Chain drug review sept 12 2011
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Chain Drug Review/September 12, 2011 55 Retailers, suppliers agree category is in state of flux NEW YORK — Hair care is a profitable category for chain drug stores, defined in part by sales of long established prod- ucts that men and women have grown up with and by newer entries with unique benefits that attract customers who tra- ditionally make such purchases from specialty shops. “Women shopping drug stores are pretty much in there for the convenience factor — they know exactly what they want, have purchased it before and are typically repeat buyers of the same product,” points out Cathy White, director of marketing and public relations for Bainbridge & Knight. “Drug stores typically sell the full line of the various hair brands, whereas food [retail] carries a limited selection. Styling prod- ucts and hair color treatments definitely have an audience in drug. Shampoos, conditioners and basics are shopped gener- ally at food. Discount can really run the gamut, as long as the brand is well known. “As a whole, the hair industry is continuing to grow, especially with styling products. The sec- tor that seems to be getting left behind would have to be some of the more medicinal hair offer- ings. Products for the treatment of hair issues, like dandruff, pso- riasis and hair loss haven’t re- ally delivered in terms of grow- ing their category, attracting a wider clientele or garnering any industry buzz.” As with other categories, the costs of conducting business are soaring for hair care product makers, says Michele Sherbert, brand manager for the Not Your Mother’s hair care line. “The challenge is in helping retailers maintain their margins while still offering consumers that premium price point,” she says. “We have to continue to find ways to cut costs without sacri- ficing quality ingredients.” At Continental Consumer Products, which markets the Salon Grafix brand, president and chief executive officer Scott Petchul believes that the cat- egory has fared better this year in drug than is the case in the discount and food channels. “Time will tell if the recent downturn in the economy will permit the category to keep its first-half gains. New inno- vation in the expanded drug sets continues to help drive with the numbers,” he notes. “What’s old is new again: The straight and natural styles of the ’70s continue to be the de- sired styles for 2011. This mini- malist style tends to fare better with products that preserve, protect and mend the hair as well as straighten.” Hoyu America Co. brand man- ager Sandra Pinto notes that after category declines in 2008 and 2009, hair care posted a gain last year. “Although growth was mod- est, a number of products that shared the same features had significant sales gains. This strongly suggests a new era of opportunities for the category,” Pinto explains. “Because of this, there’s been an increase in pri- vate label offerings and a reluc- tance by consumers to return to more pricey name brands and brand dilution.” The hair care category, mean- while, is set for a major shake- up on the supply side. Last month Unilever an- nounced that it had reached an agreement to sell the Alberto VO5 brand in the United States and Puerto Rico from the Alber- to Culver portfolio and the Rave brand globally from the Unile- ver portfolio to private equity firm Brynwood Partners VI L.P. Terms were not disclosed. The divestiture is required in conjunction with Unilever’s $3.7 billion acquisition of Alberto Culver Co., which was complet- ed on May 10. The Alberto VO5 brand in the United States and Puerto Rico includes shampoos, condition- ers and hairstyling products, and Rave consists of aerosol and nonaerosol hair sprays. Outside the United States and Puerto Rico, Alberto VO5 will stay in Unilever’s portfolio. The Alberto Culver acquisition includes such brands as TRES- emmé, Nexxus, Motions, St. Ives and Simple, which comple- ment Unilever’s portfolio of such brands as Dove, Clear, Suave, TIGI and Sunsilk in hair care. “We are excited to make an- other acquisition in the per- sonal care space,” says Darlo Margve, a managing partner at Brynwood Partners. “The challenge is in helping retailers maintain margins while still offering consumers that premium price point.” HAIR CARE SELECTED HAIR CARE CATEGORIES IN CHAIN DRUG STORES Dollar sales (000) Dollar sales % change Unit sales (000) Unit sales % change Hair coloring $ 143,846 + 5.6% 19,999 + 3.5% Shampoo $ 110,573 + 5.8% 24,199 + 0.2% Conditioner $ 84,935 + 9.2% 17,793 + 2.9% Hair styling gel/mousse $ 68,808 + 4.2% 13,454 - 0.3% Hair spray/spritz $ 40,496 + 0.7% 9,737 + 0.4% Hair growth products $ 12,590 - 1.2% 353 - 5.9% Source: SymphonyIRI Group. For the 12 weeks ended July 10, 2011. Consumers seeking hair care solutions NEW YORK — Products that solve a specific hair care prob- lem for the consumer continue to trend upward, according to Scott Petchuel, president and chief executive officer of Conti- nental Consumer Products, mar- keter of the Salon Grafix brand. “Frugal consumers are seeking out value-priced alternatives to premium-priced goods and ser- vices typically found in salons,” Petchuel says. “The DIY [do-it- yourself] approach to smoothing and straightening and products that repair damaged hair contin- ue to show strong growth in the retail sector.” He adds that antidandruff shampoos and premium brands also sell better in drug than in discount and grocery channels. The key for chain drug stores is not just to keep pace with whatever current trends may be, but to exhibit authority in creating them, notes Cathy White, director of marketing and public relations at Bain- bridge & Knight Laboratories. “If you walk into any drug store, you’ll see how much the cosmetics sector is expand- ing, which is a testament to its power within the industry,” White explains. “Consumers walk by the shelves looking for the [hair care] solution, and it’s the drug store that provides the possibilities.” Following grows for natural, organic products NEW YORK — One rising trend in the hair care category is the marketing of so-called green or organic products. “We’re seeing more new natural hair brands being intro- duced, as well as the extension of existing brands with organic options,” says Cathy White, director of marketing and pub- lic relations at Bainbridge & Knight. “Stocking natural, spe- cialty and boutique brands is a compliment to savvy custom- ers, which says, ‘We know what you want, and we’re happy to offer it at an affordable price.’ ” She adds that Zinn Beauty, the company’s organic Argan oil-based hair care product, has benefited from rave reviews. “Women want to know that what they are putting in their hair is healthy and good for them and that there are no harsh chemicals involved,” White comments. “Anything vitamin enriched, fruit,- oil- or herbal-related seems to be do- ing quite well.” Zinn Beauty’s ingredients include vitamin E, antioxidants, essential fatty ac- ids and phytosterols. Similarly, Alba Botanica, part of the Hain Celestial Group, is revitalizing the Alba Botanica Hawaiian Hair Care Collection. The line of shampoos and condi- tioners have been reformulated to address such hair concerns as dry, brittle, frizzy, flyaway and dull, limp locks. The natural product-based items are infused with such in- gredients as papaya, macada- mia nut oil, jojoba, awapuhi and panthenol. Made with 100% vegetarian ingredients, the products are free of artificial col- ors, harmful sulfates and para- bens, and phthalates, according to the company. p055_CDR_09-12-11 55 9/1/11 3:53 PM
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Transcript of Chain drug review sept 12 2011
Chain Drug Review/September 12, 2011 55
Retailers, suppliers agree category is in state of fluxNEW YORK — Hair care is a
profitable category for chain drug stores, defined in part by sales of long established prod-ucts that men and women have grown up with and by newer entries with unique benefits that attract customers who tra-ditionally make such purchases from specialty shops.
“Women shopping drug stores are pretty much in there for the convenience factor — they know exactly what they want, have purchased it before and are typically repeat buyers of the same product,” points out Cathy White, director of marketing and public relations for Bainbridge & Knight. “Drug stores typically sell the full line of the various hair brands, whereas food [retail] carries a limited selection. Styling prod-ucts and hair color treatments definitely have an audience in drug. Shampoos, conditioners and basics are shopped gener-ally at food. Discount can really run the gamut, as long as the
brand is well known.“As a whole, the hair industry
is continuing to grow, especially with styling products. The sec-tor that seems to be getting left behind would have to be some of the more medicinal hair offer-ings. Products for the treatment of hair issues, like dandruff, pso-riasis and hair loss haven’t re-ally delivered in terms of grow-
ing their category, attracting a wider clientele or garnering any industry buzz.”
As with other categories, the costs of conducting business are soaring for hair care product makers, says Michele Sherbert, brand manager for the Not Your Mother’s hair care line. “The challenge is in helping retailers maintain their margins while still offering consumers that
premium price point,” she says. “We have to continue to find ways to cut costs without sacri-ficing quality ingredients.”
At Continental Consumer Products, which markets the Salon Grafix brand, president and chief executive officer Scott Petchul believes that the cat-egory has fared better this year in drug than is the case in the
discount and food channels.“Time will tell if the recent
downturn in the economy will permit the category to keep its first-half gains. New inno-vation in the expanded drug sets continues to help drive with the numbers,” he notes. “What’s old is new again: The straight and natural styles of the ’70s continue to be the de-sired styles for 2011. This mini-
malist style tends to fare better with products that preserve, protect and mend the hair as well as straighten.”
Hoyu America Co. brand man-ager Sandra Pinto notes that after category declines in 2008 and 2009, hair care posted a gain last year.
“Although growth was mod-est, a number of products that shared the same features had significant sales gains. This strongly suggests a new era of opportunities for the category,” Pinto explains. “Because of this, there’s been an increase in pri-vate label offerings and a reluc-tance by consumers to return to more pricey name brands and brand dilution.”
The hair care category, mean-while, is set for a major shake-up on the supply side.
Last month Unilever an-nounced that it had reached an agreement to sell the Alberto VO5 brand in the United States and Puerto Rico from the Alber-to Culver portfolio and the Rave
brand globally from the Unile-ver portfolio to private equity firm Brynwood Partners VI L.P. Terms were not disclosed.
The divestiture is required in conjunction with Unilever’s $3.7 billion acquisition of Alberto Culver Co., which was complet-ed on May 10.
The Alberto VO5 brand in the United States and Puerto Rico includes shampoos, condition-ers and hairstyling products, and Rave consists of aerosol and nonaerosol hair sprays. Outside the United States and Puerto Rico, Alberto VO5 will stay in Unilever’s portfolio.
The Alberto Culver acquisition includes such brands as TRES-emmé, Nexxus, Motions, St. Ives and Simple, which comple-ment Unilever’s portfolio of such brands as Dove, Clear, Suave, TIGI and Sunsilk in hair care.
“We are excited to make an-other acquisition in the per-sonal care space,” says Darlo Margve, a managing partner at Brynwood Partners.
Beauty Care SpeCial report
“The challenge is in helping retailers maintain margins while still offering consumers that premium price point.”
Hair Care
selected hair care categories in chain drug stores
Dollar sales (000)
Dollar sales % change
Unit sales (000)
Unit sales % change
Hair coloring $ 143,846 + 5.6% 19,999 + 3.5%
Shampoo $ 110,573 + 5.8% 24,199 + 0.2%
Conditioner $ 84,935 + 9.2% 17,793 + 2.9%
Hair styling gel/mousse $ 68,808 + 4.2% 13,454 - 0.3%
Hair spray/spritz $ 40,496 + 0.7% 9,737 + 0.4%
Hair growth products $ 12,590 - 1.2% 353 - 5.9%
Source: SymphonyIRI Group. For the 12 weeks ended July 10, 2011.
Consumers seeking hair care solutions
NEW YORK — Products that solve a specific hair care prob-lem for the consumer continue to trend upward, according to Scott Petchuel, president and chief executive officer of Conti-nental Consumer Products, mar-keter of the Salon Grafix brand.
“Frugal consumers are seeking out value-priced alternatives to premium-priced goods and ser-vices typically found in salons,” Petchuel says. “The DIY [do-it-yourself] approach to smoothing and straightening and products that repair damaged hair contin-ue to show strong growth in the retail sector.”
He adds that antidandruff shampoos and premium brands also sell better in drug than in discount and grocery channels.
The key for chain drug stores is not just to keep pace with whatever current trends may be, but to exhibit authority in creating them, notes Cathy White, director of marketing and public relations at Bain-
bridge & Knight Laboratories.“If you walk into any drug
store, you’ll see how much the cosmetics sector is expand-ing, which is a testament to its power within the industry,” White explains. “Consumers walk by the shelves looking for the [hair care] solution, and it’s the drug store that provides the possibilities.”
Following grows for natural, organic productsNEW YORK — One rising
trend in the hair care category is the marketing of so-called green or organic products.
“We’re seeing more new natural hair brands being intro-duced, as well as the extension of existing brands with organic options,” says Cathy White, director of marketing and pub-lic relations at Bainbridge & Knight. “Stocking natural, spe-cialty and boutique brands is a
compliment to savvy custom-ers, which says, ‘We know what you want, and we’re happy to offer it at an affordable price.’ ”
She adds that Zinn Beauty, the company’s organic Argan oil-based hair care product, has benefited from rave reviews.
“Women want to know that what they are putting in their hair is healthy and good for them and that there are no harsh chemicals involved,”
White comments. “Anything vitamin enriched, fruit,- oil- or herbal-related seems to be do-ing quite well.” Zinn Beauty’s ingredients include vitamin E, antioxidants, essential fatty ac-ids and phytosterols.
Similarly, Alba Botanica, part of the Hain Celestial Group, is revitalizing the Alba Botanica Hawaiian Hair Care Collection. The line of shampoos and condi-tioners have been reformulated
to address such hair concerns as dry, brittle, frizzy, flyaway and dull, limp locks.
The natural product-based items are infused with such in-gredients as papaya, macada-mia nut oil, jojoba, awapuhi and panthenol. Made with 100% vegetarian ingredients, the products are free of artificial col-ors, harmful sulfates and para-bens, and phthalates, according to the company.
p055_CDR_09-12-11 55 9/1/11 3:53 PM
