Chains widen lead for share of $2 billion skin care market

Chain Drug Review, Jan 27, 1992

CDR Roundup--Drug chains widened their lead in the competition for a piece of the almost $2 billion in skin care products sales during 1991. Yet, despite such gains, skin care business was moderate: except for sunscreens, skin care subcategories registered very little growth, no growth or declines.

But there is still optimism from both retail and supplier corners. According to the National Association of Chain Drug Stores' Executive Category Review, skin care will continue to be competitive with more new products and substantial advertising to back them.

St. Ives Laboratories Inc. marketing director Stu Fine says that the economy has forced consumers to look for products offering good value. As a result, the company's lotions have been selling very well, and it is planning to release four skin care products during the first quarter of 1992.

The front-runner of skin care sub-categories is face creams and lotions, which tallied $677 million in 1991, up 3.9% compared with the year before.

Competition within the segment is heated, as manufacturers up the ante with product improvements. According to Nicholas Hall & Co., mass market moisturizers are led by Procter & Gamble Co., with its Oil of Olay, Noxzema and Clarion brands; Revlon Inc.'s Almay, Clean & Clear and Moon Drops; Chesebrough-Ponds' Pond's; Neutrogena Corp.'s Neutrogena; and Beiersdorf Inc.'s Nivea.

The biggest shares went to drug chains, which captured some 44% of the skin care business. Discounters and deep discounters followed--with 15% and 13%, respectively. The remaining trade classes had shares of 10% or less.

The second-largest subcategory, hand and body lotions, remained the same for the year: its volume held at $638 million. Drug chains, when combined with deep discounters (which weren't broken out in last year's data), account for 46% of the business, 10 points better than during the previous year.

The lack of sales movement is mostly attributable to the rise of condition-specific products, but that is not to say that manufacturers are not trying to revive the segment. Andrew Jergens Co. relaunched its Jergens line with new technology which helps the skin heal from the inside out. Also, Chesebrough-Pond's has added products to its Vaseline Intensive Care line to broaden its appeal.

Both of these two areas already mentioned are expected to expand. "Brands will vie for niche positioning on the trends toward older consumers who need therapeutic, more serious moisturizers," says NACDS.

The real mover in the skin preparations, however, was sunscreens, which has benefited from a health-conscious public way of overexposure to the sun. The segment accounted for nearly $230 million in sales during the year. With a dollar volume increase of 13.4%, it was by far skin care's biggest gainer.

Marketers are doing a variety of things to promote the category. For example, Chesebrouhg-Pond's, the maker of Vaseline SunCare products, is helping educate both consumers and the industry by supporting The Skin Cancer Foundation's Sun & Skin News, which seeks to spread the word about skin cancer.

Much of the growth can be attributed to hot competition, as numerous suppliers seek to improve their business with new products for specific conditions and new applications to target such groups as the elderly or sports enthusiasts.

Schering-Plough Corp. is the dominant marketer in the sports segment, producing such brands as Shade, Nosekote and Face. However, it is probably best known for its Coppertone line, which has introduced several products and extensions recently. More products will be added to its Coppertone Sports active lifestyle line, which will include more SPF variations and a sunless tanning lotion.

Another company giving retailers and consumers more choices is Sun Pharmaceuticals Inc. This company has expanded its sunblock and tanning lines; it has also added oils and gels to its Banana Boat line.

Chain drug stores widened their lead in this segment again this year, accounting for 39% of subcategory sales. They were followed by combos, discounters and deep discounters--with 15%, 14% and 13% of the market, respectively. Combined with deep discounters, drug chains boosted their share 7 percentage points versus the year before. All other outlets, with the exception of discounters (whose share was unchanged), had declines.

Suntan products, not surprisingly, continued to drop in deference to the rising popularity of sun-screens, because the same factors that have fueled the rise of protective creams and lotions have eroded sales of suntan products. Sales totaled $153 million in 1991, 26.4% less than those of the year before.

About the only good news in this segment is that chain drug stores led other outlets, with a 37% share of sales. During 1991 chains and deep discounters garnered more business in the category--increasing their combined share by 11 percentage points at the expense of the other outlets. The next nearest figure (16%) was held by discounters, while combos posted 15%.