'Metrosexuals' Drive Growth in Personal Care Products; ACNielsen Study Finds New Male Grooming Habits Spur Category Sales; Older Populations Demanding Anti-Aging Solutions.

NEW YORK -- Products Designed for Convenience Have Global Appeal

A growing interest in personal grooming among males - part of the so-called "metrosexual" phenomenon - is contributing to growth in Personal Care categories around the world, according to a study released today by ACNielsen, a VNU business and the world's leading marketing information company.

The study - What's Hot Around the Globe: Insights on Growth in Personal Care - analyzed retail purchases in 56 countries across nearly 60 categories and found many examples of this trend. For instance, the sales value of Shower Gels, one of the fastest growing personal care categories worldwide, grew by 7% in 2003, primarily on the strength of sales in male-oriented products.

"Women aren't the only ones focused on personal grooming," said Jane Perrin, ACNielsen Managing Director of Global Services and sponsor of the study. "In many of the countries we studied, the growth in Personal Care categories was impacted by the introduction of new male-oriented products. The so-called 'metrosexual' phenomenon is definitely having an impact."

According to the Internet site wordspy.com, the term "metrosexual" refers to "an urban male with a strong aesthetic sense who spends a great deal of time and money on his appearance and lifestyle."

In the UK, for example, the Shower Gel category grew by only 4% last year, but the male segment grew by 18%. Two other categories - Deodorants and Razors & Blades - are also benefiting from men's newfound attention to appearance.

The Deodorants category grew by 5% overall, with 35 of the 50 countries studied by ACNielsen reporting increases. Sales of male-oriented products grew twice as fast as those of female-oriented products (See Table 1).

Table 1: Growth in Male Deodorants Outpaced Female Deodorants in 2003

Deodorants:        Value Sales 2002   Value Sales 2003   Growth
                        US$(mill)         US$(mill)     2002-2003
------------------ ------------------ ----------------- ----------
Male Targeted                     649              719         11%
------------------ ------------------ ----------------- ----------
Female Targeted                   705              742          5%
------------------ ------------------ ----------------- ----------

Note - based on data from 21 countries

The Razors & Blades category grew 5%, with three-quarters of the 52 countries measured by ACNielsen reporting an increase. "Men are upgrading to more advanced shaving systems," Perrin said. "This significantly impacts the growth in value sales since a simple disposable razor can cost less than US$1, while the newer, more advanced shaving systems may require an initial investment of US$10 to US$15."

A number of manufacturers are trying to capitalize on the growing interest in personal grooming among males. Procter & Gamble, for example, announced in March an exclusive licensing agreement with OT OverTime to market a line of Personal Care products developed for tweens and teenage boys. Unilever's male-focused brand Axe, now available in over 58 countries, saw its product line expand from a body spray to a roll-on deodorant, a shower gel, a pre-shave and post-shave product and a hair gel, outperforming Unilever's own sales targets within a year of its 2002 launch in North America. Gillette's recent introduction of the M3 Power system is another example of a new product targeted to the fast-growing male grooming market, leveraging technological innovations in the Razors & Blades category.

Aging Consumers Try to Turn Back the Clock

The ACNielsen study also found the trend toward older populations is affecting purchases in the Personal Care arena.

"With the Baby Boomer segment getting older and continuing to influence the consumer marketplace, sales of anti-aging products are growing. Face & Eye Moisturizers grew by 10% with the introduction of creams that do everything from reducing wrinkles and minimizing dark circles to lightening age-spots," Perrin said. "We also saw 48% growth in products that remove stains from your teeth and whiten your smile."

Another age-related category that experienced growth was Adult Incontinence Pads/Pants, which was up 4% globally. Latin America saw the fastest growth - 6% - in this category, reflecting the region's rapidly aging population. Although the proportion of Latin America's population over the age of 65 is still smaller than in North America and Europe, the 65-plus age group grew faster there than in any other region of the world.

Need for Convenience Drives Growth in Personal Care

Perrin said that consumers' desire for convenience, a key global trend found in other ACNielsen studies, was seen across a number of categories within Personal Care as well. For example, new Baby Care products that emphasize convenience performed well. "Disposable Diaper Pants are being used as an easier way to change a baby on the go, not just as a training tool," Perrin said. Consumer demand for that product drove a 5% increase in global sales value, with Europe leading the way with 11% growth in 2003. Also easing the diaper-changing process were Disposable Changing Mats (currently only reported in three countries - UK, USA and Ireland). This new category saw a sales value growth of 23% in the last year.

Regional Variations Were Apparent

The ACNielsen study found a wide variation in the growth of Personal Care products across major regions of the world. Developing economies in Latin America, parts of Asia, Eastern Europe, the Middle East and Africa experienced the fastest growth, with a number of categories expanding by double-digits, while the more developed economies reported slower growth (See Table 2).

"When looking at global trends it is important to consider what is new in one country may well have been available for years in another," Perrin said. "Disposable Diapers, for example, grew by 24% in Indonesia as the dimensions of the category expanded with the introduction of lower-priced products."

Another factor driving growth in the less-developed markets was the increased presence of international grocery chains and the greater availability of international brands and private label brands. "As new varieties and brands are constantly added to the Personal Care arena, the growth across these categories has accelerated," Perrin said.

In the more developed markets, growth was not as strong. In North America, for instance, six of the nine Personal Care product areas reviewed showed declines. The three that grew were Dental Care, Hair Care and Face Cleansing and Moisturizers. Increased sales of premium products - once sold only in specialty stores, salons and department stores and now available in traditional drug and grocery outlets - drove growth in the Hair and Face Care categories.

For certain categories (i.e. commodity categories such as Toilet Tissue and Disposable Diapers), value growth was negatively affected by the wider availability of more economical products in warehouse clubs, hard discounters and dollar stores as well as the increased share of less expensive private label brands.

Table 2: Regional Growth in Personal Care Categories

Number of Value Sales 2002 Value Sales 2003 Growth
                 countries     US$(mill)        US$(mill)    2002-2003
---------------- --------- ---------------- ---------------- ---------
Asia Pacific            16           24,245          24,594         1%
---------------- --------- ---------------- ---------------- ---------
Emerging Markets        14            5,803           6,582        13%
---------------- --------- ---------------- ---------------- ---------
Europe                  17           41,572          43,202         4%
---------------- --------- ---------------- ---------------- ---------
Latin America            7            9,394          10,337        10%
---------------- --------- ---------------- ---------------- ---------
North America            2           45,224          44,941        -1%
---------------- --------- ---------------- ---------------- ---------

Methodology

The study's findings are based on sales value of products determined by retail purchase data from 56 countries, spanning Asia Pacific, Emerging Markets, Europe, Latin America and North America (See Table 3) and accounting for more than 95% of the world's GDP (Gross Domestic Product) and more than 75% of the world's population. To get a complete view of the Personal Care market in these 56 countries, ACNielsen included trends from nearly 60 Personal Care categories and then grouped these categories into nine larger product areas for a higher-level analysis: Baby Care, Cosmetics, Hair Care, Personal Paper, Dental Care, Body Cleansing & Moisturizing, Face Cleansing & Moisturizing, Sun Care and Hair Removal.

Table 3: Countries Included

Asia         Europe          Emerging       Latin        North
 Pacific                      Markets        America      America
------------ --------------- -------------- ------------ -------------
Australia    Austria         Bulgaria       Argentina    Canada
Bangladesh   Belgium         Czech Republic Brazil       United States
China        Denmark         Egypt          Central
Hong Kong    Finland         Hungary         America(1)
India        France          Morocco        Chile
Indonesia    Germany         Poland         Colombia
Japan        Greece          Romania        Mexico
South Korea  Ireland         Russia         Puerto Rico
Malaysia     Italy           Saudi Arabia
New Zealand  Netherlands     Slovakia
Philippines  Norway          South Africa   (1) includes
Singapore    Portugal        Tunisia         Costa Rica,
Sri Lanka    Spain           Ukraine         El Salvador,
Taiwan       Sweden          United Arab     Guatemala,
Thailand     Switzerland      Emirates       Honduras,
Vietnam      Turkey                          Nicaragua,
             United Kingdom                  Panama
------------ --------------- --------------- ----------- -------------

About ACNielsen

ACNielsen, a VNU business, is the world's leading marketing information company. Offering services in more than 100 countries, the company provides measurement and analysis of marketplace dynamics and consumer attitudes and behavior. Clients rely on ACNielsen's market research, proprietary products, analytical tools and professional service to understand competitive performance, to uncover new opportunities and to raise the profitability of their marketing and sales campaigns.

ACNielsen is part of the VNU Marketing Information Group. VNU is a global information and media company with leading market positions and recognized brands in marketing information (ACNielsen), media measurement and information (Nielsen Media Research), business information (Billboard, The Hollywood Reporter, Computing, Intermediair) and directory publishing (Golden Pages). VNU is active in more than 100 countries, with headquarters in Haarlem, The Netherlands and New York, USA. The company employs 38,000 people. Total revenues amounted to EUR 3.9 billion in 2003. VNU is listed on the Euronext Amsterdam (ASE: VNU) stock exchange. For more information, please visit the VNU website at www.vnu.com.

Editor's Note: This press release and the complete findings of What's Hot Around the Globe: Insights on Growth in Personal Care are available at http://www.acnielsen.com/news/american/us/2004/20040622.htm.