Market Beat Fragrance Tops Holiday Gift Lists $14 billion in 2015. European market The annual holiday retail study by The Demand for natural and come close to pre- NPD Group, Inc., a global information organic products has recession peak levels company, has revealed that fragrance spread to every region, as consumers return moved up the ladder as a top gift on however sales remain to professional consumers’ holiday shopping list in 2012. concentrated in Europe venues for skin care Following the footsteps of last year’s and North America. treatments. Despite survey, fragrance continued to rise and Natural and organic this resurgence, climbed from number eight to the number products have 2% share consumers continue six position last year. In previous years, of global personal care to cautiously spend on fragrance has been consistently ranked at product sales. In some their post-treatment number 10, but in 2011 fragrance countries—such as the purchases and moved up to the number eight spot. U.S., Germany and remain highly value- More good news, while 14% of Austria—the market conscious. consumers reported plans to purchase share is reaching 10%. Sales through fragrance as a holiday gift; 17% of The large market share is because of beauty institutes and salons, the largest consumers reported that they actually did high consumer awareness and extensive purchase channel in Europe representing purchase fragrance as a holiday gift. distribution of natural and organic almost 60% of the market, increase by 3.7% According to NPD, during the first 10 products. in 2011. However, the strongest growth is months of 2012 (January to October), Widening availability is a major driver experienced in the medical care providers total prestige fragrance dollar sales in of market growth, as natural and organic channel in both Europe and the U.S. U.S. department stores were nearly $1.8 personal care products are crossing over Spas, salons, and medical care billion, up 7%, compared to the same time from specialists to mainstream channels. providers are stimulating traffic by last year. Units grew 2% with over 27 Retailer private labels are also becoming modernizing facilities and implementing million units sold. prominent for natural personal care new communication tools, such as In addition, men’s fragrances overall products. They are most successful in social networking, and tablet devices fared a little better than women’s as that Germany, where they comprise about that enable therapists to complete category grew 7% in dollars and women’s 20% of natural personal care product medical questionnaires or recommend grew 6% for year-to-date, January to sales. Private labels are most established products without interrupting the October 2012. The real boost in sales in Europe, however they are also treatment. The increase in the number of came from men’s prestige fragrance gift becoming popular in the U.S., Russia and locations through franchised networks set sales, which doubled in growth, 14% other countries. or chains, particularly in Europe, and vs. 7% growth of women’s fragrance gift increasing skin care product distribution set sales for the same time period. Professional Skin Care through other professional-type outlets, The professional skin care products such as hair salons or medical care Natural Beauty Surges Ahead market experienced a second year of providers, is successfully increasing While the scope to innovate remains growth, posting a 5.3% increase in 2011, revenues. largely varied in the beauty industry, according to the latest Professional Skin Sales within the largest channel in the for many categories this will mean not Care Global Series: Market Analysis & U.S.—spas and salons—declined as just new brand creation but reinventing Opportunities by international consulting spas continue to reduce the number of brands more holistically, from ingredients and research firmKline & Company. brands carried, underperforming spas and formulations to packaging While the overall tendency suggests are closed down, and more salons and and advertising, said Euromonitor a continued recovery of the market hotels are divesting their spa business International. Certainly in respect to following the onset of the recession, to re-focus on their core businesses. the Green movement, naturally sourced subtle trends behind the figures paint a Another factor, a surge in at-home ingredients and free-from formulations more undecided picture. beauty devices, has reportedly impeded are what many brands, across an China and South Korea posted stellar business in the spas channel. increasingly wide range of categories, growth of 9.3% and 9.5%, respectively, The European market is highly are trying to leverage. With plant and within the professional sector. As a fragmented with leading brands fruit-based alternatives becoming ever result of a regulatory change in South enjoying strong growth. The U.S. more varied, there is still much to explore Korea, which drove investment in beauty market is relatively consolidated, with in boosting natural product portfolios. institutes, and greater consumer spending, the top five brands accounting for a Global sales of natural and organic beauty the market, penetrated by domestic brands 38% market share. Brands entrenched products are projected to reach $9 billion recovered rapidly from the recession. in the medical care providers channel this year. Although consumer demand “Professional products in South posted the strongest gains in 2011. for natural and organic products remains Korea are sold comparable to the U.S. Industry executives expressed buoyant, new research finds the growth market through the Internet and home particular concern with finding the rate is slowing because of the weak shopping channels, where especially local correct balance of distribution between economic climate. brands actively develop e-commerce purchase channels in addition to by operating their own online shopping growing commercial pressures between Global Market for Natural & Organic websites, as well as entering larger manufacturers, distributors, and Personal Care platforms run by Internet home shopping professional outlets. Another concern In its report, Global Market for Natural & channels,” observed Karen Doskow, consists of developing attractive pricing Organic Personal Care Products, Organic Kline’s Industry Manager. solutions for both retail and treatment Monitor predicts revenues to climb to With 4% growth in 2011, sales for the products for price sensitive consumers. 28 Spray January 2013
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