Category Report: Toiletries & Personal Care

Personal pride

84 Autumn 2016 www.ownlabelbuyer.co.uk

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Own label is gaining a significant hold in the diverse toiletries and personal care market, where price is often the overriding factor for consumers. Chloe Ryan reports

ehaviour learnt during a recession can be hard to shift. Just look at how engrained was

the careful consumption of the generation who came of age during the Second World War, lifelong frugality shaped by the constraints of rationing.

The sharp shift in consumer behaviour that happened in the aftermath of the 2008 crash has also become habitual for many. Former Sainsbury’s chief executive Justin King described it at the time as “savvy shopping”; for some it was a case of having to choose between heating and eating. In the uncertain wake of the Brexit referendum, this careful behaviour may be engrained yet

deeper. It is particularly noticeable in a

large and diverse category like toiletries and personal care that includes products such as cotton pads, deodorant, facial tissue, body lotions, moisturisers, nappies, perfumes, razors, shaving creams, talcum powder, toothpaste and wet wipes. The category primarily has a functional reputation, with basic hygiene the main product requirement.

Consumers have became “accustomed to saving money on basic hygiene essentials,” Charlotte Libby, senior beauty analyst, writes in Mintel’s Soap, Bath & Shower products 2016 report. The growth of discount

retailers and pound shops has facilitated this cost cutting, she notes. Consequently, many products in this category, particularly those which are seen as basic staples, have struggled to innovate, focusing instead on offering good value.

As Libby points out: “In soap, bath and shower (SBS) products, slow growth of just 0.6 per cent was seen in 2015, a slowdown from the previous year as consumers switched to cheaper formats. Based on the current economic climate, the SBS

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market will struggle to see significant growth over the next year. Shower products… have seen sales slip as consumers look to save money on everyday essentials while trying newer innovations in the bath and soap categories.”

Overall, more than a quarter of adults buy the cheapest available soap, bath and shower products, with no brand loyalty, Mintel data shows. Own-label products are most likely to be bought by parents. Data shows that among parents of under-16s, 12 per cent buy own label and 37 per cent both branded and own label, “driven by a desire to save money on products with a high frequency of use among children,” says Libby.

That’s not to say there hasn’t been innovation in this market. Diet trends have influenced new fragrances and formulations, with numerous new superfood-inspired fragrances such as Manuka honey, herbs and superfruits. Vegan claims on NPD also increased 51 per cent

during 2014-15, according to Mintel data. One example of this is

Waitrose’s orchid and honeysuckle bodywash, which is part of the retailer’s ‘Flower Garden’ range of fragrances used in its own-label toiletries, and is certified vegan. Asda’s private label range N Spa also includes a superfruit blueberry shower and bath gel and a golden honey body scrub. Another hope for growth is the slew of new in-shower treatments, such as moisturisers and self-tans, which could help reposition the category away from its value proposition.

Other areas of the toiletries market are also seeing innovation. Bart Van Malderen is chief executive of Drylock Technologies, which manufactures own-label nappies, incontinence products and sanitary protection. It has developed and patented very thin “fluffless” nappies and incontinence products, which use no cellulose fibres.

While the market for nappies and sanitary towels is fairly stable in line with the population, there has been a rapid growth in the market for

incontinence products. “Within a couple of years, the taboo has fallen away almost entirely,” says Van Malderen.

According to Mintel data, the market for incontinence products in the UK grew 12.8 per cent between 2014 and 2015, up from £115.6 million to £130.4m in the space of a year. This compares to the larger UK market of sanitary protection, worth £289m in 2014, which declined four per cent over the year and was worth £277.5m.

“Kimberly-Clark made an advert where people were biking in the streets wearing underpants,” says Van Malderen. He argues this kind of taboo-busting marketing, along with genuine improvements in the effectiveness of incontinence products, has helped the market mushroom. “The products are so slim now you can wear the pants under tight jeans and nobody will know about it and this really means the difference between staying at home and going out for a walk or to the movies. There are good products now, extremely thin, comfortable, flexible

Category Report: Toiletries & Personal Care

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and absorbent.” Within the UK, there is also some

evidence, according to Euromonitor’s April 2016 report Incontinence in the United Kingdom, that the government’s austerity measures have inadvertently boosted the market. “As local NHS trusts faced significant cuts to their procurement budgets, trade sources reported a contraction in the volume and value of incontinence products supplied to patients across the country. In some extreme instances,

this was manifested in incidents of ‘rationing’ of incontinence products by health professionals. As a direct result, a significant minority of consumers increasingly turned to the retail market to fulfil unmet demand,” the report states.

Drylock’s product range includes Lidl’s Toujours nappies, which have won numerous awards for absorbency and effectiveness, competing against more expensive, branded products.

Although manufacturers have gradually moved over from cellulose, which is bulky and derived from wood pulp, to thinner superabsorbent polymers, Drylock was the first manufacturer – including all the major brands – to remove all cellulose fibres. “So it is less bulky, very slim, and highly absorbent,” Van Malderen says.

“The product used to be 75g and very thick, but today it is something like 32g to 33g and very thin. In our opinion this evolution hasn’t come to an end yet. We designed the line and in 2012 we invested in a brand new plant in the Czech Republic and we started producing. Fluffless is a net gain for the ecology. It is thinner and it is more comfortable,” says Van Malderen.

After developing fluffless nappies, the company extended into adult incontinence products, with the same strategy: some fluffless and some low-fluff products to cover the whole market. And more recently, the company extended into the ‘femcare’ market, buying a sanitary towel firm in Italy. “So now, in a nutshell, we have a full range of baby products, a full range of adult inco products, and a

Dry shampoo outpaces regular shampoo

According to Superdrug, the drive for convenient products has led to a big upsurge in demand for dry shampoos. In 2015 sales of dry shampoo saw an uplift of 14 per cent in comparison to regular shampoo sales. Sales of dry shampoo are continuing to increase, while regular shampoo sales are slowing down as customers are choosing a convenient option to freshen up their hair. “Dry shampoo has been on the rise for the past five years and shows no signs of slowing down,” says Allen Webb, Superdrug senior buyer for hair. “Our customers are opting for a convenient and easy solution to spruce up their hair on the go.” The trend shows no sign of easing up, so Superdrug has

introduced a new dry shampoo zone in all stores to keep up with demand. As well as the major brands, Superdrug’s own brand is stocked. “Dry shampoo is catching up with regular shampoo and we’re adapting the way we showcase our products to help customers find the right product for them,” says Webb.

Photo: Edward Hands

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Will black toothpaste be the next big thing? Weckerle Cosmetics Eislingen is a German manufacturer that supplies own-label toothpaste to retail customers across Europe. The oral care market is fairly stable, according to Randolf Tolkmitt-Lehmann, general manager of sales, R&D and marketing, and growth is therefore mainly focussed on launching innovative new flavours or ingredients. “The market is hungry for new things,” he says. “Customers want to experience something beyond mint in the morning. If they have the opportunity to experience a limited edition product, some extraordinary flavour, or colour, they want that.” Recent examples from the past year include grapefruit-flavoured toothpaste, and spicy variants such as cinnamon and clove. Another trend in Germany at the moment, which Tolkmitt-Lehmann anticipates will spread across Europe, is charcoal toothpaste, which is black. Weckerle has launched several charcoal toothpaste products, including one incorporating red, yellow and black stripes to mimic the German flag.

full range of femcare products, which we sell into two markets, the retailers’ private label and the institutions, hospitals and elderly homes.”

Growth in this market will be driven by “innovation, innovation and innovation,” Van Malderen says, namely making products even thinner, more comfortable, and more absorbent. “We have to be careful it doesn’t become a commodity, so we have to innovate, otherwise the retailers will call us and ask us what is the price of the day. It mustn’t become

like toilet paper.” As Mintel reported in March

2016, sales of toilet paper are tumbling, largely due to average prices reducing, driven by the discounters. Over the past five years the toilet tissue market has declined from £1.2 billion in 2011 to £1.1bn in 2015, wiping six per cent off the market value. In the last year alone, despite an increase in the population and a subsequent rise in the number of households, sales of this household

essential fell by two per cent. This is a

challenge the whole category is facing. There are bright spots in this category, and manufacturers will need to continue to innovate in order to avoid continuing price depression and a race to the

bottom.