IRI Pulse Report Personal Care Welcome to the Pulse Q1 2014 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. Q1 2014 IRIworldwide.eu
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 around Europe. The market was split into the following categories: deodorants, haircare, 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, 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. When this has occurred, it has been documented in the Notes section found at the end of the report. 2
On the Radar The year ending Q1 2014 shows better results for personal care in Europe, especially in the UK and France. However, this good trend in value hides real difficulties in volumes. The personal care department is still affected by the choices shoppers have to make to deal with their budget. Some categories, such as oral care, are very dynamic, while others are still going through really hard times. ECONOMIC FIGURES INFLUENCING CONSUMER BEHAVIOUR POPULATION IN MILLIONS UNEMPLOYMENT (%) AVERAGE 12 MONTH INFLATION RATES GDP IN MILLIONS ( ) Jan. 2013 Jan. 2012 Sep. 2013 Avg. 2012 Sep. 2013 Avg. 2012 2013 (Estimate) 2012 France 65.6 65.3 11.1 10.2 +1.2 +2.5 2 059 358 2 032 297 Germany 80.5 80.3 5.2 5.5 +1.8 +2.4 2 694 499 2 644 200 Italy 59.6 59.3 12.5 10.7 +1.8 +3.5 1 568 388 1 565 916 Netherlands 16.8 16.7 7.0 5.3 +3.1 +2.8 604 459 600 638 Spain 46.7 46.8 26.6 25.0 +2.3 +2.3 1 051 076 1 049 525 United Kingdom 63.8 63.4 7.5 7.9 +2.7 +3.7 1 854 920 1 901 001 Source: Eurostat, September 2013 3
GLOBAL TRENDS TOTAL PERSONAL CARE VALUE SALES AND % CHANGE VERSUS PRIOR YEAR +1.6% -2.0% VALUE SALES IN MILLIONS ( ) -3.5% +2.7-1.8% 0.0% Total EU 36 329 DE 12 532 FR 6 189 UK 6 023* ES 4 744 IT 4 698 NL 2 144 *based on an exchange rate of 1.150 to the pound TOTAL EUROPE -0.1% TOTAL PERSONAL CARE VALUE SALES FOR THE LAST SIX QUARTERS ( ) 10,000 9,000 8,000 1 456 1 375 1 563 1 605 1 459 1 395 UK 7,000 6,000 1 474 1 413 1 618 1 599 1 468 1 504 France 5,000 4,000 3 288 2 994 3 066 3 101 3 381 2 984 Germany Italy 3,000 2,000 1,000 0 1 108 1 094 1 220 1 302 1 101 1 075 533 509 577 547 520 499 1 206 1 152 1 179 1 255 1 169 1 141 30-dic-12 31-mar-13 30-jun-13 29-sep-13 29-dic-13 30-mar-14 Netherlands Spain Period Ending 4
Euros, in millions Europe CATEGORY VALUE SALES IN THE LAST YEAR 4 651 4 629 4 407 3 517 3 008 2 872 2 781 2 556 2 382 2 049 Oral Care Body Cleansing Cosmetics Shaving / Hair Removal Fragrances Deodorants Body Care Sanitary Products SHARE OF VALUE IN THE YEAR Oral Care 12.80% 12.74% 12.13% Body Cleansing 9.68% Cosmetics 8.28% Shaving / Hair Removal 7.91% Fragrances 7.65% Deodorants 7.04% Body Care 6.56% Sanitary Products 5.64% Hair Dye 3.83% Feminine Hygeine 2.82% Sun Care 2.54% Insect Repellent 0.39% KEY TRENDS On Q1 2014, the personal care trend is better in so much as it is not as negative as it was (-0.1% in value sales). This improvement was heavily influenced by strong sales growth in France and the UK. For France, 2.7% growth is purely based upon different timing of promotions yearon-year, so will not be maintained. For the UK, value sales are positive because of price rises, but volumes are declining. The situation is still very difficult for other European countries, especially Spain (-3.5%), Netherlands (-2.0%) and Italy (-1.8%). Europe includes: France, Germany, Italy, the Netherlands, Spain and the United Kingdom 5
Oral Care Body Cleansing Cosmetics Europe TOP WINNERS: VALUE SALES TOP LOSERS: VALUE SALES 0 20 40 60 80 100-350 -300-250 -200-150 -100-50 0. Oral Care 85.3 Cosmetics 59.9-11.3 Sanitary Products Feminine Hygeine 46.6-41.9 Body Cleansing 38.0-90.6 Shaving / Hair Removal 29.8-177.4 Fragrances TOP 5 CATEGORIES: EVOLUTION Value sales ( ) and % change versus a year ago 4 651 4 629 4 407 3 517 1.9 0.9-1.2 0.6 3 008 2.0 CATEGORY INSIGHTS Even if the global picture is not very positive for personal care in Europe, some categories are still performing well. Oral care kept its number one position in terms of growth contribution, far beyond the other categories. Oral care is performing well in France, Italy, Spain and the UK. Cosmetics is also on a good trend in Q1 (+2.0%). However, growth is not consistent across Europe, but rather linked to the very positive German situation supported by innovations on eye segment. On the other hand, fragrance losses are still huge (France, Germany, the Netherlands and Spain) whilst the shaving category is suffering across Europe due to the three day beard trend, which is popular across countries. Total Sales % vs. YA Europe includes: France, Germany, Italy, the Netherlands, Spain and the United Kingdom 6
Euros, in millions France CATEGORY VALUE SALES IN THE LAST YEAR 942 771 708 626 616 514 481 375 286 281 Oral Care Body Cleansing Shaving / Hair Removal Cosmetics Deodorants Sanitary Products Hair Dye Feminine Hygeine SHARE OF VALUE IN THE YEAR 15.22% Oral Care 12.47% Body Cleansing 11.44% Shaving / Hair Removal 10.11% 9.95% Cosmetics 8.31% Deodorants 7.77% Sanitary Products 6.06% Hair Dye 4.62% Feminine Hygeine 4.54% Body Care 4.03% Fragrances 3.30% Sun Care 2.00% Insect Repellent 0.17% KEY TRENDS For the Q1 moving annual total (MAT), the personal care growth in France (+2.7%) was particularly strong. However, it has been produced by timing of promotions. As a matter of fact, promotional beauty events, which heavily impact personal care trend, began sooner in 2014 than in 2013. As a consequence, the month of March is very positive (+26% value sales) versus March 2013 (which where not promoted at all) and the MAT trend is clearly impacted. Turnover is growing on personal care in France while volumes are quite stable. At the same time, France is in a deflation context : prices of existing products are declining versus last year due to a price war between retailers. So, if turnover is growing it is thanks to a positive mix effect : shoppers put national brands versus private labels in their basket, and they are choosing innovations that are more expensive than existing items. 7
Oral Care Body Cleansing Shaving / Hair Removal France TOP WINNERS: VALUE SALES TOP LOSERS: VALUE SALES 0 10 20 30 40 50-50 -40-30 -20-10 0. Oral Care 46.8 27.7 Body Cleansing 24.0 Deodorants 22.6-4.4 Fragrances 18.3-12.3 Shaving / Hair Removal TOP 5 CATEGORIES: EVOLUTION Value sales ( ) and % change versus a year ago 942 771 708 626 2.0 6.5 3.5-1.9 616 4.7 CATEGORY INSIGHTS Oral care is still the top contributor to personal care growth in France, with a very positive evolution (+6.5%). Innovations, promotion, media investments are driving the growth. For example, only 27% of French people buy mouthwash: potential is huge on this category. For body cleansing and facial care, beauty events have a strong impact on growth. We have to wait for Q2 data to confirm, or not, the good health of these categories. Concerning deodorants, there is a positive impact beyond beauty events: launch of Unilever Compressed range, which has been positively received for the dynamism it brings to the category. Total Sales % vs. YA 8
Euros, in millions Germany CATEGORY VALUE SALES IN THE LAST YEAR 1 889 1 526 1 472 1 449 1 425 1 059 973 784 691 478 Cosmetics Fragrances Oral Care Body Cleansing Body Care Shaving / Hair Removal Deodorants Sanitary Products SHARE OF VALUE IN THE YEAR 15.07% Cosmetics 12.18% 11.75% Fragrances 11.57% Oral Care 11.37% Body Cleansing 8.45% Body Care 7.77% Shaving / Hair Removal 6.26% Deodorants 5.51% Sanitary Products 3.82% Hair Dye 2.66% Sun Care 1.76% Feminine Hygeine 1.57% Insect Repellent 0.28% KEY TRENDS In Q1 2014, the personal care market in Germany resumed a pattern of slow growth. Although the drugstore chains have absorbed revenues that were previously earned by Schlecker, they in total suffered from declining sales in 2013. Currently the drugstores show positive growth rates in most of the product categories again. The food retail sector benefited strongly from the Schlecker exit last year. Currently, it is mainly the hypermarket sales that are decreasing again. Discount stores, main profiteers of the development in the last year, have almost stagnated in Q1. Overall, nearly 25% of personal care sales were made in hypermarkets and discount stores. Thus, this channel has a bigger share of sales than perfumeries and department stores combined. Facial care stays the strongest segment in personal care in Germany, with continuing growth in Q1 2014, driven by strong brands as well as by positive development of private label solutions. 9
Cosmetics Fragrances Oral Care Germany TOP WINNERS: VALUE SALES TOP LOSERS: VALUE SALES 0 20 40 60 80 100-80 -60-40 -20 0. Cosmetics 84.1-9.8 Oral Care 32.0-12.0 Sun care Insect Repellent 12.2-15.1 Shaving / Hair Removal 11.0-25.7 Body Cleansing Feminine Hygeine 4.7-60.2 Fragrances TOP 5 CATEGORIES: EVOLUTION Value sales ( ) and % change versus a year ago 1 889 1 526 1 472 1 449 1 425 0.8 1.7 5.8-0.7-4.0 Total Sales % vs. YA CATEGORY INSIGHTS Cosmetics is the fastest-growing personal care category in Germany. The rise in color cosmetics is based on successful launches in the eye segment. After the big hype of nail products in the past years, the eye segment generated growth in 2013 and the first quarter of 2014. Fragrances continue to lose turnover and fall back to fourth place of the top-selling categories due to losses in all three core segments: mono, ancillaries and gift sets. These segments lost in both the female and male fragrance segments. More than one-fifth of the facial care sales are generated by private label solutions, which are growing slightly faster than the whole category. The growth of the category is negatively impacted by losses of some high-priced brands. Body cleansing also continues to lose turnover. Mainly private labels, contributing about 16% of the category sales, lost heavily due to declining promotion-sales compared to Q1 of the prior year. 10
Euros, in millions Italy CATEGORY VALUE SALES IN THE LAST YEAR 675 642 531 462 439 439 315 289 241 220 Oral Care Body Cleansing Sanitary Products Shaving / Hair Removal Deodorants Feminine Hygeine Cosmetics Body Care SHARE OF VALUE IN THE YEAR Oral Care 14.36% 13.66% Body Cleansing 11.30% Sanitary Products 9.84% 9.35% Shaving / Hair Removal 9.35% Deodorants 6.71% Feminine Hygeine 6.15% Cosmetics 5.13% Body Care 4.68% Hair Dye 3.70% Fragrances 2.65% Sun Care 2.17% Insect Repellent 0.95% KEY TRENDS Personal care is still decreasing in Italy, together with home care. The trend for food markets has been less severe. Promotional pressure is still rising and price cuts are deeper, having a negative impact on value sales. Base sales (no promotional sales) are decreasing. Going forward, special attention has to be given to promotional productivity, for the consumer has changed shopping habits (more rational to reduce waste). The right weight has to be found between trade and consumer investments. The private label sector is still increasing, though share is still relatively low, 9.6% ( +0.2 point). Private label promotional activity is lower versus national brands and less than in 2013, but the results are better. In disposable and paper markets (paper towels, napkins, etc.) private labels have higher share than other personal care categories (skin care or cosmetics). 11
Oral Care Body Cleansing Sanitary Products Italy TOP WINNERS: VALUE SALES TOP LOSERS: VALUE SALES 0 2 4 6 8 10-30 -25-20 -15-10 -5 0. Feminine Hygeine 8.9-6.6 Cosmetics Oral Care 4.0-9.5 Sun care Hair Dye 2.7-15.3-17.2 Body Cleansing - 28.3 Shaving / Hair Removal TOP 5 CATEGORIES: EVOLUTION Value sales ( ) and % change versus a year ago 675 642 531 462 0.6-2.3-3.1-1.1 Total Sales % vs. YA 439-1.1 CATEGORY INSIGHTS Mouthwash and denture cleaners are supporting solid oral care growth. Toothpaste is increasing in unit sales, but not value. The promotional pressure in this market is high and stronger versus 2013. Shaving blades show negative performance, even though promotional pressure and price cuts were consistent versus year ago. Drugstore is the only channel with positive trend. Disposable razors blades decreased less than blade systems. As seem last quarter, haircare sales declined in Q1, even though promotional pressure and price cuts in shampoo and conditioner are sharper versus year ago. The number of products assortment is increasing on all hair care categories. Feminine hygiene is showing healthy growth, due to intimate care soap and incontinence diapers. Innovation is an important contributor to hair dye growth. Colorants has the highest increase in product assortment. 12
Euros, in millions The Netherlands CATEGORY VALUE SALES IN THE LAST YEAR 317 270 267 231 196 159 156 143 131 110 Cosmetics Oral Care Body Cleansing Fragrances Deodorants Body Care Shaving / Hair Removal Sanitary Products SHARE OF VALUE IN THE YEAR 14.79% Cosmetics 12.60% Oral Care 12.44% 10.79% Body Cleansing 9.14% Fragrances 7.41% Deodorants 7.26% Body Care 6.66% Shaving / Hair Removal 6.10% Sanitary Products 5.14% Hair Dye 3.30% Sun Care 3.07% KEY TRENDS Economic growth in the Netherlands declined in the first quarter of 2014, down 0.5% versus Q1 2013. The economic downturn has impacted consumption, especially on the facial care category. Non-food categories are declining more rapidly than the rest of the market, due to higher level of promotion activity and less innovations. In some categories, like washing detergents and deodorant, up to 30% of the total sales has shifted to the low-end retail channels. Feminine Hygeine 0.74% Insect Repellent 0.56% 13
Cosmetics Oral Care Body Cleansing The Netherlands TOP WINNERS: VALUE SALES TOP LOSERS: VALUE SALES 0 1 2 3 4 5-20 -15-10 -5 0. 4.5-5.6 Fragrances Sun care 3.1-7.1 Body Care Deodorants 2.3-8.6 Cosmetics Feminine Hygeine 1.0-12.6 Shaving / Hair Removal Sanitary Products 1.0-16.7 TOP 5 CATEGORIES: EVOLUTION Value sales ( ) and % change versus a year ago 317 270 267 231 1.5-3.1-0.5-6.7 196-0.7 CATEGORY INSIGHTS Categories with double digit growth are foot care and incontinence pads, for both unit sales and euro sales. Within haircare, shampoo and conditioner have grown versus last quarter, mainly due to the increase in promotional pressure (up to 50% now). Nivea is the only national brand that has grown within body cleansing, partly due to the re-launch of the shower cream and oils range, and mainly driven by the in-shower body milks and lotions. The trend in cosmetics is switching from national brands to private label. This happened especially in the eye cosmetics segment. All major cosmetics brands are under pressure. Total Sales % vs. YA 14
Euros, in millions Spain CATEGORY VALUE SALES IN THE LAST YEAR 844 600 576 457 388 331 329 297 262 236 Fragrances Cosmetics Oral Care Shaving / Hair Removal Body Cleansing Sanitary Products Deodorants Body Care SHARE OF VALUE IN THE YEAR Fragrances 17.79% 12.65% 12.14% Cosmetics 9.63% Oral Care 8.18% Shaving / Hair Removal 6.97% Body Cleansing 6.93% Sanitary Products 6.26% Deodorants 5.53% Body Care 4.98% Hair Dye 3.90% Sun Care 3.22% Feminine Hygeine 1.75% Insect Repellent 0.08% KEY TRENDS Personal care sales decreased in Spain by 3.5%, showing some improvement versus Q4 2013. Despite this, it is the worst evolution among the analysed countries. In the analysed quarter, prices in personal care are almost flat (+0.4%). Fragrances, the most important category in personal care, maintain the same evolution than the previous quarters, and value sales are on the decline. 15
Fragrances Cosmetics Oral Care Spain TOP WINNERS: VALUE SALES TOP LOSERS: VALUE SALES 0 2 4 6 8 10 12-150 -100-50 0. Feminine Hygeine 10.0-8.9 Deodorants Oral Care 4.3-16.4 Shaving / Hair Removal Sun care 1.1-18.2 Cosmetics Insect Repellent 0.4-20.8-106.7 Fragrances TOP 5 CATEGORIES: EVOLUTION Value sales ( ) and % change versus a year ago 844 600 576 457 388-11.2-0.7-3.5-3.8 1.1 CATEGORY INSIGHTS There has been poor performance from the top 5 categories in personal care. Except oral Care, all the other Top 5 categories declined in Q1 2014. The worst evolution came from fragrances, facial care and cosmetics. Feminine hygiene is a small category in Spain, but it is increasing in value sales. Oral care products are growing too, with a similar trend to the previous quarter. Fragrance, the core category in personal care, is decreasing in value. 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, is contributing to negative sales trends. Total Sales % vs. YA 16
Euros, in millions The United Kingdom CATEGORY VALUE SALES IN THE LAST YEAR 1 125 694 656 655 651 562 560 344 326 258 Oral Care Body Cleansing Deodorants Shaving / Hair Removal Body Care Hair Dye Sanitary Products Sun care SHARE OF VALUE IN THE YEAR Oral Care 18.67% Body Cleansing 11.53% 10.89% 10.88% Deodorants 10.81% Shaving / Hair Removal 9.33% Body Care 9.31% Hair Dye 5.71% Sanitary Products 5.41% Sun Care 4.28% Feminine Hygeine 2.62% Insect Repellent 0.57% KEY TRENDS Total FMCG sales in the UK in Q1 14 showed volume decline, as did the personal care sector. The consumer recession is reducing shoppers available budgets, and food and non-food sales are suffering. Price rises have been coming through for personal care. This is a combination of higher value items being introduced and reduced promotional discounts in some categories. Most personal care sectors experienced both volume and value decline in Q1 14; oral care is the exception. Q1 13 was the coldest Spring in the UK for 30 years. This had the effect of increasing sales of some skincare such as lip salves and hand cream. These categories had correspondingly much lower sales this year. 17
Oral Care Body Cleansing Deodorants The United Kingdom TOP WINNERS: VALUE SALES TOP LOSERS: VALUE SALES 0 10 20 30 40 50-20 -15-10 -5 0. Oral Care 41.4 20.8-0.8 Insect Repellent Feminine Hygeine 16.4-2.2 Deodorants 15.6-5.9 Shaving / Hair Removal Body Care 13.7-17.7 Body Cleansing TOP 5 CATEGORIES: EVOLUTION Value sales ( ) and % change versus a year ago 1 125 694 656 655 651 3.3 3.8-2.5 2.4-0.3 Total Sales % vs. YA CATEGORY INSIGHTS Oral care remains the biggest sector by value sales, although haircare is not far behind, if hair dye is included. Along with skin care in general, oral care was the only sector to grow in value in Q1 14. Toothpaste, toothbrushes and dental accessories gained value sales, whilst mouthwash fell by almost 6% in Q1 14 versus Q1 13. All categories, except accessories, fell in volume. Price per unit is driving value sales as new products enter at premium prices. The growth in brushes is from rechargeable products. Price rises are driving up value sales in shampoo, hair conditioner and styling aids, as promotional discounts have subsided. Hairspray lost close to 2% volume and value in Q1 14. Body cleansing continued to decline and showed the sharpest percent value yearon-year decline in Q1 of all major sectors. Volume sales were also down by almost 3.8%, nearly double the average volume decline of 2.2%. 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. Those exceptions are listed below. Facial care The France data in this report includes wet wipes for facial care, 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. Cosmetics The UK data in this report does not include cosmetics. Fragrance The UK data in this report does not include fragrance. 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 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 Consulting provides strategic insights and advice leveraging a variety of data sources, predictive analytics, enabling technologies, and business analyses to help FMCG manufacturers and retailers address significant sales and marketing issues effectively. FOR MORE INFORMATION Please contact Emily Mayer, Business Unit Director, France, IRI at Emily.Mayer@IRIworldwide.com or +33 (0)130 06 26 56 with questions or comments about this report. About IRI. IRI is a leader in delivering powerful market and shopper information, predictive analysis and the foresight that leads to action. We go beyond the data to ignite extraordinary growth for our clients in the CPG, retail and overthe-counter healthcare industries by pinpointing what matters and illuminating how it can impact their businesses across sales and marketing. Move your business forward at IRIworldwide.eu Arlington Square, Downshire Way, Bracknell, Berkshire RG12 1WA, Tel +44 (0) 1344 746000 Copyright 2014 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