IRI Pulse Report Personal Care Welcome to the Pulse H2 2015 edition for personal care. We hope you find it useful. Please do not hesitate to contact us if you have any questions or comments at EU.Marketing@IRIworldwide.com. H2 2015 IRIworldwide.com
About the Report This personal care report is one of 10 super category reports designed to show high-level comparison and analysis for retail markets across major countries in Europe. This report contains data gathered from countries throughout Europe. The market was split into the following categories: deodorants, hair care, hair dye, body care, insect repellent, oral care, body cleansing, facial care, sun care, sanitary products, feminine hygiene, cosmetics, fragrances and shaving/hair removal. The report highlights key metrics such as total sales figures, market trends, category shares, and winners and losers for Europe and for individual countries. The data has been sourced from IRI retail databases and Eurostat, the statistical branch of administration for the European Commission. The countries included in the report are: France, Germany, Italy, the Netherlands, Spain and the United Kingdom (UK). The market channels used for each country in this report are as follows: Country UK ES DE NL IT FR Channels used Hypermarkets, supermarkets, drugstores and impulse outlets Hypermarkets, supermarkets, hard discounters, drugstores, including the Canary Islands Hypermarkets, supermarkets, hard discounters and drugstores Hypermarkets, supermarkets, hard discounters and drugstores Hypermarkets, supermarkets, small self-service, hard discounters and drugstores Hypermarkets and supermarkets For analytical purposes, the data sourced from available retail databases has been consolidated to provide consistent results. However, for some countries it has not been possible to source data pertaining to certain categories. Where this has occurred it has been documented in the Notes section found at the end of the report. 2
On the Radar In the first period of 2015 personal care in Europe experienced +0.6% of value sales. This positive trend was also reflected in Germany and Spain but the outlook was less promising for France and the Netherlands where turnover decreased in early 2015. There are some familiar trends across the European countries included in this report for example consumers adopting good dental health practices at home have helped the oral care category and the feminine hygiene category continues to perform well. Yet it is interesting to see how four countries are key to the personal care sector s growth (in value sales): France, Germany, Italy and the Netherlands. ECONOMIC FIGURES INFLUENCING CONSUMER BEHAVIOUR POPULATION IN MILLIONS UNEMPLOYMENT (%) AVERAGE 12 MONTHS INFLATION RATES GDP IN MILLIONS ( ) Jan. 2014 Jan. 2015 Dec. 2015 Average 2015 Dec. 2015 Average 2015 2013 2014 (Estimate) France 65.8 66.3 10.2 10.4 +0.1 +0.7 2 116 565 2 132 449 Germany 80.7 81.1 4.5 4.6 +0.1 +0.9 2 820 820 2 915 650 Italy 60.7 60.7 11.4 12.7 +0.1 +0.3 1 609 462 1 616 253 Netherlands 16.8 16.9 6.6 6.9 +0.2 +0.5 650 857 662 770 Spain 46.5 46.4 26.6 22.1-0.6 +0.0 1 049 181 1 058 469 United Kingdom 64.3 64.7 5.1 6.1 +0.0 +1.7 2 017 193 2 222 912 Source: Eurostat, Dec 2015 3
Millions GLOBAL TRENDS TOTAL PERSONAL CARE VALUE SALES AND % CHANGE VERSUS PRIOR YEAR -0.5% -1.6% VALUE SALES IN MILLIONS ( ) Total EU 35 026 +2.7% DE 13 146 FR 6 120-0.1% UK 5 839* ES 3 129 IT 4 726 +1.9% NL 2 074 +2.1% *based on an exchange rate of 1.12 to the pound TOTAL EUROPE +1.2% TOTAL PERSONAL CARE VALUE SALES FOR THE LAST SIX QUARTERS 10.000 9.000 8.000 1 594 1 458 1 416 1 593 1 583 1 246 UK 7.000 6.000 1 562 1 442 1 476 1 642 1 564 1 439 France 5.000 Germany 4.000 3 171 3 438 3 095 3 283 3 275 3 493 Italy 3.000 2.000 1 256 1 101 1 100 1 218 1 308 1 100 Netherlands 1.000 0 530 507 487 553 530 504 855 718 719 810 867 726 28-dic-14 26-gen-15 29-mar-15 28-giu-15 27-set-15 27-dic-15 Spain Period Ending 4
Europe CATEGORY SHARE OF VALUE IN THE LAST YEAR 5 101 4 432 4 136 3 529 2 377 2 841 2 461 2 450 2 259 1 980 Oral Care Facial Care Body Cleansing Shaving / Hair Removal Deodorants Body Care Fragrances Sanitary Products KEY TRENDS SHARE OF VALUE IN THE YEAR Oral Care 14.6% Hair care 12.7% Facial Care 11.8% Body Cleansing 10.1% Shaving / Hair Removal 7.9% 8.1% Deodorants 7.0% Body Care 7.0% Fragrances 6.5% Sanitary Products 5.7% Hair Dye 3.6% Feminine Hygiene 3.2% Sun care 2.7% Insect Repellent 0.5% With a growth of 1.2% in value sales, personal care s H2 trend is twice as good as that of H1 (+0.6%). Four countries are responsible for this acceleration in growth: Italy: from -0.4% in H1 to +2.1% in H2 The Netherlands: from -3% in H1 to -1.6% in H2 France: from -0.8% in H1 to -0.1% in H2 Germany: from +2.2% in H1 to +2.7% Other countries are slowing down slightly: The UK: from -0.1% in H1 to -0.5% in H2 Spain: from +2.4% in H1 to +1.9% in H2 You will discover in the respective country pages the reasons for these different trends between countries. Europe includes: France, Germany, Italy, the Netherlands, Spain and the United Kingdom 5
Oral Care Facial Care Body Cleansing Europe TOP WINNERS: VALUE SALES 0 50 100 150 TOP LOSERS: VALUE SALES -50-40 -30-20 -10 0 102,0-16,2 Shaving / Hair Removal Body Care 88,8-18,2 Sanitary Products Oral Care 80,7-41,0 Deodorants Facial Care 79,7-41,9 Feminine Hygiene 79,3-45,3 Hair Dye TOP 5 CATEGORIES: EVOLUTION Value sales ( ) and % change versus a year ago 5 101 4 432 4 136 3 529 2 841 CATEGORY INSIGHTS The positive trend in H2 is explained by the good health of key personal care categories like cosmetics (a top 5 winner in all countries except France and the UK), body care (a top 5 winner in all countries except France and Spain), oral care (a top 5 winner in France, Spain and the UK), facial care (a top 5 winner in France and Germany) and feminine hygiene (a top 5 winner in all countries except Germany). 1,6-0,9 2,0 1,1 3,7 The situation is more difficult for hair dye (top 5 losers in all countries), hair care (top 5 losers in all countries except Germany) and deodorants (top 5 losers in Germany, the Netherlands and the UK). These 3 categories have generated almost 130m euros of losses across the six countries for H2. % vs. YA Europe includes: France, Germany, Italy, the Netherlands, Spain and the United Kingdom 6
France CATEGORY VALUE SALES IN THE LAST YEAR 892 787 708 622 593 498 484 371 314 274 Oral Care Body Cleansing Facial Care Shaving / Hair Removal Deodorants Sanitary Products Feminine Hygeine Hair Dye SHARE OF VALUE IN THE YEAR Hair Care 14.6% Oral Care 12.9% Body Cleansing 11.6% Facial Care 10.2% Shaving / Hair Removal 9.7% 8.1% Deodorants 7.9% Sanitary Products 6.1% Feminine Hygiene 5.1% Hair Dye 4.5% Body Care 4.0% Fragrances 3.3% Sun care 2.0% Insect Repellent 0.2% KEY TRENDS Even if the H2 2015 trend is much better than H1 (-0.1% vs -0.8%), the personal care business did shrink in France in 2015. The better trend in H2 is mainly explained by the strong impact of the summer weather on seasonal categories (particularly sun care). Personal care is the FMCG department that is the most affected by price war. Prices are falling from 2.2% in 2015. This price war has been ineffective as it has not stimulated volumes. This price war between retailers has destroyed value for personal care. On top of this price war explanation, promotion has not played its traditional role of growth accelerator in 2015. At last, innovations were less powerful in 2015 on important personal care categories like hair care or colourants for instance. Besides these explanations, it is important to underline the very good health of the parapharmacy corner (+5.4% of value sales growth on personal care in 2015) and Click & Collect (+17.2%) that take volumes to hypermarkets and supermarkets. 7
Oral Care Body Cleansing Facial Care Shaving / Hair Removal France TOP WINNERS: VALUE SALES TOP LOSERS: VALUE SALES 0 10 20-25 -20-15 -10-5 0 Feminine Hygiene 19,0-2,0 Fragrances Facial Care 12,4-8,0 Hair Dye Sun care 10,3-12,2 Body Cleansing 5,4-15,5 Shaving / Hair Removal Oral Care 2,6-21,3 TOP 5 CATEGORIES: EVOLUTION Value sales ( ) and % change versus a year ago 892 787 708 622 593 CATEGORY INSIGHTS Even if the global picture shows a stability for personal care in France in H2, some businesses are very dynamic like feminine hygiene (valorisation), facial care (innovations) and sun care (sunny summer). Body cleansing is also on a good trend due to very successful innovations, heavily supported by promotion. Products that claim a dermatology positioning are particularly efficient in France. -2,3 0,3 0,8 2,0-2,6 On the other hand, big categories like hair care (a lack of innovations) or shaving/hair removal (a huge fall in consumption) are decreasing by more than 2% in H2 2015. For the cosmetics category values sales are decreasing for two mains reasons: % vs. YA de-valorisation of the market (shoppers are seduced by low cost brands), and a decrease in consumption in hypermarkets and supermarkets because of other channel competition: Kiko, Yves Rocher, H&M 8
Germany CATEGORY VALUE SALES IN THE LAST YEAR 2 000 1 638 1 528 1 493 1 491 1 128 1.050 794 699 487 Facial Care Oral Care Fragrances Body Cleansing Body Care Shaving / Hair Removal Deodorants Sanitary Products SHARE OF VALUE IN THE YEAR Facial Care 15.2% 12.5% Oral Care 11.6% Hair Care 11.4% Fragrances 11.3% Body Cleansing 8.6% Body Care 8.0% Shaving / Hair Removal 6.0% Deodorants 5.3% Sanitary Products 3.7% Hair Dye 2.4% Feminine Hygiene 1.8% Sun care 1.9% Insect Repellent 0.% KEY TRENDS The German personal care market is the largest within Europe with a value share of 38.0% and it continues to grow by posting growth of +2.7%. All personal care categories are able to increase value share except for hair dye (-3.6%), deodorants (-0.7%) and sanitary products (-0.3%) which show decline despite increasing unit and volume sales due to decreasing prices. Facial care remains the biggest category with a turnover of 2 billion euros and it has enlarged its market share by an increase of +4.1%. The top four categories: facial care, cosmetics, oral care and hair care are responsible for more than half of the total value share of the German personal care market. Drugstores remain the most important retail channel for personal care with 45% of total sales and they continue to increase by +5.5% value share while almost all other channels exhibit decline. 9
Facial Care Oral Care Fragrances Germany TOP WINNERS: VALUE SALES TOP LOSERS: VALUE SALES 0 40 80-15 -10-5 0 80,4 Facial Care 78,8 Body Care 49,9-1,6 Sanitary Products Body Cleansing 36,8-6,1 Deodorants Sun care 28,4-11,7 Hair Dye CATEGORY INSIGHTS TOP 5 CATEGORIES: EVOLUTION Value sales ( ) and % change versus a year ago and facial care show the strongest increase within personal care and thus they are responsible for almost half of total personal care growth. 2 000 1 638 1 528 1 493 1 491 All segments of facial care are showing positive growth led by face creams (+24.1 m ). Private labels growth is over proportional and a third of the overall face creams increase is attributed to them. 76% of the cosmetics value growth in Germany is generated at drugstores. The segment lip cosmetics alone gains +21.4 million euros and therefore contributes a quarter of total cosmetics growth. 4,1 5,2 1,5 1,4 0,4 Oral care increased by +1.5% mainly driven by its biggest segment toothpaste, which increased by +3.0%. Hair care - one of the largest categories - is almost stable while its styling segment has decreased but shampoo has increased and has compensated other segments losses. % vs. YA Despite increasing promo sales hair dye has decreased in turnover due to a price cut in shelf and promo prices which has led to an overall price decline in the category. 10
Italy CATEGORY VALUE SALES IN THE LAST YEAR 684 615 524 445 437 411 316 312 264 249 Oral Care Body Cleansing Sanitary Products Facial Care Shaving / Hair Removal Feminine Hygeine Deodorants Body Care KEY TRENDS SHARE OF VALUE IN THE YEAR Oral Care 14.5% Hair Care 13.0% Body Cleansing 11.1% Sanitary Products 8.7% Facial Care 6.7% Shaving / Hair Removal 8.7% Feminine Hygiene 6.6% Deodorants 6.6% 5.6% Body Care 5.3% Hair Dye 3.5% Fragrances 3.1% Sun care 2.2% Insect Repellent 0.% Macroeconomic indicators are showing signs of growth and consumption is growing most significantly in the durable markets. The FMCG market closed 2015 with a very good performance. After two years of decline personal care is showing signs of growth; this is due to the positive performance of hand and body creams, make up and fragrances while shaving, hair care and baby care are still in negative figures. Drugstore and superstore sales keep growing and this is an inversion of supermarkets (especially in unit sales). In the drugstore channel more specialist categories such as make-up and fragrances are growing against personal hygiene, hair care and baby toiletries. In drugstores there are wider assortments but in many markets references are falling. In drugstores cut prices are more aggressive although in some cases are less deep than 2014 and promotions are still increasing. In the last year in hypermarkets and supermarkets price promotions did not increase. 11
Oral Care Body Cleansing Sanitary Products Facial Care Italy TOP WINNERS: VALUE SALES TOP LOSERS: VALUE SALES 0 10 20-8 -4 0 Body Care 21,1 17,1-3,4 Hair Dye Insect Repellent 15,0-4,9 Sanitary Products Feminine Hygiene 13,3-5,2 Shaving / Hair Removal Sun care 13,3-5,9 TOP 5 CATEGORIES: EVOLUTION Value sales ( ) and % change versus a year ago 684 615 524 445 437 1,9 1,4 1,1-1,0-1,1 % vs. YA CATEGORY INSIGHTS The good performance of sun care and insect repellent is due to the summer season. In fact during the full period (April September) average temperatures were higher than in 2014. In the ranking of top categories colour cosmetics is the first category in value sales in drugstores while in hypermarkets and supermarkets it has a lower weight. In mass market channels mascara and lipstick have a higher weight than in drugstores, foundation has the same weight in both channels, while eye pencil has a higher weight in drugstores than GDO. Over the last three years innovation has declined in these categories. In hair care the weakness is due to hair styling decreasing in value and in volume sales. After two tough years, in 2015 the category experienced a return to growth in volume. This growth was mainly due to high promotion activities. Conditioner increased in value and volume sales. The number of references rose in shampoo and conditioner, while falling for hair dye. In 2015 private label entered the market for hair dye. 12
The Netherlands CATEGORY VALUE SALES IN THE LAST YEAR 300 271 264 220 181 160 151 143 121 107 Oral Care Facial Care Body Cleansing Fragrances Body Care Deodorants Shaving / Hair Removal Sanitary Products SHARE OF VALUE IN THE YEAR Hair Care 14.5% 13.1% Oral Care 12.7% Facial Care 10.6% Body Cleansing 8.7% Fragrances 7.7% Body Care 7.3% Deodorants 6.9% Shaving / Hair Removal 5.8% Sanitary Products 5.2% Sun care 3.2% Hair Dye 2.7% Feminine Hygiene 1.0% Insect Repellent 0.6% KEY TRENDS Low end retail is still a major impact on the personal care category, and, increasingly, online is playing a bigger part due to several retailer distribution channel innovations. The impact on value sales is stronger at supermarkets with -6% (moving annual total versus year ago) than for drugstores (-1%). We see manufacturers make clear choices on distribution channels, and supermarkets are often channels that manufacturers in personal care will stop distributing to first. Lack of category knowledge of the store employees is often a reason why manufacturers stop delivering to supermarkets. Many manufacturers are now looking into ways of deploying promotions in the most efficient way, with topics such as best mechanism and best moment. This is a result of the rising promotion pressure of this category. 13
Oral Care Facial Care Body Cleansing The Netherlands TOP WINNERS: VALUE SALES TOP LOSERS: VALUE SALES 0 2 4 6 8-10 -6-2 Body Care 6,3-4,1 Shaving / Hair Removal 2,9-6,4 Body Cleansing Feminine Hygiene 2,5-7,5 Hair Dye Sun care 1,6-9,1-9,5 Deodorants TOP 5 CATEGORIES: EVOLUTION Value sales ( ) and % change versus a year ago 300 271 264 220 181 CATEGORY INSIGHTS Hair care is the category that has declined the hardest in the past year in absolute value. All segments in this category are declining except for hair cure (treatments). New introductions in bath and shower gels have ensured a positive impact on the body care category s development. This high rate of innovations is different to body lotions, where consumer involvement is much higher and consumers tend to stick to their familiar products. -2,9 1,1-1,3-0,1-3,4 Sun care is an example of a category where the low end retail impact is less present compared to other categories. There have been examples of expired sun care products in budget stores that have caused a negative image for this category in the low end retail channel. % vs. YA 14
Spain CATEGORY VALUE SALES IN THE LAST YEAR 494 378 300 277 249 257 249 216 183 169 Oral Care Body Cleansing Sanitary Products Facial Care Shaving / Hair Removal Fragrances Deodorants Body Care SHARE OF VALUE IN THE YEAR Hair Care 15.8% Oral Care 12.1% Body Cleansing 9.6% Sanitary Products 8.9% Facial Care 8.0% Shaving / Hair Removal 8.2% Fragrances 8.3% Deodorants 6.9% Body Care 5.9% 5.4% Hair Dye 4.1% Sun care 4.0% Feminine Hygiene 2.5% Insect Repellent 0.2% KEY TRENDS Personal care sales have increased by +1.9%, and it has one of the best performances among the different countries. There was a FMCG increase of 1.8% at the end of 2015 in Spain and personal care is one of the sections with an important growth record due to this consumption. Despite the growth of prices in FMCG versus the previous year, the prices in personal care are flat (-0.6%). Some of the most important categories in personal care, like fragrances and oral care, are increasing in value sales. 15
Oral Care Body Cleansing Sanitary Products Fragrances Spain TOP WINNERS: VALUE SALES TOP LOSERS: VALUE SALES 0 10 20-10 -6-2 Oral Care 19,2 13,8 Fragrances 10,9-1,8 Feminine Hygiene 8,1-2,7 Hair Dye Sun care 8,1-9,3 Facial Care TOP 5 CATEGORIES: EVOLUTION Value sales ( ) and % change versus a year ago 494 CATEGORY INSIGHTS Overall there has been a strong performance for the top 5 categories in personal care due to the evolution of consumption. The most important growth comes from oral care (+5.3%) and fragrances (+4.4%). 378 300 277 260 Oral care products are growing due to more awareness about dental health, as well as effective oral care being a way to avoid dentist expenses. Potential growth is still important in Spain. -0,4 5,3 1,0 1,4 4,4 Fragrances products are growing too. The increase of me too brands, which copy the fragrances of top brands for half the price, and the transfer of sales from prestige to mass market, has helped to increase the value sales in this category. There is also an important growth in the consumption of these products. % vs. YA 16
The United Kingdom CATEGORY VALUE SALES IN THE LAST YEAR 1 460 688 641 608 606 572 201 308 294 287 Oral Care Body Cleansing Facial Care Deodorants Shaving / Hair Removal Body Care Hair Dye Sanitary Products Sun care SHARE OF VALUE IN THE YEAR Oral Care 25.0% Body Cleansing 11.8% Hair Care 11.0% Facial Care 10.2% Deodorants 10.4% Shaving / Hair Removal 3.4% Body Care 9.8% Hair Dye 5.3% Sanitary Products 5.0% Sun care 4.9% Feminine Hygiene 2.4% Insect Repellent 0.6% KEY TRENDS Since 2009, a gap has opened up between price increases and wages growth, resulting in the average household having less disposable income. The impact of this on fast moving consumer goods is that consumers are purchasing less across most sectors. Personal care volume fell by 1.6% in the latest year; while price inflation is driving a 0.5% increase in value sales. Further decline will be driven by the sun care category. June 2013 was extremely hot and sunny, conditions that were not repeated in 2014. As that boom period for the sun care sector moves into the previous year, sun care will start to show a year-on-year decline. Volume on deal for the personal care sector has stabilised at 66%. The average depth of discount has dipped slightly to 34.3%, leading to the uplift on promotion remaining at 135%, after four consecutive years of increase. 17
Oral Care Body Cleansing Facial Care Deodorants The United Kingdom TOP WINNERS: VALUE SALES CHANGE VERSU A YEAR AGO ( ) TOP LOSERS: VALUE SALES 0 20 40-40 -20 0 Oral Care 31,8-9,5 Feminine Hygiene 15,7-10,4 Body Cleansing Body Care 11,5-12,0 Hair Dye Sun care 7,3-12,8 Sanitary Products 2,9-30,1 Deodorants TOP 5 CATEGORIES: EVOLUTION Value sales ( ) and % change versus a year ago 1 460 CATEGORY INSIGHTS Volume sales were down year on year for all segments, with price inflation driving some value growth. Deodorants volume has been reduced by Unilever s move to compressed cans for key brands such as Lynx, Sure and Dove. 688 641 608 606 Toothpaste continues to show strong value growth, driven by the continued introduction of premium new product development (NPD). Shampoo and conditioner have enjoyed value growth; successful NPD launches from Garnier and Elvive have supported this. 2,2-1,5-1,5-1,3-4,7 However, volume decline is particularly marked for those products that could be made to last longer, e.g. razor blades and toothbrushes; or where the user could choose to wait longer between applications e.g. hair colorants and depilatories. % vs. YA Incontinence products remains a growth area, driven by consumer demand. P&G have recently launched Always Discreet to compete with the market leader, Tena. 18
Final Notes Notes on category definitions for countries Due to the diverse products found in individual countries across this market, it was necessary to consolidate the available data into the categories in this report. In some cases, it wasn t always possible to align products across all six countries, hence the need to highlight any anomalies in the report. These exceptions are listed below. Facial care The France data in this report includes wet wipes for this category, while the other countries do not. The France data in this report does not include lip balm whereas the other countries do. Feminine hygiene The Netherlands data in this report does not include intimate hygiene products, which are included in body care. The UK data in this report does not include this category. Fragrances The UK data in this report does not include this category. 19
Resources To gain insight into opportunities across specific categories, segments, channels or retailers, contact your IRI client service representative regarding custom analyses leveraging the following resources: IRI InfoScan Census TM is a syndicated retail tracking service that enables manufacturers and retailers to acquire industry insights used to make better business decisions. IRI InfoScan Census utilises the data that IRI collects from grocery, drug, and mass merchandise retailers to provide the most comprehensive and accurate syndicated data offering in the FMCG sector. With access to accurate, granular detail by category, geography, measure, and time period, clients have the tools needed to develop marketing and sales strategies based on product performance, distribution, and promotion responsiveness. All data about personal care comes from IRI InfoScan Census. IRI Analytics Advantage Suite provides global solutions for all strategic marketing needs. It enables retailers and manufacturers to get fast and in-depth category insights and dynamic analysis for identifying growth opportunities and measure business impact in term of return on investment, sales and profit. The Analytics Advantage Suite goes from in-store interviews to advanced modelling solutions. FOR MORE INFORMATION Please contact Emily Mayer, Business Unit Director, France, IRI at Emily.Mayer@IRIworldwide.com or call +33 (0)130 06 26 56 with any questions or comments about this report. About IRI. IRI is a leader in delivering powerful market, consumer and media exposure information, predictive analytics and the foresight that leads to action. We go beyond the data to create growth for our clients in the FMCG, retail and over-the-counter health care industries by pinpointing what matters and illuminating how it can impact their businesses. Move your business forward at www.iriworldwide.com. Follow IRI on Twitter: @IRI_INTL Arlington Square, Downshire Way, Bracknell, Berkshire RG12 1WA, Tel +44 (0) 1344 746000 Copyright 2016 Information Resources, Inc. (IRI). All rights reserved. IRI, the IRI logo and the names of IRI products and services referenced herein are either trademarks or registered trademarks of IRI. All other trademarks are the property of their respective owners. 20