toiletries 2011

Market Report Plus 2011

24th Edition July 2011Edited by Sarah Walker

ISBN 978-1-84729-750-1

Toiletries

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Toiletries Foreword

© Key Note Ltd 2011

Contents

Executive Summary 1

1. Market Definition 2

REPORT COVERAGE....................................................................................................................2

MARKET SECTORS.......................................................................................................................2

MARKET TRENDS.........................................................................................................................3

Suppliers Change Promotional Strategies.................................................................................3

Growing Popularity of Social Media..........................................................................................3

Private Labels Benefiting From Changing Consumer Spending Habits..............................3

ECONOMIC TRENDS....................................................................................................................4

Gross Domestic Product ...............................................................................................................4Table 1.1: UK Gross Domestic Product at Current and Annual Chain-Linked Prices(£m), 2006-2010..............................................................................................................................4

Inflation ..........................................................................................................................................4Table 1.2: UK Rate of Inflation (%), 2006-2010.......................................................................5

Household Disposable Income ...................................................................................................5Table 1.3: UK Household Disposable Income Per Capita (£), 2006-2010............................5

Population ......................................................................................................................................6Table 1.4: UK Resident Population Estimates by Sex (000), Mid-Years 2006-2010...........6

Unemployment ..............................................................................................................................6Table 1.5: Actual Number of Unemployed Persons in the UK (million), 2006-2010.........7

MARKET POSITION......................................................................................................................7

The UK..............................................................................................................................................7

Table 1.6: Consumer Expenditure on Miscellaneous Goods and Services for PersonalCare (£m), 2006-2010....................................................................................................................7

Overseas...........................................................................................................................................8

2. Market Size 9

THE TOTAL MARKET..................................................................................................................9

Manufacturers’ Sales ....................................................................................................................9Retail Sales.......................................................................................................................................9

Table 2.1: The Total UK Market for Toiletries by Sector by Value at Current Prices(£m at rsp), 2006-2010...................................................................................................................9

Toiletries Contents


Figure 2.1: The Total UK Market for Toiletries by Value at Current Prices(£m at rsp), 2006-2010.................................................................................................................10

BY MARKET SECTOR.................................................................................................................10

Figure 2.2: The Total UK Toiletries Market by Sector Share (%), 2010.............................11

Personal Wash and Bathroom Toiletries ................................................................................11

Table 2.2: The UK Personal Wash and Bathroom Toiletries Sector by Subsectorby Value at Current Prices (£m at rsp), 2009 and 2010........................................................12

Skincare Products ........................................................................................................................12

Table 2.3: The UK Skincare Products Sector by Subsector by Value at Current Prices(£m at rsp), 2009 and 2010.........................................................................................................12

Hair Care Products.......................................................................................................................13

Table 2.4: The UK Hair Care Products Sector by Subsector by Value at Current Prices(£m at rsp), 2009 and 2010.........................................................................................................13

Oral Care Products ......................................................................................................................13

Table 2.5: The UK Oral Care Products Sector by Subsector by Value at Current Prices(£m at rsp), 2009 and 2010.........................................................................................................14

Shaving Products .........................................................................................................................14

Table 2.6: The UK Shaving Products Sector by Subsector by Value at Current Prices(£m at rsp), 2009 and 2010.........................................................................................................14

OVERSEAS TRADE......................................................................................................................15

Table 2.7: UK Imports and Exports of Toiletries by Value (£000), 2008-2010..................15

Imports...........................................................................................................................................15

Table 2.8: UK Intra-EU Arrivals and Extra-EU Imports of Toiletries by Categoryby Value (£000), 2010..................................................................................................................16

Exports............................................................................................................................................16

Table 2.9: UK Intra-EU Despatches and Extra-EU Exports of Toiletries by Categoryby Value (£000), 2010..................................................................................................................17

3. Industry Background 18

RECENT HISTORY.......................................................................................................................18

NUMBER OF COMPANIES.......................................................................................................18

Table 3.1: Number of UK VAT- and/or PAYE-Based Enterprises Engagedin the Manufacture of Perfumes and Toilet Preparations by Turnover Sizeband,2010................................................................................................................................................18

EMPLOYMENT............................................................................................................................19

Table 3.2: Number of UK VAT- and/or PAYE-Based Enterprises Engagedin the Manufacture of Perfumes and Toilet Preparations by Employment Sizeband,2010................................................................................................................................................19

REGIONAL VARIATIONS IN THE MARKETPLACE.............................................................20

DISTRIBUTION.............................................................................................................................20

Selective Distribution .................................................................................................................20

Specialist Retailers ......................................................................................................................20

Toiletries Contents


High-Street Stores........................................................................................................................21

Department Stores ......................................................................................................................21

Supermarkets ...............................................................................................................................21

Direct Selling ................................................................................................................................21

HOW ROBUST IS THE MARKET?...........................................................................................21

LEGISLATION...............................................................................................................................22

Cosmetics Directive 1976............................................................................................................22

Cosmetics Products Regulations................................................................................................22

REACH............................................................................................................................................22

KEY TRADE ASSOCIATIONS....................................................................................................23

Cosmetic, Toiletry and Perfumery Association.......................................................................23

The European Cosmetics Association ......................................................................................23

4. Competitor Analysis 24

THE MARKETPLACE..................................................................................................................24

MARKET LEADERS — MANUFACTURERS..........................................................................24

Avon Cosmetics Ltd......................................................................................................................24

Estée Lauder Cosmetics Ltd .......................................................................................................25

L’Oréal (UK) Ltd............................................................................................................................25

Procter & Gamble (Health & Beauty Care) Ltd ......................................................................26

PZ Cussons PLC..............................................................................................................................26

Unilever PLC..................................................................................................................................27

MARKET LEADERS — RETAILERS ........................................................................................27

Alliance Boots Ltd .......................................................................................................................27

Table 4.1: Alliance Boots Group Revenue and Trading Profit by Division (£m), YearEnding 31st March 2011.............................................................................................................28

The Body Shop International PLC ............................................................................................29

Lush Cosmetics Ltd ......................................................................................................................29

Molton Brown Ltd ......................................................................................................................30

Superdrug Stores PLC .................................................................................................................30

OUTSIDE SUPPLIERS..................................................................................................................31

Research and Development ......................................................................................................31

Raw Materials ..............................................................................................................................31

Processing Machinery, Packaging and components ............................................................31

Outsourcing ..................................................................................................................................32

MARKETING ACTIVITY.............................................................................................................32

Main Media Advertising Expenditure .....................................................................................32

Table 4.2: Main Media Advertising Expenditure on Toiletries by Sector (£000), YearsEnding March 2010 and 2011....................................................................................................32

Table 4.3: Main Media Advertising Expenditure on Deodorants (£000), Year EndingMarch 2011....................................................................................................................................34

Toiletries Contents


Table 4.4: Main Media Advertising Expenditure on Bath Toiletries and Shower Gels(£000), Year Ending March 2011...............................................................................................36

Table 4.5: Main Media Advertising Expenditure on Mass-Market Cleaners and Wipes(£000), Year Ending March 2011...............................................................................................37

Table 4.6: Main Media Advertising Expenditure on Liquid Foam Bath and LiquidHand Soap (£000), Year Ending March 2011..........................................................................37

Table 4.7: Main Media Advertising Expenditure on Mass-Market Bath and BeautyRanges (£000), Year Ending March 2011................................................................................38

Table 4.8: Main Media Advertising Expenditure on Skincare by Type (£000), YearEnding Marching 2011................................................................................................................38

Table 4.9: Main Media Advertising Expenditure on Mass-Market Women’s FacialSkincare (£000), Year Ending March 2011..............................................................................39

Table 4.10: Main Media Advertising Expenditure on Mass-Market Women’s BodySkincare (£000), Year Ending March 2011..............................................................................42

Table 4.11: Main Media Advertising Expenditure on Premium Women’s FacialSkincare (£000), Year Ending March 2011..............................................................................44

Table 4.12: Main Media Advertising Expenditure on Mass-Market Women’sMedicated Facial Skincare (£000), Year Ending March 2011..............................................45

Table 4.13: Main Media Advertising Expenditure on Mass-Market Men’s Skincare(£000), Year Ending March 2011...............................................................................................46

Table 4.14: Main Media Advertising Expenditure on Mass-Market Suncareand Tanning Products (£000), Year Ending March 2011......................................................47

Table 4.15: Main Media Advertising Expenditure on Shampoos and Conditionersby Type (£000), Year Ending March 2011...............................................................................49

Table 4.16: Main Media Advertising Expenditure on Shampoos and Conditioners(£000), Year Ending March 2011...............................................................................................49

Table 4.17: Main Media Advertising Expenditure on Hair Colourants (£000), YearEnding March 2011......................................................................................................................51

Table 4.18: Main Media Advertising Expenditure on Hair Product Ranges (£000),Year Ending March 2011............................................................................................................52

Table 4.19: Main Media Advertising Expenditure on Hair Styling Aids (£000), YearEnding March 2011......................................................................................................................53

Table 4.20: Main Media Advertising Expenditure on Hairsprays (£000), Year EndingMarch 2011....................................................................................................................................53

Table 4.21: Main Media Advertising Expenditure on Toothpastes and Polishes(£000), Year Ending March 2011...............................................................................................54

Table 4.22: Main Media Advertising Expenditure on Other Oral Hygiene Products(£000), Year Ending March 2011...............................................................................................56

Table 4.23: Main Media Advertising Expenditure on Wet Razors and Blades (£000),Year Ending March 2011............................................................................................................58

Table 4.24: Main Media Advertising Expenditure on Shaving Preparations (£000),Year Ending March 2011............................................................................................................59

Table 4.25: Main Media Advertising Expenditure on Depilatories and Bleach(£000), Year Ending March 2011...............................................................................................59

Exhibitions and Trade Fairs........................................................................................................60

Toiletries Contents


5. Brand Strategy 61

INTRODUCTION..........................................................................................................................61

THE WORLD’S MOST VALUABLE BRANDS .......................................................................61

Table 5.1: Leading Global Brands of Cosmetics and Toiletries by Rank and Value($m), 2010......................................................................................................................................61

CEW AWARDS.............................................................................................................................62

LEADING BRANDS BY SECTOR..............................................................................................63

Personal Wash and Bathroom Toiletries ................................................................................63

Skincare Products.........................................................................................................................63

Hair Care Products ......................................................................................................................63

Oral Care Products ......................................................................................................................63

Shaving Products .........................................................................................................................64

6. Strengths, Weaknesses, Opportunities and Threats 65

STRENGTHS..................................................................................................................................65

WEAKNESSES..............................................................................................................................65

OPPORTUNITIES.........................................................................................................................66

THREATS.......................................................................................................................................66

7. Buying Behaviour 67

AVERAGE WEEKLY HOUSEHOLD EXPENDITURE............................................................67

Table 7.1: Average Weekly Household Expenditure on Personal Care (£), 2009............67

By Age............................................................................................................................................67

Table 7.2: Average Weekly Household Expenditure on Personal Care by Ageof Household Reference Person (£), 2009...............................................................................68

By Gross Income Decile Group...................................................................................................68

Table 7.3: Average Weekly Household Expenditure on Personal Care by GrossIncome Decile Group (£), 2009..................................................................................................69

CUSTOMER PENETRATION.....................................................................................................69

Hair Care Products ......................................................................................................................70

Table 7.4: Usage of Hair Care Products in the Last 12 Months by Sex (% of adults),2010................................................................................................................................................70

Shampoo........................................................................................................................................70

Table 7.5: Female Usage of Shampoo in the Last 12 Months by Age and Social Grade(% of adults), 2010......................................................................................................................71

Table 7.6: Types of Shampoo Used Most Often by Women in the Last 12 Months(%), 2010........................................................................................................................................71

Conditioner ..................................................................................................................................72

Toiletries Contents


Table 7.7: FemaIe Usage of Conditioners (Excluding Treatments and Masques)in the Last 12 Months by Age and Social Grade (% of adults), 2010................................72

Hair Styling Products ..................................................................................................................73

Table 7.8: Usage of Hair Styling Products in the Last 12 Months by Sex, Ageand Social Grade (% of adults), 2010.......................................................................................73

Hair Colourants ...........................................................................................................................74

Table 7.9: Usage of Hair Colourants in the Last 12 Months by Sex, Age and SocialGrade (% of adults), 2010..........................................................................................................74

Other Toiletries ...........................................................................................................................75

Table 7.10: Usage of Other Toiletries Products by Women in the Last 12 Months(%), 2010........................................................................................................................................75

Table 7.11: Usage of Other Toiletries Products by Men in the Last 12 Months (%),2010................................................................................................................................................76

Toothpaste ...................................................................................................................................76

Table 7.12: Usage of Toothpaste in the Last 12 Months by Age and Social Grade(% of adults), 2010......................................................................................................................76

Deodorants ...................................................................................................................................77

Table 7.13: Usage of Deodorant in the Last 12 Months by Sex, Age and Social Grade(% of adults), 2010......................................................................................................................77

Face Creams and Lotions ...........................................................................................................78

Table 7.14: Usage of Face Cream and Lotions in the Last 12 Months by Sex, Ageand Social Grade (% of adults), 2010.......................................................................................78

Hair Removers and Razors ........................................................................................................79

Table 7.15: Usage of Hair Removers and Razors in the Last 12 Months by Sex, Ageand Social Grade (% of adults), 2010.......................................................................................79

Shower Gels and Bath Products ...............................................................................................80

Table 7.16: Usage of Shower Gels and Bath Products in the Last 12 Months by Sex,Age and Social Grade (% of adults), 2010..............................................................................80

Cleansing Creams, Lotions and Wipes ....................................................................................81

Table 7.17: Usage of Cleansing Creams, Milks, Lotions, Toner, Wipes and Washesby Women in the Last 12 Months by Age and Social Grade (% of adults), 2010...........81

Liquid Soap/Handwash ..............................................................................................................82

Table 7.18: Usage of Liquid Soap/Handwash in the Last 12 Months by Age and SocialGrade (% of adults), 2010..........................................................................................................82

Bars of Soap .................................................................................................................................83

Table 7.19: Usage of Bars of Soap in the Last 12 Months by Age and Social Grade(% of adults), 2010......................................................................................................................83

Suntan and Sun Protection Products ......................................................................................84

Table 7.20: Usage of Suntan and Sun Protection Products in the Last 12 Monthsby Age and Social Grade (% of adults), 2010.........................................................................84

Toiletries Contents


8. Current Issues 86

THE ECONOMY...........................................................................................................................86

RETAILERS ARE STRUGGLING................................................................................................86

RISING MATERIALS COSTS CAUSING PRICES HIKES........................................................87

UNILEVER AND P&G IN PRICE FIXING FINE.......................................................................87

NEW PRODUCTS.........................................................................................................................87

NIVEA..............................................................................................................................................87

L’Oreal ...........................................................................................................................................87

Dove ...............................................................................................................................................88

Sensodyne......................................................................................................................................88

Mandara.........................................................................................................................................88

Sk:n.................................................................................................................................................88

9. The Global Market 89

INTRODUCTION..........................................................................................................................89

EUROPE.........................................................................................................................................89

Table 9.1: Retail Sales of Cosmetics and Toiletries in the Top Five EU Member Statesby Value (€), 2009........................................................................................................................89

THE US...........................................................................................................................................90

SELECTED GLOBAL COMPETITORS .....................................................................................90

AS Watson Group.........................................................................................................................90

Avon Products Inc........................................................................................................................91

Beiersdorf AG................................................................................................................................91

Burt’s Bees ....................................................................................................................................91

Colgate-Palmolive Company .....................................................................................................92

Crabtree & Evelyn Ltd.................................................................................................................92

Estee Lauder Inc...........................................................................................................................92

Table 9.2: Estée Lauder Inc — Total Sales by Product Category ($m), Years Ending30th June 2009 and 2010...........................................................................................................93

L’Oreal SA......................................................................................................................................93

Mary Kay Inc..................................................................................................................................94

Procter & Gamble Company .....................................................................................................94

PZ Cussons ....................................................................................................................................94

Table 9.3: PZ Cussons — Group Revenue by Geographical Region (£m), Years Ending31st May 2009 and 2010.............................................................................................................95

Unilever PLC..................................................................................................................................95

Table 9.4: Unilever PLC — Sales by Geographic Region (€m), Year Ending31st December 2009 and 2010..................................................................................................96

Toiletries Contents


10. Forecasts 97

INTRODUCTION..........................................................................................................................97

Population.....................................................................................................................................97

Table 10.1: Forecast UK Resident Population by Sex (000), Mid-Years 2011-2015.........97

Gross Domestic Product..............................................................................................................97

Table 10.2: Forecast UK Growth in Gross Domestic Product in Real Terms (%),2011-2015......................................................................................................................................98

Inflation.........................................................................................................................................98

Table 10.3: Forecast UK Rate of Inflation (%), 2011-2015...................................................98

Unemployment.............................................................................................................................98

Table 10.4: Forecast Actual Number of Unemployed Persons in the UK (million),2011-2015......................................................................................................................................99

FORECASTS 2006-2010.............................................................................................................99

Table 10.5: The Forecast UK Market for Toiletries by Sector by Value at CurrentPrices (£m at rsp), 2011-2015.....................................................................................................99

MARKET GROWTH..................................................................................................................100

Figure 10.1: The Actual and Forecast UK Market for Toiletries by Sector by Valueat Current Prices (£m at rsp), 2006-2015...............................................................................100

FUTURE TRENDS.......................................................................................................................100

New Product Development......................................................................................................100

Size of Products Set to Shrink..................................................................................................101

11. Company Profiles 102

AVON COSMETICS LTD..........................................................................................................103

ESTEE LAUDER COSMETICS LTD.........................................................................................105

L’OREAL (UK) LTD....................................................................................................................107

PROCTER & GAMBLE (HEALTH & BEAUTY CARE) LTD................................................109

PZ CUSSONS PLC......................................................................................................................111

SUPERDRUG STORES PLC......................................................................................................113

UNILEVER PLC...........................................................................................................................115

12. Company Financials 117

13. Further Sources 119

Associations...............................................................................................................................119

Publications...............................................................................................................................119

General Sources.......................................................................................................................120

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Government Publications ....................................................................................................120

Other Sources...........................................................................................................................121

Key Note Sources ....................................................................................................................122

Understanding TGI Data 124

Number, Profile, Penetration..............................................................................................124

Social Grade...............................................................................................................................125

Standard Region......................................................................................................................125

Key Note Research 126

The Key Note Range of Reports 127

Toiletries Contents


• “Product performance is the key tosuccess as consumers will only purchasebrands they can trust and rely on.Staying at the forefront of technologyand investing in brands will ensurecategory growth.”

Matt Close, VP Marketing, Unilever (The Grocer,5th February 2011)

• “Today’s savvy consumers arescrutinising the ingredients in personalcare products and driving the demandfor natural products that are safe,efficacious and sustainable.”

Kerty Levy, Kemin Industries,(www.cosmeticsbusiness.com)

• “The 2010 figures are consistent withprevious years, with personal care stillthe major driver in the UK. The sectoralso continues to show resilienceoverall, despite a difficult economicclimate.”

Sue Rogers, Director of British AerosolManufacturers’ Association,(www.cosmeticsbusiness.com)

Toiletries


Executive Summary

This Key Note Market Report Plus examines the toiletries market in the UK.Characterised by a wide range of product types, the toiletries market isdominated by a small number of large multinational corporations includingProcter & Gamble, PZ Cussons, L’Oreal SA and Unilever.

The market itself is divided into five sectors: personal wash and bathroomproducts, skincare products, hair care products, oral care products and shavingproducts (for men and women). Key Note estimates that the total UK toiletriesmarket was worth £4.5bn in 2010, with personal wash and bathroom toiletriescomprising the largest sector by value (27.3%), followed by skincare products(27.1%) and hair care products (24.8%).

Compared with other industries — such as the construction and propertymarkets — the overall toiletries market weathered the recent economicdownturn relatively well. Many items, such as shampoos, soaps anddeodorants, etc., are regarded as daily essentials. Nevertheless, the economicdownturn did leave its mark on the industry.

One manifestation of this has been a change in consumer spending habits, withincreasing numbers trading down to value products. On the positive side, someconsumers are purchasing more premium products as they cut down on moreexpensive salon treatments, effectively transferring new business to thetoiletries market. Another noticeable impact of the strained economy has beenthe clear scaling down of some promotional activities, a result of suppliers’profit margins being squeezed as commodity prices have risen for almosteverything from oil to specialist beauty ingredients.

While television and print media remain popular, brands are increasinglyexperimenting with new digital channels as they seek more effective ways ofconnecting with their existing and potential clientele. The Internet and socialmedia sites such as Facebook, Twitter, and YouTube, are perceived to beeffective avenues for brands to communicate through, especially to both maleand younger buyers.

Although some sectors are reaching saturation point — and discountingcontinues to restrict value growth — outlook for the industry is positive. The‘necessary’ nature of its products and a strong sense of brand loyalty amongits customers are its strongest assets. The industry also features high levels ofinvestment in new product development (NPD), which continues to drive sales.Significant opportunities exist in the areas of cosmeceuticals and green/ethicalproducts.

Key Note forecasts retail sales of toiletries will grow by close to 10% between2011 and 2015, to reach £5.03m in the latter year. The sectors which areexpected to exhibit the strongest growth are skincare products, followed bypersonal wash and bathroom toiletries.

Toiletries Executive Summary

© Key Note Ltd 2011 1

1. Market Definition

REPORT COVERAGE

Cosmetic and toiletry products are defined as any substance or preparationintended to be placed in contact with the various external parts of the humanbody, or with the teeth and the mucous membranes of the oral cavity, with aview exclusively or mainly of cleaning them, perfuming them, changing theirappearance and/or correcting body odours, and/or protecting them or keepingthem in good condition. This Key Note report looks at the range of toiletryproducts that are primarily of a functional use. Cosmetics, which are of a purelydecorative nature, are not included, although the distinction is becomingincreasingly blurred with new types of product.

MARKET SECTORS

For the purpose of this report, the toiletries market will be divided into thefollowing sectors:

• Personal washing and related bathroom products — traditional bar soaps,liquid soaps, shower gels, bath liquids, deodorants, bodysprays and talcumpowder

• Oral care products — toothpaste, mouthwash, dental floss, etc.

• Hair care products — shampoos, conditioners, colourants and hair styling aidssuch as gels, mousses and sprays

• Skincare products — hand, body and facial moisturisers, cleansers and toners,exfoliating scrubs and sun filters/after-sun products

• Shaving products — wet-shave and after-shave products, and razors andblades, including those designed specifically for the women’s market;depilatory creams are also included.

Toiletries Market Definition


MARKET TRENDS

Suppliers Change Promotional Strategies

In recent years, promotions in the toiletries market have been exerting a stronginfluence on consumer purchasing behaviour, with supermarkets being one ofthe most common places to buy toiletry products. The ’buy one, get one free’trend became so wide-spread that consumers rarely needed to buy certainproducts at full price. In 2010, however, as a result of suppliers being unableto sustain the level of promotions (following the increases in commodity prices,from oil to specialist beauty ingredients including geranium and lavender),deep discount promotion all but disappeared. Many suppliers believe thechange is necessary. As one brand manager of Beiersdorf put it: ‘If you promoteand promote, there will be no value left. That’s not beneficial to anybody. Noteven consumers, because it will stop brands investing in new productdevelopment (NPD). There needs to be some value, so that’s why we’re startingto do ’two for £4’ on our deodorants, rather than ’three for £3.50’.’

Growing Popularity of Social Media

While television and print media remain popular, social media is thefastest-growing marketing channel. Brands are increasingly experimentingwith these new digital channels, from which they are seeking to developstronger and deeper relationships with their existing and potential clientele.Lynx, for example, launched its Excite variant with a focus on digital activity,including a Facebook game — featuring Kelly Brook — aimed at maleaudiences. The Internet and social media sites, such as Facebook, Twitter,YouTube and Flickr, are perceived to be a particularly effective way for brandsto reach both male and younger buyers. Social media avenues may be used fordirect communication with consumers and for listening exercises, to promotebrand awareness or trial new product ideas, and to support larger mediacampaigns.

Private Labels Benefiting From Changing Consumer SpendingHabits

Economic turbulence has undoubtedly accelerated the growth of private-labelproducts, as a significant number of consumers seek out less expensivepurchases. This is evident from the number of private-label products that havebeen launched by retailers in recent years, examples of which are Tesco’sVitamin E skincare range and Boots’ No. 7 range. According to the Private LabelManufacturers Association (PLMA), private-label products now hold theirstrongest competitive position, accounting for one of every two products soldin the UK and Switzerland. Younger shoppers show particularly strong supportfor this sector.



ECONOMIC TRENDS

Gross Domestic Product

Between 2003 and 2008, the UK’s gross domestic product (GDP) grew at ayear-on-year rate of approximately 5%. This growth was principally driven byconsumer spending and low interest rates. In 2008, however, as a result of thefinancial crisis, growth slowed markedly to 2.9% — and dramatically moved toa contraction of 3.5% (at current prices) as the country entered recession in2009. The UK officially emerged from recession in January 2010, bringing to anend six consecutive quarters of contraction. In 2010, official figures confirmedthat the economy had begun to recover, as GDP increased by 4.2% (at currentprices) on 2009. However, annual chain-linked figures for 2010 indicate thatGDP growth remains well below levels registered prior to the recession.

Table 1.1: UK Gross Domestic Product at Current and AnnualChain-Linked Prices (£m), 2006-2010

2006 2007 2008 2009 2010

Current prices 1,328,363 1,404,845 1,445,580 1,394,989 1,453,616

% changeyear-on-year - 5.8 2.9 -3.5 4.2

Annual chain-linkedGDP 1,328,363 1,364,029 1,363,139 1,296,689 1,312,911

% changeyear-on-year - 2.7 -0.1 -4.9 1.3

GDP — gross domestic product

Source: Economic & Labour Market Review, May 2011, National Statistics website© Crown copyright material is reproduced with the permission of the Controllerof HMSO (and the Queen’s Printer for Scotland)

Inflation

UK inflation rose gradually in the years leading up to 2007, before droppingby 0.3 percentage points in 2008. By the end of 2009, despite the high price ofa number of commodities, including fuel, clothing and certain foods, inflationturned negative. However, it has since started to rise sharply, with the latestNational Statistics figures placing it at 4.6%, more than twice that of the Bankof England’s target of 2%. This sharp hike in inflation has been buoyed in partby the rise in VAT which came into effect in January 2011.



Table 1.2: UK Rate of Inflation (%), 2006-2010

2006 2007 2008 2009 2010

Inflation (%) 3.2 4.3 4.0 -0.5 4.6

Percentage point changeyear-on-year - 1.1 -0.3 -4.5 5.1

Note: inflation is at retail price index (RPI).

Source: Focus on Consumer Price Indices — Data for April 2011, published May2011, National Statistics website © Crown copyright material is reproduced withthe permission of the Controller of HMSO (and the Queen’s Printer for Scotland)

Household Disposable Income

Despite the current economic downturn, household disposable income percapita continued to increase year-on-year of approximately 3% over the reviewperiod, although growth in this measure slowed markedly to around 1.7% in2009. Rising household disposable income should, under normal circumstances,help to encourage consumer spending. However, since the recession, consumerconfidence has remained low and is likely to continue to do so as theGovernment’s proposed cuts to the public sector come into force.

Table 1.3: UK Household Disposable Income Per Capita (£),2006-2010

2006 2007 2008 2009 2010

Household disposableincome (£) 14,080 14,453 14,976 15,225 15,676

% change year-on-year - 2.6 3.6 1.7 3.0

Source: Economic & Labour Market Review, May 2011, National Statistics website© Crown copyright material is reproduced with the permission of the Controllerof HMSO (and the Queen’s Printer for Scotland)



Population

According to the Office for National Statistics, the UK’s population is currentlygrowing at an average annual rate of around 0.6% to 0.7% a year. At this rate,it is expected the 65 million-barrier will be exceeded by 2017. A growingpopulation is likely to contribute to an increase in consumer spending, whichin turn, will benefit the toiletries market.

Table 1.4: UK Resident Population Estimates by Sex (000),Mid-Years 2006-2010

2006 2007 2008 2009 †2010

Female 30,895 31,068 31,244 31,418 31,614

Male 29,689 29,918 30,154 30,374 30,609

Total 60,584 60,986 61,398 61,792 ‡62,222

% changeyear-on-year - 0.7 0.7 0.6 0.7

† — taken from Population Projections Database

‡ — does not sum due to rounding at source

Source: Time Series Data — Monthly Digest of Statistics (accessed June 2011)/Population Projections Database (2008-based projections), National Statisticswebsite © Crown copyright material is reproduced with the permission of theController of HMSO (and the Queen’s Printer for Scotland)

Unemployment

In 2004, the number of people unemployed in the UK stood at 850,000 — itslowest level in over a decade. This remained at a comparable level up until2007. Starting in March 2008, however, the economic downturn beganaffecting the labour market, sending UK unemployment figures rising. Theclaimant count reached 1 million in October 2008 and rose to a 13-year highof 1.53 million in 2009, before decreasing again in 2010. The latest figurespublished by National Statistics suggest that the number of peopleunemployed in the UK currently stands at 2.5 million. This figure is likely toincrease in the first half of 2011 as public sector cuts come into effect.



Table 1.5: Actual Number of Unemployed Persons in the UK(million), 2006-2010

2006 2007 2008 2009 2010

Actual number ofclaimants (million) 0.95 0.86 0.91 1.53 1.50

% changeyear-on-year - -9.5 5.8 68.1 -2.0

Source: Time Series Data — Monthly Digest of Statistics (accessed June 2011),National Statistics website © Crown copyright material is reproduced with thepermission of the Controller of HMSO (and the Queen’s Printer for Scotland)

MARKET POSITION

The UK

The Office for National Statistics includes expenditure on cosmetics, fragrancesand toiletries in the category for miscellaneous goods and services for personalcare. Within this category, expenditure on toiletries is covered under ‘otherproducts for personal care’, along with non-electrical grooming appliances(such as combs and hairbrushes). The revised figures show that the overall valueof miscellaneous goods and services for personal care declined by 4.3% to£20.87bn in 2009, before increasing again in 2010 by 12.1%, to £23.39bn. Atthe same time, expenditure for the ‘other products for personal care’ subsectordecreased by 6.7% in 2009, which was followed by an increase of 15% in 2010to £16.54bn.

Table 1.6: Consumer Expenditure on Miscellaneous Goods andServices for Personal Care (£m), 2006-2010

2006 2007 2008 2009 2010

Hairdressing salons andpersonal groomingestablishments 5,065 5,273 5,500 5,401 5,815

Electrical appliances forpersonal care 1,028 1,007 894 1,089 1,042

Other products for personalcare 14,237 15,072 15,410 14,378 16,535

Table continues...



Table 1.6: Consumer Expenditure on Miscellaneous Goods andServices for Personal Care (£m), 2006-2010

...table continued

2006 2007 2008 2009 2010

Total 20,330 21,352 21,804 20,868 23,392

% change year-on-year - 5.0 2.1 -4.3 12.1

Source: Consumer Trends 2010, National Statistics © Crown copyright material isreproduced with the permission of the Controller of HMSO (and the Queen’sPrinter for Scotland)

Overseas

According to the European Cosmetics Association (Colipa), the EU-27 marketfor cosmetics and fragrances including toiletries covered in this Key Note reportrepresents close to one-third of the global market. At retail prices, the marketwas valued at €69.5bn in 2009, marginally down — by 1.6% — from €70.6bnin 2008. The UK’s market was valued at €8.9bn, accounting for 12.8% of salesin the EU-27.



2. Market Size

THE TOTAL MARKET

Manufacturers’ Sales

According to the latest available figures from National Statistics, the value ofUK manufacturers’ sales of perfumes and toilet preparations (which coverscosmetics and perfumes, as well as products for personal care), was worth£2.25bn in 2009, having marginally declined — by 0.8% — from £2.27bn in2008. The value of manufacturers’ sales fell in most personal care productcategories, including shaving preparations, oral care, shampoos and skincareproducts.

Retail Sales

The total market for toiletries, as covered by this report, was valued at £4.53bnin 2010. Personal wash and bathroom toiletries make up the largest sector byvalue, accounting for 27.3% of the total. This is closely followed by skincareand hair care products, accounting for 27.1% and 24.8%, respectively in 2010.

Table 2.1: The Total UK Market for Toiletries by Sector by Valueat Current Prices (£m at rsp), 2006-2010

2006 2007 2008 2009 2010

Personal wash andbathroom toiletries 1170.0 1172.0 1175.0 1212.0 1237.0

Skincare products 978.0 1060.0 1140.0 1196.9 1229.0

Hair care products 1100.5 1106.5 1118.0 1120.0 1123.0

Oral care products 545.0 549.5 557.0 559.0 562.6

Shaving preparations,wet razors and blades,and depilatories 378.0 380.5 385.0 378.0 381.3

Total 4171.5 4268.5 4375.0 4465.9 4532.9

% change year-on-year - 2.3 2.5 2.1 1.5

rsp — retail selling prices

Source: Key Note

Toiletries Market Size


Figure 2.1: The Total UK Market for Toiletries by Value atCurrent Prices (£m at rsp), 2006-2010

20062007

20082009

2010

3,000

3,250

3,500

3,750

4,000

4,250

4,500

4,750

5,000


Source: Key Note

BY MARKET SECTOR

Figure 2.2 displays the market share percentage attributed to each sectorfeatured in this Key Note Market Report Plus.



Figure 2.2: The Total UK Toiletries Market by Sector Share (%),2010

Shaving preparations,

wet razors and blades,

and depilatories

8.4%

Oral care products

12.4%

Hair care products

24.8%

Personal wash and bathroom toiletries

27.3%

Skincare products

27.1%

Source: Key Note

Personal Wash and Bathroom Toiletries

As shown in Table 2.2, the total value for personal wash and bathroomtoiletries increased by an estimated 2.1% from £1.21bn in 2009 to £1.24bn in2010. Although household penetration of personal wash and bathroomtoiletries remains high, potential value growth is restricted due to theprevalence of discounting. Moreover, retailers’ own brands are increasinglygaining market share over more expensive brands, as consumers are likely totrade down to less expensive products in the current economic climate.Notably, however, deodorants outperformed the sector as a whole, with salesincreasing in value by an estimated 3.8%. Continuing economic recovery, albeitslow, should see less discounting and returning consumer confidence.



Table 2.2: The UK Personal Wash and Bathroom Toiletries Sectorby Subsector by Value at Current Prices (£m at rsp),

2009 and 2010

2009 2010% Change2009-2010

Bath/shower soaps, gels, additives andtalcum powder 690.0 695.0 0.7

Deodorants 522.0 542.0 3.8

Total 1,212.0 1,237.0 2.1


Source: Key Note

Skincare Products

The market for skincare products, including sun care, was valued at £1.23bn in2010, an increase of 2.7% from the previous year. Growth in this marketcontinues to be driven by premium-priced products with anti-ageingformulations.

Table 2.3: The UK Skincare Products Sector by Subsector byValue at Current Prices (£m at rsp), 2009 and 2010

2009 2010% Change2009-2010

Facial skincare 680.0 702.0 3.2

Hand and body skincare 316.0 324.0 2.5

Suncare 200.9 203.0 1.0

Total 1,196.9 1,229.0 2.7


Source: Key Note



Hair Care Products

The value of the market for hair care products in 2010 increased by a marginal0.3%, from £1.12bn in 2009. The colourants and enhancers sector showed thestrongest growth with 1.3%, followed by conditioners with 0.8%. By contrast,sales of hairsprays and other styling aids decreased. The largest sector in thismarket segment is formed by shampoo, which accounts for just under a third(32.5%) of the total value of hair care products. This subsector is, however,another which is subject to heavy discounting, thereby restricting valuegrowth.

Table 2.4: The UK Hair Care Products Sector by Subsector byValue at Current Prices (£m at rsp), 2009 and 2010

2009 2010% Change2009-2010

Shampoo 364.0 365.2 0.3

Conditioners 238.0 240.0 0.8

Colourants and enhancers 221.0 223.8 1.3

Hairsprays 131.0 130.0 -0.8

Other styling aids 166.0 164.0 -1.2

Total 1,120.0 1,123.0 0.3


Source: Key Note

Oral Care Products

Oral care products accounted for 12.4% of the toiletries market in 2010, saleshaving increased in value by a marginal 0.6%, to £562.6m. Householdpenetration of oral care products is high (see Chapter 7 — Buying Behaviour),and volume sales are helped by a growing population. It is, however, anothersector in which special price promotions are frequent, thereby keeping a checkon value growth.



Table 2.5: The UK Oral Care Products Sector by Subsector byValue at Current Prices (£m at rsp), 2009 and 2010

2009 2010% Change2009-2010

Toothpaste, mouthwashes, etc. 425.0 428.6 0.8

Toothbrushes 134.0 134.0 0.0

Total 559.0 562.6 0.6


Source: Key Note

Shaving Products

Shaving products account for the remaining 8.4% of the toiletries market andthis sector was worth an estimated £381.3m in 2010. The men’s sector has beendriven by new product innovation in recent years, although this trend notablyreversed during the economic downturn, as cost-conscious consumersincreasingly looked for less expensive — yet still high quality — alternatives.The sector experienced an increase in value of just under 1% in 2010,amounting to £381.3m.

Table 2.6: The UK Shaving Products Sector by Subsector byValue at Current Prices (£m at rsp), 2009 and 2010

2009 2010% Change2009-2010

Shaving preparations 88.0 89.0 1.1

Razors, blades and depilatories 290.0 292.3 0.8

Total 378.0 381.3 0.9


Source: Key Note



OVERSEAS TRADE

The UK has had a favourable trade balance in toiletries in the 3 years between2008 and 201, exporting a greater value than is imported. However, the tradebalance for 2010 decreased by 29.3% from £295.3m in 2009 to £208.7m in 2010.

Table 2.7: UK Imports and Exports of Toiletries by Value (£000),2008-2010

2008 2009 2010

Exports 1,012,512.0 1,097,203.3 1,045,949.3

Less imports 742,723.9 801,950.7 837,297.4

Balance of trade 269,788.1 295,252.6 208,651.9

Source: HM Revenue & Customs © Crown copyright material is reproduced withpermission of the Controller of HMSO (and the Queen’s Printer for Scotland)

Imports

Imports of toiletries from within the EU accounted for 76% of the value of totalUK imports of toiletries in 2010 (see Table 2.8). Hair care products representedthe highest-value category, accounting for 44.4% of total imports.Interestingly, this is one of only two sectors for which the cost of importsexceeded the value of exports, the other sector being perfumed bath salts andother bath preparations. The EU was the biggest source of imports in almostall sectors, with the exception of toilet soap. The UK’s main European sourcesof toiletries are Germany, France and Italy; while non-EU suppliers includeNorth America, the People’s Republic of China (PRC) and India.



Table 2.8: UK Intra-EU Arrivals and Extra-EU Imports ofToiletries by Category by Value (£000), 2010

Intra-EU Extra-EU Total

Preparations for the hair 282,181.8 94,807.5 376,989.3

Preparations for oral or dental hygiene 106,394.7 26,718.5 133,113.2

Personal deodorants and anti-perspirants 104,259.5 11,124.6 115,384.1

Perfumed bath salts and other bathpreparations 40,226.4 15,396.3 55,622.7

Toilet soap 29,738.0 31,462.8 61,200.8

Pre-shave, shaving and after-shavepreparations 46,483.8 6,064.8 52,548.6

Depilatories and perfumery, cosmetic ortoilet preparations not elsewherespecified 26,753.6 15,685.1 42,438.7

Total 636,037.8 201,259.6 837,297.4


Exports

EU countries were the principal destinations for UK exports of toiletries,accounting for 70.1% of total exports in 2010, compared with 74.1% in 2009.The Netherlands, the Republic of Ireland (RoI), Germany, France, and Spainwere the most important EU destinations for UK exports of toiletries, whilenon-EU markets include North America, Russia, Australia and the United ArabEmirates.



Table 2.9: UK Intra-EU Despatches and Extra-EU Exports ofToiletries by Category by Value (£000), 2010

Intra-EU Extra-EU Total

Preparations for the hair 208,637.7 62,838.8 271,476.5

Preparations for oral or dentalhygiene 170,349 57,544.1 227,893.1

Personal deodorants andanti-perspirants 173,600 45,971.3 219,571.3

Perfumed bath salts and otherbath preparations 30,634.6 14,183.7 44,818.3

Toilet soap 41,642.0 33,668.7 75,310.7

Pre-shave, shaving andafter-shave preparations 80,880.7 47,500.5 128,381.2

Depilatories and perfumery,cosmetic or toilet preparationsNES 27,177.5 51,320.7 78,498.2

Total 732,921.5 313,027.8 1,045,949.3




3. Industry Background

RECENT HISTORY

The use of some form of personal care products can be traced back thousandsof years, and usage is evident in almost every society. Throughout time, peoplehave striven to make the most of their appearance with feature-enhancingpastes and dyes — such as henna — and perfumed oil, which was frequentlyused by the wealthy as a means to mask body odours.

By the 1970s, mounting pressure from environmentalists and animal-rightsactivists marked the beginning of closer scrutiny of industry practices. Despitestringent regulation, such as the European Cosmetics Directive of 1976 and theCosmetic Products (Safety) Regulations of 1996, as well as assurances fromindustry members, animal testing scandals still arise. Toiletries that areformulated using natural, plant-based ingredients have become the preferredchoice of many customers; this trend is exemplified by the success of The BodyShop International over the past couple of decades.

NUMBER OF COMPANIES

In 2010, according to UK Business: Activity, Size and Location, there were 320VAT- and/or PAYE-based enterprises involved in the manufacturing ofperfumes and toilet preparations. 46.9% of these had a turnover of more than£250,000, while nearly one third (29.7%) of these companies turned over £1mor more.

Table 3.1: Number of UK VAT- and/or PAYE-Based EnterprisesEngaged in the Manufacture of Perfumes and Toilet

Preparations by Turnover Sizeband, 2010

Number of Enterprises

Turnover Sizeband (£000)

0-49 55

50-99 60

100-249 55

250-499 30

500-999 25

Table continues...

Toiletries Industry Background



Preparations by Turnover Sizeband, 2010

...table continued


Turnover Sizeband (£000)

1,000-4,999 55

5,000+ 40

Total 320

Source: UK Business: Activity, Size and Location, National Statistics website ©Crown copyright material is reproduced with the permission of the Controller ofHMSO (and the Queen’s Printer for Scotland)

EMPLOYMENT

Table 3.2 shows the same number of UK VAT- and/or PAYE-based enterprisesthat in 2010 were involved in the manufacturing of perfumes and toiletpreparations, this time separated by employment sizeband. As can be seen,most are small enterprises, with nearly two-third (70.3%) of companiesemploying fewer than ten people and more than half (57.8%) of companiesemploying fewer than five.


Preparations by Employment Sizeband, 2010


Employment Sizeband

0-4 185

5-9 40

10-19 30

20-49 25

50-99 15

Table continues...




Preparations by Employment Sizeband, 2010

...table continued


Employment Sizeband

100-249 10

250+ 15

Total 320

Source: UK Business: Activity, Size and Location, National Statistics website ©Crown copyright material is reproduced with the permission of the Controller ofHMSO (and the Queen’s Printer for Scotland)

REGIONAL VARIATIONS IN THE MARKETPLACE

According to UK Business: Activity, Size and Location 2010, most companiesmanufacturing perfumes and toilet preparations are concentrated in London(65 units) and the South East (55 units), followed by the East (30) and SouthWest (30).

DISTRIBUTION

Selective Distribution

Toiletry products are often distributed selectively, whereby their sale is limitedto certain wholesalers or retailers. This method is used either to give a premiumbrand the exclusivity crucial to its image, or as a concession to a favouredretailer. However, exclusive distribution agreements are not necessarilypermanent. A recent example of selective distribution was the launch ofskincare range Naked Truth, by cosmetic surgeon Darren McKeown, in May2011. The products include a moisturiser, a cleanser, an eye cream and facialrehydration fluid, and are to be sold exclusively at UK Superdrug stores.

Specialist Retailers

Specialist retailers of toiletries include The Body Shop, Lush Cosmetics, MoltonBrown, L’Occitane, Space NK, Jo Malone and Neal’s Yard.



High-Street Stores

Health and beauty chains Boots and Superdrug are the leading high-streetstores, both selling a wide range of personal care products. Others includeLloyds Pharmacy, along with a number of smaller chains and independentstores.

Department Stores

Department stores, such as Debenhams, House of Fraser, Harrods, HarveyNichols, Selfridges and John Lewis, offer a range of branded as well asown-brand cosmetics and toiletries. Many stores also house concessions forbrands such as Molton Brown and L’Occitane.

Supermarkets

The supermarkets continue their expansion into the health and beauty sectorby offering products at discounted prices. Major UK supermarkets such asTesco, ASDA, Sainsbury’s, Morrisons and Waitrose also stock their own-brandtoiletry ranges, all sold at reasonable prices. It is the involvement of thesupermarkets and the price wars between them and other main competitors,that do much to keep down the value of sales of everyday toiletries.

Direct Selling

Avon is a prime example of the direct selling of cosmetics and fragrances, whichis carried out both online and through representatives. The Body Shop alsostarted its own ‘Body Shop at Home’ party plan, which offers 25% commissionto its sales representatives. VIE At Home is another company that specialises indirect selling of cosmetics, skincare and body care products in the UK. VIE AtHome was launched in 1996 and has more than 10,000 sales representatives.

HOW ROBUST IS THE MARKET?

The toiletries market was not impacted nearly as much by the global recessionas, for instance, the construction and property markets. Sales of toiletryproducts remained strong during the economic downturn as many of theseitems, such as shampoos, shower gels and deodorants, etc., are regarded asnecessities (see Chapter 2 — Market Size, and Chapter 7— Buying Behaviour).Nevertheless, there have been considerable changes in consumer behaviourand trends, predominantly in response to the ongoing economic uncertainty,rising energy and commodity prices, and a squeeze in households’ disposableincome. Combined, these factors are prompting consumers to adjust theirpriorities and spending habits. Consumers today are more likely to trade downto value products in order to save money, while others may view toiletryproducts as ‘feel good’ indulgences and stay loyal to their favourite brands. Intrading down, some consumers will be selecting premium products as analternative to salon beauty and spa treatments, effectively bringing new retailcustom to the toiletries market.



LEGISLATION

Cosmetics Directive 1976

All cosmetic, toiletry and perfumery products placed on the market in the UK(and throughout the EU) are regulated by European legislation, namely theCosmetics Directive (76/768/EEC). The primary purpose of these laws is toprotect human safety. The manufacturer or supplier of the cosmetic product isresponsible for ensuring it is safe; each cosmetic must be assessed for safety bya duly qualified safety assessor before it can be made available to the public.The Directive covers the composition, manufacturing, safety assessment andlabelling of all cosmetics products. The Cosmetics Directive also controls whatmay or may not be put in a cosmetic. There are lists of substances that mustnot be present and lists of substances that may be used as ingredients subjectto particular restrictions.

Cosmetics Products Regulations

The legislation that regulates cosmetic products in the UK is the CosmeticProducts (Safety) Regulations 2008. The Regulations are based on theCosmetics Directive (76/768/EEC) and are updated periodically, reflectingchanges to prohibitions of, and restrictions on, certain substances, andsubsequent amendments to the Cosmetic Products (Safety) Regulations 2008.

The Cosmetic Products (Safety) Regulations 2008 came into force on18th June 2008 and consolidated earlier Regulations, as well as implementingcurrent European Directives. Under the Cosmetic Products (Safety) Regulations2008, all cosmetic products sold in the EU must display a complete ingredientslist. New products are required to undergo a full safety assessment before theyare allowed onto the market. Safety assessments need to be carried out byqualified professionals and must cover the finished product, all ingredients andhow products will be used.

In July 2013, the EU Cosmetics Directive will be replaced by the EU CosmeticsRegulation (1223/2009), which will apply directly in all EU Member States.

REACH

Also relating to the industry is the Registration, Evaluation & Authorisation ofChemicals (REACH), a European regulation concerning the safety of chemicals.In order to ensure a high level of protection, this regulation requires data tobe provided concerning human and environmental safety. It applies to allchemicals made in the EU or imported into the EU, including certain naturalsubstances and other substances used in cosmetic products. It is intended toaddress any public concern about the use of chemicals.



KEY TRADE ASSOCIATIONS

Cosmetic, Toiletry and Perfumery Association

Founded in 1945, the Cosmetic, Toiletry and Perfumery Association (CTPA) is atrade association providing a voice for the UK cosmetic, toiletry and perfumeryindustry. Its members vary from small- and medium-sized companies to largemulti-nationals and include manufacturers, raw material suppliers and serviceproviders. The Association co-ordinates the industry’s viewpoint on key issues,such as science, innovation and safety, and maintains an open dialogue withthe Government, both in the UK and in Europe, as well as with internationalregulatory authorities and key opinion formers.

The European Cosmetics Association

Established in 1962 in Brussels, the European Cosmetics Association (Colipa)aims to be the voice of Europe’s cosmetic, toiletry and perfumery industry. Itrepresents the interests of more than 2,000 companies, ranging from majorinternational cosmetics manufacturers to small family-run businessesoperating in niche markets. Together, these companies employ more than500,000 people within the EU. The products that fall within the scope of Colipaextend across a diverse range and include essential personal hygiene products,such as deodorant, shampoo and toothpaste, as well as beauty preparations.The Association assists its members with the ongoing development of safe,innovative and effective products, while also meeting the demands ofconsumers through intensive market research.



4. Competitor Analysis

THE MARKETPLACE

The manufacture of toiletries is currently dominated by a small number ofmultinational corporations, such as Unilever and Procter & Gamble (P&G),which also produce a wide range of consumer goods for other markets outsideof the toiletry industry. Other specialist companies include L’Oreal, PZ Cussons,Estee Lauder and number of smaller, niche operations. On the retail side,principle retailers of toiletries include Alliance Boots, Superdrug and thegrocery multiples such as Tesco, which sell a much wider range of consumergoods than just toiletries.

MARKET LEADERS — MANUFACTURERS

Avon Cosmetics Ltd

Company Structure

Avon Cosmetics Ltd is one of the world’s leading direct sellers of beauty andrelated products, marketing to women in more than 100 countries throughapproximately 6.5 million independent sales representatives. Having enteredthe UK market in 1959, the company claims to be one of the top three beautybrands in the country today. The company’s head office is located inNorthampton and supports operations in both the UK and European market.

Current and Future Developments

In March 2011, over 5,000 independent Avon representatives joined AvonChairman and CEO Andrea Jung at a concert in Birmingham to mark Avon’s125th anniversary. In May, Avon Cosmetics Ltd was crowned the winner of theEnvironmental Award at the Direct Selling Association (DSA) Conference.

Financial Results

In the year ending 31st December 2009, Avon Cosmetics Ltd registered aturnover of £316.6m, a decrease of 0.6% from £318.6m in the previous year.Its pre-tax profit dropped significantly, from £20.6m to a loss of £7.1m over thesame period.

Toiletries Competitor Analysis


Estée Lauder Cosmetics Ltd

Company Structure

Estée Lauder Cosmetics Ltd is a US-based company, which was established in1946. The company entered the European market in 1960, after setting upoperations in London. Its product range covers skincare, cosmetics, perfumeand haircare products, which are sold in more than 135 countries. Its subsidiaryoperations include Clinique Laboratories, Jo Malone and Bobbi Brown.


In December 2010, the company announced that it had signed Puerto Ricanmodel Joan Smalls as the new face for its cosmetics and skincare advertisingcampaigns. In March 2011, Estee Lauder launched a new fragrance —Adventurous — which is exclusive to travel retail. The product is a fragrancedesigned for the modern jet setter, and is available at all Estee Lauder travelretail locations worldwide.

Financial Results

In the 12 months ending 30th June 2010, turnover at Estée Lauder CosmeticsLtd reached £365.9m, up by 5.9% from £345.6m in the previous year. Its pre-taxprofit also improved, increasing by 7.1% from £56.2m in the previous year to£60.2m in 2010.

L’Oréal (UK) Ltd

Company Structure

Based in London, L’Oréal (UK) Ltd is a subsidiary of the French company L’OréalSA and specialises in women’s make-up, skincare, hair care, dermatology andfragrances. In 2006, the company acquired The Body Shop International for£652m.


In March 2010, L’Oreal’s YSL Beauty brand and Ermenegildo Zegna agreed toput an early termination to their existing license agreement for the creationand development of fine fragrances under the Ermenegildo Zegna brand. Themove was based on L’Oreal’s Luxury Division objective to focus its men’sperfume business on a number of limited brands which include — amongothers — Giorgio Armani, Ralph Lauren, Yves Saint Laurent and Diesel.

In May, L’Oreal was recognised for its innovative reporting on sustainabledevelopment by Ethical Corporation, an organisation that promotes debateand discussion about corporate social responsibility.



Financial Results

In the year ending 31st December 2009, turnover at L’Oréal UK Ltd increasedby 2.2% to £745.8m, compared with £730.1m in the previous year. Pre-taxprofit increased by 25.8% from £74m to £93.2m.

Procter & Gamble (Health & Beauty Care) Ltd

Company Structure

P&G Ltd was founded in 1837 by William Procter and James Gamble. Whatstarted off as a small family-run soap and candle company in the US is nowconsidered to be the world’s largest consumer goods company. It owns manywell-known branded products, including Fairy Liquid washing-up liquid, andGillette. Its UK subsidiary, P&G (Health & Beauty Care) Ltd, is based in Surrey.


In February 2011, P&G announced its Oral-B brand had appointed Dr JamesRussell as its ambassador, who was known for his work on Channel 4’s primetime Embarrassing Bodies series. In April, P&G launched its ‘Proud Sponsor ofMums’ campaign for Mother’s Day, to promote its own corporate brand forthe first time in the UK, in addition to the outlay campaigns for its 50-plushousehold products including Pringles, Pampers and Pantene.

Financial Results

In the year ending 30th June 2010, Procter & Gamble (Health & Beauty Care)Ltd recorded a pre-tax loss of £10.1m, down from a profit of £77.7m in theprevious year. Total turnover for the same period is not available from the atthe time of writing, July 2011.

PZ Cussons PLC

Company Structure

Known as Paterson Zochonis PLC until 2002, PZ Cussons manufactures personaland household cleaning products in Europe, Asia and Africa. Its origins go backto 1879, when George Paterson and George Zochonis set up a trading post inSierra Leone. It acquired the soap-making Cussons Group Ltd in 1975.


In February 2011, PZ Cussons announced it would form a new beauty divisioncomprising its premium beauty brands: St Tropez, The Sanctuary and CharlesWorthington. The division is based in Covent Garden, London and aims tomaximise the three ranges and their presence both in the UK andinternationally.



Financial Results

In the year ending 31st May 2010, PZ Cussons PLC recorded a turnover of£771.6m, a decrease of 7.9% from £838.1m in the previous 12 months.However, its pre-tax profit grew by 20.6%, from £84.4m to £101.8m over thesame period.

Unilever PLC

Company Structure

Originally two separate legal entities — Unilever NV and Unilever PLC — withseparate stock-exchange listings, the Unilever Group announced a series ofsignificant changes to streamline its management and leadership in 2005.Unilever is home to brands such as: Knorr, Hellmann’s, Lipton, Dove, Vaseline,Persil, Cif and Marmite.


In February 2011, Unilever reported savings of €1.4bn in 2010 throughlowering supply chain costs and indirect costs, well ahead of the €1bn thegroup was targeting at the start of the year. Later in April, Unilever sold Sanex,the multi-category personal care brand, to Colgate for €672m. Sanex wasacquired by Unilever from Sara Lee in 2009. In May 2011, Unilever completedthe acquisition of Alberto Culver Company, manufacturer and distributor ofbeauty care and other personal care brands, including TRESemme, AlbertoVO5, St. Ives and Simple. Unilever paid $3.7bn in cash for the acquisition.

Financial Results

In the year ending 31st December 2010, turnover at Unilever PLC grew by11.1%, to €44.26bn, up from €39.82bn in 2009. Over the same period, itspre-tax profit increased by 24.7%, from €4.92bn to €6.13bn.

MARKET LEADERS — RETAILERS

Alliance Boots Ltd

Company Structure

Alliance Boots Ltd is a privately owned company and a leading internationalpharmacy-led health and beauty group. It offers a wide range of products andservices to its customers. The company, which employs over 115,000 people,has two core business divisions — pharmacy-led health and beauty retailing;and pharmaceutical wholesaling. Its wholesale and distribution network servesover 150,000 pharmacies, doctors, health centres and hospitals from over 360pharmaceutical wholesale distribution centres in 16 countries. The companywas taken over by private-equity firm Kohlberg Kravis Roberts (KKR) in 2007.




In March 2011, Alliance Boots agreed to produce beauty and skin care productsfor the world’s second largest supermarket chain, Carrefour. Boots will bemaking the products, including cosmetics, bathing and hair care, which will besold under Carrefour’s own name. Boots also planned to open its nextdrive-through store at St James Retail Park in Northampton in May 2011, anda further 20 in the next few years. The format aims to allow customers to driveup to a window where they can drop off or pick up prescriptions rather thanqueuing up in stores.

At the time this Key Note Report was published (June 2011), Boots is workingon a major upgrade of its Advantage Card programme under a project entitledAdvantage Card Futures. The project aims to increase the personalisation ofthe card with mailings tailored to individuals’ shopping patterns and personalneeds, which is to be completed by the end of 2011.

Financial Results

According to the Alliance Boots 2010/2011 Annual Review (see Table 4.1), thecompany’s revenue for its financial year ending 31st March 2011 was £20.22bn,up 8% from £18.72bn in the previous year.

Table 4.1: Alliance Boots Group Revenue and Trading Profit byDivision (£m), Year Ending 31st March 2011

Revenue (£m)Trading Profit

(£m)

Health and beauty 7,626 767

Pharmaceutical wholesale 13,942 320

Contract manufacturing andcorporate costs 253 -36

Intra-group -1,603 -

Total 20,218 1,051

Source: Alliance Boots 2010/2011 Annual Review



The Body Shop International PLC

Company Structure

The Body Shop was founded in 1976 by the late entrepreneur Dame AnitaRoddick as a single shop in Brighton. The Body Shop chain now comprises morethan 2,500 stores worldwide, some of which are company-owned, while othersare franchised. The company was bought by the French cosmetic giant L’Orealin 2006, but retains a separate identity from the parent company. The BodyShop is widely known for its focus on environmentally-friendly and fairtradecosmetic products.


In April 2011, the ethical brand launched a petition calling on the Governmentto improve, and offer greater, protection to young children who are victims oftrafficking.

Financial Results

In the 53 weeks ending 2nd January 2010, turnover at The Body ShopInternational PLC had grown by 10.5% to £320.5m, up from £290m on27th December 2008. Its pre-tax profit also increased from £25.4m to £34.7m.

Lush Cosmetics Ltd

Company Structure

Lush Cosmetics Ltd began as a manufacturer and supplier of handmadetoiletries and cosmetics to The Body Shop in 1978, before opening its own shopon the King’s Road, Chelsea, in 1994. It now operates a chain of more than 600stores in 40-plus countries, with its own production facilities in the UK, NorthAmerica and Japan. The company intends to open another factory in Chile toserve the South American market.


In April 2011, Lush decided to pay an hourly rate of £7.85 to its staff at all 11Lush stores in the capital. The decision was hailed as a breakthrough for theLondon Citizens group, which launched the living wage campaign back in 2001.

Financial Results

In the year ending 30th June 2010, turnover at Lush Cosmetics Ltd increasedby 15.2% to £247.2m from £214.m in 2009. Its pre-tax profit increased by 60.2%to £22.3m, from £13.9m in the previous year.



Molton Brown Ltd

Company Structure

Molton Brown originated as a hair salon in London’s Mayfair in 1973, but, bythe 1980s, it had expanded into retail products with an emphasis on natural,plant-based toiletries. Molton Brown grooming products are now sold in 70countries worldwide, in its own stores, department-store concessions, spas andonline, and in leading luxury hotels and airlines. In July 2005, Molton Brownwas acquired by the Kao Corporation of Japan, in a £170m deal.


In April 2011, Molton Brown announced the launch of two new products to itsbath, body and fragrance collection. The two products, Vitalising Vitamin AB+C body hydrating gel and Vitalising Vitamin AB+C eau fraiche body spray arenew additions to the brand’s original AB+C bath foam and shower gel.

Financial Results

In the year ending 31st, December 2009, turnover at Molton Brown Ltddecreased marginally (by 2%), to £58.2m from £59.4m in 2009. Its pre-tax profitwas reduced by 54.9%, from £9.6m to £4.3m over the same period.

Superdrug Stores PLC

Company Structure

Superdrug was founded in 1964 by the Goldstein family, who developed thebusiness from a single store and eventually sold it to Kingfisher in 1987. A majorexpansion programme took place in 1988, which included the acquisition ofthe Tip Top chain. In 1989, the company acquired the Medicare chain whichincreased its store base to over 650. In 2002, the company became part of theAS Watson family, the world’s largest health and beauty retailer. Today,Superdrug Stores PLC is the UK’s second-largest beauty and health retailer, andcurrently has over 900 stores across the UK.


In May 2011, Superdrug launched its first loyalty card for customers to enablethem to earn points online and in-store. The loyalty card will be known as theBeautycard and doubles as a mirror; it offers one point for every pound spent,with 100 points translating into a pound to spend in store. The launch wasaccompanied by points promotions both in store and online.

Financial Results

Superdrug Stores PLC registered a turnover of £1.07bn in the year ending26th December 2009, almost unchanged on the previous year. In 2010, this fellslightly to £1.05bn. Pre-tax profit, meanwhile, increased from a loss of £7.4min 2008 to a loss of £234,000 in 2009, before reaching £9.3m in 2010.



OUTSIDE SUPPLIERS

Research and Development

The Scientific advisory Committee (SAC), which is part of the Cosmetic Toiletryand Perfumery Association (CTPA), consists of senior scientists form leadingcosmetics, fragrances and toiletries companies, who advise and give help onthe safety of ingredients and production procedures. Others giving advice andguidance for safety evaluation and risk assessment include the Intertek Group.Founded more than 100 years ago, it is an industry leader in quality, processand systems, employing more than 30,000 people in 1,000 locations in over 100countries.

Raw Materials

Givaudan is a Swiss manufacturer of flavouring and fragrances. Its FineFragrance division has created perfumes that include L’Air du Temps by NinaRicci, Thierry Mugler’s Angel and Prada’s Infusion d’Iris.

Lonza Group Ltd is a leading supplier to the pharmaceutical, healthcare andlife science industries. Headquartered in Basel, Switzerland, it is also a leaderin the production and support of active pharmaceutical ingredients, bothchemically as well as biotechnologically.

Sensient Technologies Corporation is a US-based manufacturer and supplier offlavours, fragrances and colours which are used for foods, beverages,pharmaceuticals, cosmetics, home and personal care products and printing andimaging products. The company has operations in more than 30 countries.

Treatt PLC is an independent supplier to the flavour and fragrance industries.It also supplies products to food, beverage, soap, perfumery, cosmetic andpharmaceutical companies. Treatt manufactures and supplies a vast range ofproducts, from essential oils and natural fractions to high-impact specialtyaroma chemicals. The company is publicly traded and listed on the LondonStock Exchange (LSE).

Processing Machinery, Packaging and components

Suppliers of equipment, such as moulds, pumps, mixers, blenders andequipment for processing, packaging, solids/fluids handling and control,include the German company Dieter Bakic, Chesterfield-based Robinson PLC,Harlands Labels, Vetroplas Packaging, Boxes Prestige Ltd, Rio Tinto, andMeason Freer Ltd, among many others.



Outsourcing

Swallowfield PLC is one of the leading suppliers of contract outsourcingservices to the toiletries and cosmetics industry. Founded in 1876, its servicesinclude formulating, manufacturing and packaging cosmetics and toiletries forown-label and brand names. In 2009, it worked in collaboration with theclothing store Primark, developing the Beautiful Colour Cosmetics range,which went on sale in 30 Primark stores across the UK.

MARKETING ACTIVITY

Main Media Advertising Expenditure

Total expenditure on the main media advertising of toiletries amounted to£354.3m for the year ending March 2011, up by 3% from £343.9m in theprevious year. As can be seen in Table 4.2, hair care products had the largestadvertising budget in 2011, accounting for 36.4% of total expenditure,followed by skincare products, which accounted for 29% of the total.

Table 4.2: Main Media Advertising Expenditure on Toiletries bySector (£000), Years Ending March 2010 and 2011

2010 2011

Personal Wash and Bathroom Products

Deodorants 35,199 36,515

Bath toiletries, shower gels and wipes 6,935 10,579

Liquid foam bath and liquid soap 5,747 4,160

Bath and beauty ranges 1,924 2,676

Total personal wash and bathroomproducts 49,805 53,930

Skincare Products

Skincare (excluding suncare/tanning) 100,956 94,060

Suncare and tanning 8,512 8,868

Total skincare products 109,468 102,928

Table continues...



Table 4.2: Main Media Advertising Expenditure on Toiletries bySector (£000), Years Ending March 2010 and 2011

...table continued

2010 2011

Hair Care Products

Shampoos and conditioners 50,328 57,889

Hair colourants 42,515 48,111

Hair product ranges 9,290 8,938

Hair styling aids 9,804 7,701

Hairsprays 5,861 6,480

Total hair care products 117,798 129,119

Oral Care Products

Toothpaste and polishes 28,422 25,460

Other oral hygiene products 15,346 19,259

Total oral care products 43,768 44,719

Shaving Products

Wet razors and blades 12,918 19,580

Shaving preparations 4,861 1,209

Depilatories and bleach 5,246 2,845

Total shaving products 23,025 23,634

Total 343,864 354,330

Source: Nielsen Media Research

Personal Wash and Bathroom Products

• Deodorants

As shown in Table 4.3, main media advertising expenditure on deodorants inthe year ending March 2011 was £36.5m, up by 3.7% from £35.2m in theprevious year. Unilever was the biggest spender in this category, backing itsSure brand with £9.2m and its Dove and Elide Lynx brands by £8m and £6.3m,respectively. Beiersdorf supported its NIVEA deodorant brand with advertisingexpenditure of £5.4m over the same period.



Table 4.3: Main Media Advertising Expenditure on Deodorants(£000), Year Ending March 2011

L’Oreal

Men Expert 48h Dry Full Power deodorant 1,430

Men Expert 48h Dry Non Stop deodorant 217

Total L’Oreal 1,647

Sure

Sure for Men 603

Sure for Men Sport 337

Sure for Men Sport Defence 748

Sure Crystal for Women 823

Sure for Women 3,656

Sure for Women Cotton Fresh 624

Sure Maximum Protection women’s deodorant 1,382

Sure Natural Minerals women deodorant 1,012

Total Sure 9,185

Garnier

Garnier Invisi Calm deodorant 401

Mineral 48hr Protection deodorant 248

Mineral 48hr deodorant for women 1,445

Total Garnier 2,094

Elida

Lynx deodorant range 1,972

Lynx Dry+Sensitive deodorant 2,624

Impulse Body Sprays 560

Impulse Generic 630

Impulse Into Glamour 492

Total Elida 6,278

Table continues...



Table 4.3: Main Media Advertising Expenditure on Deodorants(£000), Year Ending March 2011

...table continued

Dove

Deodorant for women 2,656

Go Fresh deodorant 174

Hair Minimising anti-perspirant 630

Invisible Dry Deodorant 1,755

Men+Care Clean Comfort deodorant 2,800

Total Dove 8,015

NIVEA

Calm & Care deodorant for women 3,831

Invisible Black & White range 1,419

Silver Protect deodorant for men 144

Total NIVEA 5,394

Right Guard

Right Guard deodorant spray 203

Right Guard Xtreme deodorant 1,264

Total Right Guard 1,467

Sanex deodorant range 977

Gillette Series anti-perspirant 772

Sub-threshold brands 686

Total 36,515


• Bath Toiletries, Shower Gels and Wipes

Main media advertising expenditure on bath toiletries and shower gelsamounted to £6.9m in 2011 (see Table 4.4). Unilever spent a combined £4.6mto promote its Dove, Radox and Elida Lynx brands, while PZ Cussons supportedits Imperial Leather brand with £1.1m.



Table 4.4: Main Media Advertising Expenditure on BathToiletries and Shower Gels (£000), Year Ending March 2011

Dove

Dove Men+Care body & face wash 659

Dove Visible Care Nutrium Moisture 924

Total Dove 1,583

Imperial Leather

Imperial Leather Skin Kind Hydrate 175

Imperial Leather Skin Kind Refresh 108

Imperial Leather Skin Kind Range 837

Total Imperial Leather 1,120

Radox

Radox shower gel and shampoo for men 1,309

Radox Men shower gel range 202

Radox Shower Smoothies 661

Total Radox 2,172

Sanex

Sanex Dermo Moisturising shower gel 115

Sanex Dermo Protector shower gel 554

Total Sanex 669

Palmolive Naturals Nutra Fruit 182

Elida Lynx Rise shower gel 893


Total Shower Gel 6,886


In the mass-market cleansers and wipes product sector, the brand that receivedthe highest advertising spending was Simple’s Kind to Skin cleansing wipes,accounting for 46.8% of total category spending in the year ending March2011 (see Table 4.5).



Table 4.5: Main Media Advertising Expenditure on Mass-MarketCleaners and Wipes (£000), Year Ending March 2011

Clearasil Skin Perfecting wash 146

Loreal Dermo Expertise Perfect Clean gel 521

Loreal Dermo Expertise Perfect Clean scrub 443

Neutrogena Wave Duo Power cleanser 593

NIVEA Visage Daily Essentials wipes 104

Simple Kind to Skin cleansing wipes 1,728


Total Ϯ3,693

† — does not sum due to rounding


• Liquid Foam Bath and Liquid Hand Soap

Main media advertising expenditure on liquid foam bath and hand soapamounted to £4.2m in 2011, a decrease from £5.7m in the previous year. Thebrand that received the strongest backing was Dettol’s No Touch hand soapsystem, which accounted for 79.1% of spending in this category.

Table 4.6: Main Media Advertising Expenditure on Liquid FoamBath and Liquid Hand Soap (£000), Year Ending March 2011

Cussons Carex anti-bacterial handwash 82

Cussons Carex handwash 722

Dettol No Touch hand soap system 3,292

Total liquid foam bath 26


Total 4,160




• Bath and Beauty Ranges

Annual main media advertising expenditure on mass-market bath and beautyranges increased from £1.9m in March 2010 to £2.7m in the following year. TheNIVEA product range received the highest advertising expenditure, accountingfor approximately half (50.9%) of total spending in this category.

Table 4.7: Main Media Advertising Expenditure on Mass-MarketBath and Beauty Ranges (£000), Year Ending March 2011

Dove product range 92

Johnson & Johnson generic 686

Johnson & Johnson product range 80

NIVEA generic 141

NIVEA product range 1,361

Space NK beauty range 84


Total 2,676


Skincare Products

Total expenditure on skincare advertising in the main media amounted to£102.9m in the year ending March 2011, down from £109.5m in the previousyear.

Table 4.8: Main Media Advertising Expenditure on Skincare byType (£000), Year Ending Marching 2011

Skincare for Women

Mass-market women’s facial skincare 52,857

Mass-market women’s body skincare 18,552

Premium women’s facial skincare 8,228

Mass-market women’s medicated facial skincare 7,324

Premium women’s body skincare 56

Table continues...



Table 4.8: Main Media Advertising Expenditure on Skincare byType (£000), Year Ending Marching 2011

...table continued

Skincare for Men

Mass-market men’s facial skincare 6,866

Premium men’s facial skincare 177

Suncare and Tanning

Mass-market suncare and tanning 8,739

Premium suncare and tanning 129

Total 102,928


• Women’s Skincare

A total of £52.9m was spent on advertising mass-market women’s facialskincare in 2011, of which Olay and L’Oreal were responsible for the lion’sshare. They contributed 32% and 30% of total expenditure, respectively.Garnier was the third biggest spender in this sector, contributing a further13.9% of the total.

Table 4.9: Main Media Advertising Expenditure on Mass-MarketWomen’s Facial Skincare (£000), Year Ending March 2011

Avon

Anew Clinical Luminosity Pro 331

Anew Emulsions range 598

Anew Regime Starter Kit 610

Total Avon 1,539

Garnier

Anti-dark circles roll on 5,110

Nutritionist eye roll on 259

Skin Natural Ultra ProX roll on 162

Table continues...




...table continued

Garnier (cont.)

Skin Natural Ultra Lift range 230

Skin Natural Ultra Lift roll on 84

Skin Natural Ultra Lift SPF15 1,504

Total Garnier 7,349

Johnson’s

Daily Essentials facial moisturizer 544

Daily Essentials face care 320

Total Johnson’s 864

L’Oreal

Dermo Exage Perfect range 564

Dermo Exage re-perfect 110

Collagen Double act lip 837

Dermo Expertise CollagenMicro-Vibration Eye 2,187

Dermo Expertise Revitalift 1,975

Dermo Expertise Revitalift ProConturing System 2,158

Dermo Expertise Youth Code 6,184

Dermo Expertise Youth Code range 1,826


NIVEA

Visage Q10 plus day cream 1,766

Visage Q10 plus product range 978

Total NIVEA 2,744

Olay

Anti-wrinkle Aqua Physics serum 2,014

Anti-wrinkle classic deep wrinkletreatment 627

Anti-wrinkle range 350

Table continues...




...table continued

Olay (cont.)

Complete Care range 576

Complete Care Touch of Foundation 501

Definity Colour Enhancer Anti-ageingmoisturiser 420

Generic 171

Regenerist daily 3 point treatmentcream 3,185

Skincare range 1,185

Total effects 7x day moisturiser 5,008

Total Effects range 252

Total Effects Touch of Foundation 651

Total Effects Wake Up Wonder 1,957

Total Olay 16,897

Roc

Retin Ox Wrinkle Correxion 712

Sublime Energy Eye 1,412

Total Roc 2,124

Simple

Kind To Skin range 90

Kind To Skin Vital Vitamin moisturiser 989

Kind To Skin Vital Vitamin range 119

Total Simple 1,198

Vichy

Liftactiv Retinol HA Night 342

Normaderm 389

Total Vichy 731

Good Skin Tri-Aktiline Deep WrinkleFiller 440

Imedeen skincare range 118

Table continues...




...table continued

Organic Surge skincare range 179

Neutrogena Multi-Defence Moisturiser 1,409

Sub-threshold brands 1,429

Total Ϯ52,857



As Table 4.10 shows, main media advertising expenditure on mass-marketwomen’s body skincare was valued at £18.6m in 2011. E45 had the largestadvertising backing, accounting for 27.4% of the total, followed by NIVEA(14.3%) and Dove (11.1%).

Table 4.10: Main Media Advertising Expenditure onMass-Market Women’s Body Skincare (£000), Year Ending

March 2011

Aveeno

Daily moisturising lotion 836

Skin Relief 880

Total Aveeno 1,716

Dove

Pro Age Advanced Beauty Care 1,050

Visible Effects range 1,012

Total Dove 2,062

Table continues...




March 2011

...table continued

E45

Dermatological cream 2,283

Endless Moisture body lotion 317

Endless Moisture Radiance 243

Endless Moisture range 1,899

E45 lotion 343

Total E45 5,085

Johnson’s

24 hour moisture body lotion 230

Daily Essentials range 394

Total Johnson’s 624

NIVEA

Body moisturiser range 1,018

Q10 Plus firming lotion 1,642

Total NIVEA 2,660

L’Oreal Body Expertise Perfect Slim 375

Garnier Body Intensive 7 Days 1,061

Astral Moisturising cream 144

Mama Mio Get Waisted Body Shaping 214

Neutrogena Norwegian Deep Moisture 763

Palmers Cocoa Butter Formula range 285

Sudocrem Skincare cream 339

Union Swiss Bio-oil skincare 1,661

Vaseline Sheer Infusion body lotion 711


Total Ϯ18,552


Table continues...




March 2011

...table continued


In the year ending March 2011, £8.2m was spent on advertising premiumwomen’s facial skincare. Genifigue by Lancome was the product with thelargest promotional budget, accounting for approximately a quarter (25.1%)of the total advertising expenditure in this category.

Table 4.11: Main Media Advertising Expenditure on PremiumWomen’s Facial Skincare (£000), Year Ending March 2011

Clarins

Beauty Flash Balm 263

Multi-Active day cream 184

Vital Light day cream 1,022

Total Clarins 1,469

Clinique

All About Eyes 101

Even Better Dark Spot Corrector 1,601

Total Clinique 1,702

Estee Lauder

Advanced Night Repair range 1,486

Daywear SPF15 range 261

Time Zone Line moisturiser 103

Total Estee Lauder 1,850

Lancome

Genifique 2,062

Renergie Lift Volumetry 92

Total Lancome 2,154

Table continues...



Table 4.11: Main Media Advertising Expenditure on PremiumWomen’s Facial Skincare (£000), Year Ending March 2011

...table continued

Origins Ginzing eye cream 83

Sanctuary Therapist’s Secret 95


Total Ϯ8,228



Main media advertising expenditure on mass-market women’s medicatedfacial skincare was valued at £7.3m in 2011. Garnier’s Skin Naturals Pure Activeand Frederm’s gel were the two products with the biggest advertisingexpenditure, accounting for 24% and 23.3% of the total, respectively.

Table 4.12: Main Media Advertising Expenditure onMass-Market Women’s Medicated Facial Skincare (£000), Year

Ending March 2011

Clearasil

Overnight wash 889

Clearasil product range 384

Rapid Action 389

Ultra Overnight lotion 140

Total Clearasil 1,802

Garnier

Skin Naturals Pure Active 1,760

Skin Natural Pure Active Tinted roll on 307

Total Garnier 2,067

Doctor Brand Blemish Relief 121

Freederm gel 1,707

Table continues...



Table 4.12: Main Media Advertising Expenditure onMass-Market Women’s Medicated Facial Skincare (£000), Year

Ending March 2011

...table continued

Johnson’s Clean & Clear spot control 575

Neutrogena Visibly Clear Pink facial 499

Proactiv Solution Acne Treatment 186


Total 7,324


• Men’s Skincare

Main media advertising expenditure on mass-market men’s skincare wasvalued at £6.9m in the year ending March 2011. As can be seen in Table 4.13,L’Oreal was the biggest spender, backing up its Men Expert Hydra Energeticproducts with £4.6m, which accounted for 67.3% of the total advertisingexpenditure in this category.

Table 4.13: Main Media Advertising Expenditure onMass-Market Men’s Skincare (£000), Year Ending March 2011

L’Oreal

Men Expert Hydra Energetic eye roll on 2,703

Men Expert Hydra Energetic Fatigue 1,601

Men Expert Hydra Energetic TurboBooster 203

Men Expert Hydra Energetic range 113


Gillette Series Energising moisturiser 2,148

NIVEA for men Q10 Revitalising gel 92


Table continues...



Table 4.13: Main Media Advertising Expenditure onMass-Market Men’s Skincare (£000), Year Ending March 2011

...table continued

Total Ϯ6,866



• Suncare and Tanning Products

In the year ending in March 2011, main media advertising expenditure onmass-market suncare and tanning products increased by 4.2%, to £8.9m.Garnier had the highest advertising expenditure in this category andaccounted for 34.3% of the total. It is followed by NIVEA and L’Oreal, whichaccounted for 24.7% and 22.5% of the total, respectively.

Table 4.14: Main Media Advertising Expenditure onMass-Market Suncare and Tanning Products (£000), Year Ending

March 2011

Garnier

Ambre Clear spray 167

Ambre Solaire Golden Protect 234

Ambre Kids Rapido 50 SPF 589

Ambre Light & Silky Milk 1,283

Ambre Light & Silky range 95

Ambre Sun Protect range 83

Ambre Bronzer Spray 85

Ambre No Streaks Bronzer 508

Total Garnier 3,044

NIVEA

NIVEA Sun Invisible Protection spray 370

NIVEA Sun Protect & Bronze 1,419

NIVEA Sun Kids Swim & Play lotion 404

Table continues...



Table 4.14: Main Media Advertising Expenditure onMass-Market Suncare and Tanning Products (£000), Year Ending

March 2011

...table continued

NIVEA (cont.)

Total NIVEA 2,193

L’Oreal

Dermo Expertise Sublime Bronze 104

Sublime Bronze Express Pro 1,889


Piz Buin Allergy Sun Spray 398

Riemann P10 & P20 Sunfilter 462

Rimmel Sunshimmer Maxi Instant 226

St Tropez Bronzing mousse 85


Total 8,868


Hair Care Products

Total advertising expenditure on hair products increased by 9.6% in 2011 to£129.1m, up from £117.8m in the previous 12 months. This was largely due tosharp increases in main media expenditure on shampoos and conditioners, andhair colourants, which compensated for reduced spending in hair styling aidsand hair product ranges.

• Shampoos and Conditioners

Total advertising spending on these products was valued at £57.9m in the yearending 2011, an increase of 15% from the previous 12 months. Advertisingspending on products that combine shampoo and conditioners was muchhigher than the spending on products that are solely shampoos or conditioners.



Table 4.15: Main Media Advertising Expenditure on Shampoosand Conditioners by Type (£000), Year Ending March 2011

Shampoo and conditioners 45,388

Shampoo only 8,215

Conditioners only 4,286

Total 57,889


As Table 4.16 shows the brand that received by far the largest spend across theentire shampoo/conditioner category was Pantene’s Pro V, supported by£11.7m in 2011 and accounting for 25.7% of total expenditure on shampoosand conditioners. Other products supported by significant promotionalbudgets were L’Oreal’s Elvive (£8.7m), Clairol’s Herbal Essence (7.2m) and Head& Shoulders (£6.1m).

Table 4.16: Main Media Advertising Expenditure on Shampoosand Conditioners (£000), Year Ending March 2011

Shampoos and Conditioners

Alberto VO5 271

Aussie 3 Minute Miracle 2,117

Charles Worthington range 261

Clairol Herbal Essences range 7,194

Head & Shoulders range 6,147

John Frieda range 1,545

L’Oreal Elvive range 8,749

Pantene Pro V hair product range 11,658

Schwarzkopf Gliss Hair Repair 187

Timotei range 1,381

Tresemme range 5,547


Total Ϯ45,388

Table continues...



Table 4.16: Main Media Advertising Expenditure on Shampoosand Conditioners (£000), Year Ending March 2011

...table continued

Shampoos Only

Alpecin Caffeine shampoo 1,369

Head & Shoulders Classic Clean 869

Head & Shoulders shampoo 4,434

Loreal Elvive colour protect shampoo 766

Tresemme Instant Refresh 652


Total Ϯ8,215

Conditioners Only

Aussie 3 Minute Miracle 1,364

Aussie Limited Edition Colour Mate 239

Head & Shoulders conditioner 166

John Frieda Frizz Ease serum 840

Kerastase Chroma Sensitive 80

Loreal Elvive Full Restore 1,515


Total Ϯ4,286



• Hair Colourants

Main media advertising expenditure on hair colourants increased by 13.2% in2011, to a total of £48.1m. The two brands that received the strongestadvertising support were Clairol and L’Oreal, accounting for a combined 64.5%of the total expenditure in this category. L’Oreal spent a further £9m backingits Garnier brand, which accounted for 18.7% of the total.



Table 4.17: Main Media Advertising Expenditure on HairColourants (£000), Year Ending March 2011

Clairol

Nice ’n Easy Colour Blend 3,063

Nice ’n Easy Permanent 7,405

Nice ’n Easy Perfect 10 5,448

Nice ’n Easy Non Permanent 109

Total Clairol 16,025

Garnier

Garnier Belle Color 2,432

Garnier Herbashine 809

Nutrisse colour cream 5,734

Total Garnier 8,975

L’Oreal

Excellence 10 3,197

Excellence Creme 1,547

Loreal Feria 3D 235

Loreal Men Expert Excell 5 702

Recital Preference 1,725

Casting Creme Gloss 5,902

Casting Sublime Mousse 1,676


Schwarzkopf

Schwarzkopf Live XXL 1322

Schwarzkopf Palette cream colour 2,497

Total Schwarzkopf 3,819

Combe

Just For Men hair colour 1,123

Just For Men Touch of Grey 187

Total Combe 1,310

Table continues...



Table 4.17: Main Media Advertising Expenditure on HairColourants (£000), Year Ending March 2011

...table continued

John Frieda Precision Foam 2,467

Colour B4 hair colour remover 146


Total 48,111


• Hair Product Ranges

Total expenditure on hair product ranges declined from £9.3m in 2010 to £8.9min 2011. With a value of £2.3m, Dove Damage Therapy was the brandsupported by the highest advertising expenditure in this category, followed byPantene Pro V (£2.2m) and L’Oreal’s Elvive Nutri-Gloss (£2m).

Table 4.18: Main Media Advertising Expenditure on HairProduct Ranges (£000), Year Ending March 2011

Aussie hair care range 232

Charles Worthington Full Volume range 109

Dove Damage Therapy range 2,272

John Frieda Frizz Ease product range 731

L’Oreal Elvive Nutri-Gloss range 1,968

Pantene Pro V Colour Protect & Smooth 1,702

Pantene Pro V Smooth & Sleek range 461

Tresemme 24 Hour Body range 1,138


Total 8,938




• Hair Styling Aids

Main media advertising expenditure on hair styling gels, waxes, mousses, etc.,was valued at £7.7m in 2011, a decline from £9.8m in the previous 12 months.Alberto Culver’s VO5 range received the largest advertising spend in thiscategory, accounting for more than half (50.2%) of the total expenditure.

Table 4.19: Main Media Advertising Expenditure on Hair StylingAids (£000), Year Ending March 2011

Alberto VO5 Extreme 3,686

Schwarzkopf Got2b range 126

Avon Advance Techniques Lotus Shield 554

Garnier Fructis Style Survivor 631

L’Oreal Studio Indestructible 800

L’Oreal Studio Silk & Gloss Volume range 635

Tresemme 24 Hour Body Dramatic 556

Wella Shockwaves range 502


Total 7,701


• Hairsprays

Total advertising expenditure on hairsprays increased by 10.6%, from £5.9m in2010 to £6.5m in 2011. In this category, L’Oreal was the biggest spender in 2011,supporting its Elnett hairspray range with a £3.8m advertising budget.

Table 4.20: Main Media Advertising Expenditure on Hairsprays(£000), Year Ending March 2011

L’Oreal

Elnett hairspray 2,374

Elnett Satin Absolute Extreme 287

Elnett Satin hairspray 382

Table continues...



Table 4.20: Main Media Advertising Expenditure on Hairsprays(£000), Year Ending March 2011

...table continued

L’Oreal (cont.)

Elnett Satin Love Cheryl 735


Alberto VO5 Weather Resist 990

Garnier Fructis Style Bamboo spray 268

Tresemme hairspray 624

Wella Silvikrin hairspray 668


Total 6,480


Oral Care Products

Total expenditure on toothpastes, polishes, mouthwashes, etc., was valued at£44.7m in 2011, up from £43.8m in preceding 12 months. Toothpastes andpolishes accounted for 56.9% of the total spending in this category, a smallershare compared to the previous year (64.9%).

• Toothpastes and Polishes

Expenditure on toothpastes and polishes for the year ending March 2011 wasvalued at £25.5m, a decrease of 10.4% from the previous year. The marketleader, Colgate, supported its brand with £9.3m in 2011. GlaxoSmithKlinespent a total of £11.8m promoting its Sensodyne and Aquafresh brands.

Table 4.21: Main Media Advertising Expenditure onToothpastes and Polishes (£000), Year Ending March 2011

Aquafresh

Big Teeth range 112

Complete Care 260

Fresh & Minty 201

Table continues...




...table continued

Aquafresh (cont.)

Iso-Active toothpaste 770

Iso-Active Whitening 993

Little Teeth toothpaste 133

Milk Teeth toothpaste 156

Aquafresh toothpaste 1,269

Triple Protection 1,181

Total Aquafresh 5,075

Arm & Hammer

Brilliant Sparkle 1,178

Enamel Care 134

Enamel Care Sensitive 239

Total Arm & Hammer 1,551

Beverly Hills

Natural White range 79

Sensitive Whitening 85

Beverly Hills formula toothpaste 249

Beverly Hills formula Total Enamel 85

Total Beverly Hills 498

Colgate

Maxfresh mouthwash beads 103

Sensitive Pro-Relief 3,997

Total Advanced Clean 640

Total sensitive 609

Total toothpaste 3,944

Total Colgate 9,293

Table continues...




...table continued

Sensodyne

Pronamel Gentle Whitening 896

Pronamel toothpaste 2,032

Rapid Relief 2,788

Sensodyne toothpaste 1,007

Total Sensodyne 6,723

Corsodyl Daily gum & toothpaste 116

Macleans Whitening 1,406

ACDO Blanx Whitening toothpaste 464


Total Ϯ25,460



• Other Oral Hygiene Products

Advertising expenditure on other oral hygiene products includingmouthwashes amounted to £19.3m in 2011, an increase of 25.5% from theprevious year. The biggest spender in this category was Johnson & Johnson,which backed its Listerine brand with £7.7m in advertisements, accounting for40.1% of the total expenditure.

Table 4.22: Main Media Advertising Expenditure on Other OralHygiene Products (£000), Year Ending March 2011

Mouthwash

Aquafresh Extra Care 2,435

Colgate Plax Dental Rinse 1,431

Corsodyl mouthwash 4,093

Table continues...



Table 4.22: Main Media Advertising Expenditure on Other OralHygiene Products (£000), Year Ending March 2011

...table continued

Mouthwash (cont.)

Dentyl mouthwash 1,039

Listerine Antiseptic mouthwash 3,425

Listerine Smart Rinse 931

Listerine Total Care Enamel Guard 3,374

Retardent/Retardex 227

Sensodyne Pronamel Dailymouthwash 123


Total mouthwash Ϯ17,172

Multi-Product

Aquafresh product range 358

Corsodyl product range 1,250

Oral-B Dentaid World Wide Smiles 249

Sensodyne Pronamel product range 129


Total multi-product Ϯ2,087

Total 19,259



Shaving Products

• Wet Razors and Blades

Main media advertising expenditure on wet razors and blades was valued at£19.6m in year ending March 2011. The market leader, Gillette, invested a totalof £12.1m in its Fusion and Venus ranges, while its competitor, WilkinsonSword, invested £6.5m in its brand products. The two leading manufacturerstogether accounted for 94.7% of all main media advertising expenditure inthis sector.



Table 4.23: Main Media Advertising Expenditure on Wet Razorsand Blades (£000), Year Ending March 2011

Gillette

Fusion blades 253

Fusion Power 292

Fusion Proglide razor 2,688

Fusion razor range 4,730

Venus Embrace 2,502

Venus Spa Breeze 1,617

Total Gillette 12,082

Wilkinson Sword

Hydro 5 razor 3,384

Wilkinson Sword productrange 444

Quattro Titanium Precision 556

Quattro Women Bikini 2,081

Total Wilkinson Sword 6,465

Bic razor range 76

Bic Soleil Scent womens razors 93

BNL Microforce razor 677


Total 19,580


• Shaving Preparations

Expenditure on advertising for shaving preparations decreased dramaticallyfrom £4.9m in 2010 to £1.2m in 2011. Gillette, which spent £3.2m in theprevious year on advertising its shaving preparations, has significantly reducedits expenditure in 2011, to £471,000.



Table 4.24: Main Media Advertising Expenditure on ShavingPreparations (£000), Year Ending March 2011

Gillette Generic 102

Gillette series shave care 369

Pitchwell Sheer Skin hair removal 203

Wilkinson Sword Hydro range 301


Total Ϯ1,197



• Depilatories and Bleach

Main media advertising expenditure on depilatories and bleach decreased by45.8% in 2011. The brand receiving the highest spending was Veet by ReckittBenckiser, which accounted for 82.2% of total expenditure in this category.

Table 4.25: Main Media Advertising Expenditure onDepilatories and Bleach (£000), Year Ending March 2011

Nair hair removal range 433

Veet bikini & underarm kit 178

Veet hair remover 1,568

Veet Suprem Essence range 592


Total 2,845




Exhibitions and Trade Fairs

Beautyworld

Beautyworld is an international trade fair for the perfumery, drug store,cosmetics and hairdressing trades, organised by Messe Frankfurt GmbH. Thenext event will take place from 24th to 26th October 2011 in Osaka, Japan.

Beyond Beauty Paris

Beyond Beauty Paris is the umbrella name covering the trade showsCosmeeting, European Exhibition and Creative. The next event will take placeon 12th to 14th of September 2011 in Paris.

Cosmobelleza & Wellness

Cosmobelleza & Wellness is a leading trade event for companies involved inbeauty and well-being businesses. The trade event shows world-renownedbrands of perfumes, cosmetics, hair care, skincare, toiletries, salon and spaproducts and equipment, raw materials, components, packaging as well asprivate label products and services. The next event is scheduled to take placein February 2012.

Cosmoprof

Cosmoprof has been held annually in April in the Italian city of Bologna since1967, however, there are now three additional events bearing the Cosmoprofbrand: Cosmoprof Asia, which is held in Hong Kong; Cosmoprof Shanghai; andCosmoprof North America, which is held in Las Vegas.

In-Cosmetics

Staged annually in spring in a major European city, In-Cosmetics bringstogether the world’s leading personal care ingredients suppliers, formulators,research and development (R&D) and marketing specialists.

Luxe Pack

Luxe Pack is an annual trade show dedicated to the packaging of luxuryproducts. It is staged in Monaco, with similar Luxe Pack events taking place inNew York and Shanghai. The next event will take place in Monaco on 19th to21st October 2011.

Natural & Organic Products Europe

Natural & Organic Products Europe is the UK’s only trade show for natural andorganic products. The show, which runs annually, attracts thousands of tradebuyers from across the world. It is dedicated to natural, organic, biodynamic,fairtrade, artisan and sustainable products to be used in the beauty industry,in sports nutrition or as pure ingredients, among other things. The next eventwill be held in London’s Olympia on 3rd and 4th April 2011.



5. Brand Strategy

INTRODUCTION

Owing to the downturn in the economy and the ensuing changes in customerpriorities and spending habits, even the strongest brands are facing a toughtrading environment. Consumers may decide to trade down from moreexpensive brand’s products to cheaper and private-label brands. On the otherhand, product quality, reputation, customer loyalty and trust also haveconsiderable influence on consumer choice. Equally, brands which are moreresponsive to socioeconomic trends and understand the needs of the customercan be expected to continue to perform well.

THE WORLD’S MOST VALUABLE BRANDS

Interbrand, a leading branding consultancy, compiles an annual league tableof the world’s most valuable brands. Table 5.1 shows the cosmetics, fragrancesand toiletries brands that were included in Interbrand’s most recent top 100global brands by rank and value. It should be noted that, in addition totoiletries, a brand’s value may include other products by the same company.For example, as well as toiletries, Louis Vuitton, Gucci and Giorgio Armani sella range of products including bags, clothing and fashion accessories. Amongthese brands, Gillette, Cartier and Louis Vuitton maintained their rank fromthe previous year, while Gucci, Lancôme and Giorgio Armani — despite thesebrands having increasing their total value in 2010 — moved down in ranking.Brands that appeared in the 2009 top 100 global brands but disappearedaltogether in 2010 include Prada, Chanel and Ralph Lauren.

Table 5.1: Leading Global Brands of Cosmetics and Toiletries byRank and Value ($m), 2010

Value ($m)

Rank Brand

13 Gillette 23,298

16 Louis Vuitton 21,860

44 Gucci 8,346

45 L’Oréal 7,981

64 Avon 5,072

69 Hermes 4,782

75 Johnson & Johnson 4,155

Table continues...

Toiletries Brand Strategy


Table 5.1: Leading Global Brands of Cosmetics and Toiletries byRank and Value ($m), 2010

...table continued

Value ($m)

Rank Brand

77 Cartier 4,052

87 NIVEA 3,734

95 Giorgio Armani 3,443

96 Lancôme 3,403

Source: Interbrand Corporation

CEW AWARDS

CEW UK (Cosmetic Executive Women) is a network of 700 beauty industryinsiders, such as beauty editors, buyers and brand directors. Each year, theyjudge the CEW Awards, having first tested the products. First launched in 2006,the CEW Beauty Awards were created to drive brands awareness as well ashelping consumers find the best products in the market.

Title-sponsored by Superdrug, there were 304 products that entered the awardin 2011 and votes were cast by over 600 CEW members. The winners of the2011 CEW Beauty Awards relevant to this report are as follows:

• Best New Bath and Body Product (mass) — The Sanctuary Ultra Rich BodyButter by The Sanctuary

• Best New Haircare/Styling/Colouring Product (mass) — Batiste Dry ShampooFresh by Batiste

• Best New Everyday Facial Skincare Product (mass) — Dr Organic’s OrganicRose Otto Facial Serum by Dr Organic

• Best New Men’s Grooming Product (mass) — Q10 Revitalising Gel by NIVEAFor Men

• Best New Bath and Body Product (prestige) — Rose Otto Body Wash byBalance Me

• Best New Haircare/Styling Product (prestige) — Botanical Shine Shampoo byLiz Earle

• Best New Everyday Facial Skincare Product (prestige) — Clarins Multi-ActiveDay Early Wrinkle Correction Cream by Clarins

• Best New Men’s Grooming Product (prestige) — Shiseido for Men SkinEmpowering Cream by Shiseido



• Best New Certified Organic Skincare Product (mass or prestige) — BalanceMe Super Oil with juniper and bergamot by Balance Me

• Best New Self Tan or Sun Care Product (mass or prestige) — Eight Hour CreamSun Defense for Face SPF 50 by Elizabeth Arden

LEADING BRANDS BY SECTOR

Personal Wash and Bathroom Toiletries

PZ Cussons is a major manufacturer of personal wash products in the UK. Itsbrands include numerous British household names such as Imperial Leather,Carex and Original Source. Other major brands in the personal wash sectorinclude NIVEA, Johnson & Johnson, Radox, and Dove and Lux soap, owned bythe British-Dutch company Unilever. Unilever also dominates the deodorantsand bodysprays market, its biggest brands there being Lynx, Impulse, Dove andSure.

Skincare Products

Procter & Gamble’s Olay is the UK’s leading mass-market skincare brand, alongwith L’Oréal’s Garnier. Olay’s successful sub-brands include Regenerist, TotalEffects and Olay Pro-X. Other leading brands in the skincare market includeBoots No7 and Beiersdorf’s NIVEA. Simple is another best-selling women’sskincare brand in the UK, with its Kind To Skin range winning many beautyawards.

Hair Care Products

Leading mass market hair care brands include Procter & Gamble’s Head &Shoulders, Pantene, Wella, Herbal Essences, Aussie, Clairol Nice n Easy, andSilvikrin. Its rival Unilever owns everyday hair care brands Dove and Sunsilk, aswell as premium brand TIGI.

L’Oreal is market leader in hair colour and is also prominent in other hairproduct categories with brands that include Elvive, Elnett, Garnier Fructis,Redken and Kérastase. Alberto Culver is another major contender in hair care,with, among others, the TRESemmé and VO5 brand. Alberto Culver wasacquired by Unilever in May 2011.

Oral Care Products

The diversified, US company Colgate-Palmolive is a market leader in the oralcare sector. GlaxoSmithKline’s rate of market growth, however, is increasinglychallenging its lead with brands such as Macleans, Aquafresh and Sensodyne.Other oral hygiene ranges of significance include Procter & Gamble’s Crest andOral-B toothpaste.



Shaving Products

Procter & Gamble’s Gillette is the UK’s leading brand in the shaving productssector. Gillette offers a variety of razors for men and women, as well as shavingcream for men. Its shaving product range includes Gillette Fusion and theVenus range for women. Wilkinson Sword is another major brand in theshaving product sector. Wilkinson Sword is owned by Energizer Holdings andits razors are produced in Germany.



6. Strengths, Weaknesses, Opportunitiesand Threats

STRENGTHS

• Many toiletry products, such as shower gels, deodorants, shaving creams,etc., are considered to be essentials.

• Some toiletry products, such as bath salts or body spray, are perceived to havethe effect of enhancing well-being and potentially self-esteem.

• There is strong brand loyalty, as well a willingness to try new products.

• Luxury toiletries make a good choice for gifts, especially for women.

• The common human traits of vanity and insecurity make many consumerssusceptible to marketing strategies.

• The toiletries and cosmetics industry has high levels of investment in newproduct development (NPD). For example, a lot of activity has recently beenfocused on cosmeceuticals — cosmetics with medical benefits.

• Toiletry products are sold in most supermarket stores and can be easily pickedup by consumers when doing their weekly grocery shopping.

WEAKNESSES

• In times of prolonged economic hardship, consumers may trade down theirchoices of toiletries, opting for value or discounted ranges instead of themore usual brands.

• Some categories of toiletries are reaching saturation levels, leaving littleopportunity to increase consumer penetration.

• Competition in the marketplace is fierce for both manufacturers andretailers, as well as in the premium and mass-market sectors.

• Discounting is common, especially in the middle range and mass-marketrange, limiting overall opportunity for value growth.

• Brand loyalty makes it difficult for new brands to break through successfully.

• The market is, to some extent, seasonal, peaking around Christmas,Valentine’s Day and Mother’s Day.

• The perceived safety and efficacy of toiletry products is under constantscrutiny and is vulnerable to scaremongering.

Toiletries Strengths, Weaknesses, Opportunities and Threats


OPPORTUNITIES

• UK’s aging population will increase the demand for cosmeceutical products— products containing ingredients that claim to influence the biologicalperformance of the skin.

• The ’baby-boomer’ generation has a relatively high disposable income andis more often willing to pay premium prices for products that promise to holdback the effects of time.

• A fall in the strength of the Sterling, as witnessed currently in the UK, hasmade British manufactured products more competitive in the global market.

• Green and ethical products are becoming increasingly popular, presentingopportunities for brands to expand in this sector of the market.

• Sales of toiletries may benefit from discounting and promotional activities,especially in times of economic hardship.

THREATS

• Rising inflation and high unemployment rates are forcing people to cut backon spending and/or trade down to cheaper brands or retailers’ own labels.

• The involvement of the grocery chains in the toiletries market is continuingto exert downward pressure on prices.

• A decline in the value of Sterling makes the purchasing of raw materials andcomponents sourced from outside the UK more expensive.

• With a wide range of toiletry brands available, and constant new productlaunches, retailers are ruthless about removing underperforming brandsfrom their shelves.

Toiletries Strengths, Weaknesses, Opportunities and Threats


7. Buying Behaviour

AVERAGE WEEKLY HOUSEHOLD EXPENDITURE

According to figures published by the Office for National Statistics (FamilySpending 2010), average weekly household expenditure on personal care,including cosmetics and toiletries, amounted to £10.60 in 2009, up from £9.90per week in 2008. As Table 7.1 shows, average weekly spending on toiletriesand soap was £2.20 in 2009, up from £2.00 in 2008. Average weekly householdexpenditure on hairdressing and beauty treatments also increased, up from£3.10 in 2008 to £3.40 in 2009. Expenditure on hair products, cosmetics andrelated electrical appliances rose from £3.40 to £3.50 over the same period.

Table 7.1: Average Weekly Household Expenditure on PersonalCare (£), 2009

Hairdressing, beauty treatments 3.40

Toilet paper 0.80

Toiletries and soap 2.20

Baby toiletries and accessories 0.70

Hair products, cosmetics and related electricalappliances 3.50

Total 10.60

Source: Family Spending, 2010, National Statistics © Crown copyright material isreproduced with the permission of the Controller of HMSO (and the Queen’sPrinter for Scotland)

By Age

Table 7.2 shows average weekly household expenditure on personal careproducts by age group. Those aged between 30 and 49 spent the most on hairproducts, cosmetics and related electrical appliances, as well as on toiletriesand soap. People over 75 generally had the lowest level of expenditure on alltypes of personal care products, with the exception of hairdressing and beautytreatments, on which they spent an average of £3.00 per week. People in theyoungest age group were more likely to spend their money on hair products,cosmetics and related electrical appliances. However, the same age group wasleast likely to spend money on hairdressing and beauty treatments.

Toiletries Buying Behaviour


Table 7.2: Average Weekly Household Expenditure on PersonalCare by Age of Household Reference Person (£), 2009

Under30 30-49 50-64 65-74 75+

Hairdressing, beauty treatment 1.90 3.60 3.90 3.00 3.00

Toilet paper 0.50 0.90 0.80 0.80 0.50

Toiletries and soap 1.70 2.60 2.50 1.70 1.10

Baby toiletries and accessories 1.70 1.00 0.30 0.10 0.10

Hair products, cosmetics and relatedelectrical appliances 3.10 4.40 4.10 2.50 1.30

Total 8.90 12.50 11.60 8.10 6.00


By Gross Income Decile Group

As one might expect, households with a higher gross income were inclined tospend more on personal care products than households with lower grossincomes. This is reflected in data from the Office for National Statistics, asshown in Table 7.3, listing average weekly household expenditure on personalcare by gross income decile group. Households in the highest gross incomedecile group spent more than six times as much on personal care items thanthose in the lowest income decile, including a weekly average of £9.10 on hairproducts, cosmetics and related electrical equipment and £8.40 on hairdressingand beauty treatments. This contrasts with just £2.10 spent on the same itemsby households in the lowest income decile.



Table 7.3: Average Weekly Household Expenditure on PersonalCare by Gross Income Decile Group (£), 2009

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Lowest 10% 1.20 0.40 1.00 0.20 0.90 3.70

2nd decile group 1.80 0.50 1.10 0.40 1.20 5.00

3rd decile group 2.00 0.60 1.40 0.50 1.90 6.40

4th decile group 2.60 0.70 1.50 0.50 2.00 7.30

5th decile group 2.60 0.70 2.00 0.60 3.20 9.10

6th decile group 2.40 0.80 2.00 0.70 3.00 8.90

7th decile group 3.40 0.90 2.30 0.70 4.10 11.40

8th decile group 4.20 1.00 2.60 0.80 4.80 13.40

9th decile group 4.80 1.10 3.20 1.50 5.30 15.90

Highest 10% 8.40 1.10 4.70 1.00 9.10 24.30

All households 3.40 0.80 2.20 0.70 3.50 10.60


CUSTOMER PENETRATION

To gauge consumer penetration on toiletries, Key Note has analysed relevantTarget Group Index (TGI) survey data. The survey was conducted in January2011 among a nationally representative sample of adults in Great Britain, allof whom were asked about their usage of various toiletries products in theprevious 12 months.



Hair Care Products

Table 7.4 shows the usage of hair care products by both men and women in2010. Unsurprisingly, shampoo and conditioner are the most commonly usedhair care products among both sexes.

Table 7.4: Usage of Hair Care Products in the Last 12 Months bySex (% of adults), 2010

Women

Shampoo 96.8

Conditioner (excluding treatments andmasques) 75.7

Conditioning treatments and masques 26.1

2 in 1 combined shampoo/conditioner 14.6

Hair styling and finishing products (includinghairsprays) 63.2

Hair colourants, bleaches and lighteners 35.9

Men

Shampoos and conditioners 89.2

Hair styling products 29.1

Hair colourants, lighteners and bleach 3.4

Source: Target Group Index (TGI) © Kantar Media, Quarter 2 (January2010-December 2010), 2011

Shampoo

49.6% of total respondents using shampoo were women, while percentagepenetration among female respondents alone was as high as 96.8%. Table 7.5shows the use of shampoo among women as a percentage penetration of allrespondents by age and social grade. Usage was highest among older womenand lowest among 15 to 19 year-olds; 51.6% of those aged 65+ using shampoowere women, while 46.3% of all those aged 15 to 19 were female. In terms ofsocial grade, the usage was highest among those in the E social grade.



Table 7.5: Female Usage of Shampoo in the Last 12 Months byAge and Social Grade (% of adults), 2010

Age

15-19 46.3

20-24 49.6

25-34 48.2

35-44 49.9

45-54 49.7

55-64 49.7

65+ 51.6

Social Grade

A 43.2

B 47.8

C1 52.4

C2 44.8

D 51.5

E 56.7


• Women’s Hair Type

According to the TGI survey, the most common natural hair colours amongwomen respondents were dark brown and light brown. Common hairproblems cited were split ends (22.9%) and/or itchy scalps (15.3%). However,the type of shampoo that was used most often was one with a normalformulation, followed by shampoos for coloured/permed hair (see Table 7.6).

Table 7.6: Types of Shampoo Used Most Often by Women in theLast 12 Months (%), 2010

Normal 38.4

Coloured/permed 32.5

Dry 18.1

Table continues...



Table 7.6: Types of Shampoo Used Most Often by Women in theLast 12 Months (%), 2010

...table continued

Anti-dandruff 14.0

Fine 13.8

Greasy 11.7

Others 8.5


Conditioner

In 2010, 75.7% of women (or 38.8% of total respondents) responded they hadused conditioners (other than treatments and masques). Usage tailed offamong older age groups after peaking among 20 to 24 year-olds. In terms ofsocial grade, usage was most prevalent among women in the C1 social grade,followed by Es and Ds.

Table 7.7: FemaIe Usage of Conditioners (Excluding Treatmentsand Masques) in the Last 12 Months by Age and Social Grade

(% of adults), 2010

Age

15-19 39.3

20-24 44.6

25-34 41.2

35-44 41.2

45-54 39.4

55-64 36.8

65+ 32.9

Table continues...



Table 7.7: FemaIe Usage of Conditioners (Excluding Treatmentsand Masques) in the Last 12 Months by Age and Social Grade

(% of adults), 2010

...table continued

Social Grade

A 32.8

B 38.5

C1 41.8

C2 35.2

D 39.2

E 40.6


Hair Styling Products

According to the TGI survey, 63.2% of women (or 32.4% of all respondents)and 29.1% of men (or 14.2% of all respondents) said they had used hair stylingproducts in 2010. Among women, those in the oldest age group were the mostlikely to use these products. In contrast, among men, those in the youngest agegroup were the most likely to use hair styling products, and the tendencydecreases with age. In terms of social grade, both men and women in the C1grades were the most likely to use hair styling products.

Table 7.8: Usage of Hair Styling Products in the Last 12 Monthsby Sex, Age and Social Grade (% of adults), 2010

†Women ‡Men

Age

15-19 33.4 30.9

20-24 33.5 27.6

25-34 29.4 24.2

35-44 31.2 14.3

45-54 28.7 8.8

55-64 32.2 4.7

65+ 38.0 5.5

Table continues...



Table 7.8: Usage of Hair Styling Products in the Last 12 Monthsby Sex, Age and Social Grade (% of adults), 2010

...table continued

Social Grade

A 27.2 13.5

B 32.3 13.9

C1 36.4 15.3

C2 29.3 14.8

D 30.3 13.0

E 33.5 12.4

† — including hairsprays

‡ — excluding hairsprays


Hair Colourants

35.9% of women (or 18.4% of all respondents) and 3.4% of men (or 1.7% ofall respondents) said they had used hair colourants at home in 2010. For bothsexes, usage of hair colourants was most common among those in the youngestage groups, as well as among those in the E social grade.

Table 7.9: Usage of Hair Colourants in the Last 12 Months bySex, Age and Social Grade (% of adults), 2010

Women Men

Age

15-19 26.6 3.4

20-24 21.7 2.3

25-34 18.4 2.2

35-44 20.7 2.4

45-54 21.3 1.4

55-64 16.7 1.0

65+ 10.6 0.5

Table continues...



Table 7.9: Usage of Hair Colourants in the Last 12 Months bySex, Age and Social Grade (% of adults), 2010

...table continued

Social Grade

A 9.9 0.5

B 14.2 1.8

C1 19.5 1.4

C2 18.1 1.8

D 22.9 1.5

E 23.1 3.1


Other Toiletries

Other toiletry products such as toothpaste, deodorant, liquid soap and showergels also had the highest penetration rates among women in 2010 (see Table7.10). Usage of toothpaste, deodorants and shower gels was almost universal,as might be expected.

Table 7.10: Usage of Other Toiletries Products by Women in theLast 12 Months (%), 2010

Toothpaste 97.6

Deodorants 94.4

Face creams and lotions 86.0

Body creams and lotions 72.6

Hair removers/razors 79.4

Shower gels and bath products 91.0

Cleansing creams, milks, lotions, toners, wipes andwashes 69.0

Liquid soap/handwash 88.5

Bars of soap 75.9

Suntan and sun protection products 60.1




In comparison, percentage penetration of other toiletries tended to be loweramong men than women, with the exception of razors and bars of soap.

Table 7.11: Usage of Other Toiletries Products by Men in the Last12 Months (%), 2010

Toothpaste 96.3

Deodorants 87.8

Face creams and lotions (including masks and scrubs) 36.7

Razors/razor blades and electric shavers 93.8

Shower gels and bath products 83.5

Liquid soap/handwash 83.1

Bars of soap 79.1

Suntan and sun protection products 40.6

Source: Target Group Index (TGI) © Kantar Media, Quarter 2 (January2010-December 2010), 2011©

Toothpaste

Overall penetration of toothpaste among all respondents was high (96.8%).However, usage was notably lower among those aged 65 and over. In terms ofsocial grade, differences in penetration rates were less marked, with usagepeaking at 98% among Bs and falling to 94.4% among Es.

Table 7.12: Usage of Toothpaste in the Last 12 Months by Ageand Social Grade (% of adults), 2010

Age

15-19 98.1

20-24 98.5

25-34 98.8

35-44 97.3

45-54 97.0

55-64 96.6

65+ 93.6

Table continues...



Table 7.12: Usage of Toothpaste in the Last 12 Months by Ageand Social Grade (% of adults), 2010

...table continued

Social Grade

A 96.8

B 98.0

C1 97.6

C2 96.5

D 95.2

E 94.4


Deodorants

94.4% of women (or 48.3% of all respondents) and 87.8% of men (or 42.8%of all respondents) said they had used deodorants in 2010. In terms of age,usage generally increases with age among women, but declines with ageamong men. By social grade, Es had the highest penetration rates amongwomen, but the lowest among men.

Table 7.13: Usage of Deodorant in the Last 12 Months by Sex,Age and Social Grade (% of adults), 2010

Women Men

Age

15-19 45.2 49.4

20-24 48.3 46.3

25-34 47.6 47.2

35-44 48.8 45.3

45-54 48.9 44.3

55-64 48.3 42.0

65+ 49.3 32.7

Table continues...



Table 7.13: Usage of Deodorant in the Last 12 Months by Sex,Age and Social Grade (% of adults), 2010

...table continued

Social Grade

A 41.7 45.1

B 46.8 44.1

C1 51.1 40.8

C2 44.0 47.6

D 50.2 42.1

E 54.7 34.8


Face Creams and Lotions

According to TGI, 86% of women (or 44% of all respondents) and 36.7% ofmen (or 17.9% of all respondents) used face creams and lotions in 2010.Penetration rates were generally higher in the older age groups amongwomen, but among men the reverse is true. There was no clear trend in usageby social grade among men or women.

Table 7.14: Usage of Face Cream and Lotions in the Last12 Months by Sex, Age and Social Grade (% of adults), 2010

Women Men

Age

15-19 40.3 24.7

20-24 43.1 23.4

25-34 42.8 26.9

35-44 42.4 22.0

45-54 43.8 16.0

55-64 44.5 11.9

65+ 48.1 8.4

Table continues...



Table 7.14: Usage of Face Cream and Lotions in the Last12 Months by Sex, Age and Social Grade (% of adults), 2010

...table continued

Social Grade

A 40.4 14.9

B 44.9 20.8

C1 48.0 18.1

C2 38.8 18.2

D 43.0 16.4

E 45.5 13.3


Hair Removers and Razors

79.4% of women (or 40.6% of all respondents) and 93.8% of men (or 45.8%of all respondents) responded positive to having used razors or depilatories in2010. Usage of hair removers and razors generally decreases with age amongboth men and women beyond the middle age group. Trends are not clearlydefined by social grade, but As and Es had the lowest penetration rates forwomen and men, respectively.

Table 7.15: Usage of Hair Removers and Razors in the Last12 Months by Sex, Age and Social Grade (% of adults), 2010

ϮWomen ‡Men

Age

15-19 43.8 45.1

20-24 47.8 46.5

25-34 45.7 48.7

35-44 45.9 47.0

45-54 43.4 46.4

55-64 38.9 45.6

65+ 26.9 42.0

Table continues...



Table 7.15: Usage of Hair Removers and Razors in the Last12 Months by Sex, Age and Social Grade (% of adults), 2010

...table continued

Social Grade

A 35.0 50.3

B 39.5 47.7

C1 44.5 43.0

C2 37.1 50.9

D 40.9 44.3

E 42.3 37.4

† — hair removers/razors

‡ — razors, razor blades and electric shavers


Shower Gels and Bath Products

91% of women (or 46.6% of all respondents) and 83.5% of men (or 40.7% ofall respondents) claimed to have used shower gels and bath products in 2010.Interestingly, women in the oldest age groups and those in social grade E werethe most likely to use these products, while men from the same age groupsand social grade were the least likely to do so (see Table 7.16).

Table 7.16: Usage of Shower Gels and Bath Products in the Last12 Months by Sex, Age and Social Grade (% of adults), 2010

Women Men

Age

15-19 44.7 46.6

20-24 46.7 44.7

25-34 46.1 46.1

35-44 46.7 43.7

45-54 46.1 40.1

55-64 45.0 38.2

65+ 48.9 32.3

Table continues...



Table 7.16: Usage of Shower Gels and Bath Products in the Last12 Months by Sex, Age and Social Grade (% of adults), 2010

...table continued

Social Grade

A 41.1 43.4

B 44.2 41.3

C1 49.8 39.1

C2 42.6 45.5

D 47.9 39.4

E 52.9 33.2


Cleansing Creams, Lotions and Wipes

According to the TGI survey, 69% of women, representing 35.3% of allrespondents, had used cleansing creams, milks, lotions, toner, wipes and/orwashes in 2010. Women in younger age groups were more inclined to haveused these products, and the trend decreases with age. There was no strongcorrelation between usage and social grade, with percentage penetrationranging from 31.1% among C2s to 38.9% among C1s.

Table 7.17: Usage of Cleansing Creams, Milks, Lotions, Toner,Wipes and Washes by Women in the Last 12 Months by Age and

Social Grade (% of adults), 2010

Age

15-19 40.2

20-24 40.6

25-34 37.5

35-44 35.5

45-54 34.1

55-64 33.2

65+ 31.9

Table continues...



Table 7.17: Usage of Cleansing Creams, Milks, Lotions, Toner,Wipes and Washes by Women in the Last 12 Months by Age and

Social Grade (% of adults), 2010

...table continued

Social Grade

A 32.0

B 36.8

C1 38.9

C2 31.1

D 33.3

E 35.5


Liquid Soap/Handwash

Percentage penetration of liquid soap among all respondents was high,standing at 85.9%, and ranged from 83.1% of men to 88.5% of women.Penetration was highest among the youngest age group and social grade B,and lowest among the oldest age group and social grade E.

Table 7.18: Usage of Liquid Soap/Handwash in the Last12 Months by Age and Social Grade (% of adults), 2010

Age

15-19 91.4

20-24 89.9

25-34 90.0

35-44 88.5

45-54 84.7

55-64 84.5

65+ 78.6

Table continues...



Table 7.18: Usage of Liquid Soap/Handwash in the Last12 Months by Age and Social Grade (% of adults), 2010

...table continued

Social Grade

A 87.0

B 90.5

C1 88.6

C2 85.3

D 81.4

E 73.8


Bars of Soap

According to the TGI survey, 77.5% of adults were said to have used bars ofsoap in 2010, with men being slightly more likely to do so than women.Respondents in older age groups were more inclined to use bars of soap, whilepenetration among the youngest age group was also fairly high (79.9%). Interms of social grade, penetration was highest among As, and lowest amongC1s and Ds.

Table 7.19: Usage of Bars of Soap in the Last 12 Months by Ageand Social Grade (% of adults), 2010

Age

15-19 79.9

20-24 69.8

25-34 69.0

35-44 69.8

45-54 78.6

55-64 84.7

65+ 86.8

Table continues...



Table 7.19: Usage of Bars of Soap in the Last 12 Months by Ageand Social Grade (% of adults), 2010

...table continued

Social Grade

A 81.6

B 76.8

C1 76.7

C2 78.0

D 76.7

E 79.6


Suntan and Sun Protection Products

In 2010, 60.1% of women (or 30.8% of all respondents) and 40.6% of men (or19.8% of all respondents) used suntan and sun protection products, includingself-tanning products. Among both sexes, usage of these products was mostlikely among 35 to 44 year-olds, and least likely among those aged 65 and over.In terms of social grade, penetration rates were low among C2s, Ds and Es.

Table 7.20: Usage of Suntan and Sun Protection Products in theLast 12 Months by Age and Social Grade (% of adults), 2010

Women Men

Age

15-19 29.4 19.0

20-24 29.4 15.1

25-34 31.6 21.9

35-44 34.9 24.7

45-54 32.7 22.1

55-64 32.0 19.9

65+ 25.2 14.1

Table continues...



Table 7.20: Usage of Suntan and Sun Protection Products in theLast 12 Months by Age and Social Grade (% of adults), 2010

...table continued

Social Grade

A 32.6 32.3

B 34.3 25.9

C1 34.5 20.6

C2 28.3 18.8

D 25.9 14.4

E 23.1 6.6




8. Current Issues

THE ECONOMY

The UK economy is currently still reeling from the longest recession in recordedhistory. 2009 saw the economy shrink by 5%, the biggest calendar-year fallsince 1921. Although there were hints of recovery in the UK economy duringthe first half of 2010, in the final quarter of 2010 gross domestic product (GDP)contracted by 0.5%, demonstrating that the economy is still some way off frombeing back to normality. Encouragingly, in the first 3 months of 2011 the UKeconomy grew by 0.5%. Inflation rates, however, continue to rise, having beenpushed upwards by increasing fuel, energy and commodity prices, as well asthe VAT increase introduced in January 2011. In June, Scottish Power, one ofthe major gas and electricity suppliers in the UK, announced gas tariffs are torise by 19%, with electricity up by 10%. This is expected to be soon followedby other energy companies. According to official inflation figures, theconsumer price index (CPI) currently stands at 4.5% (June 2011), well above theBank of England’s target rate of 2%. The latest inflation report, published inMay 2011 by the Bank of England, predicted that inflation may rise to 5% laterin the year, largely due to price hikes in utility bills.

RETAILERS ARE STRUGGLING

The retail sector has been adversely affected by the Government’s proposedspending cuts, the increased tax burden and rising commodity costs. Non-foodretailers were hit particularly hard, including those selling clothing, footwearand big ticket items. According to British Retail Consortium (BRC), UK retailsales values in May were 2.1% lower on a like-for-like basis than in 2010. Thecauses are well-known: household disposable incomes continue to be squeezedby high inflation rates and low wage growth, while uncertainty over the effectsof Government cuts is weighing down consumer confidence. It is believed thatthe increase in VAT since January 2011 is flattering the sales figures for mostnon-food goods.

Toiletries Current Issues


RISING MATERIALS COSTS CAUSING PRICES HIKES

Conscious of squeezed household budgets and trading-down trends, brandowners are struggling to pass on the rising costs of raw materials, packaging,and energy costs to consumers. In June, PZ Cussons announced plans to cut itsImperial Leather soap bar by a fifth in weight — to 100g — as the manufacturerattempts to reduce the product rather than raise the price. PZ Cussons andothers are facing steep rises in the cost of raw materials, including palm oil.The company has raised prices by an average of 7% in 2010, and hopes toincrease prices by another 2% in 2011. Procter & Gamble (P&G) has increasedprices by up to 7% on a wide range of household and personal care products,while Unilever, the maker of Dove soap, expects its commodity costs to rise by14 to 16% in 2011. In April, market leaders Procter & Gamble, Unilever and PZCussons announced that they expect trading for the rest 2011 to be challengingas UK consumers further cut spending on products such as shower gels andhandwash.

UNILEVER AND P&G IN PRICE FIXING FINE

In April, 2011, the consumer products giants Unilever and P&G were fined€315m for fixing washing powder prices in 8 European countries. This followeda 3-year investigation by the European Commission following a tip-off byGerman company Henkel in 2008. The cartel was said to have existed for atleast 3 years between 2002 and 2006, fixing prices of powder detergents forwashing machines in Belgium, France, Germany, Greece, Portugal, Spain andthe Netherlands. The total fine of €315.2m (€104m for Unilever and €211.2mfor P&G) includes a 10 per cent reduction for acknowledging the facts. The finalfigures also reflect a 50 per cent reduction for P&G and 25 per cent for Unileveron account of their co-operation with regulators under the EU’s leniencynotice.

NEW PRODUCTS

NIVEA

In January 2011, Beiersdorf launched a new deodorant — Invisible for Black &White — for NIVEA. Stephen Byrne from Beiersdorf says the point of differencewith this new deodorant is that it prevents stains on light and dark clothes.Available in Boots and major supermarkets, it comes in two fragrances and 4sizes, and it is backed by an outdoor media campaign.

L’Oreal

In February 2011, L’Oreal launched its new hair colour product Sublime Mousse,which was backed with digital investment in order to reach a younger,previously untapped audience. The product’s innovation removes the need forsectioning hair while colouring, allowing shampoo-like application.



Dove

In March 2011, Dove launched two post-wash variants — Intensive Repair Maskand Overnight Creme — to its Intensive Repair hair care range. The newadditions were prompted by findings that nearly 30% of UK women considertheir hair ‘dry’ or ‘’normal to dry’, and are part of their increased investmentin the portfolio in 2011.

Sensodyne

In March 2011, GlaxoSmithKline launched Repair & Protect Toothpaste for itsSensodyne brand. The product is designed to repair teeth that have sufferederosion.

Mandara

Luxury spa brand Mandara Spa, part of Steiner Leisure, has created a new rangeof bath and body products that will be retailed exclusively through 400Sainsbury’s supermarkets. The premium own-label, which was launched in May2011 and will not carry the Sainsbury’s name, aims to provide affordable luxury.Based on Mandara’s Balinese relaxation treatments, the five collections includeTropical Blooms, Honeymilk Dream, Amber Heaven, Island Paradise and CitrusSpice.

Sk:n

In June 2011, UK skin clinic Sk:n created a new range of skin care products,which will be launched in Sk:n clinics and larger Boots stores across the UK inJuly. The collection is split into five treatment areas include cleansing andexfoliating, anti-aging, anti-blemish, corrective and repair and protect. Theintention is to provide a more accessible alternative to doctor brands sold indepartment stores and through Sk:n clinics.



9. The Global Market

INTRODUCTION

The diversified, multinational companies Unilever and Proctor & Gamble (P&G)remain the stalwarts of the global toiletries market. L’Oreal, meanwhile,remains the main player in the make-up and skincare sector.

EUROPE

According to the European Cosmetics Association (Colipa), the retail marketfor cosmetic and toiletries in the EU-27, as well as Norway and Switzerland,was worth €69.5bn in 2009, having decreased from €70.4bn in the previousyear. The five major European cosmetics and toiletries markets are Germany,France, Italy, the UK and Spain. In 2009, the German market accounted for18.5% of European sales, France for 15.1%, Italy for 13.1%, and the UK andSpain for 12.7% and 6.5%, respectively.

As can be seen in Table 9.1, while Germany and France saw the value of theirsales increase, Italy, the UK and Spain all experienced a decline in sales. TheUK’s cosmetics, toiletries and perfumery market shrunk by 3.1% in 2009, whilein Italy sales decreased, albeit marginally, by 0.4%. Spain experienced thelargest decline, with a drop in cosmetics, toiletries and perfumes sales of 8.5%.

It should be noted, however, that these sales figures are not only inclusive oftoiletries, but also of cosmetics and fragrances. Therefore, the decrease in totalvalue does not necessarily indicate a drop in the sales value of toiletries.

Table 9.1: Retail Sales of Cosmetics and Toiletries in the Top FiveEU Member States by Value (€), 2009

Value (€m)% Change2008-2009

Germany 12,829 1.8

France 10,517 0.9

Italy 9,108 -0.4

UK 8,855 -3.1

Spain 7,203 -8.5

Source: Colipa Activity Report 2009

Toiletries The Global Market


According to Industrieverband Köerperpflege und Waschmittel eV (IKW), theGerman Cosmetic, Toiletry, Perfumery and Detergent Association, the personalcare sector in Germany, including decorative cosmetics and perfumes/fragrances, was worth €12.74bn in 2010. Sales of deodorants rose by 2.3% from€689m in 2009 to €705m in 2010. On the other hand, sales of hair care, skincare,soaps, bath and shower products fell by 2.9%, 0.7%, 1.8% and 2.2%,respectively.

THE US

According to Kline & Company, the research and consultancy firm, sales ofcosmetics and toiletries in the US grew by 2.4% in 2010 at the manufacturers’level, reaching $36.5bn. Growth was driven by rising consumer confidence,aggressive promotional activity and technological advances.

SELECTED GLOBAL COMPETITORS

AS Watson Group

The AS Watson Group (ASW) dates back to 1828 and has evolved into aninternational retail and manufacturing business with operations in 33 marketsworldwide. Currently owned by Hong Kong-based conglomerate HutchinsonWhampoa, the Group employs 98,000 staff in more than 9,500 retail stores.These stores focus on a range of products from health and beauty goods, luxuryperfumeries and cosmetics to food and electronics. The Group is also anestablished player in the beverage industry, supplying a full range of beveragesfrom bottled water, fruit juices, soft drinks and tea products to premium winelabels via its international wine wholesaler and distributor.

The ASW portfolio encompasses popular Asian brands and retail chains. Theseinclude the health and beauty specialists Watson’s (Your Personal Store); Park‘n Shop supermarket; the food galleria, Taste; Great Food Halls; Gourmet, aboutique-style fine food hall; Fortress electrical appliance stores; Watson’sWine Cellar; and Nuance-Watson airport duty-free shops. ASW is also a majorproducer and distributor of water products and beverages in the region, andWatsons Water is the top-selling brand in Hong Kong.

In Europe, ASW currently operates stores in more than 20 countries under thehealth and beauty brands Kruidvat, Trekpleister, Rossmann, Superdrug, Savers,DC, Drogas, Spektr and Watson’s (Your Personal Store), as well as luxuryperfumeries and cosmetics brands, Marionnaud, ICI Paris XL and The PerfumeShop.

In March 2011, ASW announced it would rebrand its 212-store retail networkin Ukraine from DC Ukraine to Watsons. DC Ukraine operates retail store ofhousehold chemical goods, personal hygiene products, perfumes andcosmetics throughout Ukraine. The rebranding decision followed a successfulexpansion of DC in the market since the Group acquired the business in 2006.



Avon Products Inc

The world’s largest direct seller and leading beauty company, Avon ProductsInc, had a market capitalisation in excess of $12bn as of January 2011. Itsproducts fall into three categories, namely beauty, fashion and home products.Its beauty products division consists of colour cosmetics, fragrances, skincareand personal care. Avon Products’ best-recognised brands include Avon Colour,Anew, Skin-So-Soft, Advance Techniques, Avon Naturals and Mark. Avonprimarily sells its products through direct-selling channels. It has operations insix regions including Latin America, North America, Central and EasternEurope, Western Europe, the Middle East and Africa, Asia/Pacific, and thePeople’s Republic of China (PRC).

In April 2011, beauty company Avon Products, Inc. joined the Roundtable onSustainable Palm Oil (RSPO) in support of its commitment to 100% certifiedsustainable palm oil. The company has made a commitment to purchaseGreenPalm certificates covering all of its global palm oil use. The certificatesaim to help to drive demand for sustainable palm oil, increase the supply forsustainable palm oil, and maintain biodiversity and habitat for endangeredspecies.

In June 2011, Avon launched ‘Barbie Loves Avon’ beauty and lifestyle productsacross Europe, Middle East and Africa. The collection, in partnership with theUS-based toy company, Mattel, includes lip gloss, hair care, sunglasses andhandbags, and will be supported by a marketing programme targeting girlsand mums via social media and digital advertising.

Beiersdorf AG

The German company Beiersdorf AG is a leading manufacturer in the cosmeticsand toiletries, as well as medical and adhesive-tape industries. Its brandsinclude NIVEA, Eucerin and La Prairie. Beiersdorf employs around 20,000people worldwide.

In May 2011, Beiersdorf launched the global campaign ’100 Years Skincare forLife’ for its NIVEA brand. The campaign was centred around the values that itbelieves have been associated with NIVEA for generations: trust, honesty,reliability, quality and family. In 2010, turnover at Beiersdorf amounted to€6.19bn, up from €5.75bn in 2009. Its pre-tax profit, however, decreased from€583m to €553m.

Burt’s Bees

Burt’s Bees is a US company that produces personal care, health, beauty andpersonal hygiene products. Established in the 1980s, the companymanufacturers its products with natural ingredients using minimal processing,including distillation, exaction and hydrolysis.

In May 2011, Burt’s Bees teamed up with Natural Environmental EcologicalManagement to build three urban gardens in downtown Durham, NC. Thegardens were constructed using natural and sustainable agricultural methods.



Colgate-Palmolive Company

The US-based Colgate-Palmolive Company was founded as a small soap andcandle business in 1806. Today it sells its oral care, personal care, householdcare and pet nutrition products in more than 200 countries. The Palmolivebrand is prominent in hair care, but the company is particularly strong in oralcare. Colgate is among the 100 most valuable global brands with a marketshare of 45% in the toothpaste and 30.8% in toothbrush segments.

In March 2011, Colgate-Palmolive came to an agreement with Unilever to sellits laundry brands Fab, Lavomatic and Vel in Columbia to Unilever for $215m.In May, Colgate announced it would sponsor the breakfast show across GlobalRadio’s Heart network for 4 weeks starting from 9th May, part of its ’KeepBritain Smiling’ campaign. The campaign, the stated aim of which was tocollect one million ’smiles’ during May and June, pledged to donate £100,000to children’s charity Barnardo’s when said target was reached.

Crabtree & Evelyn Ltd

Founded in 1972, the British company Crabtree & Evelyn has evolved from asmall, family-run business specialising in fine soaps to an internationalcompany known for its fragrances, toiletries, gourmet foods and gifts. It wasa forerunner in the use of natural ingredients from fruit, plants and flowers inits toiletries, and its products are available in more than 40 countries andthrough its e-commerce site.

In March 2011, Crabtree & Evelyn Ltd launched the first phase of a 5 yearmarketing strategy in which it would use digital channels to attract newaudiences. In April, the company launched a new home fragrance collectionwhich was available in room sprays, scented candles, drawer liners and reeddiffusers. The summer scents include single notes of lily, rose, lavender and iris.

Estee Lauder Inc

Founded in New York City in 1946 by a husband-and-wife team, the cosmeticscompany Estée Lauder is a US manufacturer and marketer of skincare,cosmetics, perfume and haircare products. It went international in 1960, withits first overseas concession opening in the London department store Harrods.Its products are now sold in 140 countries and, in its latest financial year (ending30th June 2010), sales outside the Americas accounted for 55.9% of revenueand 81.5% of operating income. Total sales for the year ending 30th June 2010amounted to $7.8bn, up from $7.33bn in the previous year. Its operatingincome increased from $510.1m in 2008/2009 to $874.6m in 2009/2010.

In June 2011, Estee Lauder Inc announced the opening of an innovation centrein Shanghai, China. The new centre aims to increase the company’s researchcapabilities in Asia, reinforcing a commitment to local consumers bydeveloping products tailored to the needs of Chinese and Asian skin.



Table 9.2: Estée Lauder Inc — Total Sales by Product Category($m), Years Ending 30th June 2009 and 2010

2009 2010

Skincare 2,886.0 3,227.1

Make-up 2,830.9 2,978.2

Fragrance 1,150.9 1,136.9

Hair care 402.4 413.9

Other 61.7 55.4

Total 7,331.9 7,811.5

Note: total are before returns associated with restructuring activities.

Source: Estee Lauder Inc

L’Oreal SA

The French group L’Oréal was founded in 1907 by the chemist, EugèneSchueller, who invented the first synthetic hair colourant, which he calledAuréale. The company markets 23 global cosmetic brands under a number ofdifferent product ranges, including ‘Consumer Products’, which compriseproducts intended for skincare, haircare, hair colouring, make-up and stylingproducts; its ‘Luxury Products’ range includes international brand cosmetics,such as Lancôme, Ralph Lauren and Cacharel, distributed through selectedretail channels; while its ‘Active Cosmetics’ division consists of the Innéov andVichy brands among others, for sale principally in pharmacies.

In 2008, L’Oréal acquired YSL Beauté for €1.15bn. YSL Beauté and its subsidiary,Roger & Gallet, formed part of PPR’s Gucci Group luxury division. In October2010, the company announced plans to review its digital media planning andbuying business across Europe and to increase its digital spend. In December,beauty pills manufacturer Innéov, which is owned by L’Oréal and Nestlé,announced plans to launch in the People’s Republic of China (PRC) in 2011. Asmore people in the region are turning to dietary supplements to treat skin andhair conditions, the company sees a huge opportunity in Asia fornutricosmetics.

In January 2011, singer Gwen Stefani signed a deal with L’Oreal and becameits latest public face. In May, L’Oreal picked digital marketing company Gyroto handle its estimated £20m UK customer relationship marketing account.Gyro is to build customer engagement across the Garnier, Maybelline andL’Oreal beauty brands, and the activity will span direct mail and digitalchannels.



Mary Kay Inc

Mary Kay Inc is a US-based direct selling company that sells skincare andcosmetics products in more than 30 global markets through an independentsales force of more than 1.7 million consultants. Founded in 1963 by Mary KayAsh, the company has headquarters in Dallas, Texas, and manufacturingfacilities in Dallas and the PRC.

Procter & Gamble Company

From its origins as a small family-run soap and candle company, established in1837, Cincinnati-based Procter & Gamble (P&G) now employs around 135,000people in more than 80 countries worldwide, marketing to consumers in morethan 180 countries. It operates in the divisions of Beauty & Grooming, Health& Well-Being and Household Care. 22 of its brands earn more than $1bn insales each year. The billion-dollar toiletries brands include Gillette, Crest, Head& Shoulders, Olay and Pantene.

In April 2011, P&G announced it would sell its Pringles snacks business toDiamond Foods, the owner of Kettle Chips. Under the terms of the deal, a newentity will be formed to hold the Pringles business, which will then be mergedinto Diamond Foods. P&G shareholders will own about 57% of the newcompany, with Diamond shareholders owning the rest. In the same month,P&G launched a new monthly digital magazine to drive up its online offering.The magazine is sent to the 1 million customers who are registered on the P&Gsite, supersavvyme.com. Also in the same month, P&G’s hair brand Pantenestarted producing its first shampoo and conditioner bottles made primarilyfrom plant-based plastic, derived from sugarcane.

In 2010, P&G’s net sales were valued at $78.94bn, up from $76.69bn in 2009.Its operating income increased from $15.37bn to $16.02bn.

PZ Cussons

Following the recent acquisition of St Tropez (September 2010), PZ Cussonsformed a new beauty division comprising its premium beauty brands: StTropez, The Sanctuary and Charles Worthington. The division is based inCovent Garden, London and aims to maximise the three products and theirpresence both in the UK and internationally. It has been fully operational byJune 2011. In the same month, PZ Cussons also announced it would cut itsImperial Leather soap size by 20% to 100g as a result of the rising costs of rawmaterials. The manufacturer’s decision to reduce the product quantity ratherthan raise the price reflects the increased price sensitivity among its customers.Cussons’ revenue in 2010 — for its European and African business — decreasedby 2.5% and 9.3%, respectively. Sales in Asia, however, grew by a massive22.7% over the same period.



Table 9.3: PZ Cussons — Group Revenue by Geographical Region(£m), Years Ending 31st May 2009 and 2010

2009 2010

Africa 358.7 325.2

Asia 135.0 165.6

Europe 288.1 280.8

Total 781.8 771.6

Source: PZ Cussons Annual Report 2010

Unilever PLC

Having sold its fine-fragrance business to Coty Inc in 2005, Unilever’s personalcare division is now primarily concentrated on toiletries. Its Impulse brand,however, remains a leader in the women’s mass-market fragrance sector, whileLynx, which is known as Axe outside of the UK, is an important brand in themen’s mass-market fragrance sector.

In January 2011, Unilever entered into a partnership with BioLeap — acompany specialising in molecular design technology — with the aim ofdeveloping improved consumer products. The first 2 years of partnership willconsist of a team of scientists from Unilever and BioLeap working together onthe core biology of ageing. The company hopes molecular design technologywill enable it to build differentiated, health-enhancing products across severalcategories.

In March, Unilever sold the Sanex brands to Colgate-Palmolive for €672m. Themultinational was ordered by the European commission to sell the Sanexportfolio, part of the €1.28bn Sara Lee personal care acquisition in 2009, oncompetitive grounds. Later in April, the company shut its UK Final-salarypension scheme to the existing members and said the scheme hasbecome ’increasingly unaffordable and unsustainable’. In May 2011, Unilevercompleted the acquisition of Alberto Culver, the personal care company forbrands including Tresemme, nexus, Albert VO5 and St. Ives. Unilever claims theacquisition makes it the world leader in hair conditioning, second largest inshampoo products and third largest in styling. Turnover at Unilever PLCincreased from €39.82bn in 2009 to €44.26bn in 2010, a big contribution towhich came from sales growth in the US, Asia and Africa.



Table 9.4: Unilever PLC — Sales by Geographic Region (€m),Year Ending 31st December 2009 and 2010

2009 2010

Western Europe 12,067 12,015

The Americas 12,850 14,562

Asia Africa 14,897 17,685

Total †39,823 44,262

† — does not sum due to rounding at source

Source: Unilever PLC, Annual Report 2010



10. Forecasts

INTRODUCTION

Population

According the latest estimates by the Office for National Statistics, the UKpopulation will increase at an average annual rate of 0.7% over the next fewyears. At this rate, the UK’s population will surpass the 65 million and 70 millionmarks in 2018 and 2033, respectively. This increase will inevitably boost overallconsumer consumption. Although the female population will continue tooutnumber the male population, the latter is anticipated to grow at a slightlyfaster rate. In the long term, this may constitute a potential driver for the maletoiletries market.

Table 10.1: Forecast UK Resident Population by Sex (000),Mid-Years 2011-2015

2011 2012 2013 2014 2015

Female 31,807 32,001 32,196 32,391 32,587

Male 30,842 31,073 31,302 31,530 31,757

Total 62,649 63,074 63,498 63,921 64,344

% change year-on-year 0.7 0.7 0.7 0.7 0.7

Source: Population Projections Database (2008-based projections), NationalStatistics website © Crown copyright material is reproduced with the permissionof the Controller of HMSO (and the Queen’s Printer for Scotland)

Gross Domestic Product

In June, HM Treasury released figures to the effect that it expects the UK’seconomy to grow by 1.5% in 2011, before increasing by a further 2.2% in 2012(see Table 9.1). It should be noted, however, that these figures represent adowngrade of 0.3 percentage points from February 2011, when GDP wasforecast to grow by 1.8%.

Toiletries Forecasts


Table 10.2: Forecast UK Growth in Gross Domestic Product inReal Terms (%), 2011-2015

2011 2012 2013 2014 2015

Gross domestic product growth(%) 1.5 2.2 2.4 2.5 2.5

Percentage point changeyear-on-year - 0.7 0.2 0.1 0.0

Source: Forecasts for the UK Economy, May 2011, Treasury Independent Average© Crown copyright

Inflation

The latest official figures place inflation at 5.1%, up from 3.7% in December2010. It is believed that the rise in fuel, commodity and energy costs, as well asthe value-added-tax rise in effect since 4th January 2011, has significantlypushed up the inflation rate. Food, energy and mortgage costs are currentlyrising well above average inflation levels and are expected to continue to doso in the near future.

Table 10.3: Forecast UK Rate of Inflation (%), 2011-2015

2011 2012 2013 2014 2015

Inflation (%) 5.1 3.6 3.4 3.4 3.1

Percentage point changeyear-on-year 0.5 -1.5 -0.2 0.0 -0.3

Note: inflation is at retail price index (RPI).


Unemployment

Unemployment, already at a 17-year high, is expected to stabilise in 2012 atthe 1.51 million mark, before lowering, starting in 2013. It is not until 2015,however, that the number of claimants is predicted to fall below pre-recessionlevels to 1.28 million.



Table 10.4: Forecast Actual Number of Unemployed Persons inthe UK (million), 2011-2015

2011 2012 2013 2014 2015

Actual number ofclaimants (million) 1.51 1.51 1.45 1.33 1.28

% change year-on-year 0.7 0.0 -4.0 -8.3 -3.8


FORECASTS 2006-2010

Key Note expects growth in the value of retail sales of toiletries to remainmoderate in the coming years, particularly in the fragrances sector. During the5-year forecast period, the total sales value of toiletries is expected to increaseby around 9.5%, driven by new product innovations (e.g. the so-calledcosmeceuticals), as well as benefiting from a growing population. Key Noteforecasts the UK market for toiletries to be worth around £5.03bn by 2015.

Table 10.5: The Forecast UK Market for Toiletries by Sector byValue at Current Prices (£m at rsp), 2011-2015

2011 2012 2013 2014 2015

Personal wash and bathroomtoiletries 1,267.3 1,312.7 1,357.3 1,398.3 1,428.2

Skincare products 1,230.6 1,270.5 1,304.5 1,344.4 1,377.9

Hair care products 1,134.2 1,139.2 1,151.1 1,162.8 1,196.9

Oral care products 569.4 567.3 575.5 583.9 598.5

Shaving preparations, wetrazors and blades, anddepilatories 390.3 398.5 407.7 417.0 427.5

Total 4,591.8 4,688.2 4,796.1 4,906.4 5,029.0

% change year-on-year 1.3 2.1 2.3 2.3 2.5


Source: Key Note



MARKET GROWTH

Figure 10.1 illustrates estimated growth in the value of the UK market fortoiletries for the period between 2006 and 2015. Key Note predicts that totalgrowth over this 10-year period will be around 20.5%.

Figure 10.1: The Actual and Forecast UK Market for Toiletries bySector by Value at Current Prices (£m at rsp), 2006-2015

20062007

20082009

20102011

20122013

20142015

3,900

4,000

4,100

4,200

4,300

4,400

4,500

4,600

4,700

4,800

4,900

5,000


Source: Key Note

FUTURE TRENDS

New Product Development

New products are essential to sustain growth in the highly competitivecosmetics and toiletries industry. In order to increase brand awareness anddrive growth in sales, companies will continue to pour significant resourcesinto developing new products, such as formulating effective beauty treatmentsthat are relevant to consumer’s needs, or redesigning and reformulatingexisting products.



Size of Products Set to Shrink

As the cost of raw materials continues to rise, manufacturers will see theirprofit margins shrink unless these costs are passed on to the consumer. In aclimate of economic uncertainty and price-conscious customers, manufacturersare loathed to raise prices for fear of losing their customer base. An alternativestrategy, which has already been adopted by some (e.g. PZ Cussons’ decisionto reduce the size of its Imperial Leather soap from 125g to 100g) and whichis likely to become more widespread, is to reduce product sizes instead.



11. Company Profiles

INTRODUCTION

The following section contains financial profiles of some of the principalcompanies identified as operating within the market sector discussed in thisreport. The financial results of some of the important names within the sectormay not be reported if:

• their principal activities are so varied that their results are not consideredapplicable to the survey

• they are no longer trading as separate companies

• their financial data are very out of date.

DEFINITIONS

A company which has a ‘Y’ consolidated value has filed consolidated accountsfor the relevant year.

† — denotes that the growth rate calculation is invalid, because the figureseither move from positive to negative or from negative to positive.

Turnover (Sales)

This includes all income derived from the principal activities of the firm, net ofVAT. It encompasses UK sales, exports and overseas and intercompany sales.

Pre-Tax Profit

The net trading profit figure after deduction of all operating expenses,including depreciation and finance charges but before deduction of tax,dividends, subventions or group relief, and other appropriations. Whereapplicable, it will include the share of profits and losses of associatedcompanies. Items described by the company as exceptional are included;extraordinary items are excluded.

Profit Margin

Pre-tax profit expressed as a percentage of sales.

Average Remuneration

Total employee remuneration divided by the number of employees.

Sales per Employee

Sales divided by the number of employees.

FURTHER INFORMATION

For more detailed financial information telephone Key Note on: 0845-5040452.

Toiletries Company Profiles


AVON COSMETICS LTD

Registered Office Nunn Mills Road,Northampton, NN1 5PATelephone: 01604-232 425

Company Registration Number 00592235Date of Incorporation 21/10/57Holding Company Avon European Holdings LtdUltimate Holding Company Avon Products Inc

Previous Name(s) and Date(s) of Change

None.

Principal Activities

The distribution and sale of beauty products, gifts and decorative products.

SIC Codes

51450, Wholesale of perfume and cosmetics51479, Wholesale of other household goods not elsewhere classified

Structure

Avon Cosmetics Ltd is one of the world’s leading direct sellers of beauty and related products,marketing to women in more than 100 countries through approximately 6.5 millionindependent sales representatives. Avon entered the UK market in 1959.

Brand Information

Avon’s leading brands of toiletries include Anew, Solutions, Skin So Soft and Senses.

Recent Developments

In May 2011, Avon Cosmetics Ltd was crowned the winner of the Environmental Award at theDirect Selling Association (DSA) conference.



FINANCIAL PROFILE

Year End 31/12/09 31/12/08 31/12/07 31/12/06Weeks 52 52 52 52Consolidated N N N N

Sales

Sales (£000) 316,642 318,599 297,961 283,772% change year-on-year -0.61 6.93 5.00 -Exports (£000) 25,161 23,502 17,281 8,166Exports/Sales (%) 7.95 7.38 5.80 2.88

Profits

Pre-Tax Profit (£000) -7,105 20,644 7,421 9,928% change year-on-year -134.42 178.18 -25.25 -Profit Margin (%) -2.24 6.48 2.49 3.50Operating Profit (£000) -4,325 20,844 6,543 8,553

Employees

Number of Employees 1,766 1,599 1,632 1,734Average Employee Remuneration (£) 30,278 30,874 32,604 33,307Sales per Employee (£) 179,299 199,249 182,574 163,652Profit per Employee (£) -4,023 12,911 4,547 5,725Capital Employed per Employee (£) 43,314 52,171 41,224 45,413

Balance Sheet/Ratios

Capital Employed (£000) 76,493 83,422 67,277 78,747Return on Capital (%) -9.29 24.75 11.03 12.61Net Worth (£000) 39,123 45,811 61,119 52,752Current Ratio 0.96 1.07 0.94 0.95Liquidity Ratio 0.78 0.87 0.74 0.71



ESTEE LAUDER COSMETICS LTD

Registered Office 73 Grosvenor Street,London, W1K 3BQTelephone: 01730-266 531

Company Registration Number 00659213Date of Incorporation 16/05/60Holding Company Estee Lauder Europe Inc.Ultimate Holding Company Estee Lauder Companies Inc.


None.


A group engaged in the sale of cosmetics to retail outlets in the UK and the Republic of Ireland.

SIC Codes

51450, Wholesale of perfume and cosmetics.

Structure

Estée Lauder Cosmetics Ltd is a US-based company, which was established in 1946. The companyentered the European market in 1960, after setting up operations in London. Its product rangecovers skincare, cosmetics, perfume and haircare products, which are sold in more than 135countries.

Brand Information

Brands include Aveda, Bobbi Brown, Clinique and Jo Malone.

Recent Developments

In March 2011, Estee Lauder launched a new fragrance, Adventurous, which is exclusive to travelretail and available at all Estee Lauder travel retail locations worldwide.



FINANCIAL PROFILE

Year End 30/06/10 30/06/09 30/06/08 30/06/07Weeks 52 52 52 52Consolidated Y Y Y Y

Sales

Sales (£000) 365,899 345,558 326,755 301,195% change year-on-year 5.89 5.75 8.49 -Exports (£000) 23,905 23,904 21,961 19,145Exports/Sales (%) 6.53 6.92 6.72 6.36

Profits

Pre-Tax Profits (£000) 60,202 56,167 44,390 48,599% change year-on-year 7.18 26.53 -8.66 -Profit Margin (%) 16.45 16.25 13.59 16.14Operating Profit (£000) 59,712 53,171 39,360 46,139

Employees

Number of Employees 6,236 6,429 4,240 4,008Average Employee Remuneration (£) 15,804 15,440 21,548 21,910Sales per Employee (£) 58,675 53,750 77,065 75,148Profit per Employee (£) 9,654 8,737 10,469 12,126Capital Employed per Employee (£) 20,208 19,358 21,124 13,552


Capital Employed (£000) 126,014 124,454 89,564 54,317Return on Capital (%) 47.77 45.13 49.56 89.47Net Worth (£000) 122,983 121,454 85,611 51,092Current Ratio 2.60 2.64 2.05 1.54Liquidity Ratio 2.35 2.41 1.74 1.24



L’OREAL (UK) LTD

Registered Office 255 Hammersmith Road,London, W6 8AZTelephone: 01443 234400

Company Registration Number 00271555Date of Incorporation 24/12/32Holding Company L’oreal SAUltimate Holding Company L’oreal SA


Golden Ltd (01/01/86)


The manufacture and distribution of hair care, hair colour, perfume, make-up and skincareproducts.

SIC Codes

24520, Manufacture of perfumes and toilet preparations.

Structure

Based in London, L’Oréal (UK) Ltd is a subsidiary of the French company L’Oréal SA andspecialises in women’s make-up, skincare, haircare, dermatology and fragrances. In 2006, thecompany acquired The Body Shop International for £652m.

Brand Information

L’Oreal’s leading cosmetics and toiletries brands include Vichy, Biotherm, YSL Beaute, Elvive,Garnier and luxury brand Lancome.

Recent Developments

In May 2011, L’Oreal picked digital marketing company Gyro to handle its estimated £20m UKcustomer relationship marketing account. Gyro is to build customer engagement across theGarnier, Maybelline and L’Oreal beauty brands, and the activity will span direct mail and digitalchannels.



FINANCIAL PROFILE


Sales

Sales (£000) 745,770 730,066 721,597 663,611% change year-on-year 2.15 1.17 8.74 -Exports (£000) - - - -Exports/Sales (%) - - - -

Profits

Pre-Tax Profits (£000) 93,180 74,042 96,043 76,961% change year-on-year 25.85 -22.91 24.79 -Profit Margin (%) 12.49 10.14 13.31 11.60Operating Profit (£000) 95,944 104,612 94,397 76,764

Employees



Capital Employed (£000) 33,040 108,823 96,033 80,910Return on Capital (%) 282.02 68.04 100.01 95.12Net Worth (£000) -29,314 45,160 65,873 35,449Current Ratio 1.02 1.13 1.18 1.16Liquidity Ratio 0.93 0.99 1.04 1.02



PROCTER & GAMBLE (HEALTH & BEAUTY CARE) LTD

Registered Office The Heights,Brooklands,Weybridge,Surrey, KT13 0XP

Company Registration Number 00436549Date of Incorporation 06/06/47Holding Company Procter & Gamble LtdUltimate Holding Company Procter & Gamble Co.


Richardson-Vicks Ltd (01/01/89)


A partner in Procter & Gamble UK.

SIC Codes

65239, Financial intermediation not elsewhere classified.

Structure

Procter & Gamble (P&G) Ltd was founded in 1837 by William Procter and James Gamble. It ownsmany well-known branded products, including the washing-up liquid, Fairy Liquid, and Gillette.Its UK subsidiary, P&G (Health & Beauty Care) Ltd, is based in Surrey.

Brand Information

Leading Procter & Gamble brands include Olay, Head & Shoulders, Pantene, Herbal Essences,Braun, Gillette, Crest and Oral-B.

Recent Developments

In February, Proctor & Gamble announced one of its brands, Oral-B, had appointed Dr JamesRussell as its ambassador, who was known for his work on Channel 4’s prime time EmbarrassingBodies series.



FINANCIAL PROFILE


Sales

Sales (£000) 0 0 19,330 57,643% change year-on-year - -100.00 -66.47 -Exports (£000) 0 0 - -Exports/Sales (%) - - - -

Profits

Pre-Tax Profits (£000) -10,110 77,716 19,330 57,643% change year-on-year † 302.05 -66.47 -Profit Margin (%) - - 100.00 100.00Operating Profit (£000) -10,110 30,716 19,330 57,643

Employees

Number of Employees - - - -Average Employee Remuneration (£) - - - -Sales per Employee (£) - - - -Profit per Employee (£) - - - -Capital Employed per Employee (£) - - - -


Capital Employed (£000) 389,971 386,582 348,436 322,327Return on Capital (%) -2.59 20.10 5.55 17.88Net Worth (£000) 389,971 386,582 348,436 321,685Current Ratio 1.44 1.41 1.09 0.87Liquidity Ratio 1.44 1.41 1.09 0.87



PZ CUSSONS PLC

Registered Office Manchester Business Park,3500 Aviator Way,Manchester, M22 5TGTelephone: 0161-491 8000

Company Registration Number 00019457Date of Incorporation 20/02/84Holding Company NoneUltimate Holding Company None


Paterson Zochonis Public Ltd Company (31/05/02)


A group engaged in the manufacture and distribution of soaps, detergents, toiletries,pharmaceuticals, electrical goods, edible oils, fats and spreads and nutritional products.

SIC Codes

24511, Manufacture of soap and detergents.24520, Manufacture of perfumes and toilet preparations.24421, Manufacture of medicaments.29230, Manufacture of non-domestic cooling and ventilation equipment.15420, Manufacture of refined oils and fats.15519, Manufacture of other milk products.

Structure

Known as Paterson Zochonis PLC until 2002, PZ Cussons manufactures personal and householdcleaning products in Europe, Asia and Africa. Its origins go back to 1879, when George Patersonand George Zochonis set up a trading post in Sierra Leone. It acquired the soap-making CussonsGroup Ltd in 1975.

Brand Information

PZ Cussons’ brands include Imperial Leather, Carex, Sanctuary and Original Source.

Recent Developments

PZ Cussons formed a new beauty division comprising its premium beauty brands: St Tropez, TheSanctuary and Charles Worthington. The division aims to maximise the three products and theirpresence both in the UK and internationally. It has been fully operational since June 2011.



FINANCIAL PROFILE


Sales

Sales (£000) 771,600 838,100 660,900 577,900% change year-on-year -7.93 26.81 14.36 -Exports (£000) - - - 577,900Exports/Sales (%) - - - 100.00

Profits

Pre-Tax Profits (£000) 101,800 84,400 76,500 67,900% change year-on-year 20.62 10.33 12.67 -Profit Margin (%) 13.19 10.07 11.58 11.75Operating Profit (£000) 101,400 86,200 76,400 65,800

Employees

Number of Employees 8,312 8,596 8,697 9,877Average Employee Remuneration (£) 11,044 9,970 8,221 -Sales per Employee (£) 92,830 97,499 75,992 58,510Profit per Employee (£) 12,247 9,819 8,796 6,875Capital Employed per Employee (£) 77,960 67,148 64,402 42,776


Capital Employed (£000) 648,000 577,200 560,100 422,500Return on Capital (%) 15.71 14.62 13.66 -Net Worth (£000) 291,800 232,300 196,500 257,600Current Ratio 1.84 1.94 2.26 2.54Liquidity Ratio 1.19 1.08 1.10 1.29



SUPERDRUG STORES PLC

Registered Office 118 Beddington Lane,Croydon,Surrey, CR0 4TBTelephone: 020-8684 7000

Company Registration Number 00807043Date of Incorporation 28/05/64Holding Company Kruidvat Uk LtdUltimate Holding Company Hutchison Whampoa Ltd


Superdrug Stores Ltd (24/07/01)Superdrug Stores PLC (17/07/01)


The retail of health and beauty products.

SIC Codes

52310, Dispensing chemists.52330, Retail sales of cosmetic and toilet articles.

Structure

Superdrug Stores is a part of AS Watson Group, which also owns the UK chains The PerfumeShop and Savers Health & Beauty. AS Watson, in turn, is owned by the Hong Kong-basedcompany Hutchison Whampoa Ltd.

Brand Information

Superdrug stocks brands of toiletries including NIVEA, Garnier and Olay, as well as selling itsown-brand ranges, such as its Naturals Collection.

Recent Developments

In May 2011, Superdrug launched its first loyalty card for customers to enable them to earnpointes online and in store. The launch was accompanied by points promotions both in storeand online.



FINANCIAL PROFILE


Sales

Sales (£000) 1,074,832 1,074,863 1,097,240 1,027,417% change year-on-year 0.00 -2.04 6.80 -Exports (£000) - - - 0Exports/Sales (%) - - - 0.00

Profits

Pre-Tax Profits (£000) -234 -7,396 21,599 22,211% change year-on-year † † -2.76 -Profit Margin (%) -0.02 -0.69 1.97 2.16Operating Profit (£000) 6,033 -2,419 26,483 27,341

Employees

Number of Employees 7,330 7,495 7,537 6,671Average Employee Remuneration (£) 20,176 20,025 19,653 18,817Sales per Employee (£) 146,635 143,411 145,580 154,012Profit per Employee (£) -32 -987 2,866 3,329Capital Employed per Employee (£) 21,663 21,120 23,343 24,987


Capital Employed (£000) 158,787 158,292 175,935 166,686Return on Capital (%) -0.15 -4.67 12.28 13.33Net Worth (£000) 122,315 130,690 152,089 137,547Current Ratio 1.07 1.03 1.02 1.04Liquidity Ratio 0.62 0.51 0.46 0.49



UNILEVER PLC

Registered Office Port Sunlight,Wirral,Merseyside, CH62 4ZDTelephone: 020-7822 5252

Company Registration Number 00041424Date of Incorporation 21/06/94Holding Company NoneUltimate Holding Company None


None.


A group engaged in the manufacture and supply of savoury, dressings and spreads, personalcare products, ice cream and tea-based beverages and home care and cleaning products.

SIC Codes

24520, Manufacture of perfumes and toilet preparations.15870, Manufacture of condiments and seasonings.15430, Manufacture of margarine and similar edible fats.15891, Manufacture of soups.15899, Manufacture of other food products not elsewhere classified.15520, Manufacture of ice cream.24511, Manufacture of soap and detergents.24512, Manufacture of cleaning and polishing preparations.

Structure

Unilever is one of the world’s leading suppliers of fast-moving consumer goods (FMCG). Its threeglobal product divisions are Food, Home Care and Personal Care.

Brand Information

Unilever’s toiletries brands include Dove, Sure, Pears, Sunsilk and TIGI.

Recent Developments

In April 2011, Unilever sold Sanex, the multi-category personal care brand, to Colgate for€672m.



FINANCIAL PROFILE


Sales

Sales (£000) 44,262,000 39,823,000 40,523,000 40,187,000% change year-on-year 11.15 -1.73 0.84 -Exports (£000) - - 40,523,000 40,187,000Exports/Sales (%) - - 100.00 100.00

Profits

Pre-Tax Profits (£000) 6,132,000 4,916,000 7,129,000 5,184,000% change year-on-year 24.74 -31.04 37.52 -Profit Margin (%) 13.85 12.34 17.59 12.90Operating Profit (£000) 6,450,000 5,020,000 7,167,000 5,245,000

Employees



Capital Employed (£000) 27,561,000 25,417,000 22,342,000 23,743,000Return on Capital (%) 22.25 19.34 31.91 21.83Net Worth (£000) -3,793,000 -4,982,000 -6,143,000 -4,368,000Current Ratio 0.92 0.93 0.81 0.73Liquidity Ratio 0.60 0.62 0.53 0.45



12. Company Financials

The following companies, listed in alphabetical order, are taken from the KeyNote database.

Links with Companies House mean that when the latest accounts fora company are made available, they can be incorporated on our databaseand be ready for inclusion in Key Note Market Report Plus’. A short delay occursat Companies House between receipt of documents and their public release.As this delay can be longer, the availability of accounts can sometimes beaffected.

It should be noted that the financial results for certain companies are notrestricted to sales of the products covered by this report.

Turnover (£000)Pre-Tax Profit

(£000) Year End

Company

Alberto-CulverGroup Ltd 0 290,146 30/09/2010

Alliance BootsHoldings Ltd 0 530,000 31/03/2010

Avon CosmeticsLtd 316,642 -7,105 31/12/2009

Baylis & HardingPLC 18,985 89 31/05/2010

The Body ShopInternational PLC 320,500 34,700 02/01/2010

The BootsCompany PLC 1,146,000 220,000 31/03/2010

Bourjois Ltd 19,821 505 31/12/2010

Church & DwightUK Ltd 53,818 1,789 30/11/2009

Colgate-Palmolive(UK) Ltd 212,040 21,471 31/12/2009

CombeInternational Ltd 42,272 4,012 31/12/2009

Coty UK Ltd 228,597 995 30/06/2010

Creightons PLC 13,590 303 31/03/2010

DEB Ltd 44,011 9,214 31/12/2009

Gillette UK Ltd 30,499 746 30/06/2010

Toiletries Company Financials


Turnover (£000)Pre-Tax Profit

(£000) Year End

Company

GR & MMBlackledge PLC 126,908 -330 31/12/2009

H Bronnley & CoLtd 7,054 -1,500 31/12/2009

Johnson &Johnson Ltd 44,701 7,461 02/01/2011

L’Oréal (UK) Ltd 745,770 93,180 31/12/2009

Mercona (GB) Ltd 10,356 269 31/12/2009

Milton-Lloyd Ltd 13,802 2,321 31/12/2009

Molton Brown Ltd 58,195 4,338 31/12/2009

Pfizer ConsumerHealthcare Ltd 35,999 801 30/11/2009

Phyllis Earle Ltd 288 72 31/12/2009

Procter & GambleLtd 0 -43,028 30/06/2010

Procter & Gamble(Health

& Beauty Care) Ltd 0 -10,110 30/06/2010

PZ Cussons PLC 771,600 101,800 31/05/2010

Rayburn TradingCompany Ltd 77,657 561 31/08/2010

Sara Lee UKFinance Ltd 0 0 03/07/2010

Simple ToiletriesLtd 56,350 15,203 30/09/2010

Superdrug StoresPLC 1,074,832 -234 26/12/2009

Unilever PLC† 44,262,000 6,132,000 31/12/2010

Wella (UK) Ltd 94,657 687 30/06/2010

† — accounts express in Euros (€)

Source: Key Note

Toiletries Company Financials


13. Further Sources

Associations

Cosmetic Toiletry and PerfumeryAssociation (CTPA)Josaron House5/7 John Princes StreetLondon, W1G 0JNTelephone: 020-7491 8891Fax: 020-7493 8061E-mail: [email protected]://www.ctpa.org.uk European Cosmetics Association(COLIPA)Avenue Herrmann Debroux 15AB-1160 AuderghemBrusselsBelgiumTelephone: +32 2 227 66 10Fax: +32 2 227 66 27http://www.colipa.eu

Private Label ManufacturersAssociation (PLMA)630 Third AvenueNew York, NY 10017USTelephone: +1 212 972 3131Fax: +1 212 983 1382E-mail: [email protected]://plma.com

Publications

PZ Cussons, Annual Report 2010Manchester Business Park3500 Aviator WayManchester M22 5TGTelephone: 01614-351 000E-mail:[email protected]://www.pzcussons.com

Unilever PLC, Annual Report 2010Unilever House100 Victoria EmbankmentLondon, EC4Y 0DYUnited KingdomTelephone: 020-7822 5252Fax: 020-7822 5951http://www.unilever.co.uk

Toiletries Further Sources


General Sources

Kantar MediaEaling Gateway26-30 Uxbridge RoadEalingLondon, W5 2BPTelephone: 020-8433 4000Fax: 020-8433 4001http://www.kantarmedia.com

Nielsen Media ResearchAtrium CourtThe RingBracknellBerkshire, RG12 1BZTelephone: 01344-469 100Fax: 01344-469 102E-mail: [email protected]://www.nielsenmedia.co.uk

Government Publications

HM Treasury1 Horse Guards RoadLondon, SW1A 2HQTelephone: 020-7270 4558Fax: 020-7270 4861http://www.hm-treasury.gov.uk•Forecasts for the UKEconomy-Treasury IndependentAverage National Statistics1 Myddelton StreetLondon, EC1R 1UWTelephone: 08456-013 034Fax: 01633-652 747E-mail: [email protected]://www.statistics.gov.uk•Annual Business Inquiry•Consumer Trends 2010•Economic & Labour Market Review,May 2011•Family Spending 2010•Focus on Consumer Price Indices,April 2011•Times Series Data-Monthly Digest ofStatistics, June 2011•UK Business: Activity, Size andLocation

UK TradeinfoHM Revenue & Customs3rd Floor CentralAlexander House21 Victoria AvenueSouthend on SeaEssex, SS99 1AATelephone: 01702-367 485E-mail: [email protected]://www.uktradeinfo.com



Other Sources

British Retail Consortium (BRC)21 Dartmouth StreetWestminsterLondon, SW1H 9BPTelephone: 020-7854 8900Fax: 020-7854 8901http://www.brc.org.uk CEW UK (Cosmetic Executive Women)Telephone: 020-7940 2900Fax: 020-7940 2901http://www.cewuk.co.uk Estee Lauder Inc767 Fifth AvenueNew York, NY 10153USTelephone: +1 212 572 4200http://www.esteelauder.com Industrieverband Koerperpflege undWaschmittel eV (IKW)Mainzer Landstraße 5560329 Frankfurt am MainGermanyTelephone: +49 69 25 56 13 23Fax: +49 69 23 76 31E-mail: [email protected]://www.ikw.org

Interbrand Corporation85 StrandLondon, WC2R 0DWTelephone: 020-7554 1000Fax: 020-7554 1001http://www.interbrand.com Kline & Company7200 The QuorumOxford Business Park NorthOxford, OX4 2JZTelephone: 01865-481 430Fax: 01865-481 482http://www.klinegroup.com



Key Note Sources

Key Note Ltd

5th FloorHarlequin House7 High StreetTeddingtonRichmond Upon Thames, TW11 8EETelephone: 0845-504 0452Fax: 0845-504 0453E-mail: [email protected]://www.keynote.co.uk

Key Note Market Reports• Bridalwear

• Childrenswear

• Clothing Manufacturing

• Hand Luggage & Leather Goods

• Household Detergents & Cleaners

• Jewellery & Watches

• Lingerie

• Sports Clothing & Footwear Invaluable aids to anyone needing togain a highly detailed understandingof a specific market for more informeddecision-making.

Key Note Market Reports Plus• Cosmetics & Fragrances

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Key Note Market Reviews• Clothing & Footwear Industry Focusing on the bigger picture,Key Note Market Reviews aredesigned to inform you ofdevelopments and opportunitiesacross entire industry sectors.

Key Note Market Assessments• Men’s Toiletries & Fragrances

• Plus-Size Fashion

• Teenage Fashionwear Providing in-depth strategic analysisand including primary research, thesepremium reports examine the scope,dynamics and shape of key UK andEuropean markets, with a particularfocus on financial services, consumerand lifestyle sectors.

Key Note UKplc ReportUKplc is an indispensable guide formanagers and for those interestedin gaining a greater insight into thefinancial performance of an averagecompany operating in each of themain industries in the UK. Providingup-to-date information and analysis,the publication will allow the readerto gain a greater level of marketintelligence as well as a goodknowledge of the current stateof the UK industry.



Key Note BespokeData Service As well as choosing the companiesyou want to analyse, you can alsochoose exactly what performanceinformation you need on them —with our Bespoke Data Service.We will be able to provide you withinformation covering the companies,sectors, performance figures, ratiosand other data items specific toyour individual requirements alone.Even historical figures can beprovided. Contact us for more information:[email protected]

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Understanding TGI Data

TGI tables, produced by Kantar Media, are generally based on one of the following groups:

• Households — a private household consists of either one person living alone or a group ofpeople, usually, but not always, members of one family, who live together and whose foodand other household expenses are managed as one unit.

• Adults — any person aged 15 or over.

• Housewives — a member of a private household who is solely or mainly responsible for thehousehold duties.

Number, Profile, Penetration

Tables used in Key Note reports may give figures for the Number, Profile, and/or Penetration.These terms are explained in the following table.

Toiletries Understanding TGI Data


TGI data used in Key Note reports are broken down by age, social grade and standard region.

Social Grade

This is normally based on the occupation of the Head of the Household, or if the Head of theHousehold is retired, their former occupation. If this information is not available, social gradeis based on environmental factors such as type of dwelling, amenities in the home, presence ofdomestic help, etc.

Social grade is assessed by the interviewer when collecting the information and is, therefore,based on information given personally and verbally by the respondent. Social grade is checkedby Kantar Media’s coding and editing office.

The following table broadly defines the six social grades used. The relationship between socialgrade and net income of the Head of the Household is a complex one and readers should notethat income is not determinant of social grade.

Social Grade Social StatusHead of Household’sOccupation

A Upper middle class Higher managerial,administrative or professional

B Middle class Intermediate managerial,administrative or professional

C1 Lower middle class Supervisory or clerical andjunior managerial,administrative or professional

C2 Skilled working class Skilled manual workers

D Working class Semi and unskilled workers

E Those at lowest levels ofsubsistence (no other earner)

State pensioners or widows

Standard Region

This is as defined by the Registrar-General.

Toiletries Understanding TGI Data


Key Note Research

Key Note is a leading supplier of market information, publishing an extensive range ofconsumer, industrial, business-to-business and services titles. With over 30 years’ experience,Key Note represents clear, concise, quality market information.

For all reports, Key Note undertakes various types of research:

Online searching is carried out by product code or free search method, and covers the periodfrom the last edition of the report to the current day.

Trade sources, such as trade associations, trade journals and specific company contacts, areinvaluable to the Key Note research process.

Secondary data are provided by Kantar Media (TGI) and Nielsen Media Research for consumer/demographic information and advertising expenditure, respectively. In addition, various officialpublications published by National Statistics, etc. are used for essential background data andmarket trends.

Interviews are undertaken by Key Note for various reports, either face-to-face or by telephone.This provides qualitative data (‘industry comment’) to enhance the statistics in reports;questionnaires may also be used.

Field research is commissioned for various consumer reports and market reviews, and is carriedout by NEMS Market Research.

Key Note estimates are derived from statistical analysis and trade research carried out byexperienced research analysts. Up-to-date figures are inserted where possible, although therewill be some instances where a realistic estimate cannot be made or external sources requestthat we do not update their figures.

Key Note Editorial, 2011

Toiletries Key Note Research


The Key Note Range of Reports

Key Note publishes over 180 titles each year, across both the Key Note and Market Assessmentproduct ranges. The total range covers consumer, lifestyle, financial services and industrialsectors.

Title Edition Published

Key Note Current Reports

AABC1 Consumer 6 2010

Access Control 11 2011

Accountancy 14 2010

Activity Holidays 4 2009

Advertising Agencies 5 2011

Airlines 22 2011

Airports Update 15 2011

Alternative Healthcare 6 2010

Arts & Media Sponsorship 4 2011

Automatic Vending 25 2011

Automotive Services 7 2010

Autoparts 19 2009

B

B2B Marketing 2 2011

Baby Products 5 2010

Baths & Sanitaryware 14 2009

Betting & Gaming 23 2010

Biscuits & Cakes 18 2011

Book Publishing 21 2011

Book Retailing on the Internet 4 2010

Bookselling 17 2010

Bread & Bakery Products 26 2011

Breakfast Cereals 15 2011

Breweries & the Beer Market 28 2011

Bricks & Tiles 16 2010

Bridalwear 5 2010

Builders’ Merchants 17 2010

Building Contracting 10 2009

Building Materials 14 2011

Bus & Coach Operators 10 2010

Business Postal Services 2 2008

Business Press 14 2009

Business Travel Market 5 2008

C

C2DE Consumer 6 2010

Canned Foods 18 2011

Carpets & Floorcoverings 16 2009

Catering Equipment 14 2011

Catering Market 21 2009


Chemical Industry 13 2010

Childcare 6 2011

Children’s Publishing 3 2010

Childrenswear 9 2011

Chilled Foods 16 2011

China & Earthenware Update 28 2011

Cigarettes & Tobacco 24 2010

Closed-Circuit Television 12 2010

Clothing & Footwear Industry 13 2010

Clothing Manufacturing 16 2011

Clothing Retailing 8 2011

Coffee & Sandwich Shops 6 2009

Commercial Dynamics inFinancial Services 4 2010

Commercial Insurance for SmallBusinesses 3 2009

Commercial Vehicles 15 2009

Computer Hardware 9 2011

Computer Services 9 2010

Computer Software 8 2011

Condiments and Sauces 5 2008

Confectionery 29 2011

Construction Industry 11 2009

Consumer Credit & Debt 6 2010

Consumer Magazines 17 2010

Contact Centres 8 2010

Contraception 4 2009

Contract Catering & FoodserviceManagement 21 2010

Contract Cleaning 21 2010

Cooking & Eating Habits 6 2009

Cooking Sauces & FoodSeasonings 4 2010

Corporate & PromotionalGiftware 4 2011

Cosmetic Surgery 9 2011

Cosmetics & Fragrances 24 2011

Courier & Express Services 16 2010

Cruise Market 2 2008

Customer Magazines & ContractPublishing 4 2009

Toiletries The Key Note Range of Reports



Customer RelationshipManagement 4 2008

Customer Services in FinancialOrganisations 5 2010

D

Debt Management (Commercial& Consumer) 6 2010

Defence Equipment 11 2010

Diet Foods 4 2011

Digital Broadcasting 5 2011

Digital Communications 1 2009

Direct Insurance 6 2010

Direct Marketing 19 2009

Direct Mortgages 7 2010

Discount Retailing 7 2009

Disposable Paper Products 13 2009

Distribution Industry 10 2009

DIY & Home ImprovementsIndustry 11 2009

Domestic Heating 14 2009

Drinks Market 19 2009

E

E-Commerce: The InternetGrocery Market 6 2009

E-Commerce: The InternetLeisure & Entertainment Market 5 2008

Electrical Contracting 9 2009

Electrical Wholesale 5 2009

Electricity Industry 7 2011

Electronic Banking 4 2008

Energy Industry 8 2010

Equipment for the Disabled 5 2009

Estate Agents 18 2011

Estate Agents and Services 5 2010

Ethnic Foods 16 2011

European Long-Term Insurance 4 2008

European Renewable Energy 2 2008

European Short Breaks 2 2008

European Telecommunications 3 2010

European Tourist Attractions 3 2010

European Trends in FoodShoppin 4 2009

Exhibitions & Conferences 12 2011


F

Fast Food & Home DeliveryOutlets 4 2010

Film Market 2 2009

Financial Services Marketing toBCs 1 2009

Financial Services Marketing toDEs 2009

Financial Services Marketing toStart-Up Businesses and the Self-Employed 3 2010

Financial Services Marketing tothe Affluent 1 2009

Financial Services Organisationson the Internet 4 2009

Fish & Fish Products 14 2010

Food Industry 20 2010

Football Clubs & Finance 4 2009

Footwear 16 2009

Forecourt Retailing 8 2010

Franchising 12 2010

Freight Forwarding 17 2009

Frozen Foods 25 2011

Fruit & Vegetables 22 2011

Fruit Juices & Health Drinks 13 2010

Functional Foods 6 2010

Further & Higher Education 6 2009

G

Garden Equipment 13 2009

Gas Industry 6 2011

General Insurance 13 2010

Giftware 19 2010

Glassware 15 2009

Green and Ethical Consumer 4 2008

Greetings Cards Plus 26 2010

Grey Consumer 5 2009

H

Hand Luggage & Leather Goods 15 2010

Health Clubs & Leisure Centres 10 2010

Healthy Eating 6 2008

Holiday Purchasing Patterns 5 2009

Home Entertainment 3 2008

Home Furnishings 20 2011

Home Shopping 14 2011

Horticultural Retailing 17 2008

Hot Beverages 5 2009

Hotels 25 2011

Housebuilding 19 2011

Household Appliances (BrownGoods) 11 2008




Household Appliances (WhiteGoods) 16 2008

Household Detergents &Cleaners 2010

Household Furniture 19 2011

I

Ice Creams & Frozen DessertsUpdate 15 2011

Independent Financial Advisers 4 2008

Insurance Companies 12 2009

Insurance Industry 10 2009

Insurance Prospects 2 2008

Internet & Telephone Banking 1 2011

Internet Advertising 6 2009

IT Recruitment 5 2010

IT Security 10 2011

IT Training 13 2010

J

Jewellery & Watches 26 2011

K

Kitchenware 7 2009

L

Laboratory Equipment 10 2011

Leisure in the Home 3 2010

Leisure Outside the Home 3 2010

Lifestyle Magazines 5 2011

Lingerie 10 2011

Local Government Services 3 2010

Low-Fat & Reduced-Sugar Foods 5 2008

M

Marketing in the Digital Age 3 2009

Meat & Meat Products 21 2010

Medical Equipment 17 2009

Men and Women’s Buying Habits 5 2008

Men’s Toiletries & Fragrances 5 2008

Metal Recycling 6 2011

Milk & Dairy Products 24 2010

Mobile Marketing 1 2009

Mobile Phones 7 2010

Motor Finance 4 2011

Motor Industry 12 2008

Music Industry 2 2010


N

Newspapers 18 2010

Non-Food Sales in Supermarkets 5 2010

Non-Metal Recycling 3 2010

Nutraceuticals 3 2008

O

Office Equipment Industry 9 2010

Office Furniture 21 2008

Offshore Oil & Gas Industry 5 2009

Ophthalmic Goods & Services 17 2010

Opticians & Optical Goods 5 2010

Organic Food & Drink 7 2010

OTC Pharmaceuticals 15 2011

Over-50s Consumer 1 2009

Own Brands 13 2010

P

Packaging (Food & Drink) 6 2010

Packaging (Glass) 13 2008

Packaging (Paper & Board) 15 2010

Packaging (Plastics) 15 2010

Pensions 6 2009

Personal Lines Insurance 4 2010

Personal Loans 4 2008

Pet Market 4 2009

Pharmaceuticals Industry 6 2008

Planning for Retirement 1 2008

Plus-Size Fashion 3 2009

Poultry 4 2009

Premium Lagers, Beers & Ciders 9 2010

Printing 16 2011

Private Healthcare 22 2011

Protective Clothing & Equipment 7 2009

Public Houses Update 27 2011

Publishing Industry 13 2010

R

Rail Travel 8 2011

Ready Meals 12 2011

Recruitment Agencies(Permanent) 11 2011

Recruitment Agencies(Temporary & Contract) 11 2011

Renewable Energy 3 2009

Restaurants 25 2011

Retail Pharmacies 17 2011

Road Haulage 22 2009

Rural Economy 2 2009




S

Sauces & Spreads 12 2010

Savings & Investments 6 2010

Security Industry 13 2010

Shopfitting 14 2009

Shopping Centres 3 2008

Singles Market 4 2009

Slimming Market 4 2011

Small Businesses & Banks 2 2010

Small Domestic ElectricalAppliances 12 2010

Snack Foods 20 2010

Social Media Marketing 1 2010

Soft Drinks (Carbonated &Concentrated) 18 2011

Soup Market 3 2009

Spirits & Liqueurs 1 2010

Sports Clothing & Footwear 13 2011

Sports Equipment 16 2011

Sports Market 13 2010

Sports Sponsorship 8 2011

Stationery (Personal & Office) 25 2010

Supermarket Own Label 4 2009

Sweet & Salty Snacks 16 2010

T

Take-Home Trade 18 2011

Teenage & Pre-Teen Magazines 4 2009

Teenage Fashionwear 2 2008

Timber & Joinery 19 2008

Toiletries 24 2011

Toys & Games 24 2010

Training 19 2011

Travel & Tourism Market 17 2010

Travel Agents & Overseas TourOperators 23 2010

Trends in Food Shopping 5 2008

Tyre Industry 5 2010

U

UK Internet Market 1 2009

Utilities 4 2010

V

Vegetarian Foods 6 2009

Vehicle Breakdown Services 6 2010

Vehicle Security 9 2010

Video Gaming 1 2011

Vitamins, Minerals &Supplements 6 2009


W

Wallcoverings & Ceramic Tiles 18 2010

Waste Management 11 2011

Water Industry 6 2011

Windows & Doors 20 2010

Wine 21 2011

Working Women 5 2009

Key Note Archive Reports

A

Aerospace 12 2003

Agrochemicals & Fertilisers 3 2002

Air Freight 2 2005

Air Transport Logistics 1 2003

All Inclusive Holidays 1 2000

Animal Feedstuffs 11 2001

Audio Visual Retailing 1 2000

B

Baby Foods 3 2006

Baths and Showers 1 2000

Bearings 2 2007

Beds, Bedrooms and UpholsteredFurniture 2 2000

Bottled Water 2 2001

C

Cable & Satellite TV 10 2004

Call Centres 6 2006

Cash & Carry Outlets 16 2001

Charity Funding 3 2005

Cinemas & Theatres 9 2001

Clothing Retailers 1 2000

Commercial Radio 8 2004

Consumer Borrowing in Europe 1 2004

Consumer Internet Usage 4 2000

Contracted-Out Services 3 2007

Convenience Retailing 12 2002

Corporate Hospitality 6 2007

Cross-Border Shopping 1 2000

Customer Loyalty in the FinancialServices 1 2000

D

Dark Spirits & Liqueurs 3 2004

Defence Industry 7 2003

Design Consultancies 3 2000

Digital TV 2 2003

DINKY Market 3 2007

Document Imaging Systems 1 2007

Domestic Telecommunications 4 2006

Dry Cleaning & Laundry Services 5 2005




E

Electronic ComponentDistribution 12 2002

Electronic ComponentManufacturing 11 2002

Electronic Games 4 2003

Equipment Leasing 12 2003

E-Recruitment 3 2006

E-Shopping 1 2002

European Electricity Industry 3 2007

European Gas Industry 3 2007

European Oil & Gas Industry 2 2007

European Water Industry 3 2007

Extended Financial Families 1 2005

F

Factoring & Invoice Discounting 2 2003

Finance Houses 11 2000

Financial Services Marketing toABC1s 1 2000

Financial Services Marketing toABs 4 2006

Financial Services Marketing toC1C2DEs 1 2004

Financial Services Marketing toOver 60s 1 2004

Financial Services Marketing tothe Retired and Elderly 3 2007

Fire Protection Equipment 8 2006

Fitted Kitchens 11 2007

Free-To-Air TV 8 2004

G

Generation Y 1 2007

Global Positioning Systems 1 2002

Global Waste management 2 2070

H

Health Foods 22 2003

Healthcare Market 10 2005

Heating, Ventilating & AirConditioning 9 2002

I

In-Car Entertainment 1 2000

Individual Savings Accounts 2 2005

Industrial Fasteners 8 2001

Industrial Pumps 5 2000

Industrial Valves 8 2001

Internet Service Providers 2 2005

Internet Usage in Business 8 2005

Issues and Challenges in the UKLife Assurance Market 2 2002

Issues in Higher EducationFunding 2 2006


L

Leisure & Recreation Market 15 2005

Lighting Equipment 14 2002

M

Management Consultants 10 2003

Marketing to Children 4-11 3 2003

Mechanical Handling 9 2001

Medical & Health Insurance 3 2007

Millenium Youth 2 2002

Mobile Telecommunications 2 2007

N

Natural Products 2 2007

New Media Marketing 3 2002

O

Off-Trade Spirits 3 2004

Organic Baby & Toddler Care 1 2007

Over-40s Consumer 2 2005

P

Packaging (Metals & Aerosols) 12 2003

Paper & Board Manufacturers 14 2002

Passenger Travel in the UK 5 2007

Pay TV 2 2004

Pension Extenders 1 2002

Personal Banking 1 2003

Photocopiers & Fax Machines 14 2005

Plant Hire 13 2007

Plastic Cards in Europe 2 2005

Plastics Processing 10 2003

Power Tools 5 2007

Pre-School Childcare 1 2001

Private-Sector Opportunities inEducation 2 2001

Process Plant Industry 1 2000

Public Relations Industry 3 2007

Public Transport 1 2001

R

Rail Transport Logistics 1 2003

Railway Industry 2 2006

Recycling and the Environment 1 2000

Retail Credit 2 2000

Retail Development 1 2001

Road Transport Logistics 1 2003

S

Saving Trends in Eurozone 2 2002

Short Break Holidays 4 2001

Short Breaks 2 2004

Slimming Market 8 2000

Small Office Home OfficeConsumer 1 2001




Small Office Home OfficeProducts 1 2001

Sponsorship 2 2000

Supermarket Services 3 2007

Supermarkets & Superstores 20 2003

T

Teenage Magazines 3 2007

Telecommunications 21 2007

Teleworking 2 2003

The Computer Market 11 2004

The Film Industry 4 2002

The Fish Industry 1 2001

The Legal Services Market 1 2005

The Luggage Market 1 2000


The Newspaper Industry 3 2005

Tourist Attractions 5 2001

Trends in Leisure Activities 4 2007

Tweenagers 1 2001

V

Video & DVD Retail & Hire 8 2005

Videoconferencing 4 2007

W

Water Transport Logistics 1 2003

White Goods 2 2000

White Spirits 1 2005

Women over 45 3 2007


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No part of this publication may be reproduced, copied, stored in an electronic retrieval system or transmittedsave with written permission or in accordance with the provisions of the Copyright, Designs and Patents Act

1988.

Published by Key Note Ltd, 5th Floor, Harlequin House, 7 High Street, Teddington, Richmond Upon Thames,TW11 8EE. Telephone: 0845-504 0452

Stringent efforts have been made by Key Note to ensure accuracy. However, due principally to the fact thatdata cannot always be verified, it is possible that some errors or omissions may occur; Key Note cannot acceptresponsibility for such errors or omissions. Details supplied by Key Note should only be used as an aid, to assist

the making of business decisions, not as the sole basis for taking such decisions.

Under the new Privacy and Electronic Communications Regulations 2004, it is unlawful for a business to makean unsolicited sales & marketing call to a corporate subscriber if it is either registered with CTPS or has

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Key Note Ltd holds and regularly updates (every 28 days) its data in accordance with the regulations andensures that its data are compliant, as of the date created. It is the responsibility of the caller to ensure that

these data are up to date; Key Note Ltd does not hold itself liable for any subsequent legalities.

If you have any queries regarding the CTPS legislation you may find the following website useful:www.ico.gov.uk



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