Haircare - UK - February 2003

SUMMARY

In 2001, sales of haircare products were buoyed by higher spending on C&T products generally.

Sales of haircare products have been drivenforward over the review period by a number of factors, including renewed consumer confidence, increased segmentation of the market; technologicaldevelopment; and the growing importance of younger consumers in some sectors, particularly colourants and styling products.

"Caring"ingredients, more commonly associated with skincare products, have become a feature of haircare, particularly in products offering UV filters andmoisturisers. This trend has been most pronounced and extreme in the mid-and premium-price bands. The consumer demand towards natural looking hair hasinspired the development of fruit and floral-based formulations, including Garnier's Fructis and Clairol's Herbal Essences ranges of shampoo andconditioners.

R&D has become a key part of the haircare marketing drive. In hair colourants, vibrant colour shades such as reds and auburns havebeen a growth area, but more muted tones have also become popular since 1999. Trends in fashion prompt trends in colourants; colours and textureschange with the seasons.

In styling products, the trend has been towards newer products, such as gels and fudges, and newer delivery systems, suchas sprays. This sector, too, is driven by younger consumers, both men and women, with the latter very open to the latest developments in fashion andstyle.

TABLE OF CONTENTS

Introduction

Definitions

Abbreviations

Executive Summary

Buoyant market

Shampoo the leading sector, with highest penetration

Multiple grocers are the leading outlets

A multinational market

Future

Market Drivers

Perception of hair type

Figure 1: Trends in men's and women's hairstyles, 1999 and 2001

The importance of ageing women

Figure 2: Trends and projections in UK female adult population, by age group, 1997-2006

Male users important too

Figure 3: Total UK male and female population, 1997-2006

PDI and employment trends

Figure 4: PDI and consumer expenditure at 1997 prices, 1997-2006

Figure 5: Workforce in employment in the UK, by gender, 1997-2006

EU regulations

Market Size and Trends

Figure 6: UK retail value sales of haircare products, at current and constant prices, 1997-2002

Figure 7: UK retail sales of haircare products, by type, 1997-2001

Celebrity endorsement

Shampoos become more task-specific

Conditioners benefit from decline of 2-in-1s

NPD boosts use of colourants

Fashion boosts styling product use

Figure 8: UK retail sales of haircare products, % share by type, 1997-2001

Market Segmentation

Shampoo

Figure 9: UK retail value sales of shampoo, by type, 1999 and 2001

Conditioner

Figure 10: UK retail sales of conditioner, by type, 1999 and 2001

Colourants

Figure 11: UK retail value sales of hair colourants, by type, 1999 and 2001

Styling products

Figure 12: UK retail value sales of styling products, by type, 1999 and 2001

Hairsprays

Home perms

Figure 13: % growth/decline in sales of haircare products, by sector, 1999-2001

Distribution

Figure 14: UK retail sales of selected haircare products, by distribution channel, 2001

Multiple grocers take the lead in haircare sales

Boots the largest retailer

Superdrug leading drugstore

Independents and others struggling to compete

The Supply Structure

Production & trade

Figure 15: UK production of haircare products, at MSP, 1996-2000

Figure 16: Foreign trade in haircare products, 1997-2001

Brand shares

Figure 17: Major manufacturers' value market shares in haircare products, 1999 and 2001

Shampoo

Figure 18: Major manufacturers' value shares in the shampoo market, 1999 and 2001

Conditioners

Figure 19: Major manufacturers' value market shares in the conditioners market, 1999 and 2001

Colourants

Figure 20: Major manufacturers' value market shares in the colourants market, 1999 and 2001

Styling products

Figure 21: Major manufacturers' value market shares in the styling products market, 1999 and

2001

Hairspray

Figure 22: Major manufacturers' value market shares in the hairsprays market, 1999 and 2001

Figure 23: Retail value sales of haircare, brands vs. own-label, 1999 and 2001

Manufacturers and brands

L'Oréal

Procter & Gamble

Lever Fabergé

Wella

Alberto Culver

Others

New Product Development

New product launches 2002

The Consumer

Hair colour and perception of hair condition

Figure 24: Natural hair colour and hair conditions of adults in the UK, 2001

Figure 25: Condition of women's hair, by age, 2001

Figure 26: Condition of men's hair, by age, 2001

Figure 27: Condition of hair among men and women, 2001

Figure 28: Women having permed or coloured hair, by demographic sub-group, 2001

Female use of haircare products

Figure 29: Use of haircare products, bath & shower products and deodorant, by women, 2001

Shampoo

Figure 30: Use and weight of use of shampoo, by women, by demographic sub-group, 2001

Conditioners

Figure 31: Use and weight of use of conditioner, by women, by demographic sub-group, 2001

Styling products

Figure 32: Use and weight of use of hair gels, mousses and sprays, by women, by demographic

sub-group, 2001

Colourants

Figure 33: Use and weight of use of hair colourants, by women, by demographic sub-group, 2001

Hairspray

Figure 34: Use and weight of use of hairspray, by women, by demographic sub-group, 2001

Use of haircare by men

Figure 35: Usage of haircare products, bath & shower products and deodorant by men, 2001

Shampoo

Figure 36: Use and weight of use of shampoo, by men, by demographic sub-group, 2001

Styling products

Figure 37: Use and weight of use of hair gels, mousses and sprays, by men, by demographic sub-group, 2001

Conditioners

Figure 38: Use and weight of use of conditioner, by men, by demographic sub-group, 2002

Haircare typologies

Figure 39: Female haircare typologies, by demographic sub-group, 2001

Prospects

Premium lines encourage trading up

Shampoo sector is mature, but further segmentation likely

Designer labels

Colourants

Forecast

A mature market but with a few openings

Figure 40: Forecast for retail sales of haircare products, 2002-06

Strengthening of the euro will dampen growth

Figure 41: Retail value sales of haircare, at current and constant prices, 1997-2006

With volume sales near static, emphasis will continue on adding value

Marketing expertise of global players will be needed

Appendix: Research Methodology