Men's Grooming - Australia

Men's Grooming - Australia

HEADLINES

Men’s grooming rises by 5% in current value terms to reach A$484 million in 2009

Female consumers are the main purchasers of men’s toiletries

Men’s razors and blades attains the biggest increase at 6% in current value terms

Unit prices remain relatively stable in men’s grooming in 2009

Procter & Gamble Australia leads in men’s grooming with a 39% value share in 2009

Value sales in men’s grooming are expected to increase by a CAGR of 1% in constant terms during the forecast period to reach A$513 million in 2014

TRENDS

During 2009, Australian women remained the main purchasers of men’s grooming products for their husbands or male partners. While the “metrosexual” trend had been on the rise in previous years, Australian men were not as engaged in personal grooming and other beauty regimes in 2009. The waning interest among male consumers is likely to be partly due to preoccupations with financial concerns arising from the economic downturn.

As a result of the drop in interest by male consumers, especially in men’s toiletries, the growth attained by these product categories during 2009 was not as robust as in preceding years. With men’s toiletries growing at approximately half the value and volume growth rate as 2008, men’s grooming only posted a 5% current value growth compared with 8% in the preceding year.

Despite the lower increases attained in men’s toiletries, men’s skin care continued to perform the strongest with a volume growth of 8% and value growth of 9% in current terms. Female consumers also tend to purchase these products alongside their grocery shopping at hypermarkets/supermarkets, which had resulted in larger increases in mass brands rather than premium products.

The ageing population in Australia has also provided the opportunity for manufacturers to address consumers’ interest in anti-ageing products. Men’s skin care has become more developed along the lines of age-segmentation with new products in mass and premium brands targeting older consumers who are concerned with ageing effects such as wrinkles, fine lines and sagging skin. Marketing targeted at younger males is typically focused on refreshing and revitalising tired-looking skin, rather than in the prevention of ageing.

Men’s razors and blades continued to track similar growth rates with a 9% current value increase in 2009. Male consumers have been upgrading to more advanced razors and blades that are slated to provide better shaving performances or which have additional features such as edging blades or trimmers for grooming beards or sideburns. Consequently, systems of men’s razors and blades are growing in value share compared to disposables due to the more sophisticated offerings in the former.

The trend towards using more advanced razors and blades had also sustained value and volume growth in men’s pre-shave with consumers looking to pre-shave products to enhance the overall shaving experience as well as to facilitate the razor’s performance. In contrast, men’s post-shave attained a slight increase at 2% in current value terms as these products are not regarded as critical in enabling the shaving performance.

COMPETITIVE LANDSCAPE

Procter & Gamble Australia retained the lead in men’s grooming with a 39% value share in 2009. The company’s success is driven by the Gillette brands of men’s razors and blades which held nearly 80% of total value sales. Gillette razors and blades are widely available in systems and disposables as well as in varying levels of sophistication. In men’s pre-shave, Procter & Gamble Australia also dominates with a 53% value share.

Following in the lead of Procter & Gamble Australia, Unilever Australia trails behind with a 26% value share through the Lynx and Rexona brands in men’s toiletries. During 2009, Unilever Australia launched the Rexona Clinical Protection for Men, which is slated to provide clinical strength protection against perspiration wetness and odour of up to 48 hours.

Mass brands dominate the value sales of men’s grooming as a result of the strong sales of Procter & Gamble Australia’s performance in men’s shaving. Premium brands in men’s grooming are typically focused on men’s skin care and men’s post-shave of which the latter are usually marketed alongside fragrances. Private label remained negligible in men’s grooming with value sales of less than 1% attained during 2009.

The Fa Men brand by Schwarzkopf & Henkel recorded the steepest decline as a result of discontinuing the line of personal care products, including deodorants. The exit of the Fa brand in Australia occurred during the initial half of 2009 and resulted in a low value share of under 1% for the company in men’s grooming sales.

Naturally based products are being introduced in men’s grooming, such as A’kin for Men by The Purist Company. Natural products and the exclusion of chemicals or artificial ingredients have been sought out by women in personal and beauty care products. The trend of natural products in men’s grooming is more of a reflection of female consumers, who are the main purchasers of male grooming products, seeking out the benefits of natural products for their male partners’ or spouses usage.

PROSPECTS

Sales of men’s grooming are expected to rise by a CAGR of 1% in constant value terms over the forecast period, with a strong contribution by men’s razors and blades, up by a constant value CAGR of 1%. With an ageing demographic, male consumers are likely to be more concerned about maintaining youthful appearances through the use of men’s skin care products, especially those with anti-ageing properties.

Younger consumers are also increasingly socialised into using skin care products, partly attributed to the successful marketing campaigns of the Oxy brand by Mentholatum Australasia in acne treatments. These consumers are more likely to continue using male skin care products as they reach adulthood, as using specialised products become more of a norm in everyday grooming routines.

The success of mass brands during 2009 as a result of consumers trading down to cheaper brands is likely to extend over the forecast period. While the economic climate is expected to improve over the forecast period, finances are likely to remain tight due to rising interest rates impacting on mortgage payments. As a result, unit prices are predicted to decline slightly due to the preference towards mass over premium brands, and further price discounting by retailers and manufacturers.

Male consumers are typically creatures of habit in terms of purchasing grooming products. While new product launches in men’s grooming are likely to draw the attention of female purchasers, establishing strong brand identity through the use of brand ambassadors and media campaigns will be critical in creating loyalty among male consumers. Consequently, it will remain difficult for niche brands or smaller manufacturers to create strong value growth in men’s grooming sales that are dominated by multinational players such as Procter & Gamble Australia and Unilever Australia.

During 2009, Unilever indicated its intention to acquire the personal care division of Sara Lee Corp which includes Brylcreem in men’s hair care and the bath and shower brand of Radox. The acquisition deal, which is expected to be finalised in 2010, would provide Unilever Australia with the opportunity to gain some value share in men’s grooming.