HBA sales increase sans niche support

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Beauty products created for ethnic hair and complexions are showing a healthy growth pattern in spite of a shortage of marketing support, according to a new research report.

The study, released by market research publisher Kalorama Information, argues the demographic growth of African-American, Asian-American and U.S. Hispanic populations and their higher-than-average usage of grooming products bode well for the segment.

But it also warns that trends, particularly hairstyling fashions among African-American consumers, carry the most weight in the end.

LOW AD SPENDING

The study, based on trade data, sales figures and other observations, estimates ad spending for ethnic haircare products at $16 million, with another $6 million for make-up brands and $4 million for skincare. The study blames the low spending on industry consolidation and a shortage of new product introductions.

The study paints a picture of a healthy, but unpredictable market, heavily influenced by fashion. The market has grown at a compound annual growth rate of 2.2% in the period between 1995 and 1999 to $1.6 billion in 1999. The study projects the market will grow to $1.8 billion by 2004, according to Kalorama.

The demographic trends look promising, with all ethnic groups expected to grow at a much faster rate then whites, according to the study. It cites U.S. Census Bureau estimates showing the African-American population will grow by 23.9% from 1990 to 2005, Hispanics will grow by 58.3% and Asian-Americans will nearly double in that time frame.

ACQUISITIONS BEGIN

In the wake of purchases of two of the top ethnic health & beauty aids companies during the last month, mainstream beauty marketers seem to agree. On Feb. 28, Cosmair, the U.S. parent of L'Oreal, bought Carson Products Co., marketer of brands including Dark & Lovely and Ultra Sheen haircare and cosmetics. Two weeks later, on March 13, Alberto-Culver Co. announced it would buy Pro-Line Corp., a marketer of African-American haircare brands including Soft & Beautiful and Just for Me.

But the study warns that the market also reacts to changing tastes among consumers. For example, it noted that haircare sales, which make up 75% of the ethnic market, went nearly flat in 1997 due to a trend among African-American women toward short, natural hairstyles which depressed sales of curling products.

"The ethnic HBC [health and beauty care] market has a will of its own," said the study.

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