bar soaps, as well as saturation forproducts such as body washes and liquid soaps, were evident in slowing growth rates.

Body wash/shower gel was the highest growing niche with a 5% increase in value sales, reaching C$279million in 2010. Its popularity is confirmed by the fact that it also saw positive volume growth of nearly4%, making it one of the few niches to achieve volume growth in 2010. Product development helped todrive value and volume, although growth decelerated compared with earlier years of the review period. In2010 Dove re-launched its line of body washes with new more attractive packaging and a formulationboasting its Nutrium Moisture technology, which better penetrates the skin to help absorb moisture from the

product.

Another product that received much attention this year was Old Spice Mens Body Wash. Its innovativeviral marketing campaign which starred NFL player Isaiah Musthafa in a series of 200 YouTube videos,garnered much attention both online and in stores. The fresh and funny campaign helped to re-launch OldSpices image and revive body wash usage among older men. Private label products such as Shoppers DrugMarts Life and Balea lines also saw investment of considerable effort in developing their body washofferings, increasing the number of affordable choices available to consumers.

Liquid soap also saw a healthy current value terms growth of 5%. However, the volume of sales saw aslower pace in 2010 compared with 2009, as a result of the H1N1 flu scare receding. This category has beenmarked by intense competition, and this year saw household cleaning product giant Lysol entering thecompetition. Lysol launched a touchless liquid soap-dispensing system which comes with its own refill.However, the system retails at higher prices than regular liquid soap, with the system retailing at C$11.00

and refills at C$6.00. The refills are available in two scents. The high price of the product led to slowmovement on shelves, but some sales are occurring due to the novelty of the product. Private label productsalso reinforced their presence with Shoppers Drug Mart retailing liquid soap under both its Life and Baleabrands. Balea brand products are usually more expensive than Life, and on par with other national brands.

A sign of rising consumer confidence was seen in bath additives, which suffered during the recession asthese products are usually bought from specialty retailers where prices are higher. They are also more of adiscretionary spending item, and hence consumers were less induced to spend on them during the recession.In 2010 retail sales grew 3% versus 1% in 2009, reaching C$148 million. Volume, though still negative,also saw signs of improvement in 2010. Bath salts in particular are seeing positive volume growth to thetune of 0.1% and current value terms growth of 4%. This was due to its appeal as a natural chemical-freeproduct, which in some cases is touted as having inflammation-reducing properties. Another appeal of bathsalts lies in the fact that it is sometimes sourced from natural resources, such as the Dead Sea, increasing its

exotic appeal. Bath foam/gel and bath oils/pearls have also demonstrated positive retail growth. For thesecategories bath foams and oils that claim natural ingredients, such as Lush, increased in popularity at theend of the review period.


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Bar soaps continued to see decline, after a brief moment of recovery due to the H1N1 flu scare and therecession, which led to many consumers seeking cheaper personal hygiene options. In 2010 retail valueperformance remained negative at -2%, while volume dropped 3%. Total sales stood at C$206 million. Inorder to maintain sales, manufacturers have focused on positioning their products not just as soap but aspart of a beauty care regime that contributes to healthy-looking skin. For example, Doves Go Fresh BeautyBar is positioned not just a soap but a moisturising skin care aid.

Intimate hygiene products and talcum powder both suffered losses in 2010. Intimate washes are not deemednecessary by consumers, and usage is in fact discouraged by some doctors. There is also little information,including in-store information, available on such products. Hence, intimate washes saw a steep decline of 8-9% in both current value and volume terms. However, due to the 5% value growth of intimate wipes,intimate hygiene as a whole managed to stay afloat with retail growth of 1%. Talcum powder sales fellmainly due to their premium-pricing and not being a necessity item. There has also been quite a bit ofcontroversy regarding potential health hazards of talcum powder if inhaled. Sales of talcum powderdeclined by 4% in current value terms in 2010.

Added value has become ever more important in bath and shower products to drive sales, given the highdegree of household penetration and the increasing commoditisation of products such as liquid soap andshower gels/body washes. While pampering, scents and spa treatments remain the focus of attention of

speciality retailers, along with products with natural ingredients, more mainstream brands have paid moreattention to products and marketing of bath and shower aids with skin care benefits, including anti-ageingclaims, and body collections. Examples of products include Dove Visible Care Renewing Crme BodyWash by Unilever, which is claimed to nourish and replenish skin, and Olay Total Effects Anti-AgeingBody Wash by Procter & Gamble.

While novelty helps to add value to sales, higher price tags also contribute to growth. Thus, Olay TotalEffects body wash retails for an average of C$11.99 for 450ml bottle versus Olay Body Ribbons (launcheda couple of years ago) which retails for on average of C$7.99 for 532ml. Body collections are alsobecoming a trend, where manufacturers attempt to foster and extend brand loyalty across various productcategories by offering a full collection of body care products that include soaps, body washes and bodylotions each collection differentiated by scent, packaging and skin care properties. Examples include Olaybody collections by Procter & Gamble.

The mass segment will continue to dominate as most items in this category such as soap, liquid soap andshower gel are necessity items of daily consumption that most consumers are unwilling to splurge on. As aresult the mass segment was responsible for 93% of all bath and shower sales. On the other hand, recoveryfrom the recession is once again tempting consumers to spend more on items of indulgence such as bathadditives which are priced at a premium point. As a result these products saw a slight increase in share over2009-10.

COMPETITIVE LANDSCAPE

Unilever Canada continued to lead with close to 15% share of category value sales in 2010 and saw someshare gains over the previous year. Its two star brands, Dove and Lever 2000, together held a 46% valueshare in bar soap. The Dove brand also built a name in body washes, where it held 11% of value sales. In

2010 Dove expanded its presence with the launch of the Dove Men+Care line. With three types of bodywashes and two types of soap, this line also offers its own brand of shower tool, which is an alternative to abath sponge or loofah. Further value is added for the cautious consumer by including two bars of soap ineach package instead of one. It also capitalised on the popularity of its womens shower gel line byrevitalising its packaging and emphasising its Nutrium Moisture Technology.

Procter & Gamble followed closely in second place with a 14% share in 2010. The companys strength hasrecently been based on its Olay line of shower products, although the company also markets brands such asIvory and Zest. The company, however, has paid close attention to the Olay brand, leveraging brandstrength in skin care. In line with this brand strategy, Olay launched Total Effects Body Wash, which claimsto fight the seven signs of ageing seen on the body, such as improving skin elasticity and evening skin tone.This is a follow-up to its popular Total Effects skin care line, which makes similar claims. Olay alsofeatures a range of other body washes such as Olay Ultra Moisture Body Wash and more recently Olay

body collections. As a result of all the activity in product development and marketing, the companys Olaybrand saw share increases in 2010.


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Lush Handmade Cosmetics experienced the highest sales growth in 2010, rising from 2.5% to 2.7% of bathand shower category value. Consumer enthusiasm for natural bath and shower products continued in 2010,and Lush saw a steady performance even during the recession, with sales falling only slightly in 2009.Renewed spending on bath additives also helped, as this is at the core of the Lush bath and shower range.Lush is only second to The Body Shop in bath additives, holding an 11% value share. The main reason forthis is that Lush products are on average priced higher than The Body Shops products. Continuous productinnovation and a much publicised policy of no animal testing has held this company in good stead.

The Body Shop Canada Ltd held the third-highest value share in bath and shower products as a whole in2010 on 8%. This is mainly due its strong presence in bath additives and body wash. The company, in fact,leads sales of bath additives, holding a 32% value share in 2010. In body wash/shower gel it held 5% ofsales. The company faces strong competition from the lower priced and expanding Bath & Body Worksretailer, as well as higher priced Lush Cosmetics line, and maintaining a strong USP of organic andsustainably-sourced products has kept its position stable.

Some leading retailers have worked to expand presence of their store brands in the bath and showercategory throughout the review period, and in 2010 value share of private label in sales of bath & showerproducts stood at 8%. Shoppers Drug Marts Life held a leading position among private label products,and the retailer also introduced a new Balea line. In shower gels the Life brand attempted to capitalise on

the success of brands such as Dove and Olay by replicating the packaging and offering a similarly scentedproduct alongside the originals on shelves. While Canadian consumers traditionally prefer brandedproducts, the recession compelled some to try private label products, which many now find comparable tonational brands. Even within the category, private label products are diversifying by offering productswhich can be perceived as masstige, such as the Balea line by Shoppers Drug Mart. Priced at almostC$1.20 higher than the Life brand, Balea products are moving well in drugstores despite being priced veryclose to national branded products.

PROSPECTS

Retail sales of bath and shower products are expected to grow marginally in value over the forecast period.Saturation of previously more dynamic categories such as liquid soap and shower gel, coupled with already

declining categories such as bar soap and talcum powder, will seriously limit the pace of growth. Overall,sales of bath and shower products are expected to reach C$894 million in 2015.

Body wash/shower gel will remain the most dynamic, with a CAGR of 2% in constant value terms over theforecast period to stand at C$314 million in 2015. Despite having reached a high rate of householdpenetration, body wash products can see further growth in value by focusing on added value, mostlythrough skin care benefits and natural ingredients. Marketing body wash products and soaps as a part ofbody care collections can also help increase brand loyalty and drive sales across several categories.

Liquid soaps, which previously benefited from the H1N1 flu outbreak, will see growth slow over theforecast period. Despite the launch of innovative delivery systems, consumers are likely to choose lowerprices over novelty. The category is becoming increasingly commoditised, and soap is seen just as soap,albeit in more convenient delivery format. Private label products have greater potential to capture share ofsales here, and product developments along skin benefit lines, as in body wash, does not appear to have the

same appeal to consumers. Over the forecast period retail sales of liquid soap products are projected to see amodest CAGR of 2% in constant value terms to achieve an estimated C$233 million by 2015.

Bath additives are also unlikely to see a strong upsurge in growth, and are expected to grow at a modestpace to reach C$160 million by 2015. Bath salts will lead this growth with a CAGR of 2%, while bathfoams and bath oils/pearls will see a marginally slower growth rates. Scents and promises of spaexperiences are likely to remain on the agenda as far as products and marketing are concerned, but productswith natural ingredients are likely to grow further in popularity in coming years.

While some price increases are forecast, not least on the back of new product lines and extensions, manyconsumers see bath and shower products, especially products such as soap, as a staple of hygiene.Consequently, many consumers, especially in the wake of deep discounting and promotions in recessionarytimes, will continue to engage in smart shopping. They are unlikely to want to pay too much for bath andshower products unless they offer real benefits.


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Intense competition between major players Unilever and Procter & Gamble is expected to continue, withboth rolling out more innovative products to entice consumers. Sustainably-sourced and natural ingredientsare expected to be the trend for coming years.

CATEGORY DATA

Table 1 Sales of Bath and Shower by Category: Value 2005-2010

C$ million2005 2006 2007 2008 2009 2010

Bar Soap 249.4 239.0 227.0 217.0 210.4 206.1Bath Additives 130.6 134.1 138.6 142.6 144.1 148.0- Bath Foam/Gel 51.7 52.8 54.5 56.2 56.8 58.4- Bath Oil/Pearls 40.0 41.4 42.6 43.7 43.9 44.8- Bath Salts/Powder 32.6 33.7 35.2 36.6 37.3 38.8- Other Bath Additives 6.3 6.2 6.2 6.2 6.0 6.0

Body Wash/Shower Gel 191.8 218.6 237.1 252.7 265.9 279.3Intimate Hygiene 6.3 6.6 6.5 6.4 6.5 6.6- Intimate Washes 2.5 2.6 2.4 2.2 2.0 1.8- Intimate Wipes 3.8 4.0 4.1 4.2 4.5 4.7Liquid Soap 162.2 176.0 186.6 196.3 204.1 213.6Talcum Powder 28.2 28.4 28.4 27.3 25.8 24.7Bath and Shower 768.6 802.7 824.2 842.3 856.8 878.2Source: Euromonitor International from official statistics, trade associations, trade press, company research, store

checks, trade interviews, trade sources

Table 2 Sales of Bath and Shower by Category: % Value Growth 2005-2010

% current value growth

2009/10 2005-10 CAGR 2005/10 TOTAL

Bar Soap -2.1 -3.7 -17.4Bath Additives 2.8 2.5 13.4- Bath Foam/Gel 2.8 2.5 13.1- Bath Oil/Pearls 2.2 2.3 12.0- Bath Salts/Powder 3.9 3.5 18.9- Other Bath Additives -0.6 -0.8 -4.1Body Wash/Shower Gel 5.0 7.8 45.6Intimate Hygiene 1.3 0.8 4.0- Intimate Washes -7.7 -6.4 -28.0- Intimate Wipes 5.3 4.7 25.7Liquid Soap 4.6 5.7 31.6Talcum Powder -4.3 -2.6 -12.5

Bath and Shower 2.5 2.7 14.3Source: Euromonitor International from official statistics, trade associations, trade press, company research, storechecks, trade interviews, trade sources

Table 3 Bath and Shower Premium Vs Mass % Analysis 2005-2010

% retail value rsp2005 2006 2007 2008 2009 2010

Premium 5.9 6.2 6.4 6.4 6.3 6.7Mass 94.1 93.8 93.6 93.6 93.7 93.3Total 100.0 100.0 100.0 100.0 100.0 100.0Source: Euromonitor International from official statistics, trade associations, trade press, company research, store



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Table 4 Bath and Shower Company Shares 2006-2010

% retail value rspCompany 2006 2007 2008 2009 2010

Unilever Canada Inc 16.6 15.6 14.9 14.4 14.6Procter & Gamble Inc 15.4 14.8 14.0 13.8 13.9Body Shop Canada Ltd, The 8.1 8.3 8.4 8.3 8.4Colgate-Palmolive 6.7 6.6 6.7 6.7 6.8

Canada IncKao Brands Canada Inc 5.1 5.6 5.7 5.9 6.1Other Private Label 4.7 4.6 4.6 4.7 4.1Shoppers Drug Mart Inc 1.5 1.8 2.1 2.7 3.1Lush Handmade Cosmetics 2.5 2.6 2.7 2.5 2.7

LtdAvon Canada Inc 2.4 2.6 2.8 2.6 2.6Johnson & Johnson 2.0 2.0 2.1 2.1 2.1

(Canada) IncDial Canada Inc 2.3 1.4 1.7 2.0 2.1Coty (Canada) Inc 2.0 2.1 1.8 1.8 1.8Yves Rocher Inc 1.4 1.3 1.3 1.3 1.4Fruits & Passion 0.9 1.0 1.0 1.0 1.1

Boutique IncJean Coutu Group (PJC) 0.3 0.5 0.7 0.9 1.0

IncBeiersdorf Canada Inc 0.6 0.7 0.8 0.9 0.9Mary Kay Canada Inc 0.5 0.4 0.4 0.3 0.3Reha Enterprises Ltd 0.4 0.5 0.4 0.4 0.3Strom's Enterprises Ltd 0.1 0.1 0.2 0.2 0.2Playtex Canada Ltd 0.1 0.2 0.2 0.2 0.2Colba Laboratories Inc 0.1 0.1 0.1 0.1 0.1Belvedere International 0.1 0.1 0.1 0.1 0.1

Inc

CB Fleet Co Inc 0.1 0.1 0.1 0.1 0.1Sara Lee Household & 0.1 0.1 0.1 0.0 0.0

Body Care Canada LtdNovartis Consumer 0.1 - - - -

Health Canada IncJergens Canada Inc - - - - -Pfizer Canada Inc - - - - -Gojo Industries Inc - - - - -Bristol-Myers Squibb - - - - -

Consumer Products GroupThe Dial Corp - - - - -Schwarzkopf & Dep - - - - -

Canada LtdOthers 26.1 27.1 27.5 26.8 26.3

Total 100.0 100.0 100.0 100.0 100.0Source: Euromonitor International from official statistics, trade associations, trade press, company research, storechecks, trade interviews, trade sources

Table 5 Bath and Shower Brand Shares by GBN 2007-2010

% retail value rspBrand Company 2007 2008 2009 2010

Dove Unilever Canada Inc 12.1 11.8 11.5 11.7The Body Shop Body Shop Canada Ltd, The 8.3 8.4 8.3 8.4Olay Procter & Gamble Inc 7.0 7.2 7.3 7.5Jergens Kao Brands Canada Inc 5.6 5.7 5.9 6.1

Softsoap Colgate-Palmolive 4.2 4.4 4.6 4.7Canada Inc


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Other Private Label 4.6 4.6 4.7 4.1Ivory Procter & Gamble Inc 4.4 4.0 3.9 3.8Life Shoppers Drug Mart Inc 1.8 2.1 2.7 3.1Lever 2000 Unilever Canada Inc 3.3 3.1 2.9 2.8Lush Lush Handmade Cosmetics 2.6 2.7 2.5 2.7

Ltd

Irish Spring Colgate-Palmolive 2.4 2.3 2.2 2.1Canada Inc

Zest Procter & Gamble Inc 2.3 2.2 2.1 2.0Dial Dial Canada Inc 1.1 1.4 1.7 1.8Yves Rocher Yves Rocher Inc 1.3 1.3 1.3 1.4The Healing Garden Coty (Canada) Inc 1.5 1.3 1.3 1.3Purell Johnson & Johnson 1.0 1.1 1.1 1.2

(Canada) IncFruits & Passion Fruits & Passion 1.0 1.0 1.0 1.1

Boutique IncPersonnelle Jean Coutu Group (PJC) Inc 0.5 0.7 0.9 1.0Nivea Beiersdorf Canada Inc 0.7 0.8 0.9 0.9Calgon Coty (Canada) Inc 0.5 0.5 0.5 0.5Johnson's Baby Johnson & Johnson 0.6 0.6 0.5 0.5

(Canada) IncAvon Naturals Avon Canada Inc 0.8 0.5 0.5 0.5Neutrogena Johnson & Johnson 0.4 0.4 0.4 0.5

(Canada) IncMary Kay Mary Kay Canada Inc 0.4 0.4 0.3 0.3Ombra Reha Enterprises Ltd 0.5 0.4 0.4 0.3Fa Dial Canada Inc 0.3 0.3 0.3 0.3L'Occitane Strom's Enterprises Ltd 0.1 0.2 0.2 0.2Playtex Playtex Canada Ltd 0.2 0.2 0.2 0.2Avon Avon Canada Inc 0.2 0.2 0.2 0.1Always Procter & Gamble Inc 0.1 0.1 0.1 0.1Alpen Secrets Colba Laboratories Inc 0.1 0.1 0.1 0.1Down Under Naturals Belvedere International 0.1 0.1 0.1 0.1

IncSummer's Eve CB Fleet Co Inc 0.1 0.1 0.1 0.1

Vaseline Intensive Unilever Canada Inc 0.2 0.0 0.0 0.0Care

Radox Sara Lee Household & 0.1 0.1 0.0 -Body Care Canada Ltd

Clairol Herbal Procter & Gamble Inc 0.1 - - -Essences

Palmolive Colgate-Palmolive 0.0 - - -Canada Inc

Fa Schwarzkopf & Dep - - - -Canada Ltd

Dial The Dial Corp - - - -Caress Unilever Canada Inc - - - -Others 29.5 30.0 29.2 28.7Total 100.0 100.0 100.0 100.0

Source: Euromonitor International from official statistics, trade associations, trade press, company research, storechecks, trade interviews, trade sources

Table 6 Bath and Shower Premium Brand Shares by GBN 2007-2010

% retail value rspBrand Company 2007 2008 2009 2010

Lush Lush Handmade Cosmetics 41.4 42.1 40.4 40.4Ltd

Yves Rocher Yves Rocher Inc 21.0 20.3 21.4 21.4Fruits & Passion Fruits & Passion 15.9 15.8 16.4 16.4

Boutique Inc

L'Occitane Strom's Enterprises Ltd 2.3 2.5 2.4 2.4Others 19.4 19.4 19.4 19.4


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Total 100.0 100.0 100.0 100.0Source: Euromonitor International from official statistics, trade associations, trade press, company research, store


Table 7 Forecast Sales of Bath and Shower by Category: Value 2010-2015

C$ million2010 2011 2012 2013 2014 2015

Bar Soap 206.1 199.9 190.0 181.0 171.3 162.7Bath Additives 148.0 149.9 152.2 154.7 157.5 160.5- Bath Foam/Gel 58.4 59.2 60.2 61.3 62.5 63.8- Bath Oil/Pearls 44.8 45.2 45.6 46.1 46.7 47.3- Bath Salts/Powder 38.8 39.7 40.6 41.5 42.6 43.7- Other Bath Additives 6.0 5.9 5.8 5.8 5.7 5.7Body Wash/Shower Gel 279.3 287.0 294.5 301.5 307.9 314.0Intimate Hygiene 6.6 6.5 6.5 6.5 6.4 6.4- Intimate Washes 1.8 1.7 1.5 1.3 1.2 1.1- Intimate Wipes 4.7 4.9 5.0 5.1 5.3 5.4Liquid Soap 213.6 218.5 223.1 226.8 230.3 233.1Talcum Powder 24.7 23.1 21.5 20.0 18.5 17.1Bath and Shower 878.2 885.0 887.7 890.4 891.9 893.8Source: Euromonitor International from trade associations, trade press, company research, trade interviews, trade

sources

Table 8 Forecast Sales of Bath and Shower by Category: % Value Growth 2010-2015

% constant value growth2010-15 CAGR 2010/15 TOTAL

Bar Soap -4.6 -21.1

Bath Additives 1.6 8.4- Bath Foam/Gel 1.8 9.2- Bath Oil/Pearls 1.1 5.4- Bath Salts/Powder 2.4 12.6- Other Bath Additives -0.9 -4.4Body Wash/Shower Gel 2.4 12.4Intimate Hygiene -0.4 -2.2- Intimate Washes -10.5 -42.4- Intimate Wipes 2.5 13.4Liquid Soap 1.8 9.2Talcum Powder -7.1 -30.9Bath and Shower 0.4 1.8Source: Euromonitor International from trade associations, trade press, company research, trade interviews, trade

sources

Table 9 Forecast Bath and Shower Premium Vs Mass % Analysis 2010-2015

% retail value rsp2010 2011 2012 2013 2014 2015

Premium 6.7 6.8 6.9 7.0 7.1 7.2Mass 93.3 93.3 93.1 93.0 92.9 92.8Total 100.0 100.0 100.0 100.0 100.0 100.0Source: Euromonitor International from trade associations, trade press, company research, trade interviews, trade

sources

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