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Ethnic hair firms confident: results in the category are a mixed bag. However, many firms are showing gains.

Ethnic hair firms confident

CDR Roundup - Although retail sales of ethnic hair care products, which account for most of the business in the ethnic health and beauty aids category, are flat, manufacturers are confident that the market will rebound soon.

Results within the category are currently a mixed bag, according to data compiled by New York research firm Towne-Oller & Associates. Such segments as hair relaxers, conditioners and coloring agents produced gains in the 3% to 7% range in 1990, while such items as wave products were up 10% over the 1989 level. However, other products (curl activators, comb-out/oil sheen and shampoos) are showing drops - some as much as 14%.

A.C. Nielsen Co. says that overall ethnic hair care is down. Dollar sales at drug stores during the first eight months of 1990 were $110.9 million, down slightly from $111.5 million during 1989. Unit sales showed a similar modest drop.

But many of the companies that make, distribute and sell the products report that they are showing gains over last year.

Doing well overall

"The products are doing well overall," says Geri Jones, director of the American Health and Beauty Aids Institute, a trade association representing black-owned ethnic H&BA manufacturers. "The focus is toward products that keep hair moist and healthy."

Jones also observes that relaxers and wrap lotions are showing some growth.

Roy Brannon, director of advertising for Pro-Line Corp., agrees with Jones' assertion that business is alright. "Business is doing well overall," he says, "although some segments are stagnating. It tends to be a cyclical thing because of changing hairstyles."

He notes that the current hairstyles affecting sales are the "wrap" for women and, although it was introduced a few years ago, the "fade" for men.

The wrap is characterized by short- or medium-length hair swept in a circular fashion around the head. It is similar to beehive styles of years ago. As a result, styling and wave products used in the wrap are showing sales gains of 6% and 10%, respectively, according to Towne-Oller.

Some attribute the flat sales for some products not only to hair trends, but to the economy as well. "The sluggish market is probably due to the recession," says David Footman, group marketing manager for Worlds of Curls Inc.

He believes that consumers cut back on purchases when money gets tight. Being more budget-conscious, they buy more economy-size products and look for two-for-one deals.

Despite this, Worlds of Curls is showing slight increases both in dollar and unit sales. The company's new Bodi hair care line which includes a shampoo, conditioner and finishing foam, has been doing well. In fact, Footman says, "It's coming along as expected."

But the Worlds of Curls executive admits that the company has been getting some confusing signals from consumers. As an example, he cites the fact that sales of oil sheen products, items that are appropriate with the currently popular relaxed hairstyles, have been down lately.

Small- and medium-size companies caught in a tough competitive climate are often the first to see a reduction in sales. One firm that is bucking that pattern is Scientific Research Products Inc.

Sam Lazar, its president, asserts, "The company is doing well. Distributors are reporting that things are off a bit, but we're not seeing it."

The company's styling gels and conditioners are among the items that continue to sell well. Lazar notes that styling aids in general are selling and that relaxers (the company has four) are still strong.

The mixed performance of ethnic items could scare off retailers, but that's not the case at Walgreen Co. The company recently contributed $50,000 to the United Negro College Fund in conjunction with AHBAI and was involved in a program that highlighted ethnic products during Black History Month, which ended February 28.

"We are very committed to and optimistic about the category," says a Walgreens spokeswoman. "We have developed deep relations with suppliers, and our customers have come to expect a wide selection in our stores."

Felicia McAfee, sales director at Pro-Line, agrees. "I think that in the ethnic category promotion is key," she says.

She believes that, because consumers are very brand-loyal and competition remains fierce, promotions will lead to growth. Pro-Line, she reports, will continue to work with its spokesman, National Basketball Association star Dominique Wilkins, to support its products with both print and television ads. A new effort will begin with the release of a greaseless comb-through pomade for men.

Although sales in ethnic hair care stagnated in 1990, the category's potential remains substantial.

Nearly one-quarter of the U.S. population is made up of black, Hispanic and Asian people. Currently numbering around 55 million, ethnic consumers are multiplying at a significantly faster rate than the rest of the population. Packaged Facts Inc., a New York research firm, says that the number of blacks in the country (currently 29 million) is expected to increase to 36 million by the year 2000.

In addition, the disposable income of ethnic consumers has risen from $140 billion in 1980 to $200 billion in 1990.

Table : Ethnic products - 1990(*)
                               change    Market
Category                     from 1989    share
Curl activators                  - 5%     24.6%
Hairdressings/conditioners       + 3%     19.7%
Hair relaxers                    + 3%     14.1%
Moisturizers                     -20%      8.3%
Comb-out/oil sheen               -14%      4.0%
Skin care products               + 2%      4.1%
Curl and wave kits               - 5%      5.5%
Shaving products                 + 4%      2.9%
Hairstyling products             + 6%      5.3%
Wave products                    +10%      4.3%
Hair color                       + 7%      2.2%
Shampoos                         -10%      1.7%
Liquid conditioners              + 4%      1.7%
Pressing products                - 7%      0.6%
Cosmetics                        -11%      0.8%
Total                            - 2%     100.0%

(*) Food, drug, discounters, and beauty and barber suppliers combined.

Source: Towne-Oller & Associates.

Table : Projected sales growth
            for ethnic products(*)
Category    1995   1994   1993   1992   1991   1990(**)
Hair care   $442   $429   $417   $405   $393   $372
Skin care   $ 91   $ 88   $ 84   $ 80   $ 76   $ 73
Cosmetics   $ 93   $ 87   $ 81   $ 76   $ 71   $ 65
Total       $626   $604   $582   $561   $540   $510

(*) In millions. (**) Known volume.

Source: Packaged Facts.

PHOTO : Ethnic hair care lines include a variety of sprays, relaxers, moisturizers, wave products.
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Title Annotation:market for ethnic hair products expected to rebound
Publication:Chain Drug Review
Date:Apr 8, 1991
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