By Jill Rivkin

In the bath and body segment, some industry analysts, reports and data indicate that brand loyalty has been washed out as tough economic times and tightened purse strings create a boon for private label. Brand owners best take note as private label shows no signs of relenting, creating true competitive pressure and capturing consumers with strong value propositions that also deliver on performance claims.

According to Chicago’s Euromonitor, private label held more than 6 percent value share of bath and shower products in 2008, up 1 percent from 2007. “The relatively low brand loyalty shown by consumers in these products has enabled private labels to increase sales,” according to a report from the market research firm, which points to sizeable drug chains launching and promoting successful private label programs in this arena. Also, because of private label pressure, Euromonitor expects unit prices of branded bath and shower products to decline during the next four years.

Body Basics

Anti-aging products “will be the most dynamic in value terms between 2008 and 2013, with anticipated growth of 17 percent in constant value terms,” according to Euromonitor, forecasting approximately $2.9 billion in sales at constant 2008 prices. When it comes to anti-aging products, the baby boomer demographic, in particular, has shown a willingness to spend hard-earned dollars and experiment with new products in an effort to fight visible signs of aging.

“This generation of seniors is determined to look and feel young for as long as they can. They are turning to skin care products as well as cosmetic surgery procedures, such as Botox, to maintain their looks,” Euromonitor reports, pointing to products considered “cosmeceuticals” because of the presence of active ingredients, as well as a new niche of hand and neck products.

And because baby boomers have been willing to fight aging by buying a host of products, Natasha Lebel, vice president of innovation and marketing at KDC's (Knowlton Development Corp.) Centre for Innovation and Business Development, Toronto, says the assortment has gotten too broad in anti-aging, as well as bath and body. “I feel the same way about bath and body care as I do about anti-aging — there are too many products out there,” she says.

“A recession will rationalize and that’s not a bad thing,” she adds. “If there has been over-investment in line extension or new products, there needs to be re-alignment with the changing values of consumers. It will happen in the next year or so, and we’ll emerge with a new mix of products that are more innovative and exciting. Recession certainly isn’t great, but it’s going to make room for some new brands and new directions.”

Performance and Pampering In bath and shower products, consumers also have indicated a willingness to spend just a little bit more as they move away from bar soaps into body wash and liquid soap. “Americans are continuing to migrate from bar soap to liquid soap and body wash, despite higher prices,” Euromonitor reports. “Liquid soap and body wash is considered to be both more convenient and to offer more benefits than bar soap.”

Liquid products also provide more options for at-home luxury – enhanced lotions and washes on puffs and cloths, bubble bath and oils are just a few.

“A major trend overall is toward stress relief and personal pampering on a budget,” says Sue Hunt, president of Grand Brands LLC, Grand Rapids, Mich. “We are seeing a surge in bubble bath sales… The benefit, for example, of bubble bath is it is stress relief for less than 5 cents a capful.”

According to Chicago’s Information Resources Inc. (IRI), sales in the soap category – including the subcategories of hand sanitizer, bar and liquid soap and body wash – reached nearly $2 billion, with private label accounting for more than 9 percent, for the 52 weeks ending Sept. 6, 2009, and including sales in food, drug and mass merchandise, while excluding sales at Wal-Mart, club stores and c-stores. A closer look at the subcategories reinforces today’s trends: IRI reports liquid body wash up 5.2 percent and liquid hand soap up 3.9 percent.

However, when looking at the total soap category’s 5 percent sales growth and private label’s growth of more than double that at 11.1 percent, according to IRI, it’s important to break out the subcategories to see clearly that bar soaps plummeted while hand sanitizers skyrocketed.

Soap vs. Sanitizer

According to Euromonitor, there are a number of factors contributing to the decline in bar soaps. For one, liquid soaps and body washes offer added-value skin benefits, often offering complex scents and skin care benefits that bar soap can’t deliver. Also, studies increasingly show that bar soaps are considered less hygienic than liquid soaps, and from an aesthetic position, liquid soap dispensers can be decorative elements in the home.

However, pushing the total category’s numbers right back up, hand sanitizers grew 16.8 percent overall to $117.4 million in sales, with private label accounting for 50 percent of the subcategory and reporting 32.4 percent growth, according to IRI.

“This fall, growth in bath and body was in anti-bacterial products,” KDC’s Lebel says. “Hand sanitizer gel is one driver, but we have customers that have a variety of products that have anti-bacterial claims on them, such as hand creams and lotions.”

Hunt also points to hand sanitizer impacting the segment significantly. “Another trend is the emergence of hand sanitizer in the bath area as part of the morning routine and during any visit to the bathroom,” she says. “Hand sanitizer is a great defense against the spread of H1N1.”

Effective Formulations

In both skin care and bath and body care, consumers have shown an interest in products that deliver more than one benefit, whether it’s smooth and moisturized skin, filling lines and brightening skin or simply cleaning and smelling great. The “convenience factor” applies to formulations of products, says Kelly McIntosh, vice president of sales and marketing at Brampton, Ontario-based Body Care Innovations. McIntosh points to double or triple applications such as shampoo and body wash two-in-one combination products. And not only is this type of product convenient for use, but it helps consumers “stretch their dollars and save money,” she adds.

“[The biggest trends] are body products with benefits – extended moisturizing, hydration, residual shimmer on the body,” says Jim Berkrot, vice president of sales and marketing at San-Mar Laboratories Inc., Elmsford, N.Y. “The consumer is looking for multi-functional products with value.”

As for specific ingredients in demand today, McIntosh says gentle ingredients such as chamomile and lavender are popular, and “what is old is new again with a twist of mint and other extracts for skin effects.” She also says fragrance profiles with calming attributes are appropriate for today’s stressed-out lifestyles.

In recent years, product formulations and scents have extended to help brand owners and retailers reach a newer audience as well – men. While “the woman of the house” still is the primary shopper, both she and the “man of the house” have indicated a growing interest in skin care and bath and body products.

And while consumers often seek products that maximize function and usage, many are looking to minimize product ingredients. “Consumers are more aware of ingredients that they don’t want in their products,” says Duncan Coopland, vice president of sales and business development at KDC.

Lebel adds, “Requests now are often about formulating ‘without,’” she says. “Consumers are looking at the ingredients and seeing some things they don’t like relative to old or new scientific data, and they’re looking for products that don’t contain those ingredients. Two years ago, everything would have been about added ingredients, now it’s the opposite.”