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A Healthy Way Of Life
NACDS
A Healthy Way Of Life
A Healthy Way Of Life
Natural Personal Care
A Healthy Way Of Life
Natural Personal Care products are experiencing tremendous growth with a 65% increase versus last year.
Increasing awareness of type and quality of ingredients has encouraged consumers to seek out more natural, organic and ecologically minded products.
Trend toward individuality and products that reflect consumer’s values and attitudes
Skin Care currently accounts for 60% of Natural dollar sales, although growth is evident across all product types indicating the depth of consumer’s interest in natural products.
Successful natural brands support products with eco-conscious packaging, a company wide commitment to sustainability and a “green” lifestyle
Over 40% of the population participates in LOHAS (Lifestyles of Health and Sustainability) while 60% of consumers are more likely to purchase products from a company that is “mindful of their impact on the environment and society” and use recycled and recyclable packaging*
*NMI Institute “Hot Consumer Tren ds 2007”
A Healthy Way Of Life
Natural Personal Care SPINS
Current Dollars $ % Chg Current Dollars $ % Chg Current Dollars $ % Chg Current Dollars $ % Chg
TOTAL US
SKIN CARE $10,048,608 (0.6%) $31,179,157 0.5% $60,698,058 6.7% $132,470,407 10.0%
SOAP & BATH PREPARATIONS $5,232,112 (2.2%) $17,117,235 0.6% $33,638,188 4.6% $70,395,497 10.1%
HAIR PRODUCTS $5,118,213 5.4% $15,277,961 7.3% $30,360,008 9.9% $64,383,909 12.4%
ORAL CARE $3,284,529 1.2% $9,947,692 2.4% $19,682,845 4.9% $41,805,921 8.4%
PERSONAL CARE & FIRST AID $2,741,235 0.4% $8,206,983 0.8% $15,867,928 4.4% $33,682,190 7.7%
DEODORANTS $1,221,108 (2.8%) $3,705,931 (3.5%) $7,481,715 1.3% $16,987,916 7.5%
COSMETICS & BEAUTY AIDS $995,817 (20.9%) $3,181,869 (15.5%) $6,856,115 (5.2%) $15,214,767 4.8%$28,641,621 (0.5%) $88,616,829 1.0% $174,584,857 5.7% $374,940,606 9.7%
Current 52 WeeksCurrent 24 WeeksCurrent Dollars $ % Chg Current Dollars $ % Chg Current Dollars $ % Chg Current Dollars $ % Chg
TOTAL US
SKIN CARE $10,048,608 (0.6%) $31,179,157 0.5% $60,698,058 6.7% $132,470,407 10.0%
SOAP & BATH PREPARATIONS $5,232,112 (2.2%) $17,117,235 0.6% $33,638,188 4.6% $70,395,497 10.1%
HAIR PRODUCTS $5,118,213 5.4% $15,277,961 7.3% $30,360,008 9.9% $64,383,909 12.4%
ORAL CARE $3,284,529 1.2% $9,947,692 2.4% $19,682,845 4.9% $41,805,921 8.4%
PERSONAL CARE & FIRST AID $2,741,235 0.4% $8,206,983 0.8% $15,867,928 4.4% $33,682,190 7.7%
DEODORANTS $1,221,108 (2.8%) $3,705,931 (3.5%) $7,481,715 1.3% $16,987,916 7.5%
COSMETICS & BEAUTY AIDS $995,817 (20.9%) $3,181,869 (15.5%) $6,856,115 (5.2%) $15,214,767 4.8%
TOTAL (COSMETICS & BEAUTY AIDS, DEODORANTS, HAIR PRODUCTS, ORAL CARE, PERSONAL CARE & FIRST AID, SKIN CARE, SOAP & BATH PREPARATIONS)$28,641,621 (0.5%) $88,616,829 1.0% $174,584,857 5.7% $374,940,606 9.7%
Category is showing steady increases at 52 weeks +9.7% overall.
Hair Care is the fastest growing category, while Skin Care is the largest.
*SPINS Scan 52 weeks ending 2-24-07
Current Dollars $ % Chg Current Dollars $ % Chg Current Dollars $ % Chg Current Dollars $ % Chg
TOTAL US
SKIN CARE $10,048,608 (0.6%) $31,179,157 0.5% $60,698,058 6.7% $132,470,407 10.0%
SOAP & BATH PREPARATIONS $5,232,112 (2.2%) $17,117,235 0.6% $33,638,188 4.6% $70,395,497 10.1%
HAIR PRODUCTS $5,118,213 5.4% $15,277,961 7.3% $30,360,008 9.9% $64,383,909 12.4%
ORAL CARE $3,284,529 1.2% $9,947,692 2.4% $19,682,845 4.9% $41,805,921 8.4%
PERSONAL CARE & FIRST AID $2,741,235 0.4% $8,206,983 0.8% $15,867,928 4.4% $33,682,190 7.7%
DEODORANTS $1,221,108 (2.8%) $3,705,931 (3.5%) $7,481,715 1.3% $16,987,916 7.5%
COSMETICS & BEAUTY AIDS $995,817 (20.9%) $3,181,869 (15.5%) $6,856,115 (5.2%) $15,214,767 4.8%
TOTAL (COSMETICS & BEAUTY AIDS, DEODORANTS, HAIR PRODUCTS, ORAL CARE, PERSONAL CARE & FIRST AID, SKIN CARE, SOAP & BATH PREPARATIONS)$28,641,621 (0.5%) $88,616,829 1.0% $174,584,857 5.7% $374,940,606 9.7%
A Healthy Way Of Life
The $52.5 MM Naturals Category Is Experiencing Tremendous Growth Across Product Type
Naturals Skin Care/Hair Care/Bath&Body Dollar Sales ($MM)
Total US FDMx
Skin Care, $31.360%
Hair Care, $10.119%
Bath&Body, $11.221%
Naturals Skin Care/Hair Care/Bath&Body Growth
65.5%
49.9%
82.5%
51.3%
41.1%
27.3%
Dollar Sales Volume* Sales
Skin Care
Hair Care
Bath&Body
*16oz Equivalents Source: IRI Infoscan – Latest 52 weeks ending 4/22/07
A Healthy Way Of Life
All Products Categories Offer Broad Opportunities for Growth
Skin Lotions Account For One Third Of Naturals Dollars
Naturals by Product TypeDollar Sales ($MM)
Total US FDMx
Skin Ltn, $17.032%
Face Clnsrs, $6.3
12%
Shampoo, $5.711%
Face Mstrizers,
$4.59%
Conditioner, $4.28%
Hand Soap, $3.97%
AO Liq Soap, $3.3
6%
BarSoap, $3.16%
FacAntiAg, $2.14%
AllOther, $2.45%
Naturals Type GrowthTotal US FDMx
47%
65%
79%
228%
100%
31%
97%104%
27%
12%
Dollar Sales
SknLtnsFcClnsrsShmpooFcMstrzrsCndtnrHndSpAOLiqSpBarSoapFcAntiAgAother
Source: IRI Infoscan – Latest 52 weeks ending 4/22/07All Other includes Bubble Bath, Suntan Lotions/Oils, Acne Treatments, Hair
Coloring, Sunscreen Insect Repellant, Hair Sprays, and Hand Sanitizers.
A Healthy Way Of Life
Armathpy/Oils3%
Oral Care8%
Personal Care/1st Aid
3%
Hair Products10%
Deodorants11%
Kits/Sets/Packs
11% Soap & Bath15%
Skin Care39%
Skin Care Contributes 39% Of The Growth Dollars To Natural Body Care In FDM
All but two of the Natural Body Care Categories are growing faster than the overall department growth of 19%.Skin Care, the #2 sales category, is contributing 39% of the growth dollars to the department equating to $14.3M
FDM - Natural Body CareShare of Growth Dollars
Source: SPINSscan Conventional / 52 Weeks Ending 8/12/06
Natural Body Care Category
$ % Chg
Dollar Chg ($M)
Share of Growth $
Natural Body Care 18.7% $37.0
Skin Care 33.5% $14.3 39%
Soap & Bath 30.7% $5.7 15%
Kits/Sets/Packs 91.1% $4.2 11%
Deodorants 34.6% $4.0 11%
Hair Products 41.5% $3.7 10%
Oral Care 6.9% $2.9 8%
Personal Care & First Aid 1.7% $1.1 3%
Aromatherapy & Body Oils 51.1% $1.1 3%
Cosmetics & Beauty Aids 29.5% $0.0 0%
A Healthy Way Of Life
The Hain Celestial Group Personal Care Overview
A Healthy Way Of Life
A Healthy Way Of Life
Why Hain Personal Care? Largest natural personal care company with 17% market share covering all
categories: Hair, Bath, Body, Baby, Skin and Oral.
Publicly traded on Nasdaq (HAIN)
Supports organizations with like-minded values such as the Breast Cancer Fund, Susan G Komen, PETA, Organic Trade Association, Campaign for Safe Cosmetics
ISO 9001 compliant manufacturer with OTC, FDA, Medical device and Organic licenses and in house Research & Development facility
Practices sustainability:
• Multiple Hain facilities are powered with renewable energy, including personal care distribution center and offices
• Hain Organic farms absorb over 192 million lbs of Carbon Dioxide annually. This is equivalent to offsetting the carbon emissions of 11,180 households, not using 9.9 million gallons of gasoline, and preserving 714 acres of forest from deforestation
A Healthy Way Of Life
A Healthy Way Of Life
Why Hain Personal Care? Supports retail partners with category and industry data, planogramming,
POP, in store merchandising and category management Leader in innovation and new product development Portfolio includes brands:
• Ranked #1 in Natural Personal Care Industry• Ranked #1 in Shaving • Ranked #1 in Sun Care• Ranked #1 and #2 in Body Wash• Ranked #1 in Facial Lotions*• Ranked #1 in Body Lotions• Ranked #2 in Toothpaste with the #1 selling sku• Ranked #2, #3, #4 in Skin Care* • Ranked #2 in Liquid Soap• Ranked #2 and #3 in Shampoo
A Healthy Way Of Life *SPINS Scan 52 wks Units ending 3-24-07
A Healthy Way Of Life
Brand PortfolioJASON Natural Products Trusted, leading natural brand offering a complete range of natural personal care
products including oral, hair, skin, bath, body care. Appeals to ingredient conscious consumers seeking safe, effective value priced, vegan natural products.
Top selling items in oral and bath & body care categories.Alba Botanica Offers natural skin, bath, body and hair care products that appeal to a young, fun,
energetic demographic seeking personal care products that provide an experiential exotic escape into nature.
Leading body lotion and skin care line in natural category.Avalon Organics Offers a complete range of Organic skin, bath, body and hair care products that
appeal to an environmentally, ingredient conscious, wellness focused demographic that supports consciousness in cosmetics.
Leading brand in facial lotions and skin care.
A Healthy Way Of Life
A Healthy Way Of Life
Naturally derived, minimally processed Proven safe and efficacious in cosmetic applications Sustainably harvested Our products are free of:
• Parabens• Sodium Lauryl/Laureth Sulfates• Mineral Oil, Lanolin, Petrolatum• Animal derived ingredients• Never tested on animals• Pthalates• Known carcinogens and harsh chemicals
Use non-natural ingredients when effective natural ingredients are not available List ingredients according to the International Nomenclature of Cosmetic Ingredients (INCI)
Ingredient Philosophy
A Healthy Way Of Life
Ingredient Philosophy
There are 4 types of ingredients in every personal care formulation:1. Functional Ingredients
o Provide specific, functional benefits. For example, NaPCA, Panthenol, Aloe, Cocoa Butter are good moisturizing agents. Decyl Glycoside, Sodium Cocoyl Glutamate are cleansing agents for Shampoos, Bath Products.
2. Structural Ingredientso Provide the delivery system and a specific product form such as gel, cream, lotion. These
ingredients include Xanthan gum, Glyceryl Stearate.3. Preservatives
o All water based cosmetic products are prone to microbial contamination and require preservatives to maintain their safety & effectiveness.
o There is no single preservative capable of offering effective protection against bacteria, molds and yeast. So, a combination of several preservatives must be used to ensure an effective preservative system.
4. Fragrance/Scent
Seek to create 3rd party certification for natural or adopt European regulations already in place. Standards must take into account the structure of personal care formulations and the reality that effective personal care products may require certain synthetically derived ingredients.
A Healthy Way Of Life
Product Philosophy
To create all natural personal care products that reflect our desire to experience a healthy, vital life at any age, and our commitment to building a sustainable, eco-conscious, green lifestyle.
To never compromise our integrity, or commitment to our ingredient philosophy.
To practice truth in labeling.
A Healthy Way Of Life
Strategic Vision
Create products and services that support A Healthy Way of Life Grow our brands organically and through acquisition of those brands that meet our strict ingredient and philosophical requirements Expand brand awareness and capture new consumers through measured, strategic expansion into additional channels of distribution and classes of trade Hold the #1 position in all categories we participate in Develop and build partnerships with key retailers that support Hain values and a commitment to the natural category
A Healthy Way Of Life
Wellness Trends In Personal Care
How To Profit From The Health And Beauty Crossover
A Healthy Way Of Life
$49B Natural Products Universe
SPINSscanConventional
38%
SPINSscanNatural
22%
All Other40%
NaturalB/C32%
Full Format<$2M7%
Other10%
Trader J oe's15%
Supps17%
Wal-Mart/ Club20%
2005 Total Natural Products Retail = $49.0B (+13.4%)
Source: Estimates by SPINS, ACNielsen, Nutrition Business Journal, Natural Foods Merchandiser (including UPC and non-UPC sales) for total U.S. products universe 2005
• Natural B/C Size Health Food stores:
– <$2mm ACV; Supplements >40% but <80% of store sales• Supplement stores:
– (GNC, Vitamin World, independents, etc.); >80% supp sales
• Other:
– Includes retailer self-classified as co-ops, specialty/gourmet, personal care (i.e., Body Shop, Garden Botanica, etc.), health clubs, herb shops, mall stands, gift shops, etc.
ShareShare
ChangeACV($B)
% Change
Locations
SPINSscan Natural 22% 0.3 $10.7 14.5% 968
SPINSscan Conventional 38% 1.8 18.6 19.1% 64,262
All Other 40% (2.1) 19.8 7.7% 37,576
Total 100% $49.1 13.4% 102,806
A Healthy Way Of Life
Health And Wellness Increasingly Involves A Crossover With Beauty And Personal Care More Generally
77% of European and US consumers overall agreed that “good grooming and hygiene are just as important as diet, nutrition and exercise in achieving a sense of wellness/wellbeing”
The idea of nutrition for the skin resonates - 42% of Datamonitor’s consumer survey respondents agreed that “skincare products provide nutrition for the skin in the way that food and drinks provide nutrition internally”
The line between medical and cosmetic application has also become blurred e.g. oral care
Source: Datamonitor Consumer Survey
A Healthy Way Of Life
Wellness Concerns Are Fuelling The Growth Of Natural Personal Care
Double digit growth in both Europe and the US - growing concern about what they’re taking in internally is leading some consumers to examine what they’re applying topically and vice versa.
51% of European and US consumers overall feel that “natural ingredient based skincare and personal hygiene products are healthier and better” .
60% “associate natural products with wellness/wellbeing more than unnatural equivalents”.
Also natural is a word consumers feel comfortable in choosing to describe their looks. Dove’s ‘The Real Truth About Beauty’ research highlight that, “by an overwhelming majority, women around the world are most comfortable using the words ‘natural’ (31%) or ‘average’ (29%) to describe their looks” .
Source: Datamonitor Consumer Survey
“Vice president, marketing and merchandising, L’Occitane en Provence, Manosque, France, quoted on www.happi.com, January 2006
A Healthy Way Of Life
Beauty Products Are Second Most Common Point Of Entry To Organics
0
10
20
30
40
50%
Produce
40%
BeautyProducts
15%
Dairy
8% 7% 6%
Cereal
4%
Box &BaggedFoods
4%
BakeryI tems
4%
BulkFood
2% 2% 2% 2%
FrozenFoods
2%
NutritionalSuppl.
Homeo-pathic
Remedies
Beverage HouseholdCleaners
Meat
Source: SRG Quantitative Research July 2006
First Category In Which Organic Products Were Purchased
A Healthy Way Of Life
52%
46%
38%
29%
24%22%
15%13%
0%
10%
20%
30%
40%
50%
60%
% o
f re
sp
on
de
nts
who
stat
ed ‘h
ighl
y re
leva
nt’
Source: Datamonitor Consumer Survey
Certain Categories Are More Associated With Wellness
A Healthy Way Of Life
$13.2$14.7
$16.9
2 Year Ago Year Ago Current
$4.3$4.9
$5.6
2 Year Ago Year Ago Current
Food / Drug / Mass ($B) Natural Supermarkets ($B)
+15%+12% +12%
+15%
Source: SPINScan Natural & Conventional 52 Weeks Ending 8/12/06
* Includes UPC coded natural, organic, H&W food, beverage, supplements, body care, and GM. Excludes Private Label except for supplements.
Natural, Organic and Health & Wellness Products* Are Experiencing 15% Growth
A Healthy Way Of Life
All Of The Well Developed Natural Body Care Markets In FDM, Except For San Antonio, Also Have a Strong BDI For Both Avalon
Organics And Alba Botanica
Source: SPINSscan Conventional / 52 Weeks Ending 8/12/06
*Strong CDI / BDI for Conventional marketsis defined as an index of 110 or greater
A Healthy Way Of Life Source: US Census Data, SRG Quantitative Research July 2006 and Hartman Group – Who’s Buying Organic? Demographics 2006
• Research estimates that the percentage of U.S. households using organic products is about 70% - 73%, up 17% from 2004.
Organic Using Households – 45M
Total US Households Containing an Adult Female – 64M of 110M total
45 Million Households Buying Organics
A Healthy Way Of Life Source: SRG Quantitative Research July 2006 and Hartman Group – Who’s Buying Organic? Demographics 2006
• 30 million (66%) households regularly, or occasionally using organic NPC
HH Using Organic NPC – 30M
Regular Use of Organics
A Healthy Way Of Life
Top Three Reasons To Buy Organic
Food Household Cleaners Beauty Products
Lack of Chemicals65%
Lack of Chemicals 55%
Lack of Chemicals54%
Product Quality31%
Environmental Concerned41%
No Testing on Animals33%
Safer for Children22%
Safer for Children30%
Allergy Concerns25%
• Lack of Chemicals is the key reason to buy across food, household cleaners and beauty products.
Why Buy Organics?
A Healthy Way Of Life
The Strong Growth as a Percentage of Sales of Several Natural Body Care Categories Could Indicate a Possible Emerging Growth Trend
For The Department
91%
70%
51%
49%
42%
41%
39%
37%
36%
Shelf Stable Meats Poultry & Seafood
Bodycare Kits & Sets & Travel Packs
Gen Merchandise - Personal Care
Aromatherapy & Body Oils
Sports Nutrition
Hair Products
Pet Food & Pet Care
Shelf Stable Fruits & Vegetables
Soup
Shelf Stable Pastas
747%
Source: SPINSscan Conventional52 Weeks Ending 8/12/06
Top % Growth Categories – All Departments - FDM
A Healthy Way Of Life
Creating A Destination
Build trust among guests that Target is committed to LOHAS through corporate Initiatives and supporting brands that reflect this philosophy Keys to building this trust:
o Team member, consumer training and education • Hain can support this initiative with highly educated staff and over 35 skin care specialists & demo reps in our Training & Education Dept • Simple, straightforward product education manuals available with key ingredients and 3 main benefits of each product• Flash cards by product for quick, easy reference
o Cross promote & merchandise with other natural/organic categories in the storeo Create events to promote & communicate Target’s commitment to LOHAS
• Earth Day• Organic Month, Fair Trade Month
Differentiated set that effectively communicates natural ingredient philosophy, environmental stewardship and sustainability
A Healthy Way Of Life
Summary
The Hain Celestial Group is a single source for the leading natural personal brands representing 17% of total natural category sales Publicly traded, well funded, with high standards of integrity, process and quality Training & Education support program Partnership offers broad options for growth due to the following:
• Natural product availability has not reached full potential within a customer, and across customers. Encourage distribution in all stores.
•The breadth of products is not fully developed as some accounts are selective with which items they carry. Selling in the full line, across product categories, is ideal. If product acceptance is limited, push for Skin Care products first as they have the broadest consumer appeal.
• A dedicated “destination” for Natural Personal Care products can maximize potential sales.
• Capitalize on the growing interest and awareness of natural product benefits.
• Generate excitement in the category through innovative point of purchase vehicles, especially in stores with less than ideal shelf placement.
A Healthy Way Of Life
Project Green Space