Beauty Insights, Part 2: Men s Grooming Category Is Ready for Disruption

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1 Beauty Insights, Part 2: Men s Grooming Category Is Ready for Disruption Global sales of men s grooming products reached nearly $50 billion in 2017 and are on track to grow by 16% by 2020, according to Euromonitor International. The men s grooming market accounted for 10.7% of the $464 billion global beauty and personal care market in According to Euromonitor, American men, on average, use 4.1 grooming products and spend 48 minutes on grooming per day, which includes washing, conditioning and styling their hair; shaving; and body and facial care. According to survey data from Prosper Insights & Analytics, Walmart, CVS, Target, Walgreens and Amazon are the five specific retailers where American men purchase skincare and cosmetic products most often. Millennial men surveyed by Prosper shop at specialty stores such as Sephora, Ulta, Macy s and Bed Bath & Beyond for skincare and cosmetic products more often than their Gen X and baby boomer peers do. Gen X and baby boomer men shop for these products more frequently at value retailers such as Costco, Dollar General, Dollar Tree, Sam s Club and Family Dollar. In September 2018, luxury cosmetics maker Chanel launched Boy de Chanel, a makeup line for men that includes tinted foundation, eyebrow pencils and lip balm. This is the second report in our Beauty Insights series. Each report in the series offers a concise review of a prominent or emerging theme or trend in global beauty markets. In this report, we examine the global men s grooming market and highlight a few companies that are taking the opportunity to target the growing number of male consumers who are shopping for skincare and beauty products. 1

2 Men s Grooming Products Account for 10.7% of the Global Beauty and Personal Care Market and Are on Track to Grow by 16% by 2020 Global sales of men s grooming products reached nearly $50 billion in 2017 and are on track to grow by 16% by 2020, according to Euromonitor International. Globally, the largest male grooming market in absolute terms is Western Europe, where category sales totaled $12.3 billion in 2017 and are projected to grow at a CAGR of 3.1% from 2017 to 2022, while the Eastern European category sales totaled $3.6 billion in 2017, and are projected to grow at a CAGR of 4.4% from 2017 to The market is smallest in the Middle East and Africa region, where men s grooming product sales reached $3.4 billion in 2017 and are expected to grow to $4.7 billion in The market in Latin American is growing the fastest: men s grooming product sales in the region totaled $11.3 billion in 2017 and are expected to grow at a 7.1% CAGR to 2022, to reach $15.9 billion. By way of comparison, the global men s grooming market is expected to grow at a CAGR of 5.2% to 2022, according to Euromonitor. Figure 1. Global Men s Grooming Market: Sales by Region, 2017 vs. 2022E (USD Bil.) 20,000 18,000 16,000 14,000 12,000 10,000 8,000 6,000 4,000 2,000 0 Eastern and Western Europe Latin America Asia Pacific and Australasia North America Middle East and Africa E Source: Euromonitor International Skincare, Haircare and Fragrances Are Driving Men s Grooming Sales Sales growth of men s toiletries which Euromonitor defines as men s bath and shower, deodorant, skincare, and haircare products is outpacing sales growth of men s shaving products. Men s toiletries are expected to grow at a CAGR of 5.8% from 2017 to 2022, from $18.9 billion to $25.0 billion, while shaving products are expected to grow at a CAGR of 3.4% from $14.5 billion to $17.1 billion, over the same period. Men s fragrances are expected to grow the fastest among the three categories, at a 6.0% CAGR from 2017 to 2022, from $16.2 billion to $21.6 billion, according to Euromonitor. 2

3 Figure 2. Global Men s Grooming Market: Expected Sales Growth by Category (USD Bil.) Shaving Fragrance Toiletries Source: Euromonitor International According to Euromonitor s annual Beauty Survey, men s personal grooming routines are driven by haircare and shaving, with more than 40% of men globally reporting that they wash their hair daily with shampoo, versus 25% who use facial cleansers daily. The graph below highlights the top 10 grooming products used by men globally. Figure 3. Global: Proportion of Men Using Grooming Products, 2018 (%) Hair Shampoo (Standard) 2-in-1 Shampoo/Conditioner Post-Shave Products Hand Care Sunscreen or Sun Protection Product Facial Cleansers Pre-Shave Products Hair Conditioner or Treatment Hair Styling Products Moisturizers Base: Online panelists ages in 20 emerging and developed markets, surveyed June July More than 20,000 online panelists participate in the Beauty Survey annually, with 1,000 respondents per market. Source: Euromonitor International According to Euromonitor s survey, American men use an average of 4.1 beauty products daily. This compares with 4.9 products in Brazil, 2.0 in Russia and 2.8 France. The Beauty Survey also highlighted men s beauty concerns by region. In terms of haircare, these include: 3

4 Gray hair (36% Russia, 23% France) Greasy or oily hair (27% Brazil) Thinning hair (20% US) Men s top skincare concerns include: Blackheads (39% Brazil, 18% US) Dark circles (21% France) Wrinkles (35% Russia) Some 5% of US Men Purchase Body Moisturizers, Facial Cleansers, Facial Moisturizers and Hand Moisturizers Once a Week While most men focus on routine grooming needs, there is an opportunity for brands and retailers to expand their men s grooming portfolios beyond haircare and shaving products, as many men are also interested in skincare, anti-aging, sun protection, sleep, and overall health and wellness products. According to US survey data from Prosper Insights & Analytics, approximately 50% of American men regularly purchase body moisturizers, facial cleansers, facial moisturizers and hand moisturizers. Approximately 5% of men in the US purchase these products as frequently as once a week, and approximately 7% of them purchase such products two or three times per month. As men become more interested in skincare and health and wellness, brands and retailers can seize the opportunity to meet their needs by expanding product assortments beyond the basics to include, for example, products that offer antiaging, sun protection or acne solutions. Figure 4. US Men: Frequency of Skincare Purchases 60% 50% 57% 53% 50% 48% 40% 30% 20% 10% 5% 4% 4% 5% 7% 7% 6% 6% 13% 16% 17% 13% 12% 14% 12% 12% 10% 12% 9% 8% 0% Once a Week 2-3 Times A Month Once a Month Every Other Month Other Never Body Moisturizer Facial Cleanser Facial Moisturizer Hand Moisturizer Base: 3,357 US male Internet users ages 18+, surveyed June 29 July 8, 2018 Source: Prosper Insights & Analytics 4

5 More than a Quarter of American Men Shop Most Often at Walmart for Skincare and Cosmetic Products According to Prosper s survey data, Walmart is the top destination for skincare and cosmetic product purchases among American men, with 27.3% of survey respondents saying they shop there most often for such products. While 21.8% of survey respondents said that they had no preference with regard to where they buy skincare and cosmetics, 8% said that they buy these most often at CVS, 7% at Target, 4.3% at Walgreens and 3.7% at Amazon. Some 13.1% of respondents named other as the location where they most frequently buy such products. The top five retailers named above accounted for 50.3% of responses. There were 19 retailers named by survey respondents that each accounted less than 2% of responses. Figure 5. US Men: Where They Buy Skincare and Cosmetic Products Most Often All Respondents Millennials Gen Xers Baby Boomers Walmart 27.3% 27.0% 27.9% 28.4% No Preference 21.8% 18.7% 21.0% 22.7% Other 13.1% 15.2% 13.8% 10.2% CVS 8.0% 7.2% 8.2% 8.7% Target 7.0% 10.8% 7.3% 4.5% Walgreens 4.3% 4.1% 4.2% 4.7% Amazon 3.7% 4.1% 4.2% 2.8% Costco 2.0% 0.8% 2.6% 2.5% Kroger 1.7% 2.2% 1.3% 1.9% Rite Aid 1.5% 1.3% 1.3% 1.8% Meijer 1.1% 1.1% 1.0% 1.3% Macy s 1.0% 1.4% 0.8% 1.0% Dollar General 0.9% 0.3% 0.8% 1.3% Dollar Tree 0.8% 0.5% 0.9% 1.0% Sephora 0.7% 1.2% 0.8% 0.3% HEB 0.7% 0.6% 0.3% 1.2% Sam s Club 0.5% 0.1% 0.4% 0.9% Publix 0.4% 0.3% 0.5% 0.4% Bath & Body Works 0.4% 0.7% 0.1% 0.3% BJ s 0.4% 0.2% 0.1% 0.8% Shoprite 0.4% 0.2% 0.4% 0.7% Ulta 0.4% 0.6% 0.4% 0.1% Family Dollar 0.3% 0.1% 0.4% 0.6% Fry s 0.3% 0.3% 0.4% 0.2% ebay 0.2% 0.3% 0.0% 0.3% Avon 0.2% 0.2% 0.4% 0.0% Mary Kay 0.1% 0.0% 0.1% 0.1% Online/Internet 0.1% 0.1% 0.1% 0.0% Base: 3,357 US male Internet users ages 18+, surveyed June 29 July 8, 2018 Survey respondents were asked to write in their responses. Source: Prosper Insights & Analytics 5

6 Millennials Shop More Often at Beauty Specialty Stores than Gen Xers and Baby Boomers In the US, millennial men (ages 20 35) are more likely than their Gen X (ages 36 53) and baby boomer (ages 54 72) counterparts to shop for skincare and cosmetic products at specialty stores such as Macy s, Sephora, Bath & Body Works and Ulta, according to Prosper s survey data. Some 3.9% of millennial men surveyed said that they shop most often for skincare products at these four retailers, compared with 2.1% of Gen X men and 1.7% of baby boomer men. Stores such as Costco, Dollar Tree, Dollar General, Sam s Club and Family Dollar ranked higher among the value-conscious Gen X and baby boomer demographics in Prosper s survey. Figure 6. US Men: Specialty Stores Where They Buy Skincare and Cosmetic Products Most Often All Respondents Millennials Gen Xers Baby Boomers Macy s 1.0% 1.4% 0.8% 1.0% Sephora 0.7% 1.2% 0.8% 0.3% Bath & Body Works 0.4% 0.7% 0.1% 0.3% Ulta 0.4% 0.6% 0.4% 0.1% Total 2.5% 3.9% 2.1% 1.7% Base: 3,357 US male Internet users ages 18+, surveyed June 29 July 8, 2018 Survey respondents were asked to write in their responses. Source: Prosper Insights & Analytics Globally, Beauty Brands Are Targeting Men and Branching into Men s Skincare and Even Some Beauty Product Categories In September 2018, Chanel launched its first makeup line for men, Boy de Chanel, which features tinted foundation, eyebrow pencils and lip balm. The company said in a statement, Beauty is not a matter of gender, it is a matter of style. The foundation comes in eight sheer shades and offers SPF 25 protection. The brow pencil comes in four colors and the clear lip balm has a matte finish. Chanel first launched its men s line in South Korea on September 1 and is set to roll it out internationally between November and January Chanel s was the first mainstream men s beauty product launch by a major luxury cosmetics brand, and it signals that the men s beauty market is poised for further growth. Source: Chanel.com Hims is a brand that focuses on haircare, skincare, and health and wellness products for men. Along with hair kits to cover all bases, Hims haircare offering includes products to treat male pattern baldness and edible kits with vitamins that promote thicker hair and 6

7 stronger nails. The brand s skincare solutions include anti-aging kits, acne solutions for inflammation, vitamin C serums and wrinkle cream. Source: ForHims.com Lab Series offers products for men that are marketed based on type of solution. The website includes an e-magazine with articles such as Should You Use a Serum, a Moisturizer, or Both? and 7 Tips for a Better-Looking Movember: Quickly Improve Your Look. The company reported that its best-sellers include its Daily Moisture Defense Lotion, Multi- Action Face Wash, All-in-One Face Treatment, Age-Less Power V Lifting Cream, Future Rescue Repair Serum and Max LS Power V Instant Eye Lift. The company also sells a BB tinted moisturizer that offers SPF 35 protection. Source: LabSeries.com Dr. Barbara Sturm is a German doctor who has translated her orthopedic research and practice into advances in aesthetic nonsurgical medicine. She is recognized for offering 7

8 nonsurgical anti-aging treatments and rejuvenation of the skin matrix. One example is her incubation, centrifugation and reintroduction of a patient s own blood proteins. When combined with hyaluronic acid and injected, this treatment is claimed to have an antiinflammatory and highly regenerative effect on the cellular level that returns a youthful glow to the skin and combats some of the central causes of skin aging. Dr. Sturm has a cultlike following among influencers and celebrities and has created a men s line of skincare and face creams. Source: Molecular-Cosmetics.com 8

9 Deborah Weinswig, CPA CEO and Founder Coresight Research New York: Hong Kong: China: Erin Schmidt Research Associate Hong Kong: 2/F, LiFung Tower 888 Cheung Sha Wan Road, Kowloon Hong Kong London: Marylebone Road London, NW1 6JQ United Kingdom New York: 1359 Broadway, 18th Floor New York, NY Coresight.com 9