Hair care heats up at the high end

Drug Store News, Sept 8, 1997

Shower stalls in American homes throughout the country have become so crowded with different types of shampoos, conditioners and other hair treatments that you almost need a planogram to help organize the selection.

Clearly the specialty segment -- led by Alberto-Culver's powerful brand line-up and bulky advertising budget (well over $20 million for 1997) is driving the shampoo/conditioner category across all major channels. In fact, based on IRI InfoScan data, specialty shampoo and conditioner products, developed to solve specific problems while still offering "beauty" as the final result, are the only segment that grew in dollars and units during the 52-week span through September 30, 1997, Alberto-Culver's fiscal year-end.

"The specialty segment is the only place consumers can go to find a product specially designed to solve their specific hair problems," says Cecil Hinkhouse, Alberto-Culver's Director of Marketing, Consumer Products Division. As the population continues to age, there's a greater need for products that cater to damaged hair. Problem hair is very common hair -- two out of three women feel they have some type of problem with their hair. It may be splitting, breaking, dryness, thinning, unmanageability."

The specialty segment may also be the only place where consumers can find any "new news" in the shampoo/conditioner category these days. This year, Alberto-Culver alone launched no less than six new major items in the specialty segment, including two under the popular VO5 nameplate (VO5 Hot Creme and VO5 Hot Oil Shower Works), and four breakthrough products under the new Cortexx banner two conditioners and two shampoos). At the same time, the company reformulated and repackaged its St. Ives Swiss Formula Hair Repair line. The "re-staged" St. Ives line features an improved formula with the brand's exclusive Pantologen 2 complex and bolder, updated graphics, With this brand portfolio. Alberto-Culver is a category, leader. and has the largest advertising share of voice in the specialty segment.

Cortexx, which got off to a fast start in the nation's major drug chains. is the first product of its type to use gelatin in its formula -- the same ingredient women have used for years to strengthen their finger nails. "Cortexx actually strengthens the hair and reduces breaking and splitting by as much as 60%," explains Brand Manager Chris White.

The premium price points ($3 and up) and high margin potential of the specialty segment -- the second most profitable shampoo/conditioner segment in drug stores after therapeutic, which consists primarily of dandruff-related products -- provide an important opportunity and point-of-difference for the drug channel. "Specialty is really a great story. for the drug channel." stresses Hinkhouse. "and variety, and brand exposure are the keys. Consumers go to drug stores for these types of premium items because they know the mass merchandiser is not going to be as deep at the high end. We are expanding the segment with significant new, products that is will allow the drug, retailer to offer a greater variety and that will generate the `new news' excitement to help expand the customer base. Go with the best sellers -- the brands that are supporting the segment and have a loyal consumer following, because they innovate, rather than copy" The VO5 brand name has a 97% household awareness, and supports the specialty segment with $10 million in TV advertising. The company has also allocated about $10 million to promote the Cortexx label alone this year.

Many retailers are still dispersing their specialty products throughout the shampoo/conditioner planogram, typically matching up by brand, rather than by need. says Bob Howland, Alberto-Culver's Manager of Sales Planning. "We advocate grouping the like-products together as a segment. They are products that meet special consumer needs beyond general shampooing and conditioning, so they should not be confused with conventional shampoos or conditioners. They also carry a higher price point, so they should not be grouped together with lower priced general-use products."