MAJOR NAMES COULD SPUR MAJOR GAINS
Byline: CARA KAGAN
NEW YORK — While growth in the booming mass skin care market may have slowed down a bit last year, manufacturers agreed the sales momentum will regain its former pace by the end of this year.
“It is still a booming category, and we think it will con-tinue to be one,” said David Cohen, Chesebrough-Pond’s category director of face care.
However, last year’s sales growth was roughly half of 1994’s double-digit increase. According to industry sources, 1995 sales increased about 5 percent to a retail volume of about $2 billion, after 1994’s 10 percent sales jump.
“I think that we should all see gains in the high-single to low-double- digits next year, especially as the sales kick in from all the new products that were launched during the back half of last year,” Cohen added.
He was referring to the several big-ticket launches from the industry’s major players that didn’t hit the market until fourth quarter last year.
These new items, many of which are being backed with significant advertising budgets, are expected to generate prodigious sales volumes, while increasing awareness in the category as a whole.
Among these introductions are PlAnitude’s Revitalift firming and anti-wrinkle product, which will be supported with $20 million during its inaugural year; Chesebrough-Pond’s Prevent & Correct, which has an advertising budget of $25 million for its launch year; Neutrogena’s Healthy Skin acid-based moisturizer, which is reportedly being backed with at least $5 million, and Nivea’s Optimale high tech moisturizer, which was launched in January with $17 million in print and TV advertising.
Rosanna McCollough, director of marketing for Neutrogena, however, noted that other than these big fall introductions, the mass skin care launch pad has been rather calm over the last year, which could be another reason for the relative decline in sales gains.
“In 1993 and 1994, there were so many new products; they really spurred a lot of new business in the mass channels,” she said. “The rate of product introductions has definitely slowed now, and more of the new ones out of the gate are just variations on the alpha-hydroxy acid theme. I think things will continue to be relatively quiet for a while as everyone searches for an encore [to alpha-hydroxy acid products].”
She added that as consumers become more educated in skin care, they are also less likely to be experimental and receptive to trying new items.
Manufacturers agreed that it is time to reignite consumer interest.
“Sounding different is getting harder and harder,” McCollough said. “There is a lot of confusion out there, since there are so many products that ostensibly do the same thing. Women are also buying fewer skin care products than before, because for the most part, they have managed to find a product that works for them. There is no need [for them] to buy a zillion different things.”
McCollough was referring to the spate of technologically advanced, cutting-edge moisturizers that are now just as much a presence on drugstore shelves as basic, everyday cold cream.
According to industry sources, alpha-hydroxy acid products now comprise 25 to 30 percent of moisturizer sales. Just a few years ago, the segment did not exist.
Manufacturers note, though, that technology has its price. The cost, in this case, seems to be consumer confusion. “We are finding that consumers would rather just know what a product does and not all of the science behind it,” said Marcia Levis, vice president of marketing for Nivea. “We all have to figure out a better, less complicated way of explaining things. When our explanations become too technical, consumers become confused and there is a backlash. They decide they just want to use one, simple product.
“We all have to remember that most mass market shoppers in America still use soap and water and basic moisturizers,” she added.
According to industry sources, Olay of Olay finished off last year with a 19.5 percent share of the roughly $2 billion market, or about $429 million in retail sales.
Pond’s skin care brand followed with a 13.2 percent share, or $290 million sales, and L’Oreal’s Plenitude line commanded a 9 percent share, or $198 million in retail sales.
P&G’s Noxzema medicated face cream came in at a 8.5 percent share, or $187 million, and Neutrogena followed with a 5.5 percent share, or $121 million.
Meanwhile, relative new comer Alpha Hydrox came in fifth with a 3.5 share, or $77 million. Nivea Visage had a 2.7 percent share, or $59 million.
Nivea is hoping to cut through the clutter by beefing up its advertising budget and stepping up its sampling program.
Levis noted that this year the company was bumping up Visage’s overall advertising budget by about 25 percent to $25 million. This increase is on top of last year’s major advertising expansion, when the company roughly tripled its advertising efforts to $20 million.
She added that the company has also put more of a focus on TV advertising than it had in the past.
“It just seems to be more effective and gives us more of a presence,” she said.
While the lion’s share of the budget will be allotted to Optimale, the company is also reportedly putting $3 million worth of print and TV behind Shine Control, an oil-controlling fluid that also hydrates, which bowed last month.
Nivea is also increasing the number of samples it circulates by 10-fold, Levis said, adding that the company is planning to distribute a total of 10 million packettes that will be either passed out in stores, inserted into magazines or mailed.
The company also recently started selling 0.5-oz. trial sizes for $2 to $3 of its four top-selling products.
While Nivea executives declined to make sales projections, industry sources estimated that Optimale could generate retail sales of around $10 million in the first year and that Shine Control could generate retail sales of around $5 million.
In terms of new product launches, the company is aiming at both ends of the skin care spectrum.
Optimale Cumulative Care Creme was created to work continuously for 24 hours to provide moisture, refine skin texture and increase firmness and elasticity. It contains antioxidants to guard against free radicals and SPF 6.
Nivea executives maintain that the product is unique to the mass market due to its many functions and its formula. Optimale is formulated with water-in-oil technology, which the company claims forms a barrier to the skin to lock in moisture without the greasy heaviness typical of conventional water-in-oil emulsions.
The company plans to extend the franchise into an eye cream later this year.
Shine Control Mattifying Fluid was created to hydrate the skin while controlling shine by using corn powder to absorb and eliminate excess. The lotion, which is enriched with witch hazel to act as a mild astringent, contains antioxidants and allantoin, which is a soothing uric acid compound, and an SPF 4.
“A lot of people want a lighter, oil-free moisturizer, and this is a segment that will continue to grow and develop, like the anti-aging portion of the market,” Levis said. “The maturing population continues to be an opportunity, especially now that the majority of the boomers are turning 50. But younger consumers are smarter than they were in the past. They do have money, and we can’t forget that.”
L’Oreal’s Plenitude is also out to appeal to women of all ages.
In October, the company launched Revitalift, a firming product that also reduces the appearance of wrinkles. Later this year, it will introduce Hydra-Matte All Day Shine Control.
Revitalift was created to increase the skin’s elasticity, while smoothing lines and wrinkles and protecting the skin from the sun.
According to industry sources, Revitalift could generate a first-year wholesale volume of $20 million to $25 million.
Hydra-Matte was designed to provide hydration to the skin’s dryer areas, while controlling oil and shine in the oily areas.
L’OrAal executives feel that the new item will attract a younger user to the Plenitude display.
“Most women with oily or combination skin are under the age of 36, and they tend to avoid conventional moisturizers because they can make the skin look shiny. But all women over a certain age require hydration. Hydra-Matte delivers the moisturization benefits while producing a shine-free, fresh matte look and feel,” said Ketan Patel, assistant vice president of skin care marketing.
He added that the product’s target audience is women aged 18 to 34, which is substantially younger than Plenitude’s core consumer, who is around 45.
“Revitalift has really helped to broaden Plenitude’s consumer base,” Patel continued. “It has brought in a new group of women over the age of 50. With Hydra-Matte at the one end and Revitalift at the other, we really feel we are reaching out to both ends of the age and skin spectrum.”
Neutrogena, which is best known for its basic skin care products, finally jumped on the alpha-hydroxy-acid bandwagon in September, when it launched Healthy Skin.
But rather than taking an anti-aging positioning, like traditional acid-based entries, Healthy Skin is making broader claims that are supposed to sound ageless.
In addition to softening dry skin and reducing the appearance of fine line and wrinkles, Healthy Skin was designed to correct imperfections, improve the skin’s radiance and even out blotchy complexions.
According to industry sources, the new item could generate a wholesale volume of as much as $10 million in its first year.
Healthy Skin contains alpha-hydroxy acids, free radical fighters and vitamins A, C, E and B5.
“There is a consumer perception that vitamins and antioxidants are good for them, and this perception is extending into skin care products,” McCollough said. “So many of the department store lines are already getting into this and exploring the potentials of the concept. “At Neutrogena, however, we have to take a more cautious approach to technological advances and alpha-hydroxy acids because of our dermatologic heritage and sensitive-skin positioning,” she added. “We need to do everything in a very believable, credible way.”
For the most part, Pond’s is focusing its efforts on the aging baby boomer segment of the market.
“We are going to continue to concentrate on this part of the business,” Cohen said. “AHA’s are here to stay, but the market is expanding now to include other product types. For years, we all talked about taking preventative measures for the skin, in order to stop damage before it started. But people only seemed to get the corrective part of skin care. Now, people are finally catching on to the preventative part.”
Pond’s is banking that this theory will turn its Prevent & Correct skin care product, which was launched last fall, into a $25 million retail brand.
Prevent & Correct is a product that has a different treatment for the day and night that are housed in separate sides of the same container.
The daytime or preventative portion consists of a light daily moisturizer that is enriched with vitamins, a low level of alpha-hydroxy acids, a conditioning agent and an SPF 8. It was created to combat future skin damage from environmental irritants, sunlight and pollution.
The nighttime or restorative preparation consists of a more emollient night cream and a higher level of acid that is designed to reduce the appearance of fine lines and wrinkles through exfoliation.
Cohen noted that while Renova can only be purchased through a prescription in the pharmacy section of mass doors, the product should have a positive impact on mass skin care as a whole, especially anti-aging products.
“All of the hype surrounding Renova should really bring skin care as a whole into the limelight,” Cohen said. “This will spark a whole new group of consumers to become interested in skin care, and they may not want to see a dermatologist to get an effective product. And since Renova can make the skin sensitive to the sun, it should also boost sales of moisturizers with sunscreens.”