Modest growth in Latin America: sales of cosmetics and toiletries rose a bit last year as consumers' confidence began to pick up.
Hair Care is No. 1
Hair care was the largest segment of the market, valued at $4.3 billion in 2000. Latin Americans spend more on hair care than any other product. Consumers nave become increasingly interested in shampoos, conditioners and styling agents that protect and improve the condition of hair. Vitamin- and herbal-infused products are increasingly popular. Products that target specific hair textures are also gaining ground in Latin America, especially in Brazil, where offerings of ethnic products are increasingly important.
Colorants are another important niche in Latin America. Latin women enjoy experimenting with new colors, either subtly enhancing their natural color or dramatically altering hairstyle. As a rule, women in their late teens and early twenties are the most likely to seek radical changes. The influx of gentler hair colorants and the expansion of color ranges through 2000 has encouraged Latinas to express themselves through their hairstyles.
Brazil's Ethnic Market
Although Brazil boasts the second-largest black population in the world after Nigeria, it wasn't until the mid-1990s that local companies began to target the Afro-Brazilian market. Until recently, most ethnic products were imported, primarily from the U.S. Local products were generally perceived to be of poorer quality among Brazilians.
The ethnic market in Brazil, however, goes beyond the Afro-Brazilian market. Brazil is well known for its diverse racial mix of whites, blacks and indigenous peoples. While perms and relaxants are important segments of the ethnic hair care market in Brazil, shampoos, conditioners and treatments are growing in importance, as these products are formulated to reduce breakage after chemical treatment or to make hair more manageable. As Brazilians increasingly place equal importance on the health and style of their hair, demand for treatments and conditioners is likely to grow. According to industry sources, use of deep conditioning treatments has spread throughout the Brazilian population as a whole, especially since long, straight hairstyles are currently in vogue.
Among the top local hair care manufacturers in the ethnic market are: Phioteraphia Biofitogenia Laboratorial Biota Ltda., Industria Brasileira de Cosmeticos Ltda., Industria Brasileira de Cosmeticos Ltda., Nazca Cosmeticos, Industria Comercio Ltda and SNC Industria de Cosmeticos Ltda. The recent surge in Brazilian-made products pushed multinationals such as Wella, L'Oreal and IMS Cosmetics Ltd. to a secondary position.
Strong Fragrance Sales
Fragrance sales remained strong in 2000. In fact, despite Latin America's economic woes, fragrance sales rose 8%. Perfumes and fragrances represent aspirational purchases for many consumers because international premium brands are associated with luxury and social status. Consequently, duty-free and gray market sales constrain the retail market's value. Low-priced knock-offs and mass market me-too products have also proliferated in Latin America.
Skin Care Advances
Skin care registered a modest growth of 5% in 2000, with facial products providing much of the segment's dynamism. Rejuvenating ingredients such as alpha hydroxy acids, fruit and herbal extracts, vitamins and sunscreens transformed facial care formulations. While sales of anti-aging products were generally restricted to middle- and upper-income women, mass market manufacturers began to incorporate these technological advances into their product lines as well. Avon, Unilever, Beiersdorf and L'Oreal led the Latin American skin care segment, but Brazil's Natura made gains as the region's fifth largest manufacturer.
Better Oral Hygiene
Oral hygiene ranked second in Latin America's cosmetics and toiletries market. The bulk of sales in 2000 was attributed to toothpaste. According to manufacturers such as Colgate-Palmolive and. Unilever, Latin Americans rank the prevention of cavities and bad breath as top priorities and therefore focus on selecting an effective toothpaste, but often neglect to change toothbrushes frequently enough. Manufacturers have embarked on educational programs with dental clinics and schools to educate consumers about the importance of keeping toothbrushes in good shape.
Color Cosmetics Evolve
Color cosmetics sales grew 7% in 2000 to reach $2.1 billion. Demand for cosmetics remained strong in Latin America, driven primarily by the importance that women, especially those working outside of the home, place on their personal appearance. The majority of Latinas prefer to present a made-up face in public, making products such as lipstick, eyeliner and mascara daily necessities. International brands dominated Latin America's cosmetics segment. Avon and L'Oreal were particularly aggressive in defending their Latin American positions. Avon bolstered its strong direct sales force with retail shops, while L'Oreal acquired local brands through its buyouts of Laboratorios Ylang in Argentina and Colorama in Brazil.
Latin American women continued to push the envelope in terms of the sophistication and performance they demanded from color cosmetics. Like their counterparts worldwide, Latinas increasingly sought out products that offered not only color, but skin-enhancing ingredients such as moisturizers, vitamins, antioxidants and sunscreens. Long-wearing or no-smudge formulations, especially in lip and eye products, also gained in popularity. Latin American women also demonstrated an interest in product packaging in addition to the product inside. Mass manufacturers took their packaging cues from premium international brands such as Chanel, Christian Dior and Givenchy. Multinationals, including L'Oreal, Revlon and Avon, began to update their packaging to be sleeker and more elegant. Meanwhile local firms such as Brazil's Natura and O Boticario also revamped their designs.
Industry sources report that although natural color palettes (reds for lips and browns for eyes) are still classic looks, Latinas began experimenting with bolder colors in the late 1990s, a trend that carried through into 2000. The increased availability of more adventurous shades, such as metallics and violets, inspired Latin American women to present a more glamorous face to the world in 2000.
Ethnic products have also proved to be an emerging niche in color cosmetics. Given the racial diversity in Latin America, women have long struggled to find products that complement their skin tones, especially among lines of imported cosmetics. The most notable initiatives, therefore, are undertaken by domestic producers, such as O Boticario's Naomi line for darker-skinned Afro-Brazilians and Camile for lighter-skinned individuals of mixed African and European descent.
Showers vs. Baths
Sales of bath and shower products were also sensitive to fluctuations in income and consumer confidence. Sales increased 4% in 2000, primarily due to consumers trading up to more sophisticated products. Bar soaps remained the leading format for bath and shower because of their low costs. To stimulate demand for this mature segment, manufacturers introduced formulas containing skin conditioners and moisturizers. In contrast, body wash/shower gel and liquid soap remained an untapped segment in 2000, largely due to the fact that such products are relatively new to Latin American consumers. Given that the majority of Latin American households have showers rather than bathtubs, the leading bar soap producers launched brand extensions of body washes, shower gels and liquid soaps to establish themselves in these niches by 2000.
Deodorants, another relatively mature segment, registered positive gains of 6% in 2000. Deodorant use in Latin America tends to be well established across the region, especially in tropical regions. With the wide range of presentations available, virtually all income groups can afford deodorants; scented products may even substitute for perfume or cologne among cash-strapped consumers.
Format preferences varied from country to country, as biases were based on control of application, price and the need to touch the underarm area during application. Roll-ons (favored by Mexicans, Colombians and Venezuelans) were the leading format in Latin America in 2000, followed by sprays, the top choice among Argentine consumers. Pump deodorants continued to dominate Brazil's deodorant sales because of their relatively low prices compared to other formats. Sticks and creams captured about one-quarter of deodorant sales, although sticks were the preferred form among Chilean consumers.
A Boost from Shaving Systems
Men's grooming product sales grew 8% in 2000, or 1.5 times the overall cosmetics and toiletries market in Latin America. While mustaches and beards are still popular in some circles, the majority of Latin men favor a clean-shaven look, especially those in a corporate environment.
Razors and blades therefore commanded the bulk of sales for the region, with all other products accounting for less than 20% of sales. Shaving systems propelled the men's grooming segment, and although the Gillette brand is virtually synonymous with razors in Latin America, Bic and Pfizer (through its Schick brand) both made inroads into the men's grooming market in 2000. High profile launches of Gillette's Mach 3 and to a lesser extent Schick's Tracer, Fx Diamond and Extreme III brands spurred the development of premium razors, while Bic, Gillette's Prestobarba and private label disposables catered to the economy niche.
Sales of sun care products under-performed in Latin America compared to the cosmetics and toiletries market as a whole. Sun protection products made up the bulk of the segment's sales. According to sources, sun protection products are gaining a significant consumer base among well-educated young parents--these individuals are likely to slather high protection, factor sunscreens on their children before heading outdoors or to the beach.
These mothers are also more likely to fight the sun's aging rays by wearing sunscreen underneath moisturizer or makeup. But until a wider population perceives a need for sun protection, demand is likely to remain weak compared to other geographic markets, according to industry professionals.
Modest Baby Care Sales
Baby care products, considered luxuries by most Latin American consumers, also faced challenges in 2000. Baby toiletries and baby hair care accounted for more than 70% of sales, as baby skin care and sun care products could be readily substituted with adult formulations. Gentle shampoos, colognes, soaps and liquid baths were the leading products in this segment. According to industry sources, demand for baby care products is likely to shadow the expansion of other related products, such as disposable diapers and baby wipes. As parents become more accustomed to purchasing these types of disposable products on a regular basis, they are more likely to perceive value in other baby-specific toiletries.
Sales of Cosmetics and Toiletries by Country 1996-2000 $ million, current rsp 1996 1997 1998 1999 2000 Brazil 8,969.5 9,169.6 9,130.0 6,888.3 7,576.6 Mexico 2,660.9 2,986.5 3,129.6 3,315.2 3,539.8 Argentina 2,317.6 2,417.0 2,524.3 2,572.2 2,587.0 Colombia 849.6 880.7 904.9 926.2 955.1 Chile 746.2 852.3 904.1 881.1 841.0 Venezuela 661.6 709.8 736.1 765.6 791.8 Other 1,961.0 2,078.0 2,090.1 2,096.6 2,133.0 Total: 18,166.4 19,093.9 19,419.1 17,445.2 18,424.3 Source: Euromonitor Sales of Cosmetics and Toiletries by Sector 1996-2000 $ million, current rsp 1996 1997 1998 Hair care 4,405.7 4,689.5 4,772.1 Fragrances 2,726.6 2,763.2 2,782.2 Oral hygiene 2,336.9 2,485.6 2,530.7 Skin care 2,098.6 2,219.6 2,213.3 Color cosmetics 1,824.1 2,000.6 2,169.1 Bath/shower 1,778.5 1,831.0 1,823.4 Deodorants 1,448.7 1,504.1 1,522.2 Men's grooming 976.5 986.4 996.8 Baby care 361.5 389.1 380.8 Sun care 209.5 224.9 228.6 Total: 18,166.6 19,093.9 19,419.2 1996- 2000 1999 2000 CAGR Hair care 4,146.5 4,391.5 -0.1 Fragrances 2,524.2 2,726.2 -- Oral hygiene 2,272.6 2,324.7 -0.1 Skin care 2,090.3 2,190.1 1.1 Color cosmetics 1,943.5 2,079.2 3.3 Bath/shower 1,542.2 1,599.6 -2.6 Deodorants 1,382.5 1,464.4 0.3 Men's grooming 1,009.6 1,094.7 2.9 Baby care 330.5 341.3 -1.4 Sun care 203.2 212.7 0.4 Total: 17,445.1 18,424.4 0.4 Note: -- Indicates non-existent or negligible growth. Source: Euromonitor
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|Publication:||Household & Personal Products Industry|
|Date:||Nov 1, 2001|
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