Medicated Skincare - US - April 2005

SUMMARY

The medicated skincare market, as Mintel has defined it, includes products treating a variety of skin conditions, including minor wounds, rashes and itches, acne, chapped lips, athletes foot, warts and lice. Most of these products are used once to treat an occurrence of a condition. Others are used over time for prevention or continued treatment. Incidence and frequency of ailments, purchase patterns, and brand loyalty differ widely by segment and require different marketing approaches in order to connect with consumers.

This report covers over-the-counter powders, ointments, creams and lotions that treat skin cuts, rashes, acne and other irritations. Overall, this market has increased 18% from 1999 to 2004 (4% in constant 2004 dollars). Category sales in 2004 from FDM channels, not including Wal-Mart, were $1,676 million.

The categorys segments are diverse and support overall category growth in different ways. Lice treatment sales are down substantially in the past two years, but acne treatments and wart removers are greatly contributing to the categorys overall growth.

Mintel finds performance in this market linked primarily to the prevalence of the relevant skin conditions, changes in consumer demographics, and product innovation. The strong performance of private labels--especially in first aid and anti-itch--suggests that many consumers do not distinguish between brands. Companies will have to understand consumer behavior in order to differentiate their products. Being informed of the latest trends in consumer behavior will help you develop superior new products and create more savvy marketing.

This report covers over-the-counter medicated skincare products:

• Acne treatments (for acne, blackheads, whiteheads)
• Anti-itch (for itching of the skin caused by eczema, psoriasis, poisonous plants, jock itch, ringworm, dry skin, minor rashes)
• Athletes foot remedies (for foot fungus, extremely odorous, dry and/or cracking feet)
• First aid ointments (for minor cuts or scratches; dry, chapped, or cracking skin (except on feet); insect stings; and sunburn)
• Lip balms and cold sore medications (for cold sores, dry cracking lips)
• Wart removers (for common , plantar and flat warts, but not genital warts)
• Lice treatments (for head, body, and pubic lice infestation)

Not included are prescription medications used to treat these conditions or over-the-counter products that may be taken orally to treat these conditions (for example, non-prescription antihistamine tablets taken orally to treat skin rashes or irritations). Also not included are "premium brand" medicated acne treatments sold through department stores, boutiques, spas, or other venues (Estee Lauder, Clinique). Finally, products with medicated ingredients or additions (e.g., foundation with acne fighting ingredients, bandages with antibiotics added to the pad) are also excluded.

This report contains US IRI InfoScan data.

TABLE OF CONTENTS

Introduction and Abbreviations

Introduction

Other relevant reports

Definition

• Figure 1: Products covered in this report with some conditions the products treat

Abbreviations & terms

Abbreviations

Terms

Executive Summary

Medicated skincare has sales of $1,676 million

Prevalence and tendency to treat

Population shifts drive sales

Consumers willing to pay more for new, superior treatments

Medicated skincare products face competition on several fronts

Private label sales suggest some perceived parity

Natural products show gains, if effective

Since 2002, wart and acne treatments show greatest growth of the seven segments

Vanity and self-image drive desire for fast working formulas

Pfizer leads the category, followed closely by J&J and Schering-Plough

Drug stores gaining share of sales

Men more apt to have cuts/scrapes

Medicated skincare products have an opportunity to build lifetime value

Future fragmentation of the market with more focus on seniors and kids

Medicated skincare to grow slightly in constant terms

Market Drivers

Introduction

The prevalence of skin problems and the likelihood to treat them

• Figure 2: Suffered from various skin conditions in the past 3 months, January 2005
• Figure 3: Reasons for using first aid products, July 2002
• Figure 4: Consumers - response to various skin ailments, January 2005
• Figure 5: Tendency for sufferers of specific skin problems to -do nothing and live with it, - January 2005

Population shifts influencing demand for medicated skincare products

• Figure 6: U.S. population projections, 2000, 2005 and 2010
• Figure 7: U.S. Female population projections, 2000, 2005, and 2010

Product innovation in OTC medicated skincare

Competition for the category

Competition from combination products

Competition from prescription drugs

Competition from non-medicating products/procedures

Increasing number of diabetics

Market Size & Trends

• Figure 8: FDM sales of medicated skincare, at current and constant prices, 1999-2004
• Figure 9: Graph: FDM sales of medicated skincare products, at current and constant prices, 1999-2004

Market Trends

Some blurring of medicine and cosmetics

More -natural - medicated skincare products

Kid specific products

Evidence of some perceived parity between private labels and brands

• Figure 10: Private label sales for products treating specific skin conditions in FDM channels

Market Segmentation

Overview

• Figure 11: U.S. sales of medicated skincare products, by segment, 2002 & 2004

First aid ointments/antiseptics

• Figure 12: Sales of first aid ointments/antiseptics, at current and constant prices, 1999-2004

Anti-itch treatments

• Figure 13: Sales of anti-itch treatments, at current and constant prices, 1999-2004

Acne treatments

• Figure 14: Sales of acne treatments, at current and constant prices, 1999-2004

Lip balm/cold sore medications

• Figure 15: Sales of lip balm/cold sore medications, at current and constant prices, 1999-2004

Athletes foot medication

• Figure 16: Sales of foot care/athletes foot medication, at current and constant prices, 1999-2004

Wart removers

• Figure 17: Sales of wart removers, at current and constant prices, 1999-2004

Lice treatments

• Figure 18: Sales of lice treatments, at current and constant prices, 1999-2004

Supply Structure

Companies and brands

• Figure 19: Manufacturer sales of medicated skincare in the U.S., 2002 & 2004

First aid ointments/topical antiseptics

• Figure 20: Manufacturer brand sales of first aid ointments/antiseptics in the U.S., 2002 & 2004

Anti-Itch treatments

• Figure 21: Manufacturer brand sales of anti-itch treatments in the U.S., 2002 & 2004

Acne treatments

• Figure 22: Manufacturer brand sales of acne treatments in the U.S., 2002 & 2004

Lip balm/cold sore medication

• Figure 23: Manufacturer brand sales of lip balm/cold sore medication in the U.S., 2002 & 2004

Foot care/athletes foot medications

• Figure 24: Manufacturer brand sales foot care/athletes foot medications in the U.S., 2002 & 2004

Wart removers

• Figure 25: Manufacturer brand sales of wart removers in the U.S., 2002 & 2004

Lice treatments

• Figure 26: Manufacturer brand sales of lice treatments in the U.S., 2002 & 2004

Major manufacturers

Introduction

Pfizer

Johnson & Johnson

Schering-Plough

Wyeth

GlaxoSmithKline

Advertising & Promotion

Pfizer

Johnson & Johnson

Schering-Plough

Wyeth

Retail Distribution

Introduction

• Figure 27: U.S. retail sales of medicated skincare products, by channel, 2002 & 2004

Drug stores

• Figure 28: U.S. drug store sales of medicated skincare products, at current and constant prices, 1999-2004

Supermarkets

• Figure 29: U.S. supermarket sales of medicated skincare products, at current and constant prices, 1999-2004

Mass-merchandisers

• Figure 30: U.S. mass merchandiser sales of medicated skincare products, at current and constant prices, 1999-2004

The Consumer

Introduction

Adult usage of medicated skincare products

Overview

• Figure 31: Usage of medicated skincare products, first aid bandages, and topical antibiotic remedies, January 2004-September 2004

First aid products, topical antibiotics

• Figure 32: Use of first aid bandages and topical antibiotic remedies, January 2004-September 2004
• Figure 33: Use of first aid bandages and topical antibiotic remedies by gender, January 2004-September 2004
• Figure 34: Use of first aid bandages and topical antibiotic remedies by presence of children, January 2004-September 2004
• Figure 35: Use of first aid bandages and topical antibiotic remedies by age, January 2004-September 2004
• Figure 36: Use of first aid bandages and topical antibiotic remedies by household income, January 2004祐eptember 2004
• Figure 37: Use of first aid bandages and topical antibiotic remedies by race/ethnicity, January 2004 to September 2004

Prevalence of skin conditions

• Figure 38: Suffered from various skin conditions in the past 3 months, January 2005
• Figure 39: Suffered from various skin conditions in the past three months, by gender, January 2005
• Figure 40: Suffered from various skin conditions in the past 3 months, by age, January 2005

Steps taken when suffering from specific skin conditions

Steps taken for minor cuts/scrapes

• Figure 41: Steps taken for minor cuts and scrapes, by gender, January 2005
• Figure 42: Steps taken for minor cuts and scrapes, by age, January 2005
• Figure 43: Steps taken for minor cuts and scrapes by household income, January 2005

Steps taken for dry or chapped skin

• Figure 44: Steps taken for dry, chapped, or cracking skin, by gender, January 2005

Steps taken for rashes and skin itches

• Figure 45: Steps taken for minor rashes or skin itches, by gender, January 2005

Steps taken to treat acne

• Figure 46: Steps taken for acne or blackheads, January 2005

Steps taken to treat cold sores

• Figure 47: Steps taken for cold sores, January 2005

Attitudes toward medicated skincare products

• Figure 48: Attitudes about medicated skincare, January 2005
• Figure 49: Attitudes about medicated skincare, by age, January 2005
• Figure 50: Attitudes about medicated skincare, by race, January 2005

Teenagers - use of medicated skincare products

• Figure 51: Usage of medicated skincare products for acne by teens, January 2004-December 2004
• Figure 52: Number of time s used an acne remedy in the last seven days, by teens

Kids - use of medicated skincare products

• Figure 53: Usage of medicated skincare products among kids

Summary

Future & Forecast

Future trends

Prescriptions become OTCs

Further fragmentation of the market with more targeting by age

Oral OTC skincare

Extension of natural treatments

• Figure 54: Sales of homeopathic skin topical, 1999-2004

Market forecast

Medicated skincare

• Figure 55: Forecast of U.S. FDM sales of medicated skincare, at current and constant prices, 2004-2009

First aid ointments/antiseptics

• Figure 56: Forecast of U.S. FDM sales of first aid ointments/antiseptics, at current and constant prices, 2004-2009

Anti-itch treatments

• Figure 57: Forecast of U.S. FDM sales of anti-itch treatments, at current and constant prices, 2004-2009

Acne treatments

• Figure 58: Forecast of U.S. FDM sales of acne treatments, at current and constant prices, 2004-2009

Lip balm/cold sore medications

• Figure 59: Forecast of U.S. FDM sales of lip balm/cold sore medications, at current and constant prices, 2004-2009

Foot care/athletes foot medication

• Figure 60: Forecast of U.S. FDM sales of foot care/athletes foot medication, at current and constant prices, 2004-2009

Wart removers

• Figure 61: Forecast of U.S. FDM sales of wart removers, at current and constant prices, 2004-2009

Forecast Factors

Appendix: Trade Associations

Appendix: New Product Developments

Wal-Mart: Equate Wart Remover

Vitacilina: Derman Anti-fungal Foot Cream

Medtech: Compound W Wart Remover for Kids

Johnson & Johnson: Daily Cleansing Pads

Blistex: Medicated Berry Balm

Woodridge Labs: SafeTek Lice Removal Kit

Appendix: Research Methodology

Consumer Research

Sampling & Weighting

Presentation & Definition

Further Analysis

Trade Research

Informal trade research

Formal trade research

Desk & Internet Research

Sources

Definitions

Forecasts

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