MILAN — The Italian beauty industry continues to struggle through its blackest time ever in light of a predicted minimal 1.1 percent growth for 2004.
The figure, released by Unipro, the Italian association of cosmetics industries, shows that problems are still afflicting the industry, which was once a powerful industrial engine.
Unipro did not break down actual sales figures, but the monetary value of the growth, based on last year’s volume, would amount to approximately $9.04 billion, or 7.3 billion euros. (All figures are converted at current exchange.)
In the grip of the recession that continues to dominate Western Europe, the Italian beauty industry managed to eke out 2.2 percent in growth in 2003 to $8.86 billion, or 7.15 billion euros.
But despite the minimal increases, industry executives have been encouraged by a positive turnaround in export figures — which are predicted to hike by 4.5 percent in 2004. Based on last year’s volume, 2004 sales would approximately amount to $2.33 billion, or 1.88 billion euros.
In 2003, exports dropped by 2.2 percent with a value of $2.23 billion, or 1.8 billion euros.
Exports have long been considered a largely untapped resource of the Italian beauty industry. Unipro reported that in most of Italy’s beauty channels there was massive room for growth, especially in the pharmacy and herbalist shop channels.
Companies were now faced with a sink-or-swim export situation, said Gian Andrea Positano, vice general director of Unipro and director of the association’s consortium for promotion of exports of Italian cosmetics industries, Cosmexport.
“Not all companies have realized their capacity to export yet and that is what we are trying to push for them today. They have the product, they are ready and they have to do it. The data confirms there is room to increase exports, but to do it in a structured way,” said Positano.
Positano said that, while 36.1 percent of the perfumery channel’s turnover was exports, that figure could be pushed out by another 10 percent. He added it was critical for channels such as pharmacies and herbalist shops to increase exports, which were 0.5 percent and 5.7 percent of total sales, respectively.
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Meanwhile, the most important increases in sales growth in the individual channels were recorded for the second year running by herbalist shops, pharmacies and mass market.
President of Unipro Alberto Donato said the herbalist shop channel was “playing the role of the lion in respect to the other Italian beauty channels.” Herbalist shops sales were predicted to increase by 5.9 percent for all of 2004, with an estimated value of $313 million, or 253 million euros, based on last year’s figures.
According to Antonio Argentieri, director of the natural cosmetics division of Unipro, the continued success of herbalist shops resulted from an ongoing consumer desire for natural products.
“Herbalist shops are competitive with perfumeries and they are selling products, which are natural, and consumers are preferring to buy products from herbal stores,” said Argentieri.
The pharmacy channel also is forecasted to do a 4.8 percent increase in volume in 2004, compared with an 8.2 percent rise in 2003. The amount would equal $727 million, or 587.1 million euros, according to last year’s figures.
The continued increase in pharmacy sales, in what is considered a lackluster domestic market, was because of their new focus on cosmetics, said Donato.
“Pharmacies have really changed their cosmetics offer — the support is higher and there are lots more products to choose from. Products are more credible from the pharmacy — especially products that are anticellulite, and even antiage,” said Donato.
Mass market is expected to pull through 2004 with a 3.5 percent increase in sales to $3.27 billion, or 2.64 billion euros. The rise was attributed to beauty products in supermarkets and low-cost hypermarkets finding their way into more families’ supermarket carts.
Figures that are predicted to be negative include the perfumery and beauty salon channels, which are expected to drop by 1.2 percent and 1.9 percent, respectively, in 2004.
Unipro executives said they were not overly concerned about the figures, especially for the perfumery channel, which Donato said would decline in sales because of an ultracompetitive domestic discount pricing scheme, while actual sales remained high.