Men's Grooming Products: a Global Analysis

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Men’s Grooming Products: A Global Analysis

November 2009

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This page intentionally left blank MEN’S GROOMING PRODUCTS: A GLOBAL ANALYSIS

NOVEMBER 2009

Men’s Grooming Products: A Global Analysis has been prepared by Packaged Facts. We serve consumer products companies and allied businesses in the United States and abroad with a complete line of research publications.

Packaged Facts market intelligence reports are specifically designed to aid the action- oriented executive by providing a thorough presentation of essential data and concise analysis.

Vice President of Publishing Don Montuori

Publisher Don Montuori

Author Timothy Dowd

Research Director David Sprinkle

Marketing Manager Jenn Tekin

Communications Associate Daniel Granderson

Publication Date November 2009

LA2293646 1-59814-297-6

This page intentionally left blank Men’s Grooming Products Table of Contents

Table of Contents Men's Grooming Products: A Global Analysis

Chapter 1: Executive Summary...... 1 Market Definition...... 1 Men’s Grooming Sales Data Provided in Two Modes...... 1 Worldwide, $61.3 Billion Spent on Grooming Products Used by Men in 2009 ...... 1 Sales of Male-Specific Grooming Products at $19.7 Billion...... 2 Men’s Grooming Demand Withstands Recession Fairly Well...... 2 Table 1-1: Worldwide Retail Dollar Sales of All Grooming Products Consumed by Men, and of Male-Specific Grooming Products, 2004-2009 (In Billions)...... 3 Global Men’s Grooming Market to Boost to $84.9 Billion by 2014 ...... 3 Table 1-2: Projected Worldwide Retail Dollar Sales of All Grooming Products Consumed by Men, by Country, 2009-2014 (In Billions) ...... 4 Male-Specific Products to Climb to $28.0 Billion...... 4 Table 1-3: Projected Worldwide Retail Dollar Sales of Male-Specific Grooming Products, by Country, 2009-2014 (In Billions)...... 5 No Surprise – Shaving Items Dominate ...... 5 Table 1-4: Share of Worldwide Retail Dollar Sales of All Grooming Products Consumed by Men, by Product Category, 2004-2009 (In Billions)...... 6 U.S., Japan, France, Germany Lead Sales of All Grooming Products Consumed by Men...... 6 Table 1-5: Worldwide Retail Dollar Sales of All Grooming Products Consumed by Men, by Country, 2004-2009 (In Billions)...... 7 Men Hold Up Over Half the Sky ...... 7 Table 1-6: World Population, by Age and Gender, 2009...... 8 Billions of Men Striving to Be Middle-Class ...... 8 The Male Ego: It Took 40 Years, But Now We Have the Marketing Keys...... 10 Convenience and Functionality ...... 10 Humor: Make It Crude, Even Dirty, and You’ve Got a Classic Brand ...... 11 Sex ...... 11 Willingness to Spend on Branded Products ...... 12 Universal Positionings...... 12 Use of the Wife’s/Girlfriend’s Beauty Products ...... 13 Natural/Organic/Green/Fair Trade Concerns...... 13 Targeting Men of Developing Countries: The Plusses ...... 14 Technology – Internet, Mobile, Tagging – Empowers Third World...... 14 Machismo Eroded by Connectivity...... 15

November 2009 © Packaged Facts I Table of Contents Men’s Grooming Products

Chapter 1: Executive Summary [cont.]

Individuals and Families vs. Clans and Tribes ...... 15 Third World’s Doctors Drive Taxis in New York ...... 16 Natural HBC Market Poised for International Expansion...... 17 Key Mergers and Acquisitions...... 18 P&G, Uni, Beiersdorf, Avon Among Top Grooming Marketers in World...... 19 China’s Men Are Largest of World’s Top 10 Grooming Markets...... 21 Table 1-7: Numbers of All Males (Men and Boys) in Top 11 National Markets for Men's Grooming Products, as of July 2009 ...... 22

Chapter 2: The Worldwide Men’s Grooming Market ...... 23 Highlights...... 23 Introduction ...... 25 Market Definition ...... 25 Men’s Grooming Sales Data Provided in Two Modes...... 26 Glossary...... 26 ASEAN...... 26 Carbon Footprint...... 27 Cosmeceutical...... 27 Direct ...... 28 Fair Trade...... 28 Green...... 29 Grooming Products ...... 29 HBC ...... 29 Market versus Category versus Segment ...... 29 Mass Retail Channel(s)...... 29 NAFTA ...... 30 Natural vs. Organic ...... 30 Over the Counter (OTC)...... 31 Parapharmacies ...... 31 Prestige and Pop Prestige ...... 31 REACH ...... 32 SKU...... 32 Specialty ...... 32 Supermarket, Chain Drugstore, Mass Merchandiser ...... 33 Sustainable (also, Renewable) ...... 33 Methodology...... 34 Men’s Grooming Products...... 35 Five Categories ...... 35 Bath Products...... 35 Deodorant ...... 35 Haircare...... 36 Shampoo...... 36

II © Packaged Facts November 2009 Men’s Grooming Products Table of Contents

Chapter 2: The Worldwide Men’s Grooming Market [cont.]

Conditioner/Treatments...... 36 Styling Products...... 37 Haircolor...... 37 Other ...... 37 Shaving Products ...... 37 Shave Cream...... 37 Lotions/Balms...... 38 Disposable Razors/Shavers ...... 38 Manual Razors/Shavers ...... 38 Electric Razors/Shavers ...... 39 Other ...... 39 Skincare Products ...... 39 Market Size and Growth ...... 40 Worldwide, $61.3 Billion Spent on Grooming Products Used by Men in 2009 ...... 40 Sales of Male-Specific Grooming Products at $19.7 Billion...... 40 Men’s Grooming Demand Withstands Recession Fairly Well...... 41 Table 2-1: Worldwide Retail Dollar Sales of All Grooming Products Consumed by Men, and of Male-Specific Grooming Products, 2004-2009 (In Billions)...... 41 Male-Specific Products Account for a Third of Men’s Grooming Dollars ...... 41 No Surprise – Shaving Items Dominate ...... 42 Table 2-2: Share of Worldwide Retail Dollar Sales of All Grooming Products Consumed by Men, by Product Category, 2004-2009 (In Billions)...... 42 Mass Retail the Top Channel for Men’s Grooming Products...... 42 Table 2-3: Share of Worldwide Retail Dollar Sales of Men's Grooming Products, by Retail Channel, 2009 ...... 43 U.S., Japan, France, Germany Lead Sales of All Grooming Products Consumed by Men...... 43 Table 2-4: Worldwide Retail Dollar Sales of All Grooming Products Consumed by Men, by Country, 2004-2009 (In Billions)...... 44 Same Four Countries Lead Sales of Male-Specific Grooming Products...... 44 Table 2-5: Worldwide Retail Dollar Sales of Male-Specific Grooming Products, by Country, 2004-2009 (In Billions) ...... 45 Europe/U.K. Lead Sales by Region ...... 45 Table 2-6: Share of Worldwide Retail Dollar Sales of All Grooming Products Consumed by Men, and of Male-Specific Grooming Products, by Region, 2009 (In Billions)...... 46 Imports and Exports...... 47 Special Note on Foreign Trade Data ...... 47 Wild Fluctuations from Year to Year Are Normal ...... 47

November 2009 © Packaged Facts III Table of Contents Men’s Grooming Products

Chapter 2: The Worldwide Men’s Grooming Market [cont.]

Razor/Razor Blade Imports Climb to $368.2 Million in 2004-2008...... 47 Table 2-7: Value of U.S. Imports of Razors and Razor Blades, by Country Exporting, 2004-2008, and January 2009 Through June 2009 ...... 48 Razor/Razor Blade Exports Push to $368.7 Million...... 48 Table 2-8: Value of U.S. Exports of Razors and Razor Blades, by Country Importing, 2004-2008, and January Through June 2009 ...... 49 A Razor/Razor Blade Trade Surplus – Barely – in 2008 ...... 49 Table 2-9: Trade Balance for Value of U.S. Imports/Exports of Razors and Razor Blades, by Country, 2004-2008, and January Through June 2009 ...... 50 Imports of Toiletries Valued at $580.0 Million in 2008...... 50 Table 2-10: Value of U.S. Imports of Personal Care Preparations (Excluding Haircare and Skincare Products), by Country Exporting, 2004-2008, and January Through June 2009...... 51 Exports of Toiletries Valued at $926.4 Million in 2008 ...... 51 Table 2-11: Value of U.S. Exports of Personal Care Preparations (Excluding Haircare and Skincare Products), by Country Importing, 2004-2008, and January Through June 2009...... 52 Toiletries Trade: Surpluses for U.S., Across the Board...... 52 Table 2-12: Trade Balance for Value of U.S. Imports/Exports of Personal Care Preparations (Excluding Haircare and Skincare Products), by Country, 2004-2008, and January Through June 2009 ...... 53 Factors in Future Growth...... 54 Analysis Focuses on Cash, Class, Culture, and Contexts ...... 54 Men Hold Up Over Half the Sky...... 55 Table 2-13: World Population, by Age and Gender, 2009 ...... 55 World Economic Downturn of 2008 to Last Until…? Recovery to Start Where…? ...... 55 Billions of Men Striving to Be Middle-Class ...... 57 The Male Ego: It Took 40 Years, But Now We Have the Marketing Keys ...... 59 Convenience and Functionality...... 59 Humor: Make It Crude, Even Dirty, and You’ve Got a Classic Brand...... 60 Sex...... 61 Willingness to Spend on Branded Products...... 61 Universal Positionings ...... 61 Use of the Wife’s/Girlfriend’s Beauty Products...... 62 Natural/Organic/Green/Fair Trade Concerns ...... 62 What Comes After the Metrosexual? The übersexual! Retrosexual! Mr. Balance!...... 63 Mr. Balance in the Hip-Hop Sphere...... 64 Targeting Men of Developing Countries: The Plusses ...... 65 Technology – Internet, Mobile, Tagging – Empowers Third World ...... 65 Machismo Eroded by Connectivity ...... 66

IV © Packaged Facts November 2009 Men’s Grooming Products Table of Contents

Chapter 2: The Worldwide Men’s Grooming Market [cont.]

Individuals and Families vs. Clans and Tribes...... 66 Third World’s Doctors Drive Taxis in New York...... 66 Groups Favoring Use of Men’s Grooming Products Beyond the Basics...... 67 Natural HBC Market Poised for International Expansion ...... 68 Products Pass Easily from One Premium HBC Channel to Another...70 Men’s Makeup Will Become a Viable Category ...... 70 Skin Lighteners in Demand...... 72 Risk Factors ...... 72 Projected Sales ...... 74 Global Men’s Grooming Market to Boost to $84.9 Billion by 2014 ...... 74 Table 2-14: Projected Worldwide Retail Dollar Sales of All Grooming Products Consumed by Men, by Country, 2009-2014 (In Billions) ...... 74 Male-Specific Products to Climb to $28.0 Billion...... 75 Table 2-15: Projected Worldwide Retail Dollar Sales of Male-Specific Grooming Products, by Country, 2009-2014 (In Billions)...... 75

Chapter 3: The Top Ten Men’s Grooming Markets...... 77 Highlights ...... 77 The Global Overview ...... 79 Every Country Holds Potential for Men’s Grooming Products...... 79 U.S. Rules Dollar Share of All Grooming Items Used by Men, With 23% in 2009 ...... 79 Table 3-1: Per-Country Share of Worldwide Retail Dollar Sales of All Grooming Products Consumed by Men, 2004-2009 (In Billions)...... 80 U.S. Also Rules Male-Specific Arena, With a 28% Share...... 80 Table 3-2: Per-Country Share of Worldwide Retail Dollar Sales of Male-Specific Grooming Products, 2004-2009 (In Billions) ...... 81 Profiles of Top Men’s Grooming Countries Follow...... 81 No. 1: The United States...... 82 All Grooming Products Used by U.S. Men Valued at $14.1 Billion in 2009 ...... 82 U.S. Male-Specific Grooming Products Reach $5.6 Billion...... 82 Table 3-3: U.S. Retail Dollar Sales of All Grooming Products Consumed by Men, and of Male-Specific Grooming Products, 2004-2009 (In Billions) ...... 82 A Difficult Market for Men’s Grooming, U.S. Finally Opens Up ...... 83

November 2009 © Packaged Facts V Table of Contents Men’s Grooming Products

Chapter 3: The Top Ten Men’s Grooming Markets [cont.]

No. 2: Japan ...... 85 Japanese Men’s Grooming Market Reaches $6.3 Billion in 2009...... 85 Male-Specific Brands Break $3.0 Billion Mark...... 85 Table 3-4: Japan's Retail Dollar Sales of All Grooming Products Consumed by Men, and of Male-Specific Grooming Products, 2004-2009 (In Billions) ...... 86 Japanese Ingenuity, Feminization, Koizumi-ization Drive Sales...... 86 No. 3: France...... 89 All Grooming Items Used by French Men Valued at $4.6 Billion in 2009...... 89 French Male-Specific Grooming Market Reaches $1.6 Billion ...... 89 Table 3-5: France's Retail Dollar Sales of All Grooming Products Consumed by Men, and of Male-Specific Grooming Products, 2004-2009 (In Billions) ...... 90 France at World’s Heart of Men’s Fashion, Skincare Industries...... 90 No. 4: Germany...... 92 All Grooming Products Used by German Men Valued at $4.5 Billion in 2009...... 92 German Male-Specific Grooming Market Reaches $1.5 Billion...... 92 Table 3-6: Germany's Retail Dollar Sales of All Grooming Products Consumed by Men, and of Male-Specific Grooming Products, 2004-2009 (In Billions) ...... 92 Natural/Organic, Status Brands Drive Grooming Sales in Germany .. 93 No. 5: Brazil...... 95 Brazilian Men’s Grooming Market Reaches $4.4 Billion in 2009...... 95 Brazilian Male-Specific HBC in Push to $1.4 Billion...... 95 Table 3-7: Brazil's Retail Dollar Sales of All Grooming Products Consumed by Men, and of Male-Specific Grooming Products, 2004-2009 (In Billions) ...... 96 Brazil the Style-Setter, and Prime Source of Exotic Ingredients...... 96 No. 5: China [rank sic]...... 99 Chinese Men’s Grooming Market Also Hits $4.4 Billion in 2009 ...... 99 Male-Specific Products Approach $1.0 Billion Mark...... 99 Table 3-8: China's Retail Dollar Sales of All Grooming Products Consumed by Men, and of Male-Specific Grooming Products, 2004-2009 (In Billions) ...... 99 China’s Westernization, Respect for Upscale HBC...... 100 No. 6: The United Kingdom ...... 103 Grooming Products Used by Brits Valued at $4.3 Billion in 2009..... 103 British Male-Specific Grooming Market Reaches $1.5 Billion in 2009...... 103

VI © Packaged Facts November 2009 Men’s Grooming Products Table of Contents

Chapter 3: The Top Ten Men’s Grooming Markets [cont.]

Table 3-9: The United Kingdom's Retail Dollar Sales of All Grooming Products Consumed by Men, and of Male-Specific Grooming Products, 2004-2009 (In Billions)...... 104 Plenty of Room for British Men to Experiment with New HBC ...... 104 No. 7: Italy...... 106 Italian Men’s Grooming Market Reaches $3.6 Billion in 2009 ...... 106 Italian Male-Specific HBC in Climb to $1.0 Billion...... 106 Table 3-10: Italy's Retail Dollar Sales of All Grooming Products Consumed by Men, and of Male-Specific Grooming Products, 2004-2009 (In Billions).... 107 Growth Slows in Italy, But (Green) Potential Still Big...... 107 No. 8: Spain ...... 109 Spanish Men’s Grooming Market Touches $3.1 Billion in 2009...... 109 Spain’s Male-Specific HBC Business Expands to $700 Million ...... 109 Table 3-11: Spain's Retail Dollar Sales of All Grooming Products Consumed by Men, and of Male-Specific Grooming Products, 2004-2009 (In Billions).... 110 Spain Breaks Macho Mold ...... 110 No. 9: Russia ...... 112 Russian Men’s Grooming Market Reaches $2.9 Billion in 2009...... 112 Male-Specific HBC Grows to $645 Million ...... 112 Table 3-12: Russia's Retail Dollar Sales of All Grooming Products Consumed by Men, and of Male-Specific Grooming Products, 2004-2009 (In Billions).... 113 Rising Incomes, Luxe and Green Trends, Drive Men’s Grooming ....113 No. 10: India ...... 116 Indian Men’s Grooming Market Reaches $2.0 Billion in 2009...... 116 Male-Specific Grooming Items Reach $820 Million...... 116 Table 3-13: India's Retail Dollar Sales of All Grooming Products Consumed by Men, and of Male-Specific Grooming Products, 2004-2009 (In Billions).... 116 India a Youthful Nation, With Rising Middle Class ...... 117 The Rest of the World (ROW)...... 119 Men’s Grooming Sales in ROW Climb to $7.1 Billion in 2009 ...... 119 Male-Specific Grooming in ROW Reaches $976.0 Million ...... 119 Table 3-14: Rest of World's (ROW's) Retail Dollar Sales of All Grooming Products Consumed by Men, and of Male-Specific Grooming Products, 2004-2009 (In Billions)...... 119 ROW Hot Spots ...... 120

November 2009 © Packaged Facts VII Table of Contents Men’s Grooming Products

Chapter 4: Insights and Opportunities ...... 121 Highlights...... 121 Insights and Opportunities...... 122 How the Men’s Grooming Market Will Keep Rocking During Recession...... 122 Economic Power Already Shifting to Developing Countries...... 124 Recognize the Modernity of BRIC and Other Developing Nations.... 125 How to Impress a Male Consumer – Finally, We Know...... 126 Convenience/Multifunctionality...... 126 Broad Humor and Raunchy Sex...... 127 Culture-Specific Products and Packs...... 128 A Global Demand for Natural/Organic HBC ...... 128 Pass the Manscara, Joe! Makeup for Men Is Here...... 129 Male-Specific Haircare Products Will Be Next Big Trend ...... 129

Chapter 5: The Marketers ...... 131 Highlights...... 131 The Marketers ...... 133 Most Men’s Grooming Players Specialize in HBC...... 133 …But Diversified Marketers Dominate Rankings ...... 133 Direct Sellers ...... 134 Key Mergers and Acquisitions...... 134 Table of Marketers and Brands...... 136 Table 5-1: Selected Marketers of Men's Grooming Products, and Their Representative Brands, 2009...... 137-146 The Competitive Situation ...... 147 News Flash! Predatory West and Patiently Suffering Developing World to Trade Positions! ...... 147 P&G, Uni, Beiersdorf, Avon Among Top Grooming Marketers in World...... 148 Six Competitive Profiles Follow… ...... 150 Competitive Profile: Avon Products, Inc...... 151 Net Sales Leap to $10.7 Billion in 2008 ...... 151 Latin America Loves Avon ...... 152 Table 5-2: Share of Avon Products, Inc.'s Net Sales and Net Income, by Region, 2008...... 152 Outlook for 2009 Depends on Avon’s Holiday Season...... 152

VIII © Packaged Facts November 2009 Men’s Grooming Products Table of Contents

Chapter 5: The Marketers [cont.]

Knocking on Doors Around the World: We Sell Grooming Aids — Plus Jobs! ...... 153 Oh, Boy, It’s Fred, the Avon Man!...... 155 Competitive Profile: Beiersdorf AG...... 156 Sales at Record €6 Billion in 2008...... 156 Europe is Beiersdorf’s Stronghold...... 157 Outlook for 2009 Is Mixed ...... 157 Blue-Chip Nivea the World’s Best-Selling Men’s Skincare Brand.....157 Other Beiersdorf Brands Bolster Cachet of Nivea for Men ...... 159 New Factory in Shanghai to Make Nivea Mightier in Far East ...... 159 Competitive Profile: Kao Corporation...... 160 Net Sales of $13 Billion in Fiscal 2009 ...... 160 Kao Strongest at Home ...... 161 Kao Upscales Beauty/Grooming Business, Aims to Conquer Asia, Then World...... 161 Other Kao Products ...... 163 Competitive Profile: Lion Corporation...... 164 Net Sales of ¥338.2 Billion in 2008 ...... 164 Lion Most Active in Eight Countries, All in Far East...... 165 In Outlook for 2009, Lion Struggles ...... 165 Manufacturer/Marketer Emphasizes Asia, Partners With Western Firms...... 166 Other Lion Consumer Brands...... 166 Competitive Profile: The Procter & Gamble Company...... 168 Net Sales Slip to $79.0 Billion in Fiscal 2009...... 168 Almost a Third of Sales Transacted in Developing Countries...... 169 P&G Has Planet’s Most Powerful Brand Portfolio ...... 170 The King of Mass Takes Men’s Grooming into Prestige ...... 170 The Art of Shaving and Zirh Added to Prestige Roster ...... 171 Bye Mr. Lafley, Hello Mr. MacDonald: A Spiritual Shift ...... 172 Competitive Profile: Unilever...... 174 Turnover of €40.5 Billion in 2008 ...... 174 Asia, Africa, Eastern Europe Jointly Account for Largest Share of Sales ...... 175

November 2009 © Packaged Facts IX Table of Contents Men’s Grooming Products

Chapter 5: The Marketers [cont.]

Outlook for 2009: Turnover Stable in First Half… ...... 175 A Value-Oriented Marketer With 13 Mega-Brands...... 176 Unilever’s Strengths in Men’s HBC: Axe Body Spray, Rexona Deodorant… ...... 176 Uni and TIGI ...... 178 Unilever Buys Some Sara Lee Personal Care Brands ...... 178

Chapter 6: Global Product Trends ...... 181 Special Note: Intros of Men’s Grooming Preparations Overlap Intros of Men’s Shaving Products ...... 181 Why Total Counts Vary by Breakout...... 181 SKUs versus Reports ...... 181 U.S., U.K., Canada Lead Intros of Men’s Grooming Preps ...... 182 Table 6-1: Numbers of New Men's Grooming Preparations SKUs, by Country, September 6, 2007-September 6, 2009 ...... 183-184 P&G, Beiersdorf Are Most Prolific Introducers of Preps ...... 185 Table 6-2: Numbers of New Men's Grooming Preparations SKUs, Worldwide by Company, September 6, 2007-September 6, 2009 ...... 186-190 “Men,” “Upscale,” “Natural” Are Most Common Tags on Preps’ Labels ...... 191 Table 6-3: Numbers of New Men's Grooming Preparations Reports, Worldwide by Product Claims/Tags on Labels, September 6, 2007- September 6, 2009 ...... 191-192 Shaving Product Intros: U.S., Canada, Brazil Are Top Trio...... 192 Table 6-4: Numbers of New Men's Shaving Product SKUs, by Country, September 6, 2007-September 6, 2009 ...... 193-194 P&G, Beiersdorf Biggest Introducers of Shaving Products, Too...... 194 Table 6-5: Numbers of New Men's Shaving Product SKUs, Worldwide by Company, September 6, 2007-September 6, 2009...... 195-197 On Shaving Products, Too, Most Common Tags Are “Men,” “Upscale,” “Natural”...... 198 Table 6-6: Numbers of New Men's Shaving Product Reports, Worldwide by Product Claims/Tags on Labels, September 6, 2007-September 6, 2009 ...... 198-199 Many New Products Are Fast-Acting, Convenient, Multifunctional.. 199 Media Old and New...... 200 The Alternatives and the Viral...... 200 Global Ad Expenditure in Decline in 2009...... 203 Updating Traditional Media ...... 204

X © Packaged Facts November 2009 Men’s Grooming Products Table of Contents

Chapter 6: Global Product Trends [cont.]

Men’s Grooming Ads, Websites Use Crude Humor or Muscles-of- Steel Approach ...... 205 The Spirit of Hai Karate Returns: We Can’t Fight Off All These Babes! ...... 205 The Charming Man of Chocolate ...... 206 “We All Have Doubts... We All Have Confidence” ...... 206

Chapter 7: Distribution and Retail...... 207 Highlights ...... 207 Distribution...... 209 U.S. Product Paths: Classic Four-Step, DSD, Rack-Jobbing, “Direct”...... 209 Marketers Must Take Proactive Role in Meeting EU’s REACH Requirements...... 211 In India, Foreign Retail Chains Must Convert to Wholesale...... 213 Philips Fine-Tunes Out-of-Pack Display ...... 214 Retail Focuses and Retailer Profiles Follow...... 215 Retail Focus: Spas, Salons, and Shave Emporiums ...... 216 Men’s Grooming Products Have Increased Sell-Through in Service Channels...... 216 Old Customs, New Customs Shape Retail/Service Outlets...... 218 Developments in Selected Countries...... 218 China...... 218 Japan ...... 219 Russia...... 219 South Korea ...... 219 The United Kingdom ...... 220 The United States ...... 221 Retail Focus: Mercury Group/TSUM ...... 223 TSUM Has Sales of RUB9.8 Billion in 2008...... 223 Mercury a Luxe Goods Retailer, TSUM Its State-Owned Showpiece...... 224 TSUM Features Department Called Only for Men ...... 225 Retailer Profile: Moët Hennessy-Louis Vuitton (LVMH)/ Sephora...... 226 Revenue Climbed to €17.2 Billion in 2008 ...... 227 …But LVMH’s Resilience Gives Way to Struggle by Mid-2009 ...... 227 Gloomy Prospects for Luxe Goods, But Sephora’s Strong Worldwide ...... 227

November 2009 © Packaged Facts XI Table of Contents Men’s Grooming Products

Chapter 7: Distribution and Retail [cont.]

Sephora Steering HBC Industry to Focus on Men’s Grooming ...... 228 Other LVMH Brands ...... 230

Chapter 8: The Consumer...... 231 Highlights...... 231 About Men and Their Grooming Habits...... 233 China’s Men Are Largest of World’s Top 10 Grooming Markets...... 233 Table 8-1: Numbers of All Males (Men and Boys) in Top 11 National Markets for Men's Grooming Products, as of July 2009 ...... 234 Men of Spain, South Africa, Brazil Tend to Be Vainest...... 234 Men More Optimistic Than Women About U.S. Economy ...... 235 U.S. Men Likelier Than Women to Buy Brands, Instead of Private Label ...... 235 German Men Say They Buy Their Own HBC...... 236 BRIC Men Are the Most Aware of New Personal Care Products...... 236 Typical Grooming Regimens...... 236 Face Wash, Hairdressings World’s Most Popular Grooming Products ...... 237 Deodorant Use: Men of Spain, South Africa, Brazil Have Highest Incidences ...... 237 Goatees – Really?! – Are U.S. Men’s Favorite Facial Hair Style...... 237 U.S. Men Take on More of Household Shopping...... 237 The U.S. Men’s Grooming Product Consumer ...... 238 About Simmons Data...... 238 …And How to Use Them...... 238 The Survey’s Overall Gauge...... 239 Marketing Regions Defined ...... 239 Northeast ...... 239 East Central ...... 240 West Central ...... 240 Southeast...... 240 Southwest...... 240 Pacific...... 240 Table 8-2: Projections of Numbers of U.S. Adult Males, by Demographic Factor, 2009 (In Thousands)...... 241-243 Hispanics May Be of Any Race ...... 243 Table 8-3: Projection of U.S. Population, by Race and Gender, 2008-2020 (In Thousands) ...... 244 The U.S. Male Consumer of Bath Products ...... 245

XII © Packaged Facts November 2009 Men’s Grooming Products Table of Contents

Chapter 8: The Consumer [cont.]

Over 67.0 Million Men Use Body Wash ...... 245 Youth, Affluence Are Skews in Body Wash Use ...... 245 Table 8-4: Demographic Characteristics Most Favoring Use of Body Wash by Men, 2009 (Male Adults in Thousands)...... 246-248 Dove, Bath & Body Works Body Washes Most Popular with Men ....248 Table 8-5: Men's Use of Body Wash, by Brand, 2009 (Male Adults in Thousands) ...... 249 The U.S. Male Consumer of Deodorant ...... 250 More Than 97.1 Million Men Use Deodorant...... 250 Only Office Workers Stand Out in Deodorant Use...... 250 Table 8-6: Demographic Characteristics Most Favoring Use of Deodorant by Men, 2009 (Male Adults in Thousands)...... 251-253 Old Spice, Speed Stick, Right Guard, Degree Deodorants Most Used by Men ...... 253 Table 8-7: Men's Use of Deodorant, by Brand, 2009 (In Thousands of Adults; Recent 12 months) ...... 254 The U.S. Male Consumer of Haircare Products ...... 255 About 97.4 Million Men Use Shampoo; 31.0 Million Use Conditioner ...... 255 Asian Race Only Pronounced Factor in Men’s Shampoo Use...... 255 Youth, Low Income Characterize Men Who Use Conditioner ...... 255 Table 8-8: Demographic Characteristics Most Favoring Use of Shampoo and Conditioner by Men, 2009 (Male Adults in Thousands)...... 256-258 Men’s Preferred Shampoo Brands Are Head & Shoulders, Suave....258 Table 8-9: Men's Use of Shampoo, by Brand, 2009 (In Thousands of Adults; Recent 7 Days)...... 259 Men’s Conditioner Faves: Suave, Pantene, Head & Shoulders ...... 260 Table 8-10: Men's Use of Conditioner, by Brand, 2009 (In Thousands of Adults; Recent 7 Days) ...... 260 Over 26.5 Million Men Use Hairstyling Products...... 261 Styler Use Decreases with Age, Increases with Income ...... 261 Table 8-11: Demographic Characteristics Most Favoring Use of Hairstyling Creams, Gels, and Lotions by Men, 2009 (Male Adults in Thousands)... 262-264 Most Chosen Brands for Styling Are LA Looks and Suave ...... 264 Table 8-12: Men's Use of Hairstyling Products, by Brand, 2009 (In Thousands of Adults)...... 265 Haircolor Used by 5.3 Million U.S. Men...... 265 Men and Haircolor: Middle Age, White-Collar Pros, Lower Income Mark Use...... 265

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Chapter 8: The Consumer [cont.]

Table 8-13: Demographic Characteristics Most Favoring Use of Haircolor Products by Men, 2009 (Male Adults in Thousands)...... 267-269 The U.S. Male Consumer of Shaving Products ...... 270 Almost 72.3 Million Men Use Shave Cream ...... 270 Southwesterners, Salesmen, Solo Households Influential in Shave Cream Use ...... 270 Table 8-14: Demographic Characteristics Most Favoring Use of Shave Cream by Men, 2009 (Male Adults in Thousands)...... 271-273 Gillette, Barbasol, Edge Are Most Popular Men’s Shave Creams..... 273 Table 8-15: Men's Use of Shave Cream, by Brand, 2009 (In Thousands of Adults)...... 273 More Than 40.7 Million Men Use Disposable Razors ...... 274 Middle/Elder Age, Lower Income, Limited Education Favor Disposable Razor Use ...... 274 Table 8-16: Demographic Characteristics Most Favoring Use of Disposable Razors by Men, 2009 (Male Adults in Thousands)...... 275-277 Disposable Razors: Gillette, Bic, Schick Most Widely Used by America’s Men...... 277 Table 8-17: Men's Use of Disposable Razors, by Brand, 2009 (In Thousands of Adults; Recent 12 Months)...... 277 Nearly 40.5 Million U.S. Men Use Electric Razors...... 278 Electric Razor Users Skew Older, Non-Affluent – But Affluent, Too 278 Table 8-18: Demographic Characteristics Most Favoring Use of Electric Razors by Men, 2009 (Male Adults in Thousands) ...... 279-281 Philips Norelco the Most Popular Electric Razor with U.S. Men – By Far...... 281 Table 8-19: Men's Use of Electric Razors, by Brand, 2009 (In Thousands of Adults)...... 281 U.S. After-Shave Users Number 37.9 Million ...... 281 After-Shave Use: Again, Boomers/Seniors, Low Income Featured .. 282 Table 8-20: Demographic Characteristics Most Favoring Use of After- Shave Lotion by Men, 2009 (Male Adults in Thousands) ...... 283-285 Old Spice Wins After-Shave Popularity Race ...... 285 Table 8-21: Men's Use of After-Shave Lotion, by Brand, 2009 (In Thousands of Adults) ...... 286 The U.S. Male Consumer of Skincare Products ...... 287 Men Who Moisturize Number 40.3 Million...... 287 Gen X, High and Low Incomes Stand Out...... 287 Table 8-22: Demographic Characteristics Most Favoring Use of Moisturizers by Men, 2009 (Male Adults in Thousands)...... 288-290 Men Who Moisturize Prefer Vaseline...... 290

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Chapter 8: The Consumer [cont.]

Table 8-23: Men's Use of Moisturizers, by Brand, 2009 (In Thousands of Adults) ...... 291 Close to 32.1 Million Men Use Suncare Products ...... 291 Sunless Tanners Used by 503,000 American Men...... 291 White Race, Affluence Encourage Men’s Use of Suncare Products .292 Table 8-24: Demographic Characteristics Most Favoring Use of Suncare Products by Men, 2009 (Male Adults in Thousands)...... 293-295 Coppertone Still Men’s Favorite U.S. Suncare Brand...... 295 Table 8-25: Men's Use of Suncare Products, by Brand, 2009 (In Thousands of Adults) ...... 296 Facial Cleansers Used by 20 Million Men ...... 296 Youth, Middle Age, Affluence Favor Facial Cleanser Use by Men.....296 Table 8-26: Demographic Characteristics Most Favoring Use of Facial Cleansers/Medicated Products/Toners, Etc., by Men, 2009 (Male Adults in Thousands)...... 297-299 Neutrogena Facial Cleansers Are Tops with U.S. Men ...... 299 Table 8-27: Men's Use of Facial Cleansers, Medicated Skincare Products, and Toners, Etc., by Brand, 2009 (In Thousands of Adults)...... 300

Appendix: Addresses of Selected Marketers ...... i

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Chapter 1 Executive Summary

Market Definition

This new Packaged Facts report investigates the world consumer marketplace for personal care products used by men in their daily grooming routines. The world market is discussed as a whole; according to country and region; according to five product categories – bath products, deodorant, haircare, shaving products, and skincare; according to rival marketers’ competitive strategies; and according to retail sell-through contexts. Finally, Packaged Facts provides valuable demographic information on men’s grooming consumer bases in the United States and selected other markets.

Men’s Grooming Sales Data Provided in Two Modes

As this report is prepared in mid-2009, there exists a towering confusion of disparate estimates of men’s grooming sales at retail. This is the case whether one studies the men’s grooming industry in various countries, or even planet-wide. Some of the wildest disparities are explained by the fact that some sources estimate only sales of male-specific products, while other sources estimate only the more comprehensive numbers for sales of all grooming (or beauty) products that are consumed by men. The latter type of estimate encompasses the former.

Because the world’s men actually use more non-male-specific personal care products than male-specific, Packaged Facts takes both approaches; we provide retail figures for 1) male- specific products and 2) for the consumption of all personal care products used by men. (See the Market Size and Growth section within this chapter.)

Worldwide, $61.3 Billion Spent on Grooming Products Used by Men in 2009

Packaged Facts estimates that the global retail value of all grooming products used by men (that is, bath products, deodorant, haircare, shaving products, and skincare products) is reaching $61.3 billion in 2009. [Table 1-1] This level reflects total growth of over 37% – or a stirring $16.6 billion – during the five years 2004-2009. Such progress transposes into a compound annual growth rate (CAGR) of almost 7%.

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The estimate includes sales of both male-specific and non-male-specific grooming products. The sales performance of male-specific products alone has tended to be stronger in 2004- 2009 than that of the broader combination of male-specific with non-specific products; however, men have become more adventurous in their personal care regimens, and thus the more comprehensive sphere is also performing well: This means that many of the world’s men are trying premium male-specific hair gels or skin creams for the first time; but it means, too, that the same men are also trying a greater range of grooming products, among them unisex items, as well as girlfriends’ and wives’ beauty products that the men encounter in home medicine cabinets and shower stalls.

Packaged Facts identifies key overall market drivers as the global technology trends to give marketers in even the poorest countries enhanced access to new HBC marketplaces and consumer bases; to natural/organic and prestige products; and to rising middle classes in developing countries, including, but not limited to, BRIC (Brazil, Russia, India, and China).

Sales of Male-Specific Grooming Products at $19.7 Billion

Global retail sales of grooming products positioned specifically to men are projected by Packaged Facts to attain $19.7 billion by the close of 2009. [Table 1-1] The total increase for the period 2004-2009 is therefore calculated at almost 42%. The CAGR for the same five- year span is consequently 7%.

Men’s Grooming Demand Withstands Recession Fairly Well

Men’s grooming is one of those lucky few product markets – like natural/organic HBC – that is equipped to maintain positive, if slower growth during the economic recession set off by the collapse of financial institutions early in the fourth quarter of 2008. This continues to be the case as this report goes to press in September 2009, at least in the industrialized West. Packaged Facts predicts that, as the recession starts to lift, hopefully as soon as 2010 or even late 2009, global men’s grooming sales growth will return to high single-digit or double-digit rates.

In developing countries, where the ripples of recession hit last, sales growth will take a little more time to regain pre-crash momentum.

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Table 1-1 Worldwide Retail Dollar Sales of All Grooming Products Consumed by Men, and of Male-Specific Grooming Products, 2004-2009 (In Billions)

Male-Specific Value of All Grooming Year Grooming Products Products Consumed by Men $ % Change $ % Change 2009 $19.7 5.3% $61.3 4.1% 2008 18.7 6.3 58.9 5.9 2007 17.6 5.4 55.6 6.3 2006 16.7 7.1 52.3 7.4 2005 15.6 12.2 48.7 8.9 2004 13.9 – 44.7 – Total Growth, 2004-2009 = – 41.7% – 37.1% CAGR,** 2004-2009 = – 7.2% – 6.5% * Retail value of all grooming products consumed by men includes sales of both male-specific and non-male-specific products. ** Compound annual growth rate. Source: Packaged Facts

Global Men’s Grooming Market to Boost to $84.9 Billion by 2014

Packaged Facts projects that retail sales of all grooming products used by men will push upward by almost 39% during 2009-2014, or by $23.6 million. [Table 1-2] The market will therefore hit $84.9 billion, as of the end of the five-year period. The compound annual growth rate (CAGR) for the same period will approach 7%. This progress is quite good; in light of the huge dollar base, it could be viewed as excellent.

Of the top 12 men’s grooming national/regional markets listed in Table 2-14, China is expected to show the fastest sales growth during 2009-2014, at a blazing 57%. The United States will achieve second-fastest growth, yet still be a juggernaut, at more than 50%. Another developing BRIC country, Russia, will be third-speediest, expanding sales by 47% over the five years.

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Table 1-2 Projected Worldwide Retail Dollar Sales of All Grooming Products Consumed by Men, by Country, 2009-2014 (In Billions)

Total % Change *CAGR Country 2009 2014 2009-2014 2009-2014

World $61.3 $84.9 38.5% 6.7% United States 14.1 21.2 50.1 8.5 Japan 6.3 8.3 31.0 5.7 France 4.6 6.2 35.0 6.2 Germany 4.5 5.8 29.9 5.2 Brazil 4.4 5.8 32.6 5.7 China 4.4 6.9 56.5 9.4 The United Kingdom 4.3 6.0 40.0 6.9 Italy 3.6 4.8 33.0 5.9 Spain 3.1 4.1 31.0 5.8 Russia 2.9 4.3 46.8 8.2 India 2.0 2.7 37.4 6.2 **R-O-W 7.1 8.8 24.0 4.4 * Compound annual growth rate. ** Rest of world. Source: Packaged Facts

Male-Specific Products to Climb to $28.0 Billion

Packaged Facts further calculates that retail sales of male-specific grooming products (which are included within sales of all grooming products used by men) will plow on, advancing a mighty 42% – or by $8.3 billion – during the whole span 2009-2014. [Table 1-3] The CAGR for the five years will of course be strong, too, surpassing 7%.

As in the broader designation of sales of all grooming products used by men, China is also forecast to have the most rapidly expanding sales of male-specific grooming products, which will will leap by a spectacular 72% in that country, during 2009-2014. The United States’ sales will again exhibit the second-fastest growth – nearly 56%. And Brazil, hosting third-fastest growth, will add 51% to the retail value of male-specific HBC.

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Table 1-3 Projected Worldwide Retail Dollar Sales of Male-Specific Grooming Products, by Country, 2009-2014 (In Billions)

Total % *CAGR Country 2009 2014 Change 2009-2014 2009-2014

World $19.7 $28.0 42.1% 7.3% United States 5.6 8.7 55.5 9.2 Japan 3.0 3.8 28.0 4.8 France 1.6 2.2 36.0 6.6 Germany 1.5 2.1 40.0 7.0 The United Kingdom 1.5 2.1 37.0 7.0 Brazil 1.4 2.1 50.9 8.4 China 1.0 1.7 72.0 11.2 Italy 1.0 1.2 22.0 3.7 India 0.8 1.1 42.0 6.6 Spain 0.7 1.0 39.7 7.4 Russia 0.6 0.8 38.5 5.9 **R-O-W 1.0 1.2 24.5 3.7 * Compound annual growth rate. ** Rest of world. Source: Packaged Facts

No Surprise – Shaving Items Dominate

As one might surmise, shaving products account for the biggest chunk of global men’s grooming retail sales (i.e., sales of all grooming products consumed by men) in 2009 – almost 38%, or $23.0 billion. [Table 1-4] Bath products (including soap) follow, with about 20%, or $12.2 billion; the category edges out haircare, at 19%, or $11.9 billion. There are rumblings in the HBC industry that marketer activity in haircare will boost this category’s share in the coming years.

Deodorant commands close to a 15% share, or $9.0 billion. Skincare, despite the fact that the media often focus men’s grooming stories on facials and anti-aging serums, is fifth, with less than a 9% share, or $5.2 billion.

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Table 1-4 Share of Worldwide Retail Dollar Sales of All Grooming Products* Consumed by Men, by Product Category, 2004-2009 (In Billions)

2004 2009 Category $ % Share $ % Share Shaving Products $17.0 38.0% $23.0 37.5% Bath Products 7.8 17.5 12.2 19.9 Haircare 9.8 22.0 11.9 19.4 Deodorant 7.2 16.0 9.0 14.7 Skincare 2.9 6.5 5.2 8.5 Total $44.7 100.0% $61.3 100.0% Retail value of all grooming products consumed by men includes sales of both male-specific and non-male-specific products. Source: Packaged Facts

U.S., Japan, France, Germany Lead Sales of All Grooming Products Consumed by Men

In 2009, the United States’ retail sales of all grooming products consumed by men are expected to push to $14.1 billion, or to more than double Japan’s $6.3 billion, according to Packaged Facts. [Table 1-5] France and Germany follow, with $4.6 and $4.5 billion, respectively. Brazil and China are tied in fifth place, with about $4.4 billion each.

The five fastest-growing markets are Russia, which has catapulted over 49% during 2004- 2009, to $2.9 billion; China, powering upward by more than 46% to its abovementioned $4.4 billion; Spain, achieving almost a 45% jump, to $3.1 billion; Brazil, climbing 42% to its $4.4 billion; and the United States, which has seen retail sales jump 41%, to reach its $14.1 billion.

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Table 1-5 Worldwide Retail Dollar Sales of All Grooming Products Consumed by Men, by Country, 2004-2009 (In Billions)

Total % Change *CAGR Country 2004 2009 2004-2009 2004-2009

World $44.7 $61.3 37.1% 6.5% United States 10.0 14.1 40.6 7.1 Japan 5.0 6.3 25.7 4.7 France 3.5 4.6 31.2 5.6 Germany 3.3 4.5 36.2 6.4 Brazil 3.1 4.4 42.1 7.3 China 3.0 4.4 46.3 7.9 The United Kingdom 3.2 4.3 35.7 6.3 Italy 2.8 3.6 27.2 4.9 Spain 2.2 3.1 44.5 7.6 Russia 1.9 2.9 49.1 8.3 India 1.5 2.0 33.3 5.9 **R-O-W 5.2 7.1 35.7 6.3 * Compound annual growth rate. ** Rest of world. Source: Packaged Facts

Men Hold Up Over Half the Sky

The world may be overpopulated, but there are no signs that its overall numbers of either male or female residents will decline. As of July 2009, there are nearly 6.8 billion persons living on Planet Earth, according to The CIA World Factbook. [Table 1-6] Men and boys account for just over 50% of the total, and women and girls, for just under 50%. These percentages transpose to a bit over 3.4 billion males, and a bit under 3.4 billion females. The gender ratio varies by country.

The total number of earthlings is estimated to be expanding by 1.2% during 2009. The median age for males is almost 28; for females, it is 29.

However, the populations of some individual countries are growing wildly, at the same time that others are struggling to maintain their numbers. By 2009, China’s and India’s populations have steamrolled to 1.3 billion and 1.2 billion. But in this same year, Russians are shrinking by about 654,000, Italians by 30,000, and Japanese by 240,000.

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As of mid-2009, the most encouraging male population trend is the relentless global increase of men. Empowered to use a wider array of grooming products thanks to expanding middle classes in developing countries, and to the ongoing conversion of machismo to more practical and politically correct male attitudes, the greater number of men holds tremendous potential for grooming products marketers.

Table 1-6 World Population, by Age and Gender, 2009

% Share, All % Share, All % Share, All Age/Gender Persons Persons Males Persons Females Persons 0-14 1,844,487,084 27.2% 950,127,898 14.0% 894,359,186 13.2% 15-64 4,427,186,350 65.2 2,235,114,476 32.9 2,192,071,874 32.3 65 and older 518,388,782 7.6 227,748,114 3.4 290,640,668 4.3 Total 6,790,062,216 100.0% 3,412,990,488 50.3% 3,377,071,728 49.8% Note: Percent-share rows or columns might not add to totals, due to rounding. Source: The CIA World Factbook; Packaged Facts

Billions of Men Striving to Be Middle-Class

Citizens of the world, including billions of men, are striving to attain the lifestyle of the U.S. or European middle-classes – or more accurately, those societies’ upper middle-classes. This means that prestige and pop-prestige HBC brands have lots of potential around the globe. Men’s grooming products, which have stellar unrealized potential in wealthy industrialized countries, have practically virgin potential in most developing countries. Men in China, for example, are getting to know many imported mass-retail brands; but they are also becoming acquainted with imported prestige brands, for in their society, the giving or use of expensive skincare brands has become a nicety, and often, a status symbol. And in India, where the per capita share of GDP was just $2,800 in 2008, foreign marketers are introducing prestige brands; Estée Lauder, for example, established M.A.C. brand-dedicated stores there in 2005, following them with Clinique and Estée Lauder stores in 2007. The stores are located variously in Mumbai and New Delhi.

This new kind of middle-class lifestyle is likely to keep evolving to fit local cultures. It is human to embrace dichotomies: The HBC consumers of the world may want to use brands that glamorous residents of top-of-the-heap countries use – they want Irish actor Pierce Brosnan’s Omega watch, and U.S. basketball star Michael Jordan’s Hanes underwear; but they also want to preserve national and ethnic identity. This explains why the local Yue-Sai brand (acquired by L’Oréal, in 2004) leads skincare sales at department stores in China, and why the Natura brand outpaces many imported rivals in its native Brazil. Both brands are

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positioned unisexually, or for women, but are doubtless also used by men. Natura is extended with the male-suitable Ekos Castanha collection; “castanha” is Portugese for “Brazil nut.”

To summarize: Just as we all want to be a part of a team, and at the same time, to stand out as that team’s hero, men who consume grooming products want to use both the same brands as the rest of the world, in addition to brands that flatter their sense of national and/or ethnic identity. Sensitivity to local male populations’ twin ideals will help international marketers to expedite coverage and penetration of their targeted territories, whether they choose to reposition existing brands, acquire local brands, or create entirely original brands.

The world’s rising middle classes are important for more than their blossoming disposable incomes. Other characteristics include:

• They are ingenuously materialistic; at least that is the case for the one or two generations who experience firsthand a country’s change from poverty to a relative degree of affluence. With fresh cravings for all sorts of products, many male “ingenuous materialists” become key consumers of broader and broader ranges of items, including men’s grooming products.

• Rising middle-class persons in developing countries are typically hardworking, persevering, and patient, as they invest decades in building up small businesses. Aside from their time, they also aggressively invest money in their own or others’ ventures; thus they make good allies for international HBC firms.

• One of the first benefits enjoyed by a new middle class in any country is superior education. With schooling comes a more capable labor force, and a more sophisticated consumer base – one that is more likely to read labels, and to research personal care product ingredients on the Internet. Educated populations are more receptive to HBC products positioned to men; they are also more curious about prestige, eco-friendly, natural/organic, Fair Trade, and other value-added versions of these products.

• Bill Easterly, on the faculty at New York University, told The Economist (February 12, 2009 edition) that countries with strengthening middle classes are likelier to become more politically stable, and even to embrace democracy. Foreign marketers are thus attracted, when risk is mitigated by peace and stability.

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The Male Ego: It Took 40 Years, But Now We Have the Marketing Keys

In the tumultuous late 1960s, when students and hippies questioned absolutely everything about life over much of the world, there were student riots, love-ins, and rock festivals such as Woodstock; there were also civil rights demonstrations, protests against the war in Vietnam, and pertinent to our discussion here, both a strong Women’s Liberation movement, and the Sexual Revolution. HBC marketers heartened at the prospect of sexual equality working both ways – that men would feel freer to use a more varied range of grooming products. But though men wore their hair long and painted peace-signs on their faces, few progressed to use of HBC beyond the traditional basics of deodorant, shampoo, and shaving products.

Then in the 1970s, Alberto-Culver’s Consort hairspray for men was introduced in the United States. Ahead of its time, Consort was supported by television commercials featuring a man speaking directly to the camera; he was handsome, had well-coifed longish hair, and wore a floral print shirt. Many men felt that the character was simply less than masculine. The anticipated boom in men’s grooming sales didn’t take off. In the decades until 2000, that boom that was always just around the corner, failed to materialize; instead, gradual growth was the mode. It has only been in the 2000s that the men’s grooming market has become a steadily strong performer, in large part because marketers have finally assembled the essential keys to marketing to men:

Convenience and Functionality

The majority of men do not, or do not admit, that they enjoy the luxuriousness of a bubble bath after a hard day’s work, or the refreshing cleansing power of a facial masque. Instead, most men want grooming products that are convenient and functional – that is, products that work fast and efficiently. Combe’s Just for Men haircolor line, for example, includes many SKUs that dye hair in five minutes, as opposed to rival haircolors that take up to 45 minutes.

Multifunctional products are thus also a logical trend in 2009: Beiersdorf rolled out Active 3, an extension of the Nivea for Men skincare line; Active 3 is a body wash, shampoo, and shave gel, all in one 8.4-ounce bottle that sells at $4.49-$5.99, depending on the retailer. Najafi Companies/Innovative Brands LLC extended Pert Plus for Men with a 3-in-1 product that is body wash, conditioner, and shampoo; a 12-ounce bottle retails for about $5.

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Humor: Make It Crude, Even Dirty, and You’ve Got a Classic Brand

Crude humor has always helped to sell acne preparations such as Oxy and Stridex to teenage boys. But Unilever, using an extreme degree of sexual levity, introduced Axe grooming products (known as Lynx in Australia, Ireland, and the United Kingdom) to U.S. teen and twentysomething men so successfully, that the brand has become an instant classic. The year 2002 debuts of Axe body spray, body wash, and deodorant were powered by particularly outrageous frat-boy jokes in high-profile television spots. One of the first showed a young man mowing a lawn on a hot summer’s day. Sweating, he rests under a tree, only to have passing women run up to him to take whiffs of his Axe-deodorized body. In 2009, there are dozens of Axe spots viewable on the Internet, ranging from one in Spanish showing girls studying pole-dancing at the Axe Hot School, to naked women waiting for Axe users at the Axe Cottage by the Lake, to a long-form video telling the story of a party dude who uses Axe Shower Gel each morning to help him remember what happened the night before.

Procter & Gamble, since Axe’s debut, has repositioned Old Spice similarly on crude humor; the company has also supported Tag Body Spray with less crude, but still highly sexual, comic television spots. German-based Henkel, through its Dial Corporation, U.S. subsidiary, has repositioned Right Guard on the hip-hop version of broad comedy, in spots featuring rappers Red Man and Method Man.

Seldom have HBC products been soft-positioned so aggressively, let alone in such poor taste; again, acne preps are the only – relatively mild – precedent. (“Soft-positioning” is Packaged Facts’ term for co-positioning an otherwise adult product to youth, via separate advertising and promotion, but without changing formula or packaging.) The fact that broadcast censorship varies from country to country does not have to be a hindrance. The notoriety of some banned Axe spots has made them viral video hits on YouTube.com. Thus ads with nudity shown on Australian television, but censored in Iran or the United States, can still generate millions of impressions that are all the more solid for the heightened “word of mouth.”

Sex

Little needs to be said here, for as the whole world knows, men think about sex constantly.

In many men’s grooming product ads, it is the alpha-male who gets the beautiful woman, as in ads for P&G’s Gillette disposable razors – though sometimes the bespectacled nerd who uses Axe will get her, instead.

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Willingness to Spend on Branded Products

At least one U.S. study has found that men’s purchasing of grooming products skews more to brands, and less to private label; as opposed to women’s use of beauty products, which skews a bit less strongly to brands – perhaps because women tend to spend more money on a wider range of beauty needs, and may be concerned about how to stretch their beauty dollars. Men, on the other hand, know the HBC aisle less well, and may have an ad impressed on their brains to guide them laser-like to the brand they want. Men are often open to paying more to get themselves out of a store quickly. One must remember that there is still inequality between the sexes in the workplace; men still tend to earn more money, and can better afford to stick with brands, as opposed to private label.

In July 2009, the National Marketing Institute (NMI) published the results of its annual January survey of more than 3,100 American adults. Entitled Healthy Aging/Boomer Database, the survey found that “about half” of men gravitate to brands, and leave store brands on the shelf. In contrast, only 25% of women exhibit that behavior.

For perspective, NMI also notes that around the year 2000, men were 20% of U.S. households’ primary shoppers; but as of January 2009, they accounted for about a third of such shoppers.

The NMI estimates U.S. male spending power at over $1.0 trillion.

For more demographic information on the men of the United States and other countries, see Chapter 8, The Consumer.

Universal Positionings

The idea of positioning a brand universally on conditions or concerns (on repair of damaged hair shafts, for example, or on relief from overly dry skin, reduction of wrinkles, etc.) began in the prestige (mainly upscale department stores) and pop-prestige (M.A.C., Origins, Sephora, and other) HBC arenas. This approach avoids positioning a product on use by people of specific age brackets, races, or even genders. Men often are less shy about taking such effectively unisex formulations and package designs up to the cashiers at checkout counters, because the question of what is masculine or feminine is sidestepped altogether.

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Use of the Wife’s/Girlfriend’s Beauty Products

Certain surveys conducted by HBC marketers to determine the degree to which men typically dip into their wives’ or girlfriends’ exfoliants, eye creams, moisturizers, and other skincare and haircare products, appear to be unreliable – they have shown that over 90% of men secretly use such products on a regular basis. While this incidence and frequency of discreet use may not be credible, the idea that men are learning more complex grooming regimens from the women in their lives is logical – and for some marketers, the dynamic of male- female partnership may present selling opportunities.

At least anecdotally, it is widely observed that some men do indeed try their partners’ beauty products. Packaged Facts suggests that lots more try these products at their partners’ urging, or perhaps most successfully, with the welcome reinforcement of the wife’s/girlfriend’s actual presence. There would be nothing more likely to convince a heterosexual man of the benefits of an exfoliating scrub, for example, than a romantic interlude in the tub with the love of his life, who applies the luxurious scrub to his back.

According to Experian Simmons, women account for significant shares of the purchaser- bases for many men’s grooming products. For more details, see Chapter 8, The Consumer.

Natural/Organic/Green/Fair Trade Concerns

As the world becomes increasingly concerned about the harmful effects of toxins upon both the human body and the environment, about global warming, and about responsible trade with developing countries, HBC marketers positioning on natural or organic content, green manufacturing and packaging, and/or Fair Trade practices, are powering sales of personal care products in many countries; among them the United Kingdom, the United States and Canada, Brazil, Germany, Russia, and so on.

In 2009, marketers known primarily for their natural/organic HBC products tend to cover the men’s grooming basics – and of these, only shaving items are sometimes male-specific; other natural/organic products are almost always unisex. Green concerns are more all- encompassing, ranging from natural/organic formulation, to use of recycled materials in packaging, to reduction of carbon dioxide emissions along the supply and manufacturing paths; green positionings can cover any grooming product used by men, natural or not. Fair Trade policies involve fair treatment of indigenous peoples as they provide raw materials; and often education, with emphases on self-sufficiency, or ending spousal abuse or child labor, is in turn provided by marketers along with fair payments for goods and services. Web pages

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for explanations of Fair Trade policies have become more and more common on marketers’ websites; The Body Shop, which pioneered the idea of Fair Trade, as of the 1970s, and Estée Lauder/Aveda, are among those that offer Fair Trade-oriented promo videos on their websites or on YouTube.com.

But do men really care about these issues? They may drive HBC purchases by women, but what about HBC purchases by men? The fact that the worldwide men’s grooming market is flourishing at the same time as the natural personal care market virtually guarantees some overlap. The expanding assortment of natural, organic, and semi-natural male-specific products is another indication that men are responding to marketers’ progressive positionings.

In February 2009, Packaged Facts conducted its own survey of more than 2,600 consumers on the subject of their use of natural personal care products. We found that men accounted for 43% of those willing to pay more for natural/organic formulations – despite the fact that they also accounted for just 37% of those who said such formulations are more effective than conventional ones, and for just 36% of those who said they are safer. This disparity reflects the typically ambivalent attitudes of natural/organic HBC consumers, who keep on purchasing these products, even as they hope that marketers will improve product safety and efficacy. The natural/organic HBC market runs on the faith of U.S. men and women who are forward-thinking; such core audiences are likely characteristic of the natural/organic HBC markets in many countries.

For more product usage or purchasing data from Experian Simmons and other sources, please consult Chapter 8, The Consumer.

Targeting Men of Developing Countries: The Plusses

There is still truth in stereotypical images of impoverished Third World men, starving in Africa, laboring just to draw water in the Philippines, packed into trains in Mumbai. But there are other truths that are already helping men of developing countries become economically more independent and vital – and to become heavier consumers of men’s grooming products.

Technology – Internet, Mobile, Tagging – Empowers Third World

With the exception of a few countries – China, Iran, others – that sometimes interrupt Internet access as a means of censorship, the same Internet websites are available to people all over

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the world, no matter what their colors or creeds. In regions like the Middle East, cellular technology (mobile) connects people in war-torn countries where telephone land-line infrastructure has been destroyed. One can also use mobile to log on to the Internet, then order and pay for products and services. And electronic radio frequency identification (RFID) chips that “tag” consumer goods have the potential to improve security for international marketers who may fear that diverted shipments or product counterfeiting will fuel grey-market activity.

In short, technology helps developing world populations to be as aware of international trends as the residents of affluent countries; to transact business competitively; and – this may be one crucial key – to unite home populations with those who have emigrated for the sake of economic opportunity. Soon, the developing world’s lean and mean businesses will give birth to their own global brands that may someday rival major HBC brands such as Axe, Gillette, or Just for Men even on their home turfs in the United States, Europe, or wherever.

Thus technology is helping to level the playing field between countries with developing economies, and the superpowers.

Machismo Eroded by Connectivity

It is too easy to assume the stereotypes about developing countries. Executives in the affluent industrialized world may correctly view certain regions of the world as hopelessly torn by armed conflict, or as intolerant of women or certain races or ethnicities – but components of populations in those same regions are connected to the world via technology, and may have different views. Connectivity results in some degree of education about daily life in freer nations.

This kind of sociopolitical dichotomy not only offers hope for mankind, but also for internationally active marketers of men’s grooming products: If the developing world’s connectivity helps to erode some of the planet’s more extreme dams of machismo, marketers will be better able to overcome male resistance to the practice of more complex skincare and haircare regimens.

Individuals and Families vs. Clans and Tribes

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and Japanese sense of community or nation being more important than any individual, is well known. Less well recognized is the clan or tribe societal model, for example, which is seen in West African countries such as Guinea and the Ivory Coast. This model is characterized by very large groups of related persons who often live together in compounds, and who wield relatively great political power, at least on local bases. Marketing models must be adjusted accordingly.

This is where the technologies cited above can prove effective, because they enable niche, even micro marketing, and at low cost. Tactics might include marketer sponsorship of local blogs, or marketers’ own participation in blogs; text messaging; campaigns and promo videos designed for mobile; sponsorship of tribal events; culturally suitable adaptations of flash- mobbing – the modern equivalent of 1960s “happenings”; and low-cost viral videos that might run on sites like YouTube.com for years.

Third World’s Doctors Drive Taxis in New York

Immigrant populations are often ignored, because they often live and work invisibly, as part of their new country’s “shadow” or “grey-market” economy. Because these displaced millions now possess the same tech options as everybody else, they are united for the first time. In the United States, for instance, millions of illegals working as maids and seamstresses and busboys and heavy laborers took to the streets in April and May 2006, to protest against the Sensenbrenner Bill (H.R. 4437), which would have set severe penalties for illegal immigration. The Bill was passed by the House of Representatives, but was defeated in the Senate.

Certain marketers may benefit by targeting such immigrants, and by acknowledging their sacrifices – Pakistani doctors must drive cabs in New York; Guatemalan students work in sweat shops in Los Angeles; Turks work on construction projects in Germany, and so on. Again, technology enables HBC firms large and small to micro market to the diverse cultures these millions represent, and as well, to exploit their connections to their home countries. Such exploitation could involve sampling across borders, sweepstakes to reunite families, and the like.

Traditionally, the first family members to immigrate from developing countries are most often males who work for the money that will allow the other members to immigrate, too. Such men’s toil is often forgotten; however, their recognition by HBC marketers – if handled

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with sensitivity – could thus create intense brand loyalty, in both their adopted and home countries.

Natural HBC Market Poised for International Expansion

In our report entitled Natural and Organic Personal Care Products in the U.S. (July 2009), Packaged Facts estimates that global retail sales of natural/organic skincare, haircare, and makeup products grew 51% during 2004-2008, to finish the four years at $20.8 billion. Each of the world’s regions saw similar double-digit gains. In the United States alone, natural/organic HBC was valued at over $6.6 billion in 2008, 26% above the level for 2004.

Worldwide, Packaged Facts projects that retail sales of natural/organic HBC will rocket to $36.0 billion as of 2014. One expects that sales will continue to rise in affluent industrialized countries, but the outlook appears good in developing countries, too. Russians are becoming more interested in going natural/organic, as are the Chinese. And green-consciousness, which encompasses the preference for these products, is sweeping the world.

As noted earlier, the vast majority of natural/organic bath, deodorant, shaving, haircare, and skincare products used by men are positioned as unisex – a circumstance that will facilitate their acceptance in cultures that still embrace machismo. Of course, some readers will argue that men all over the world still strive to be macho; so the unisex preparations would continue to help marketers to penetrate the areas covered by their existing distribution footprints. In any case, the unisex brands also help to pave the way for male-specific versions of the same products, by breaking down the resistance to them.

Worldwide, the natural/organic personal care market is being driven by fear of cancer- causing ingredients found in mainstream HBC; by fear of other toxins, irritants, or allergens; by concern about the environment, which is already polluted with personal care ingredients in water tables and by packagings that overflow landfills; by the gradual move to standardization of the definitions of “natural” and “organic”; and by the increasing breakout of natural/organic brands from the natural food/HBC channel, to prestige, mass, and to direct sales media (e-tail, television home shopping networks, infomercials, and multilevel marketing schemes).

In this instance, too, technology will continue to accelerate the spread of men’s natural/organic HBC use, in every region of the globe. Resistant male cultures will simply take longer for marketers to win them over.

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Presumably, some marketers will position or re-position natural/organic HBC brands on lower price. As of mid-2009, virtually all brands in this space have been premium-to- prestige-priced. Marketers who can break from the traditional price-tier may be able to more quickly make inroads in populous China, India, Indonesia, and other developing countries, not to mention in more affluent countries, as well.

Key Mergers and Acquisitions

The following mergers, acquisitions, and divestments have helped to shape the men’s grooming market as we know it in 2009:

• St. Louis, Missouri-based Energizer Holdings, the battery marketer that gave us the Energizer bunny, acquired the Schick brand from Pfizer, Inc., in 2003. A distant second to the Gillette brand in both the global and U.S. markets, Schick is sold in Australia and the North American region; in the rest of the world, Schick becomes the Wilkinson Sword brand.

• In 2005, Procter & Gamble made its biggest acquisition ever – Boston-based Gillette, for the price of $53.4 billion. The German-based Braun, maker of numerous home appliances, including electric razors, had been owned by Gillette, and thus was part of the deal, too.

• Also in 2005, Kao bought Molton Brown Ltd., the British prestige beauty and grooming brand, for $300 million. The deal included Molton Brown brand-dedicated stores. Molton Brown products are sold in 70 countries.

• In 2006, subsequent to its takeover of Gillette, P&G sold off the latter’s Right Guard deodorant for men, along with the Dry Idea and Soft & Dri deodorant brands, to Henkel KGAaA. The three brands are now managed by Henkel’s U.S.-based Dial Inc. subsidiary.

• L’Oréal acquired The Body Shop in March 2006, for the price of $1.1 billion. The Body Shop for Men line includes hemp scrubs and moisturizers; maca root skincare products, shave cream, and deodorant; haircare products, and so on.

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skincare products, as well as on high-end versions of Gillette Fusion razors. The Art of Shaving is also a retail marque appearing on a chain of at least 36 men’s grooming shops, some of which are called “barber spas,” because they offer shaves, haircuts, and facials. The Zirh brand is packaged to look high-tech, industrial, as if to suggest that contents reinforce men’s masculinity. Zirh SKUs include anti-aging products, moisturizers, hairdressings, and others.

• In September 2009, Unilever announced that it would acquire certain skincare and deodorant brands from Sara Lee Corporation, for about $1.9 billion. For Sara Lee, the move is part of an ongoing process of streamlining and refocusing on core food and beverage businesses, particularly in North America and Europe. For Unilever, it means complementing its low-end brand stable (the company’s Rexona deodorant, for example) and its premium roster (Axe/Lynx bodycare and deodorant) by filling in the mid-price-tier. The deal, to be finalized in 2010, also strengthens Unilever in emerging markets; 15% of the Sara Lee brands’ sales are transacted in Indonesia, The Philippines, South Africa, and other developing countries. Among the Sara Lee male-specific brands or brand extensions to be acquired by Unilever are Brylcreem hairstyling products (deal covers Brylcreem’s European distribution only), Duschdas for Men shower gel and deodorant; Sanex for Men bath, shaving, and skincare products; and others.

P&G, Uni, Beiersdorf, Avon Among Top Grooming Marketers in World

Precise, reliable, and comprehensive shares of the global men’s grooming market were not available for this report. The fragmentation of the market according to numerous countries, to varying states of retail infrastructure within those countries, to sociopolitical differences, and even to corporate censorship, obscures the true standings of many players.

However, Packaged Facts makes the following observations about the competitive situation in the global men’s grooming market:

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segments, to become a billion-dollar brand, while Braun is prominent among brands of electric razors. Gillette is an international force in bath products, with Old Spice body wash and Tag body spray; in deodorant, with Gillette and Old Spice; and in skincare, again with Gillette, but also with The Art of Shaving, and Zirh. Trade press has frequently mentioned that P&G and Unilever together account for one third of the world’s sales of bath products – in that category, Old Spice goes head-to-head with Unilever’s Axe brand. P&G has also ventured into prestige men’s grooming, via acquisition of both The Art of Shaving and Zirh brands within a two-week period in June 2009. Overboxed Gillette Fusion shaving kits are also being sold through pop- prestige retailer Sephora.

• British-and-Dutch-headquartered Unilever claims that Axe is the best-selling men’s toiletry, worldwide. The brand debuted in 1983 in France. In Australia, Ireland, and the United Kingdom, Axe is known as Lynx. Unilever further claims that its Rexona deodorant, value-priced and formulated in separate men’s and women’s versions, is the best-selling deodorant, again, worldwide. In September 2009, Unilever announced that it will acquire various brands of bath products, deodorant, and skincare products from Sara Lee Corporation, for about $1.9 billion. The deal reinforces Unilever’s leadership in deodorant, and also its position in developing countries. Among the acquired brands with men’s SKUs are Brylcreem (European distribution only), Duschdas, and Sanex.

• Beiersdorf’s Nivea brand is the top “beauty and skincare brand” in the world, and the Nivea for Men extension is the top men’s facial care brand in the world. Nivea for Men certainly dominates the men’s skincare field in its home country, Germany, and in Europe.

• Kao is said to be the leader among Japan’s native HBC marketers, but is rivaled by Lion Corporation. Kao has interests in the U.S., British, German, and other mass and prestige HBC markets, via the Guhl, Jergens, or Molton Brown brands. The latter brand is sold in 70 countries. Kao distributes Nivea products in Japan, via a 50-50 joint venture with Beiersdorf AG. Both Kao and Lion are trying to increase their coverage of Asia.

• Natura is Brazil’s strongest local brand. Geared mainly to women, a few products, among them the Ekos Castanhas (Brazil nuts) collection, are co-positioned to men.

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One of Natura’s major rivals is O Boticario. Natura also happens to be Brazil’s largest direct marketer of HBC.

• Dutch-based Royal Philips has become the world’s leading electric shaver marketer, on the strength of its Philips Norelco brand. Philips says it is also the leader in other electric grooming product segments; for example, The Philips Grooming Kit is a motor in a handle that takes eight interchangeable heads, for trimming beards, moustaches, sideburns, nose hairs, ear hairs, eyebrows, and so on. The Philips Bodygroom System also takes various heads, for shaving “even the most sensitive areas of the body.”

• New York-headquartered Avon is the world’s foremost direct marketer of men’s grooming products, as well as of women’s beauty products. The company holds leadership or strong positions in direct-sold product categories in several countries; the Latin-American region alone accounts for roughly a third of the company’s net sales. Other direct sellers with international significance are Amway, also headquartered stateside; Natura, based in Brazil; and Oriflame, based in Sweden.

China’s Men Are Largest of World’s Top 10 Grooming Markets

In Chapters 2 and 3, Packaged Facts ranks the world’s top 10 national men’s grooming markets, and details the market conditions in each. Table 1-7 re-ranks these leaders according to male population.

China, fifth on the retail dollar scale in 2009, has the largest number of men and boys – 688.4 million. India, though tenth in sales, is second here, with its 600.9 million men and boys. The United States, which hosts the biggest men’s grooming market at retail, is home to 151.2 million males.

The remaining BRIC countries, Brazil and Russia (fifth and ninth in retail dollars, respectively), round out the top five in male population, with 98.3 million and 64.5 million.

Thus BRIC (Brazil, Russia, India, China) accounts for four out of the top five male populations in the world. The BRIC subtotal of men and boys comes to almost 1.5 billion.

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Table 1-7 Numbers of All Males (Men and Boys) in Top 11 National Markets for Men's Grooming Products, as of July 2009 Rank in Market/ Rank in No. Entire Retail Sales Country No. of Males Males Population 5 China* 1 688,376,749 1,338,612,968 10 India 2 600,886,425 1,166,079,217 1 The United States 3 151,205,402 307,212,123 5 Brazil* 4 98,271,218 198,739,269 9 Russia 5 64,529,760 140,041,247 2 Japan 6 61,956,584 127,078,679 4 Germany 7 40,480,932 82,329,758 3 France 8 31,496,101 64,057,792 6 The United Kingdom 9 30,267,602 61,113,205 7 Italy 10 28,490,614 58,126,212 8 Spain 11 19,798,323 40,525,002 Subtotal 1,815,759,710 3,583,915,472 ROW 1,597,230,778 3,123,077,680 Total World 3,412,990,488 6,706,993,152 * Brazil and China share the fifth rank in retail sales. Source: The CIA World Factbook; Packaged Facts

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Chapter 2 The Worldwide Men’s Grooming Market

Highlights

• This new Packaged Facts report investigates the world consumer marketplace for personal care products used by men in their daily grooming routines. The world market is discussed according to country and region; and according to five product categories – bath products, deodorant, haircare, shaving products, and skincare.

• Because the world’s men actually use more non-male-specific personal care products than male-specific, Packaged Facts covers both; we provide the retail figures for 1) male-specific products and 2) for the consumption of all personal care products used by men.

• Packaged Facts estimates that the global retail value of all grooming or beauty products used by men will reach $61.3 billion in 2009. This level reflects total growth of over 37% – or a stirring $16.6 billion – during the five years 2004-2009.

• Global retail sales of grooming products positioned specifically to men are projected by Packaged Facts to attain $19.7 billion by the close of 2009. The total increase for the period 2004-2009 is therefore calculated at almost 42%.

• Packaged Facts estimates that, in 2009, mass retail stores account for approximately 61% of the world’s expenditure for any personal care products – male-specific or not – used by men in their grooming rituals.

• In 2009, U.S. retail sales of all grooming products consumed by men are expected to push to $14.1 billion, or to more than double Japan’s $6.3 billion. France and Germany follow, with $4.6 and $4.5 billion, respectively. Brazil and China are tied in fifth place, with about $4.4 billion each.

• The five fastest-growing markets are Russia, which has catapulted over 49% during 2004-2009, to $2.9 billion; China, powering upward by more than 46% to its abovementioned $4.4 billion; Spain, achieving almost a 45% jump, to $3.1 billion; Brazil, climbing 42% to its $4.4 billion; and the United States, which has seen retail sales jump 41%, to reach its $14.1 billion.

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• Packaged Facts projects that retail sales of all grooming products used by men will push upward by almost 39% during 2009-2014, or by $23.6 billion. The market will therefore hit $84.9 billion by 2014.

• China is expected to show the fastest sales growth during 2009-2014, at a blazing 57%. The United States will achieve second-fastest growth, yet still be a juggernaut, at more than 50%. Another developing BRIC country, Russia, will be third- speediest, expanding sales by 47% over the next five years.

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Introduction

Market Definition

It should be noted that many countries’ modern HBC (health and beauty care) sell-through channels, whether well-established, as in the United States and Canada, or just emerging on a national basis, as in Indonesia, are undergoing rapid change. Therefore we cover examples of marketers that sell brands through a wide range of retail channels:

• The three mass channels, which are mainstream supermarkets, chain drugstores, and mass merchandisers. A few examples of mass retailers of men’s grooming products are Alliance Boots (primarily in the United Kingdom), CVS Caremark (United States), Shoppers Drug Mart (Canada), Target (United States), and Wal-Mart (United States).

• Prestige, encompassing upscale department stores such as Henri Bendel (based in New York), Bloomingdale’s (New York), Galeries Lafayette (Paris), GUM (Moscow), Harrod’s (London), Nieman Marcus (Dallas), and TSUM (Moscow); plus upscale salons and spas with retail counters, independent boutiques, etc.

• Pop-prestige chains (The Body Shop, Origins, Sephora).

• Natural food/HBC stores (Whole Foods).

• Direct sales media, including Internet websites, mail-order catalogs, television infomercials and home shopping networks (HSN, QVC), mobile, and so on. Since 2000, “direct” has increasingly offered prestige HBC. Direct marketers such as Avon and Amway are among the men’s grooming products sales leaders in many countries.

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In 2009, multinational and multi-channel strategies are almost a mandate for large and midsize companies’ success.

Sales of products for professional use are excluded here, yet there is doubtless overlap with the consumer sphere. Of course, men’s grooming products intended for use at home may be positioned on professional use or quality; sales of such products are indeed counted within Packaged Facts’ hard-number estimates.

Men’s Grooming Sales Data Provided in Two Modes

And while modern men in diverse cultures have assumed their fair share of household chores, we further allow for the persistence of tradition, inasmuch as many women – even in 2009 – still shop for the men’s grooming products used in their households. (For demographic information, consult Chapter 8, The Consumer.)

Glossary

The following terms, relevant to marketing men’s grooming products, may be used in this report:

ASEAN

The Association of Southeast Asian Nations was established in 1967 by Indonesia, Malaysia, The Philippines, Singapore, and Thailand. By 1999, the Association had grown to include

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Brunei Darussalam [sic], Cambodia, Lao PDR, Myanmar, and Vietnam; as of 2006, it represented over 560 million people, and transacted $1.4 trillion in international trade.

The stated mission of ASEAN is to promote security and peace in the region, and to promote free trade. As a result, the ASEAN Free Trade Area, established in 1992, strives to make the member countries function as one unit, production-wise. Intra-regional tariffs on various goods have been eliminated, or greatly reduced.

Carbon Footprint

Refers to the impact of one’s personal lifestyle upon the environment, based upon measurement of one’s consumption of fossil fuels, and the resultant carbon dioxide. Household heating or cooling, air miles flown, automobile ownership, electrical usage, the limits of one’s personal travels, and the purchase of transported foods are among the factors used to compare one lifestyle’s (or one manufacturer’s or marketer’s) carbon footprint with that of another. Carbon dioxide emissions are of course the critical factor in the production of greenhouse gases, which cause global warming.

To take the measure of one’s carbon footprint, one can visit Al Gore’s www.climatecrisis.net/takeaction, www.carbonfootprint.com (British-based), www.safeclimate.net/calculator, or other sites.

“Carbon offset” or “carbon credit” is the term for the value of green-conscious activity that mitigates the size of one’s carbon footprint.

Cosmeceutical

A term first found in medical monographs in the early 1960s, and thereafter forgotten till the early 1990s, when it was resurrected to describe a small number of anti-aging skincare preparations that contained alphahydroxy acids (AHAs). By 2008, “cosmeceutical,” as adjective or noun, has come to describe any beautifying skincare, haircare, or makeup product that also provides some kind of preventive, protective, or therapeutic benefit. In its broadest sense, the term still applies to an AHA-based anti-aging serum, but also to any skin moisturizer or hair conditioner; to shampoo with herbs to heal irritated scalps; and to any preparation that simply has a soothing botanical – perhaps eucalyptus leaves, lavender flowers, an Australian tea tree – pictured on the label, to suggest relief of stress.

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Cosmeceuticals overlap a bit with remedies, as in the case of acne-fighters or anti-dandruff shampoo.

Sometimes, products described as cosmeceuticals have very specific claims made for them – claims that may be subject to review by governmental agencies. But more often, marketers simply note ingredients that are widely understood to possess salutary effects upon the body, while they avoid making any claims at all. Tea tree oil, for example, is well known for its antiseptic properties, CoQ10 for its maintenance of cell nuclei, olive oil for its antioxidant properties, shea butter for its moisturizing power, etc. In such cases, marketers need risk no further explanation on labeling.

Direct

Whether adjective or noun, “direct” is used of direct-to-consumer sales channels that bypass physical stores, also called “brick-and-mortar” stores. Direct retail channels include Internet websites (or “e-tail”), mail-order catalogs, print ads with order blanks, television home shopping networks such as HSN and QVC, television infomercials, networks of sales associates (such as Avon’s), multilevel marketing schemes, and so on.

“Multilevel marketing” refers to programs in which consumers become salespersons, who in turn benefit by recruiting yet other consumers to become salespersons, too. Examples are the sales forces for Amway personal care and household goods; Herbalife nutritional, skincare, and weight-loss products; and Mary Kay cosmetics.

Fair Trade

Refers to materials-sourcing from developing countries, according to practices that benefit the manufacturer or marketer, at the same time that local, usually impoverished farmers or laborers are paid fair rates for what they produce. The idea of Fair-Trade practice also involves enabling those locals to achieve better lives; for example, Fair-Trading manufacturers/marketers often insist that goods are not made by children, and that raw ingredients are renewable and harmless to workers and the environment. Fair Traders may also sponsor educational programs designed to prevent violence against women, to improve local sanitation, and so on.

Fair Trade was pioneered by Anita Roddick, who founded The Body Shop PLC in 1976. Ms. Roddick positioned her quasi-natural, The Body Shop-brand personal care products on

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ingredients sourced via Fair Trade relationships with local producers in the Third World. The Body Shop and its 2,100 brand-dedicated stores were acquired by L’Oréal in 2006.

Green

Used of environmentally responsible actions or thinking, as in “green-mindedness,” “green- consciousness,” and so on. “Green” is also used alone as an adjective, per “green design” or “green manufacturing.”

Grooming Products

Essentially the masculine equivalent of the more feminine “beauty products.”

HBC

Acronym for “health and beauty care.” Interchangeable with “HBA,” for “health and beauty aids.” Often also interchangeable with “personal care products” or “grooming products.”

Market versus Category versus Segment

Too many sources use the terms “market,” “category,” and “segment” interchangeably. Packaged Facts finds it clearer to designate the overall men’s grooming business as the market; the five main product groupings (bath products, deodorant, haircare, shaving products, skincare) as categories; and the various product types (body wash, disposable razors, shampoo, etc.) within those categories as segments or even subsegments.

Example: A pre-shave lotion is counted within the lotion segment of the shaving products category of the overall men’s grooming products market.

Packaged Facts finds that this hierarchy is clearest and best comprehended.

Mass Retail Channel(s)

Used by itself, or as an adjective, the word “mass” refers to the mass retail channel, in turn composed of three principal channels – mainstream supermarkets, chain drugstores, and mass merchandisers.

Not all countries have well-established mass-retail infrastructures. The U.S./Canadian and European regions have such infrastructure solidly in place. But Indonesia, though home to 240.3 million people, is still developing a mass-retail channel.

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NAFTA

The North American Free Trade Agreement (NAFTA) took effect on January 1, 1994. The Agreement is trilateral, between Canada, Mexico, and The United States. The combined population of these countries, at 445.3 million in 2008, enjoys the largest GDP in the world, an estimated $17.2 trillion, according to the International Monetary Fund (IMF); or as broken out into purchasing power parity, $35,491 per capita (again, in 2008).

NAFTA’s goal is to function as the planet’s mightiest trade bloc; while intra-regionally, the three countries are working to eliminate all tariff and non-tariff obstacles to commerce between them.

Natural vs. Organic

Packaged Facts attempts to make precise use of the terms “natural” and “organic.” “Natural” signifies that a personal care product is composed of ingredients found in nature. “Organic” further signifies that those ingredients are pure, having been grown or refined without the aid of artificial colors or flavors, pesticides, preservatives, or any other synthesized, possibly harsh or toxic chemicals.

“Organic” has emerged as the term that is better understood by consumers; equated with the common phrase “pure and unadulterated,” “organic” is less vague than “natural.” Therefore, it is reasonable to assume that “organic” has become the more trusted descriptor, simply on the basis of its clearer, more finite definition.

Yet the distinctions between natural, organic, and semi-natural are very hazy, as those familiar with the natural HBC industry know all too well. Labels that suggest “natural” or “organic” often refer only to specific ingredients in otherwise non-natural formulations; this is most typical of products sold through mass outlets – but is certainly observed of many products sold through the natural channel, too. One must realize that even these featured ingredients may be heavily diluted in hydrosols – that is, in water – whether formulations are completely natural or not.

Those new to the personal care industry may be surprised to learn that many natural/organic men’s grooming products do have some non-natural content – perhaps a little chemical preservative, or a foaming agent like sodium lauryl sulfate, or the emulsifier and humectant propylene glycol, etc.

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Important: Throughout this report, “natural” may also refer to both natural and organic men’s grooming products taken together. This follows the HBC industry’s convenient use of the term.

Remember: All organic products are natural, but not all natural products are organic.

Over the Counter (OTC)

Personal care products and medicines that are legally sold to consumers without doctors’ prescriptions are often designated as “OTC.”

Parapharmacies

Pharmacies or drugstores that are not authorized to sell prescription medications. In theory, they are allowed to sell only OTC products, including remedies, beauty, and grooming items. But in some developing countries, Uzbekistan, for example, illegal sale of prescriptions via parapharmacies has made needed medications available to residents of small villages and towns (Euromonitor International, April 2009 press release).

Prestige and Pop Prestige

“Prestige” – adjective or noun – is used of upscale-priced personal care products sold through high-end department stores (for U.S. examples, Bergdorf Goodman, Bloomingdale’s, Dillard’s, Henri Bendel, Lord & Taylor, Neiman Marcus, Nordstrom; in London, Harrod’s; in Paris and Dubai, Galleries de Lafayette; in Russia, GUM and TSUM; etc.). Other prestige outlets include expensive salons or spas that have retail counters, and some specialty stores (whether brand-dedicated stores such as Aveda, Origins, The Body Shop – all three of which offer men’s grooming collections – or independent upscale boutiques).

Prestige products are increasingly sold through traditionally non-prestige outlets, even mass. And a growing minority of natural/organic brands that have been extended with men’s grooming items – e.g., Ahava, Annemarie Borlind, Aubrey Organics, Burt’s Bees, Weleda, Zia – are sold through both prestige and natural food/HBC stores. Weleda, for instance, is sold through chain drug-retailers CVS and Target, through Whole Foods Market, and through spas with retail counters.

“Pop prestige” is Packaged Facts’ term for upscale HBC business through such chains as Bath & Body Works, The Body Shop, Origins, Sephora, and others. Pop-prestige outlets are

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less intimidating to consumers, because they have “open-sell” formats – that is, products are on the open shelves, not guarded by chic sales clerks stationed behind glass counters. These outlets also tend to be more accessible, because they are situated at local malls or in high- traffic areas; and they are more democratic, because the products stocked tend to be positioned on specific conditions or concerns – acne treatment, wrinkle-reduction, dry skin, split ends, ranges of pigment, etc. – and not on shoppers’ age, race, or even gender.

The pop-prestige format seems particularly welcoming to men who may be shy about trying an anti-aging serum or eye cream for the first time, because they do not have to approach those intimidating clerks behind counters, as would be required of them in traditional prestige outlets.

REACH

REACH is a quasi-acronym for Registration, Evaluation, Authorization, Restriction of Chemical Substances, a body of regulations enacted into law by the European Union on June 1, 2007. The law is designed to prevent the use of dangerous ingredients in consumer products manufactured within the EU’s 27 countries, or the importation of such products into the EU – that is, if there is any reasonable substitute for the offending ingredients.

REACH stipulations are administered by the European Chemicals Agency (ECHA), located in Helsinki. Manufacturers and importers are required to register products/ingredients with the Agency, which maintains a database. The regulations that comprise REACH are being phased in over an 11-year period that concludes in 2018. For information on registering products/ingredients with ECHA, consult http://echa.europa.eu/.

SKU

Acronym for “stock keeping unit.” Every version of product design or packaging is a separate SKU. Take the example of a brand of shave cream available in Regular or Sensitive Skin formulas, each in four scents, and each scent in both a pump dispenser and a stand-on- end tube. The brand-line’s total number of SKUs is therefore 16.

Specialty

A “specialty” retail channel or outlet is literally specialized in the sale of one product or one group of products. Sporting goods, for example, are sold through a variety of outlet types,

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though dedicated sporting goods stores are obviously what is indicated by the word “specialty” – which can be adjective or noun.

“Specialty,” as used in this report, applies to any retail outlet or channel that sells mainly men’s grooming, HBC, or beauty products alone; that sells men’s grooming, HBC, or beauty products under a single brand; or that specializes in any non-HBC product grouping (gourmet foods, baby products, travel goods, yoga accessories, etc.), while including a few male- oriented personal care items in its product mixes.

As referenced here, specialty retailers may or may not sell men’s grooming products exclusively.

Supermarket, Chain Drugstore, Mass Merchandiser

These three outlet types comprise the mass retail channel: “Supermarket” refers to any grocery store (or in the United States, any grocery store transacting at least $2 million at retail annually). “Drugstore,” unless otherwise noted, refers to a chain outlet that sells a full selection of HBC products, some general merchandise, and prescription medications. A “mass merchandiser” is any large, usually chain retailer that offers a broad range of non-food products, whether or not it also sells foods and beverages. Most mass merchandisers are discounters, at least to some degree.

Large-format supermarkets and drugstores often additionally sell general merchandise. The terms “combo store” or “hypermart” are used to describe huge mass-retail venues that sell both groceries and extensive non-food assortments.

Sustainable (also, Renewable)

Refers to nature’s raw material sources that replenish themselves, if they are not over- exploited. Wood, for example, given that forests are properly managed, is a sustainable resource; but fossil fuels, which take millions of years to form deep below the earth, and which are being consumed at exponential rates, are not sustainable.

Sustainability is closely allied with green-consciousness, and is a green concern.

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Methodology

Men’s Grooming Products: A Global Analysis is based on information gathered from primary, secondary, and syndicated sources. Primary research involves on-site study of how men’s grooming products are sold through retail stores; Packaged Facts also consults with industry executives from around the world. Secondary research involves the evaluation and comparison of data from mountains of articles found in financial, marketing, and retail publications, as well as on corresponding types of websites. Company literature, government agencies, and other sources also provide valuable secondary data.

Stats on market revenues and growth trends derive from all available data on the men’s grooming marketplace, whether quantitative or qualitative; that is to say, a broad range of societal and economic trends are factored in, to help shape the most accurate possible view of sales progress.

Data on new product introductions from around the world are provided by Product Launch Analytics, a Datamonitor service; the introductions are tallied by product type, country, and company. Extensive demographic information has been provided by Experian Simmons. Packaged Facts also presents data from its own online consumer survey, conducted in February 2009.

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Men’s Grooming Products

Five Categories

Packaged Facts identifies five categories of men’s grooming products, which in descending order of global retail dollar sales are shaving products, bath products, haircare, deodorant, and skincare products.

Descriptions of the categories follow, in alphabetical order.

Bath Products

Men’s bath products include bar soap, liquid soap, bath gel, bath salts, and body wash. The most widely used products are the soaps, but in the 2000s, body washes have been responsible for most of the category’s high-profile marketing activity. Advertising for Unilever’s Axe brand, for example, known in Australia, Ireland, and the United Kingdom as Lynx, has been positioned on outrageous humor to appeal to teenage and twentysomething men. Procter & Gamble’s Old Spice is similarly positioned.

Men also account for a small degree of consumption of traditionally less masculine bath items such as bath oils and other additives, bubble bath, guest soaps, etc.

Deodorant

This category includes both simple deodorants, which neutralize or mask the odor of underarm perspiration – or sweat; and antiperspirants, which actually cause pores to close.

Sweat is essentially odorless until bacteria ferment it. Deodorants are usually alcohol-based, and to fight odor, may use hops as antimicrobials. Antiperspirants, classified as drugs by the U.S. Food and Drug Administration (FDA), typically use aluminum salts that combine with the body’s own electrolytes to form gel plugs in one’s pores, thus stopping the flow of sweat.

However, despite their efficiency, aluminum salts are linked with damage to the blood-brain barrier, to various cancers, and renal (i.e., kidney) difficulties. Consequently, natural/organic preparations are always deodorants, never antiperspirants.

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Deodorant forms are waxy push-up sticks, liquid roll-ons, body sprays (which can also be used on the feet and other body parts), and solid irregular rock shapes.

Because the deodorizing function is shared by body washes, marketers sometimes use the same outrageous humor that helps sell those products, when selling deodorant. Düsseldorf, Germany-based Henkel, via its Dial Corporation subsidiary in the United States, is one of several major examples; the company has supported Right Guard deodorant with broad boyish humor in television commercials starring rappers Red Man and Method Man.

Haircare

Of all the haircare products used by men, styling products are the likeliest to be male- specific; yet this depends on cultural considerations, as well as on individual brand- positionings.

Shampoo

Like soap, deodorant, and shave cream, shampoo is one of the basic toiletries used by most of the world’s men. Shampoo types include formulations for dry, normal, or oily hair; anti- dandruff shampoo; anti-psoriatics; formulations that repair damaged or color-treated hair shafts; those claiming to moisturize hair; and etc.

In 2009, shampoo brands are still rarely male-specific, although male-specific shampoo is indeed quite popular in Japan. However, anticipating a trend to haircare products formulated for men, Germany-based Beiersdorf has extended Nivea for Men with shampoo, dandruff shampoo, and styling gel and paste.

Conditioner/Treatments

Conditioner is meant to coat hair shafts, in order to repair and protect them. There are two types: Conditioner meant to be rinsed out (also called “crème rinse”), and that meant to be left on the hair.

Treatments are also included here. These range from heavy conditioners for the rescue of severely damaged hair, to hot oil treatments, to scalp refreshers that relieve irritations caused by the harshness of hair relaxers, hair bleach, and the like.

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Styling Products

These are any preparations that hold or sculpt men’s hair, among them creams, foams, gels, liquids, mousse, oils, pastes, pomades, sprays (aerosols or pumps), and waxes.

Haircolor

Hair dyes used by men are sold in permanent, semi-permanent, and temporary versions. Male-specific brands – Combe’s Just for Men, for example – may appear on SKUs for dyeing beards and moustaches, as well as on the usual SKUs that color the hair on one’s head.

Men’s haircolor is often positioned on ease of use, and convenience, because men are generally thought to be less patient with beauty procedures than are women. Hence Just for Men overboxes are in many cases tagged prominently with the number 5, to signify that the particular SKUs color hair in just five minutes, as opposed to the 20-45 minutes required by some other haircolor brands.

Other

The “all other” designation encompasses hair relaxers/straighteners; home permanents; over- the-counter (OTC) hair growth products such as Johnson & Johnson’s Rogaine; texturizers, which are “semi-relaxers” that impart a looser style, while exposing one’s scalp to smaller amounts of harsh chemicals; and so on. All of the “other” haircare products listed here are sold in male-specific, unisex, and/or female-specific versions. The same products, with the exception of OTC hair growth items, are used especially by men of African heritage, wherever they live in the world.

Shaving Products

Male-specific brands of shave cream and razors and after-shave lotion might be the first examples that come to mind when one thinks of men’s grooming products. Yet many men opt for natural/organic or prestige versions of shave cream and after-shave that often happen to be unisex. Increasingly, however, marketers in the natural/organic and prestige spheres are extending their brands with male-specific collections.

Shave Cream

Shave cream lubricates the face and neck, thus making it easier to maneuver a razor in ways that help it to cut whiskers smoothly and as level as possible with the skin. Shave cream is

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still sold in round bar soaps, which are set in shaving mugs and whisked into a foam with a special brush. But that antique form is mostly superseded by creams or gels dispensed via aerosols, pumps, and stand-on-end squeeze tubes.

Lotions/Balms

Shave lotions include pre-shave and after-shave lotions and balms, which, aside from preparing one’s face for the assault of the blade, and then disinfecting the shaven skin, may also act as astringents and toners. Many men let their after-shave double as fragrance, too; after-shave tends to contain alcohol, thus making it a good base for cologne-like scents. In fact, there is some overlap – confusion – of after-shaves with colognes; the latter, along with fragrances in general, are excluded from this report.

Razor bump treatments are also included in the lotions/balms segment. Some men suffer from an irritating condition known scientifically as pseudofolliculitis barbae – or more commonly as “razor bumps” – arising from ingrown whiskers. Men of African heritage are the most susceptible, for their extremely curly whiskers, once shaven, may spiral back into the skin as they regrow.

Disposable Razors/Shavers

The varieties of disposable razors are numerous, starting with the simplest single-blade models with rigid handles, and working up to triple-blade and even quadruple-blade models featuring sophisticated flexible mountings and/or handles.

The heads of some disposables also have strips impregnated with vitamin E or lanolin, behind the blades; while the user wet-shaves, the strips release their material onto the blades, which then spread it over the skin. The strips charged with beneficial substances are often positioned on soothing skin that is over-sensitive to shaving.

Manual Razors/Shavers

Manually operated, but refillable razors are an increasingly important segment of the shaving products category, because replacing the blade cartridges saves money, and because green- conscious men feel that “going manual” is less wasteful than using disposable razors. The Gillette Fusion brand of manual razors, introduced in 2005, has become one of Procter & Gamble’s billion-dollar brands by 2009.

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Electric Razors/Shavers

There are two main types of electric razors, those with foil heads and those with rotary heads. In the foil configuration, a blade up to a couple of inches wide oscillates behind a screen; while rotary shaves employ circular blades that spin inside round housings. Foil shavers sometimes have twin blades; rotary shavers have one to three blades.

The efficiency of foil versus rotary shavers depends on brand, model, and very much on the contour of a man’s own face, and on the heaviness of his beard.

Other ways to class electric shavers are by cordless rechargeable versus non-rechargeable models; and by “wet-dry” models that can be used in the shower, versus those that can be operated safely under dry conditions only.

Battery-operated razors are basically manual razors fitted with batteries in the handles, to make the blades vibrate, thus lifting whiskers for a closer, smoother shave.

Other

Other shaving products include mostly replacement blades and cartridges, for both manual and electric shavers; Philips Norelco replacement rotary heads are sold through U.S. mass- retail channels for about $40. The “Other” segment also includes shaving mugs and brushes, rechargers, and for manual razors, holders and stands that can be very expensive.

Skincare Products

The men’s skincare products category encompasses acne-fighting preparations, anti-aging serums, astringents, exfoliants, eye creams, facial cleansers, foot scrubs, hand and body lotions, masques, moisturizers, night creams, soothing balms, suncare products, self-tanning products, toners, and so on. The available assortment of male-specific versions of these products is steadily expanding.

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Market Size and Growth

Worldwide, $61.3 Billion Spent on Grooming Products Used by Men in 2009

Packaged Facts estimates that the global retail value of all grooming products used by men (that is, bath products, deodorant, haircare, shaving products, and skincare products) is reaching $61.3 billion in 2009. [Table 2-1] This level reflects total growth of over 37% – or a stirring $16.6 billion – during the five years 2004-2009. Such progress transposes into a compound annual growth rate (CAGR) of almost 7%.

Sales of Male-Specific Grooming Products at $19.7 Billion

Global retail sales of grooming products positioned specifically to men are projected by Packaged Facts to attain $19.7 billion by the close of 2009. [Table 2-1] The total increase for the period 2004-2009 is therefore calculated at almost 42%. The CAGR for the same five- year span is consequently 7%.

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Men’s Grooming Demand Withstands Recession Fairly Well

In developing countries, where the ripples of recession hit last, sales growth will take a little more time to regain pre-crash momentum.

Table 2-1 Worldwide Retail Dollar Sales of All Grooming Products Consumed by Men, and of Male-Specific Grooming Products, 2004-2009 (In Billions)

Male-Specific Products Account for a Third of Men’s Grooming Dollars

Based on Packaged Facts’ numbers in Table 2-1, male-specific products account for over 32% of the retail value of all grooming products consumed by the world’s men in 2009. Roughly the same relationship was carried forward from 2004, when the male-specific share was 31%. Clearly, sales of grooming products in both the male-specific and non-male- specific modes have climbed together.

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No Surprise – Shaving Items Dominate

As one might surmise, shaving products account for the biggest chunk of global men’s grooming retail sales (i.e., sales of all grooming products consumed by men) in 2009 – almost 38%, or $23.0 billion. [Table 2-2] Bath products (including soap) follow, with about 20%, or $12.2 billion; the category edges out haircare, at 19%, or $11.9 billion. There are rumblings in the HBC industry that marketer activity in haircare will boost this category’s share in the coming years.

Table 2-2 Share of Worldwide Retail Dollar Sales of All Grooming Products* Consumed by Men, by Product Category, 2004-2009 (In Billions)

Mass Retail the Top Channel for Men’s Grooming Products

With over 260 countries and territories in the world, and with numerous retail channels in even the least affluent of these, any breakout of global men’s grooming product sales by outlet type is bound to be somewhat speculative. Local shopping practices also vary by culture, as well as by retail infrastructures that may be in place.

However, extrapolating from published data, Packaged Facts estimates that, in 2009, mass retail stores account for approximately 68% of the world’s expenditure for any personal care products – male-specific or not – used by men in their grooming rituals. [Table 2-3] Mass is here defined as supermarkets, chain drugstores, and mass merchandisers.

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Department stores and other sources of upscale – prestige – HBC account for another 12% of sales. Direct sales, whether accomplished by door-to-door sales associates and multilevel marketing schemes, or via Internet websites, television home shopping networks, infomercials, or mail-order catalogs, account for 10% (“direct’s” share of women’s beauty product sales is assumed to be somewhat higher, perhaps 15%).

The remaining 10% of sales of grooming products consumed by men derives from a miscellany of airport kiosks, beauty supply stores, convenience stores, independent grocers, indie drugstores, newsstands, specialty stores, etc.

As for sales of male-specific HBC, mass accounts for a bit less, commanding 59% of retail dollars, while prestige and direct make better showings at 21% and 14%, respectively. All other channels for male-specific sell-through account for just 6%.

To reiterate, brick-and-mortar retail situations range from sparsely stocked farmers’ living rooms in rural India; to neighborhood indie chemists/pharmacists in Ireland; to Wal-Mart mega-stores in the United States, Canada, China, and other countries. In just a few years beyond 2009, developing countries’ improved distribution networks and access to modern retail venues may significantly alter the global picture of men’s grooming sales according to outlet type.

Table 2-3 Share of Worldwide Retail Dollar Sales of Men's Grooming Products, by Retail Channel, 2009

Male-Specific All Grooming Channel Products Items Used by Men Mass (Supermarkets, Chain 59% 68% Drugstores, Mass Merchandisers) Prestige/Pop-Prestige 21 12 Direct Sales (Mail-Order Catalogs, Television 14 10 Home Shopping, Multilevel Marketing, etc.) All Other Channels 6 10 Total 100.0% 100.0% Source: Packaged Facts

U.S., Japan, France, Germany Lead Sales of All Grooming Products Consumed by Men

In 2009, the United States’ retail sales of all grooming products consumed by men are expected to push to $14.1 billion, or to more than double Japan’s $6.3 billion, according to

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Packaged Facts. [Table 2-4] France and Germany follow, with $4.6 and $4.5 billion, respectively. Brazil and China are tied in fifth place, with about $4.4 billion each.

Table 2-4 Worldwide Retail Dollar Sales of All Grooming Products Consumed by Men, by Country, 2004-2009 (In Billions)

Total % Change *CAGR Country 2004 2009 2004-2009 2004-2009

Same Four Countries Lead Sales of Male-Specific Grooming Products

Packaged Facts calculates that the United States, Japan, France, and Germany are also the top four countries in the male-specific aspect of the global grooming market: U.S. retail sales have leapt by more than 46% during 2004-2009, and are expected to finish the period at $5.6 billion. [Table 2-5] Japan, with $3.0 billion, again follows with less than half the U.S. sum, despite having plumped sales by a total 27% over the same five years. France, predicted to finish at $1.6 billion, and Germany, at $1.5 billion, will thus post total increases of 44% and 49%, respectively, for 2004-2009.

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BRIC is accounting for some of the most magnificent retail dollar growth rates during 2004- 2009: China and Russia are each posting five-year 59% jumps in male-specific grooming sales, therefore finishing 2009 at respective sums of $1.0 billion and $600.0 million. Brazil is next fastest-growing in the male-specific aspect of the market, with a 57% total advance, but is the BRIC dollar leader, at $1.4 billion; while India is achieving 32% growth for the five- year period, carrying it to about $800.0 million.

Table 2-5 Worldwide Retail Dollar Sales of Male-Specific Grooming Products, by Country, 2004-2009 (In Billions)

Total % Change *CAGR Country 2004 2009 2004-2009 2004-2009

World $13.9 $19.7 41.7% 7.2% United States 3.8 5.6 46.2 7.9 Japan 2.4 3.0 26.5 4.8 France 1.1 1.6 43.9 7.6 Germany 1.0 1.5 49.0 8.3 The United Kingdom 1.1 1.5 32.3 5.8 Brazil 0.9 1.4 56.5 9.4 China 0.6 1.0 58.5 9.7 Italy 0.8 1.0 21.9 4.0 India 0.6 0.8 32.3 5.8 Spain 0.5 0.7 43.9 7.6 Russia 0.4 0.6 58.9 9.7 **R-O-W 0.7 1.0 41.4 7.2 * Compound annual growth rate. ** Rest of world. Source: Packaged Facts

Europe/U.K. Lead Sales by Region

Western Europe and the United Kingdom control nearly a third of the world’s retail sales of all grooming products consumed by men; this slice transposes to $19.9 billion. [Table 2-6] The United States and Canada follow, with a joint 27% share that equals $16.6 billion. Asia and the Pacific Rim account for another 23%, or $14.3 billion.

As for male-specific grooming products sales, the order of regions is the same.

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Table 2-6 Share of Worldwide Retail Dollar Sales of All Grooming Products Consumed by Men, and of Male-Specific Grooming Products, by Region, 2009 (In Billions)

Male-Specific Value of All Grooming Region Grooming Products Products Consumed by Men* $ % Share $ % Share Europe and United Kingdom $6.5 33.0% $19.9 32.5% United States and Canada 5.8 29.4 16.6 27.1 Asia & Pacific Rim 5.0 25.4 14.3 23.3 Latin America 1.6 8.1 6.5 10.6 Eastern Europe and Russia 0.7 3.6 3.4 5.5 Rest of World (R-O-W) 0.2 1.0 0.6 1.0 Total $19.7** 100.0%** $61.3 100.0% * Retail value of all grooming products consumed by men includes sales of both male-specific and non-male-specific products. ** Column does not add exactly to total, due to rounding. Source: Packaged Facts

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Imports and Exports

Special Note on Foreign Trade Data

In this section, Packaged Facts presents U.S. Department of Commerce dollar value data on imports and exports of two classes of products, razors and razor blades, and personal care preparations (“toiletries”) such as bath products, deodorant, and shaving products. These data include the value of both men’s and women’s versions, but in the razors/razor blades and toiletries product classifications, it is certain that men’s versions account for a majority – or at least very significant – share of foreign trade. Haircare and skincare product data are excluded here, because any perspective on the relatively small value of male-specific versions of these products is much more difficult to separate out, or even to “guesstimate.”

Wild Fluctuations from Year to Year Are Normal

Packaged Facts cautions that import/export values can swing wildly up or down, from year to year. Fluctuations can result from just one large marketer’s shipment sent or received – or from the same large marketer’s lack of a shipment. Thus individual marketers’ competitive strategies, inclusive of their patterns of new product introductions, can often explain a surge or a sudden big decrease.

However, real trends in foreign trade can be identified over spans of at least a few years. The rise of various countries in the trade partner rankings can also help marketers to determine which countries or regions are “hot spots.”

Razor/Razor Blade Imports Climb to $368.2 Million in 2004-2008

Imports into the United States of razors and razor blades for both men’s and women’s use, were valued at $368.2 million in 2008, which was a total of 44% above the level in 2004. [Table 2-7]

Judging by the $193.2 million in import value tallied during the first six months of 2009, it is very likely that value for the full year 2009 will surpass that of 2008.

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Mexico was the leading exporter to NAFTA trade partner the United States, shipping $87.5 million worth of razors/razor blades in 2008.

Among the top 10 national sources of these products, seven posted double-digit increases in the values of shipments during 2004-2008. Three saw such values slide: Shipments of razors and razor blades imported from Japan, Canada, and Brazil were valued at 36%, 25%, and 18% less, respectively, by the end of the four-year period.

Table 2-7 Value of U.S. Imports of Razors and Razor Blades*, by Country Exporting, 2004-2008, and January 2009 Through June 2009

Imports % Change, 2009 Trading Partner 2004 2006 2008 2004-2008 (January-June) World Total $254,965,048 $349,518,045 $368,209,281 44.4% $193,153,221 Mexico 72,997,684 90,712,791 87,480,682 19.8 39,496,283 China 54,719,176 54,170,577 80,652,695 47.4 48,680,503 Greece 39,187,702 48,963,595 57,352,066 46.4 28,162,599 Poland 34,026 41,986,298 44,732,323 131,265.1 23,562,450 Germany 17,647,859 26,347,391 25,988,974 47.3 17,283,656 Canada 23,437,901 17,811,120 17,596,587 -24.9 6,475,467 Brazil 16,936,569 26,963,286 13,862,442 -18.2 7,284,829 France 1,386,545 15,511,676 13,059,837 841.9 5,201,151 South Korea 6,025,541 8,166,872 9,808,681 62.8 6,137,589 Japan 8,569,935 5,177,016 5,457,275 -36.3 3,554,674 Subtotal $240,942,938 $335,810,622 $355,991,562 47.7% $185,839,201 All Other $14,022,110 $13,707,423 $12,217,719 -12.9% $7,314,020 * Includes versions for both men and women. Source: U.S. Department of Commerce; Packaged Facts

Razor/Razor Blade Exports Push to $368.7 Million

During 2004-2008, the value of razors and razor blades exported from the United States grew by a total of almost 11%, to $368.7 million. [Table 2-8] The $153.4 million posted in the first half of 2009 suggests that export values of these products over the full year 2009 might not equal the value achieved in 2008.

Canada, the United Kingdom, and Mexico were the top destinations for razors/razor blades in 2008, though their corresponding shipment values fell by totals of 11%, 6%, and 7% during the whole span 2004-2008. At the same time, values of exports to Germany rocketed by 2,187%, to China, by 332%, and to Malaysia, by 153%.

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Table 2-8 Value of U.S. Exports of Razors and Razor Blades*, by Country Importing, 2004-2008, and January Through June 2009

Exports % Change, 2009 Trading Partner 2004 2006 2008 2004-2008 (January-June) World Total $333,160,550 $354,528,543 $368,664,483 10.7% $153,436,387 Canada 127,629,977 127,982,550 113,036,615 (11.4) 54,252,827 United Kingdom 65,740,784 41,641,714 62,144,499 (5.5) 13,352,989 Mexico 42,299,076 39,638,524 39,553,027 (6.5) 22,547,723 Germany 1,383,089 14,637,172 31,633,140 2,187.1 18,811,597 Malaysia 10,678,437 16,441,027 27,005,743 152.9 6,728,063 Brazil 10,616,615 12,488,388 18,058,262 70.1 6,775,866 Hong Kong 13,578,212 16,334,248 16,407,904 20.8 5,993,314 Venezuela 8,087,814 11,744,826 12,052,810 49.0 2,909,007 Argentina 5,314,399 5,596,181 8,179,455 53.9 2,299,084 China 1,438,368 1,124,869 6,210,851 331.8 3,434,034 Subtotal $286,766,771 $287,629,499 $334,282,306 16.6% $137,104,504 All Other $46,393,779 $66,899,044 $34,382,177 -25.9% $16,331,883 * Includes versions for both men and women. Source: U.S. Department of Commerce; Packaged Facts

A Razor/Razor Blade Trade Surplus – Barely – in 2008

During 2004-2008, the United States’ exports of razors and razor blades yielded a miniscule $455,202 surplus value, versus the values of imports of these products. [Table 2-9] In 2004, the surplus was $78.2 million.

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Table 2-9 Trade Balance for Value of U.S. Imports/Exports of Razors and Razor Blades*, by Country, 2004-2008, and January Through June 2009

Trade Balance % Change, 2009 Trading Partner 2004 2006 2008 2004-2008 (January-June) World Total $78,195,502 $5,010,498 $455,202 -99.4% $(39,716,834) Canada 104,192,076 110,171,430 95,440,028 -8.4 47,777,360 United Kingdom 62,234,630 41,181,037 61,779,220 -0.7 13,110,046 Malaysia 10,563,802 16,441,027 27,005,743 155.6 6,728,063 Hong Kong 13,283,315 14,316,110 16,284,589 22.6 5,951,881 Venezuela 8,080,528 9,965,587 11,464,662 41.9 2,888,133 Argentina 5,240,568 5,165,503 8,138,323 55.3 2,299,084 Germany (16,264,770) (11,710,219) 5,644,166 234.7 1,527,941 Brazil (6,319,954) (14,474,898) 4,195,820 166.4 (508,963) Panama 671,396 442,192 3,772,715 461.9 1,373,921 Belize 134,721 157,125 3,627,148 2,592.3 956,719 Subtotal $181,816,312 $171,654,894 $237,352,414 30.5% $82,104,185 All Other $(103,620,810) $(166,644,396) $(236,897,212) -128.6% $(121,821,019) Includes versions for both men and women. Source: U.S. Department of Commerce; Packaged Facts

Imports of Toiletries Valued at $580.0 Million in 2008

More than $580.0 million worth of personal care products such as bath products, deodorant, and shaving preparations – but as noted, excluding haircare and skincare preps – were imported into the United States in 2008. [Table 2-10] This total was 38% higher than in 2004.

The import value for the same products imported during January-June 2009, at $262.8 million, would seem to point to a lower total for the full year 2009 – unless importation is stepped up, in time for the end-of-year gift-giving season.

Canada, China, and France were the top U.S. sources for the toiletries; values of Canadian imports were up over 15% during 2004-2008, Chinese imports were up 188%, and the French imports, up 21%. Also increased were values of shipments from Taiwan, by 177%, and from Spain, by 118%.

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Table 2-10 Value of U.S. Imports of Personal Care Preparations* (Excluding Haircare and Skincare Products), by Country Exporting, 2004-2008, and January Through June 2009

Imports % Change, 2009 Trading Partner 2004 2006 2008 2004-2008 (January-June) World Total $419,235,344 $488,750,894 $580,014,542 38.4% $262,822,925 Canada 180,875,426 178,171,143 208,686,325 15.4 101,413,098 China 45,662,248 76,000,406 131,699,502 188.4 52,082,521 France 28,834,130 31,091,931 34,820,992 20.8 14,691,634 United Kingdom 30,682,481 32,850,648 34,529,007 12.5 11,585,079 Spain 12,577,116 29,330,915 27,404,956 117.9 12,662,201 Mexico 28,426,460 39,640,547 23,512,230 (17.3) 20,218,748 India 12,575,704 17,326,087 19,268,434 53.2 9,880,675 Thailand 16,578,453 9,975,916 16,731,171 0.9 4,466,949 Germany 9,314,486 8,694,990 13,508,197 45.0 4,756,092 Taiwan 3,580,335 4,796,759 9,904,574 176.6 3,053,836 Subtotal $369,106,839 $427,879,342 $520,065,388 40.9% $234,810,833 All Other $50,128,505 $60,871,552 $59,949,154 19.6% $28,012,092 * Includes both men's and women's bath products, deodorant, and shaving preparations. Source: U.S. Department of Commerce; Packaged Facts

Exports of Toiletries Valued at $926.4 Million in 2008

The export value of toiletries (again, bath products, deodorant, and shaving preparations) shipped from the United States expanded 46% during 2004-2008, to $926.4 million. [Table 2-11] For January-June 2009, the value reached $427.6 million. Shipment value for the entire year 2009 might therefore be reckoned at a lower or similar sum, compared to that for 2008.

Canada was the top destination for U.S. exports of toiletries, and values of shipments headed there were up almost 31% during the four years 2004-2008. Japan, the second-ranked destination, received shipments in 2008 that were valued at 16% less than in 2004, while third-ranked The United Kingdom received shipments worth 47% more.

Values of toiletries exported to The Netherlands, China, and Venezuela increased 250%, 240%, and 140%, during 2004-2008.

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Table 2-11 Value of U.S. Exports of Personal Care Preparations* (Excluding Haircare and Skincare Products), by Country Importing, 2004-2008, and January Through June 2009

Exports % Change, 2009 Trading Partner 2004 2006 2008 2004-2008 (January-June) World Total $634,690,949 $835,933,232 $926,365,938 46.0% $427,649,316 Canada 209,707,695 241,671,833 273,775,639 30.6 118,937,466 Japan 71,576,645 71,253,963 59,992,675 -16.2 36,477,489 United Kingdom 33,091,221 45,317,390 48,598,344 46.9 20,040,905 Mexico 49,459,230 68,209,397 47,635,080 -3.7 25,122,438 China 9,132,015 17,623,648 31,239,291 240.0 9,790,146 Netherlands 6,263,089 23,198,712 22,049,672 250.0 12,185,313 Taiwan 15,606,186 18,188,714 21,335,083 36.7 7,144,324 Venezuela 8,296,485 17,349,688 19,897,298 139.8 15,565,837 South Korea 12,564,940 17,207,026 19,494,714 55.2 8,853,469 Australia 12,516,668 24,755,517 17,318,914 38.4 6,020,072 Subtotal $428,214,174 $544,775,888 $561,336,710 31.1% $260,137,459 All Other $206,476,775 $291,157,344 $365,029,228 76.8% $167,511,857 * Includes both men's and women's bath products, deodorant, and shaving preparations. Source: U.S. Department of Commerce; Packaged Facts

Toiletries Trade: Surpluses for U.S., Across the Board

In the period 2004-2008, the United States’ toiletries trade surplus grew 61%, to $346.4 million. [Table 2-12] In the first half of 2009, the surplus continued, at $164.8 million. There were no deficits for the U.S. in its dealings with any of its top 10 trading partners in this product category.

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Table 2-12 Trade Balance for Value of U.S. Imports/Exports of Personal Care Preparations* (Excluding Haircare and Skincare Products), by Country, 2004-2008, and January Through June 2009

Trade Balance % Change, 2009 Trading Partner 2004 2006 2008 2004-2008 (January-June) World Total $215,455,605 $347,182,338 $346,351,396 60.8% $164,826,391 Canada 28,832,269 63,500,690 65,089,314 125.8 17,524,368 Japan 64,114,046 64,228,847 54,493,039 (15.0) 34,420,276 Mexico 21,032,770 28,568,850 24,122,850 14.7 4,903,690 Netherlands 5,693,086 22,990,568 21,473,481 277.2 11,954,813 Venezuela 8,255,819 17,259,538 19,875,040 140.7 15,562,558 South Korea 11,957,593 15,854,389 17,910,147 49.8 8,373,812 Chile 9,352,147 11,245,523 16,620,560 77.7 5,826,261 United Arab Emirates 6,896,068 8,858,449 14,901,484 116.1 8,094,368 Brazil 6,804,626 14,763,570 14,786,291 117.3 7,751,278 Russian Federation 6,229,621 9,528,189 14,616,021 134.6 8,516,504 Subtotal $169,168,045 $256,798,613 $263,888,227 56.0% $122,927,928 All Other $46,287,560 $90,383,725 $82,463,169 78.2% $41,898,463 * Includes both men's and women's bath products, deodorant, and shaving preparations. Source: U.S. Department of Commerce; Packaged Facts

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Factors in Future Growth

Analysis Focuses on Cash, Class, Culture, and Contexts

In this section, the discussion of influences that either propel or dampen sales of men’s grooming products must address four types of influences:

• The effects of world recession that began with the collapse of financial markets at the start of the fourth quarter 2008... The hope that it will end soon, in late 2009 or sometime in 2010, must also be addressed: Packaged Facts forecasts that, as national economies improve, men’s incidence of first-time experimentation with grooming products will return to its former high level.

• Socioeconomic class strata – especially the rise of large middle classes in developing countries... Such expanding population sectors are important not only for their sheer numbers and colossal spending power, but also for their psychographics; in many instances, the combination of new wealth with the awareness and availability of men’s grooming products – including those under premium and status brands – greatly favors sales of those products.

• Traditional macho cultures that pressure men to limit use of grooming products to deodorant, shampoo, shaving items, and soap – versus more modern cultures that encourage men to moisturize, use eye cream, condition their hair... Marketers must educate consumers on a per-country basis. Men’s access to technology, even in developing countries, will be a big help.

• Context; for example, the competitive fields of marketers in various countries, the retail arenas, levels of green-mindedness, or the global connectivity afforded by the Internet, mobile, and other technologies... Consider such contexts to be like templates or backgrounds that throw light on the cash, class, and culture factors – and vice versa.

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Men Hold Up Over Half the Sky

The world may be overpopulated, but there are no signs that its overall numbers of either male or female residents will decline. As of July 2009, there are nearly 6.8 billion persons living on Planet Earth, according to The CIA World Factbook. [Table 2-13] Men and boys account for just over 50% of the total, and women and girls, for just under 50%. These percentages transpose to a bit over 3.4 billion males, and a bit under 3.4 billion females. The gender ratio varies by country.

The total number of earthlings is estimated to be expanding by 1.2% during 2009. The median age for males is almost 28; for females, it is 29.

Table 2-13 World Population, by Age and Gender, 2009

World Economic Downturn of 2008 to Last Until…? Recovery to Start Where…?

As this report is prepared during the summer of 2009, the world is still struggling to mend its damaged national economies, subsequent to the financial crash that occurred in the fourth quarter of 2008. International speculation in mortgage notes that were originally held by U.S.

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homeowners, the inadequate regulation of U.S. lending and personal credit industries, and U.S. involvement in the conflict in Iraq were among the problems crippling one of the world’s most affluent countries, and thus all countries. The big question now for men’s grooming marketers interested in the global scene, is, When will the recession lift, and where will it lift first?

Economists disagree on a timetable for recovery. Packaged Facts’ contacts on Wall Street point to New York Stock Exchange daily trading volumes that have ascended back to 9.0 million-plus shares, for the first time in 2009, as of July; yet the same contacts are bracing themselves for a possible second dip, if not a crash, in the fourth quarter of 2009, when the world starts to grasp the cost of national stimulus packages put together in the wake of the 2008 crash. This pessimism is actually the minority view: For example, the annual Livingston Survey of 32 economists, published by the Federal Reserve Bank of Philadelphia every June and December, finds that, as of June 2009, the U.S. gross domestic product (GDP), plus retail trade, automobile sales, housing starts, and other key economic indicators, have declined substantially from 2008 to 2009 – but that all such factors, with the exception of employment rates, will improve substantially from 2009 to 2010.

On the world scene, this is hopeful news for the many countries waiting for more commerce to trickle down to them. Developing economies are in effect isolated by the fact of their much smaller GDPs: While the crash of 2008 was disastrous for each of the planet’s 265 countries and territories, developing countries were the last to feel the pain. It is hoped that they will not be the last to participate in recovery. As worldwide recession begins to lift, in the most affluent countries first, it is hoped that HBC companies in the affluent West will revisit their plans to target the populations of developing countries. Such plans will dovetail with the outsourcing of manufacturing to such countries, which will help fuel both the expansion of middle classes, and men’s use of more sophisticated skincare and haircare and other grooming products.

Surely, the recession’s timing – many of the world’s businesses had not yet caught up to the latest technologies, nor had employment practices and corporate structures been maintained as leanly and as meanly as they should have – makes it much more than a cyclical economic low expressed on corporate balance sheets; the depth and nature of this recession requires that both management and rank-and-file change their ways of doing business. As for the global men’s grooming market, it is imperative that mid-size and larger players actively seek to build international business, even in countries such as Indonesia, where modern retail

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infrastructure is still in its infancy. As for smaller players, “going international” is simply the shrewdest course.

The world has finally gotten smaller.

Billions of Men Striving to Be Middle-Class

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The world’s rising middle classes are important for more than their blossoming disposable incomes. Other characteristics include:

A 2007 study by the World Bank found that the rich accounted for 58% of all world income in 2000, with 69% expected by 2030. The World Bank’s definition of “rich” was per capita income of about $30,000. The middle class was projected to maintain a 14% share of world income throughout 2000-2030, though one must remember that a stable percentage is applied to a world economy that will trend upward over the 30-year period.

The Economist (again, February 12, 2009) described analyst Surjit Bhalla’s method of measuring the effect of a growing middle class upon a national economy: He maintains that economic growth is raised by 0.5 points, when a country’s middle-class population increases by 10 percentage-points (not 10.0%). The magazine provided the example of Country A, with a population that is 50% middle-income, and Country B, which is 30% middle-income;

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Country A will have a growth rate that is a full point higher than Country B’s. Mr. Bhalla is Managing Director of the New Delhi-based firm Oxus Research and Investments.

The Male Ego: It Took 40 Years, But Now We Have the Marketing Keys

Convenience and Functionality

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Najafi Companies/Innovative Brands LLC extended Pert Plus for Men with a 3-in-1 product that is body wash, conditioner, and shampoo; a 12-ounce bottle retails for about $5.

Humor: Make It Crude, Even Dirty, and You’ve Got a Classic Brand

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Sex

Little needs to be said here, for as the whole world knows, men think about sex constantly. In many men’s grooming product ads, it is the alpha-male who gets the beautiful woman, as in ads for P&G’s Gillette disposable razors – though sometimes the bespectacled nerd who uses Axe will get her, instead.

Willingness to Spend on Branded Products

For perspective, NMI also notes that around the year 2000, men were 20% of U.S. households’ primary shoppers; but as of January 2009, they accounted for about a third of such shoppers.

The NMI estimates U.S. male spending power at over $1.0 trillion.

For more demographic and psychographic information on the men of the United States and other countries, see Chapter 8, The Consumer.

Universal Positionings

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people of specific age brackets, races, or even genders. Men often are less shy about taking such effectively unisex formulations and package designs up to the cashiers at checkout counters, because the question of what is masculine or feminine is sidestepped altogether.

Use of the Wife’s/Girlfriend’s Beauty Products

According to Experian Simmons, women account for significant shares of the purchaser- bases for many men’s grooming products. For more details, see Chapter 8, The Consumer.

Natural/Organic/Green/Fair Trade Concerns

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paths; green positionings can cover any grooming product used by men, natural or not. Fair Trade policies involve fair treatment of indigenous peoples as they provide raw materials; and often education, with emphases on self-sufficiency, or ending spousal abuse or child labor, is in turn provided by marketers along with fair payments for goods and services. Web pages for explanations of Fair Trade policies have become more and more common on marketers’ websites; The Body Shop, which pioneered the idea of Fair Trade, as of the 1970s, and Estée Lauder/Aveda, are among those that offer Fair Trade-oriented promo videos on their websites or on YouTube.com.

For more results of the Packaged Facts survey, as well as product usage or purchasing data Experian Simmons and other sources, please consult Chapter 8, The Consumer.

What Comes After the Metrosexual? The übersexual! Retrosexual! Mr. Balance!

The term “metrosexual” was coined in the mid-1990s to describe a trendsetting type of urban male who tends to be sensitive to women’s emotional needs, who is aware of culture and the arts, who knows fine cuisine, who dresses fashionably, who enjoys spa treatments and professional shaves and manicures – and who uses advanced skincare and haircare products at home, in his daily groming regimen. The metrosexual has supposedly been replaced by the

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“ubersexual,” also called the “retrosexual,” who is nothing more than a metrosexual who has added a little of the sacrificed manliness back into himself. Packaged Facts suggests the more lighthearted term, “Mr. Balance.”

Such appellations are most useful to marketers conceiving of their target male. Because Mr. Balance is likely much in the minority in any country, he is more important for his influence upon millions, even billions of less suave males who strive to be him, in small ways, and perhaps only occasionally. Thus marketers are actually practicing aspirational marketing, insofar as they actually target the suave, sensitive, though virile Mr. Balance that the billions dream of being...

One cannot resist musing on the perfect Mr. Balances to hire as global spokesmen for one’s brand: David Beckham, soccer star and husband of the Spice Girls’ Posh Spice; Pierce Brosnan and Daniel Craig, who have both portrayed James Bond on the big screen; Gabriel Byrne, the Irish star of HBO’s In Treatment; Chow Yun Fat, the Chinese Clark Gable; and Australian Hugh Jackman, who is Wolverine of The X-Men.

Among younger men, there is Adrien Grenier of HBO’s Entourage; Justin Long, best known for his Macintosh computer commercials; Joseph Gordon Levitt of the sitcom Third Rock from the Sun, and in summer 2009, the star of the Fox Searchlight film 500 Days of Summer; plus a raft of extreme sports stars – champion motocross drivers, skateboarders, snowboarders, surfers, and so on. Famous volleyball players also fit the bill.

Mr. Balance in the Hip-Hop Sphere

Hip-hop music and lifestyles that have originated with African Americans are emulated by youth the world over. Nothing seems further away from the metrosexual or Mr. Balance role model than rappers, and yet Red Man and Method Man, as noted above, have been spokesrappers for Dial’s Right Guard deodorant.

As for gangsta rappers, they embrace ostentatious wealth, with lots of diamond and gold “bling” around their necks and on their fingers. Doubtless some are just as ostentatious about expensive facials, massages, manicures, etc. This may afford product placements or other promotional opportunities in music videos and in feature films, for example, in scenes that pay tribute to Al Pacino’s druglord lifestyle in Scarface, the favorite film of many gangstas and wannabes; marketers may use such elements, too, in television commercials or their own viral videos.

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Hip hop should not be dismissed as an American Black phenomenon. It has influenced India’s Bollywood movie musicals, Lebanese pop music videos, Japanese boy bands, and so on. Examples of hip-hop Mr. Balances might include rapper-actors LL Cool J, Jay Zee, Mos Def, and Will Smith. Just a few other relevant gentlemen of color who influence the style of men of all races, all over the world, are actor Denzel Washington; reggae star Wyclef Jean; and will i. am of The Black-Eyed Peas, who was famously rendered as a hologram for an election night interview by CNN’s Anderson Cooper, on November 4, 2008.

Targeting Men of Developing Countries: The Plusses

Technology – Internet, Mobile, Tagging – Empowers Third World

With the exception of a few countries – China, Iran, others – that sometimes interrupt Internet access as a means of censorship, the same Internet websites are available to people all over the world, no matter what their colors or creeds. In regions like the Middle East, cellular technology (mobile) connects people in war-torn countries where telephone land-line infrastructure has been destroyed. One can also use mobile to log on to the Internet, then order and pay for products and services. And electronic radio frequency identification (RFID) chips that “tag” consumer goods have the potential to improve security for international marketers who may fear that diverted shipments or product counterfeiting will fuel grey-market activity.

Thus technology is helping to level the playing field between countries with developing economies, and the superpowers.

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Machismo Eroded by Connectivity

Individuals and Families vs. Clans and Tribes

Technology will also help international marketers of men’s grooming products to make ad impressions upon societies that are based on hierarchies quite different from the nuclear family and freedom-of-the-individual models familiar in western democracies. The Chinese and Japanese sense of community or nation being more important than any individual, is well known. Less well recognized is the clan or tribe societal model, for example, which is seen in West African countries such as Guinea and the Ivory Coast. This model is characterized by very large groups of related persons who often live together in compounds, and who wield relatively great political power, at least on local bases. Marketing models must be adjusted accordingly.

Third World’s Doctors Drive Taxis in New York

Immigrant populations are often ignored, because they often live and work invisibly, as part of their new country’s “shadow” or “grey-market” economy. Because these displaced

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millions now possess the same tech options as everybody else, they are united for the first time. In the United States, for instance, millions of illegals working as maids and seamstresses and busboys and heavy laborers took to the streets in April and May 2006, to protest against the Sensenbrenner Bill (H.R. 4437), which would have set severe penalties for illegal immigration. The Bill was passed by the House of Representatives, but was defeated in the Senate.

Groups Favoring Use of Men’s Grooming Products Beyond the Basics

Worldwide, there are numerous groups of men who are anecdotally observed to consume not only deodorant, shaving products, and shampoo, but also anti-aging serums, fade creams, hair conditioner, etc. While marketers have had a hard enough job selling even the basic grooming products to men, Packaged Facts suggests that the lower-cost technologies cited above may be used to micro-position products to the most targeted of these groups; some of the groups may yield barely significant revenue streams, though their diversified aggregates may yield very substantial streams.

Examples of such smaller male groups are teen boys who color their hair, usually in blonde or neon tints; men who shave their heads; men in need of OTC preparations to cover patches of mismatched pigment – vitiligo sufferers, for example; men whose skin is wind-burnt and dried by outdoor sports or by work in harsh cold or heat; men who must grow and dress their hair according to rules of their religions; men who shave their bodies for swimming or modeling; men with extensive tattoos that require attention to keep them from blurring and

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darkening; Goth men with lots of piercings and/or spacers (which expand holes in ear lobes, nostrils, and other soft tissue); etc.

There are also several much larger – and yet still minority – groups of men with well- established regimens involving more varied skincare and haircare products. In some countries, the size of these groups may warrant more traditional, and expensive, advertising and promotional campaigns. Three notable examples:

• Men of African heritage who need braid detanglers, hot oil treatments, comb- throughs, relaxers, texturizers, sheen sprays, and so on, to sport corn-rows, dreadlocks, and even natural-looking Afros, numbered 20.6 million in 2008, in the United States alone. There are roughly 400.0 million more such men on the African continent. Black men also routinely use preparations that prevent or treat razor bumps, or that make keloid (scar tissue) less obvious.

• Gay men, who may be of any race or ethnicity, may simply be more receptive to using products that beautify. This is empirically observed on a wide basis – for instance, beauty consultant Suzanne Grayson told Brandweek (December 13, 2004 issue) that men still needed education about many grooming products. She asserted, "You're not going to get guys over 45 to buy this stuff even if their faces are falling off," but then added that gay men were the big exception. Packaged Facts forecasts that gay cultures will keep emerging, as repressive governments democratize and become more tolerant. In a separate report, The Gay and Lesbian Market in the U.S. (February 2007), we estimate that homosexual men were 9.1 million strong in 2008, or about 6% of all U.S. men. If the same percentage is applied (unscientifically, perhaps) to the entire world’s more than 3.4 billion men, the result is 204.8 million who are gay.

• Men who suffer skin conditions that include allergies, large pores, psoriasis, rosacea, sebhorrea, vitiligo, and others, already have remedies available to them – yet perhaps they would find that prestige-style preps do not merely refresh and cover damage to skin, but also restore their self-confidence.

Natural HBC Market Poised for International Expansion

In our report entitled Natural and Organic Personal Care Products in the U.S. (July 2009), Packaged Facts estimates that global retail sales of natural/organic skincare, haircare, and

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makeup products grew 51% during 2004-2008, to finish the four years at $20.8 billion. Each of the world’s regions saw similar double-digit gains. In the United States alone, natural/organic HBC was valued at over $6.6 billion in 2008, 26% above the level for 2004.

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Products Pass Easily from One Premium HBC Channel to Another

Packaged Facts observes that men’s grooming products marketers seeking to expand distribution across international borders will find it easiest to take brands from one premium retail channel to another; that is, upscale brands can increasingly pass relatively freely between prestige, pop prestige, natural food/HBC, pharmacy, and some specialty channels (upscale lifestyle boutiques, equestrian shops, travel shops, aviators’ shops, etc.). Such brands may even find some exposure in mass (supermarkets, chain drugstores, mass merchandisers), from country to country.

The reason: Consumers who patronize premium channels have the disposable income – whether all the time, or saved up for the occasional splurge – to purchase higher-priced grooming brands wherever they find them. Furthermore, these consumers are attracted to international cachet and style. Thus while mass marketers sometimes find it advisable to create new brands upon entering competition in certain countries, prestige marketers can provide the same elegant brand to affluent shoppers at Bloomingdale’s or Bergdorf Goodman in New York, at Harrod’s in London, at GUM or TSUM in Moscow, and so on – not to mention at outlets on other strata of the upscale sphere, like Origins, Sephora, spas with retail counters, and specialty stores, as mentioned above.

A number of natural/organic brands have sell-through in natural food/HBC stores (e.g., Whole Foods), prestige and pop prestige (Bloomingdale’s and Paris-based Sephora, respectively), and even mass (Boots in the United Kingdom, CVS and Target in the United States, and Wal-Mart in various countries). Among the premium natural/organic brands with such well-stamped “passports” are Aubrey, Aveda, Dr. Hauschka, Jurlique, and Weleda; of which Aubrey, Aveda, and Weleda are extended with male-specific SKUs, while Dr. Hauschka co-positions some SKUs for male use, and Jurlique is unisex. Aveda is a special case, in that the Estée Lauder brand is sold mainly through Aveda-dedicated stores, as well as through boutique-counters in department stores. However, Jurlique and Weleda stores are also on the rise.

Men’s Makeup Will Become a Viable Category

In Packaged Facts’ opinion, it might take a long time, possibly a generation, oft defined as 17 years, but makeup for men – yes, color cosmetics for male eyes, lips, face, and maybe nails – will eventually be a viable category, even if a relatively small one in terms of retail dollars. Rock ‘n roll idols have set the precedent: Keith Richards of the Rolling Stones never leaves

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the house without first applying eyeliner to his lower lids. Steven Tyler of Aerosmith frequently makes up his face using a variety of makeup types – as have Boy George, David Bowie, Gene Simmons, Marilyn Manson, members of Kiss and Rammstein, and many, many others. The small number of rockers mentioned here are from Germany, the United Kingdom, and the United States.

Other influences are transvestism, gay night life, and men’s desire to look young, fresh, and focused for business or social occasions. In Japan and Korea, the gentle, round-eyed look of anime and manga (i.e., animation and comic-strip) characters, which first appeared in the mid-1950s, has become an ideal in real life, as women slowly gain more power and voice their preferences when it comes to male lovers.

To quote a Wall Street Journal article entitled “Asia’s Lipstick Lads” (May 27, 2005): “Cosmetics marketers are tapping into a powerful shift in gender images taking place in many developed East Asian countries; the conservative, macho male stereotypes that have long dominated society in Japan and South Korea are giving way to a softer, more gender-neutral look... [and] as women gain power and influence, they are expressing a preference for different kinds of men.” For example, the Journal goes on to report that South Korean women are increasingly attracted to men with “pretty face[s], big eyes, and fair skin.”

In 2008, L’Oréal extended its hit Yves Saint Laurent Beaute Touche Eclat concealer-pen with a men’s version that contains less pigment, and no light-reflecting particles. The item lists at over $30. The Jean Paul Gaultier Monsieur makeup line was transferred from the British Isles to the United States, in the spring; the line includes skincare and shaving products, and bronzer, concealer, eyebrow gel, and eyeliner, at $10-$160 each.

Also in 2008, Taxi Cosmetics rolled out its Disguys concealer, Guyliner, and Manscara makeup varieties, in Superdrug chain stores in the United Kingdom. The three items join TaxiPure Mineral Foundation, which is sold with a shaving brush-style applicator on the business end of its bottle-shaped dispenser.

In China, men who wear makeup and get pedicures and facials are called aimei nanren, or “love beauty men.” In South Korea, such men are known as kkotminam [spelling sic], or “flower men,” and are often seen at nightclubs, wearing gaudy jewelry and fake fur.

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Skin Lighteners in Demand

As developing Asian and Pacific Rim countries build their wealth in the coming years, men’s grooming marketers will have the opportunity to sell more fade cream and other skin lightening products to populations that have long sought ways to make skin paler, even white. Although HBC marketers from outside the region have been criticized in the 2000s for targeting Asians with lightener brands that are not sold anywhere else, the demand exists, whether it is politically correct to satisfy it or not. Women may be the initial consumer targets, but Asian men may take up use of lighteners surprisingly quickly, due to the patterns of influence already discussed in this section. Japanese and Korean women’s ideal “anime man,” described just above, is light-skinned.

Another factor is ordinary racism. All over the world, people of the same race look down on their darker-skinned brothers and sisters. As a result, the widespread use of lighteners in Asia could spill back to Europe and North America, where folks of color are accounting for greater shares of population. In the United States alone, Hispanics, African Americans, and Asians numbered 103.5 million, or 34% of all residents. By 2014, these sectors will total 116.5 million, or 36%. Male members of these U.S. ethnic groups were 52.6 million in 2008, and will increase 13% to 59.2 million in 2014.

Japan is the biggest Asian market for lighteners, but Chinese and Indian prosperity is expected to drive world demand. Packaged Facts estimates global lightener retail sales at $1.5 billion in 2009.

InsideCosmeceuticals.com has identified (in a June 22, 2009 posting) the following companies that stand to profit from Asian demand for lighteners: Beiersdorf AG, CavinKare Pvt. Ltd., Clarins SA, E.T. Browne Drug Co., Inc., Elder Health Care Ltd., Emami Ltd., Hindustan Unilever Ltd., Kao Corp., Shiseido Co. Ltd., Procter & Gamble, and Jolen, Inc. To these Packaged Facts adds Estée Lauder and L’Oréal. There are likely dozens more.

Risk Factors

It is not elitist for marketers based in more affluent countries to weigh carefully the risks in doing business in developing regions, for the simple reason that marketers based in such regions must do the same; that is, marketers in the developing world must weigh carefully the pros and cons of entering the world’s highly developed regions or countries, for example, The United States and Canada, Europe, Japan, and so on.

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Men’s grooming products marketers wishing to enter competition in developing countries must allow for cultural and religious differences, availability of water and other basic needs, fluctuating currency exchange rates, local corruption and crime, the modernity of retailing infrastructures, political stability, the state of transport systems, tariffs and other requirements for importation (per individual governments, trade blocs or alliances such as The European Union, ASEAN, REACH, and others), weather conditions, and even war.

Men’s grooming product marketers of the developing world may face a different set of risks, many of them financial, upon entering better developed countries: Here, too, cultural and religious differences; plus meeting demand for quantities of successful products, even if ingredients are rare and exotic; paying retailers’ slotting and failure fees; dependence on just a few retail accounts – Wal-Mart, Kmart, Kohl’s, for mass-retail examples – for the lion’s share of a company’s sales; import requirements per country or trade bloc (again, ASEAN,the EU, NAFTA, REACH, others); and once again, the weather.

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Projected Sales

Global Men’s Grooming Market to Boost to $84.9 Billion by 2014

Packaged Facts projects that retail sales of all grooming products used by men will push upward by almost 39% during 2009-2014, or by $23.6 million. [Table 2-14] The market will therefore hit $84.9 billion, as of the end of the five-year period. The compound annual growth rate (CAGR) for the same period will approach 7%. This progress is quite good; in light of the huge dollar base, it could be viewed as excellent.

Table 2-14 Projected Worldwide Retail Dollar Sales of All Grooming Products Consumed by Men, by Country, 2009-2014 (In Billions)

Total % Change *CAGR Country 2009 2014 2009-2014 2009-2014

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Male-Specific Products to Climb to $28.0 Billion

Packaged Facts further calculates that retail sales of male-specific grooming products (which are included within sales of all grooming products used by men) will plow on, advancing a mighty 42% – or by $8.3 billion – during the whole span 2009-2014. [Table 2-15] The CAGR for the five years will of course be strong, too, surpassing 7%.

Table 2-15 Projected Worldwide Retail Dollar Sales of Male-Specific Grooming Products, by Country, 2009-2014 (In Billions)

Total % *CAGR Country 2009 2014 Change 2009-2014 2009-2014

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Chapter 3 The Top Ten Men’s Grooming Markets

Highlights

• Every country in the world is already covered by marketers of these products, but almost no countries have reached the saturation point. Korea is one of the few exceptions, though in the skincare category only: According to L’Oreal’s own survey, 94% of South Korean men used an average of 1.9 skincare product-types in their regular grooming routine. That compared to the 49% of Japanese men who incorporated 1.8 product types in their routine.

• In 2009, the United States, the wealthiest country in the world, is expected to command a 23% share of retail dollar sales of all grooming products used by men. [Table 3-1] This portion is well more than double Japan’s 10%, and about triple France’s near 8%.

• Collectively, BRIC countries account for more than 22% of sales: Brazil and China share the fifth rank, with over 7% each; and Russia and India occupy the ninth and tenth ranks, with about 5% and 3%, respectively.

• In 2009 Japan, as elsewhere in the world, sales of men’s grooming products are propelled by a heightened appreciation of prestige and pop-prestige grooming products, by the need for older men to compete with their younger colleagues for jobs, and by natural or organic formulations that – like the prestige versions – command higher pricetags. Prime Minister Junichiro Koizumi’s reign, which lasted till September 2006, has been an influence, too, because he was a dashing, handsome fellow, as decscribed by Business Week (issue of December 11, 2006): “With his Beethoven locks, thin build, and dapper choice of suits, Koizumi was something of a heartthrob with women voters…”

• Perhaps because so many famed HBC marketers are based in France, the world’s men – or their wives and girlfriends – think to look to this country for what is perceived to be the best in men’s grooming products. Just a few of these marketers are Ales Groupe (with PhytoMen), Inter Parfum (with the Nickel brand), L’Oreal

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(The Body Shop, Kiehl’s, Lab Series), and LVMH (Sephora). L’Oreal is the largest cosmetics marketer in the world, while LVMH is the largest marketer of luxury goods. LVMH’s Sephora is at once the trailblazing pop-prestige retail chain that employs an unintimidating open-sell format – in which expensive HBC is on the open shelves, not guarded by chic clerks stationed behind counters – and a private label. In 2009, Sephora has fattened its men’s grooming assortment to at least 17 brands, from Anthony Logistics to Zirh.

• Actually, 11 countries are profiled in this chapter, because Brazil and China share the fifth rank. The big 11:

1. The United States 7. The United Kingdom 2. Japan 8. Italy 3. France 9. Spain 4. Germany 10. Russia 5. Brazil 11. India 6. China

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The Global Overview

Every Country Holds Potential for Men’s Grooming Products

If there is one message in this study that transcends all others in importance, it is the idea that every country’s male population stands to yield significantly more grooming product retail dollars in the years beyond 2009. Every country in the world is already covered by marketers of these products, but almost no countries have reached the saturation point. Korea is one of the few exceptions, though in the skincare category only: According to L’Oreal’s own survey run in 2005, 94% of South Korean men used an average of 1.9 skincare product-types in their regular grooming routine. That compared to the 49% of Japanese men who incorporated 1.8 product types in their routine; and to the 40% of Chinese men who vouched use of 1.2 product types. Four years later, these incidences of use can be assumed to be even higher; and the number of product types used routinely is likely also higher, especially where national economies have become more robust.

The great potential still left for men’s grooming players to tap, presents a magnificent opportunity. Interestingly, L’Oreal limited its canvassing to middle and upper-class Asian men in the 15-49 age bracket. Thus the market is likely to open up yet more, as players field mass-priced men’s brands geared to less affluent Asian sectors, to an even broader 10-65 bracket, and to men in other territories – notably Africa, Latin America, and Eastern Europe.

Additional interesting stats from the L’Oreal study include the 60% of young Thai men who worry about oily or acne-pimpled complexions, and the 70% of Thai men age 15-24 who use facial cleansers in lotion form.

U.S. Rules Dollar Share of All Grooming Items Used by Men, With 23% in 2009

In 2009, the United States, the wealthiest country in the world, is expected to command a 23% share of retail dollar sales of all grooming products used by men. [Table 3-1] This portion is well more than double Japan’s 10%, and about triple France’s near 8%.

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Collectively, BRIC countries account for more than 22% of sales: Brazil and China share the fifth rank, with over 7% each; and Russia and India occupy the ninth and tenth ranks, with about 5% and 3%, respectively.

Though they have expanded share by less than a point each during 2004-2009, China and the United States are the biggest gainers.

Table 3-1 Per-Country Share of Worldwide Retail Dollar Sales of All Grooming Products* Consumed by Men, 2004-2009 (In Billions)

2004 2009 Country $ % Share $ % Share World $44.7 100.0% $61.3 100.0% United States 10.0 22.4 14.1 23.0 Japan 5.0 11.2 6.3 10.3 France 3.5 7.8 4.6 7.5 Germany 3.3 7.4 4.5 7.3 Brazil 3.1 6.9 4.4 7.2 China 3.0 6.7 4.4 7.2 The United Kingdom 3.2 7.2 4.3 7.0 Italy 2.8 6.3 3.6 5.9 Spain 2.2 4.9 3.1 5.1 Russia 1.9 4.3 2.9 4.7 India 1.5 3.4 2.0 3.3 **R-O-W 5.2 11.6 7.1 11.6 * Includes male-specific and non-male-specific products. ** Rest of world. Source: Packaged Facts

U.S. Also Rules Male-Specific Arena, With a 28% Share

As one might expect, the United States also leads sales of male-specific grooming products, with an anticipated share of 28% of retail dollars in 2009. [Table 3-2] Japan follows distantly here, too, at 15%. Another gap isolates France at 8%.

As for BRIC, Brazil and China have the sixth and seventh positions, at 7% and 5%. India ranks eighth, at 4%, and Russia tenth, at 3%.

Again, Japan, where men were early adopters of male-specific grooming items – even shampoo – is expected to finish 2009 with a 15% share. Interestingly, this portion is a full

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2.1 points smaller than in 2004. The wane of the novelty factor, as such items become familiar to Japanese men, largely accounts for the loss of momentum in that country.

Table 3-2 Per-Country Share of Worldwide Retail Dollar Sales of Male-Specific Grooming Products, 2004-2009 (In Billions)

2004 2009 Country $ % Share $ % Share World $13.9 100.0% $19.7 100.0% United States 3.8 27.3 5.6 28.4 Japan 2.4 17.3 3.0 15.2 France 1.1 7.9 1.6 8.1 Germany 1.0 7.2 1.5 7.6 The United Kingdom 1.1 7.9 1.5 7.6 Brazil 0.9 6.5 1.4 7.1 China 0.6 4.3 1.0 5.1 Italy 0.8 5.8 1.0 5.1 India 0.6 4.3 0.8 4.1 Spain 0.5 3.6 0.7 3.6 Russia 0.4 2.9 0.6 3.0 *R-O-W 0.7 5.0 1.0 5.1 * Rest of world. Source: Packaged Facts

Profiles of Top Men’s Grooming Countries Follow

“Snapshot” profiles of the top ten countries in the global men’s grooming market follow. The profiles are arranged in descending order of the countries’ retail dollar sales of all grooming products used by men, as of 2009.

Actually, 11 countries are profiled, because Brazil and China share the fifth rank.

Once again, the big 11:

1. The United States 7. The United Kingdom 2. Japan 8. Italy 3. France 9. Spain 4. Germany 10. Russia 5. Brazil 11. India 6. China

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No. 1: The United States

All Grooming Products Used by U.S. Men Valued at $14.1 Billion in 2009

The retail value of all grooming products used by male residents of the United States is estimated by Packaged Facts at almost $14.1 billion in 2009. [Table 3-3] As a result, the total advance for 2004-2009 is shaping up to be 41%, for a five-year increment of $4.1 billion; the compound annual growth rate (CAGR) will therefore be a healthy 7% for the same five years.

U.S. Male-Specific Grooming Products Reach $5.6 Billion

The male-specific side of the U.S. men’s grooming market has been posting somewhat stronger growth – over 46% for the period 2004-2009, for a total increment of $1.8 billion. [Table 3-3] Male-specific HBC will thus brush the $5.6 billion mark at retail by the close of 2009, setting a CAGR of nearly 8% for 2004-2009.

Table 3-3 U.S. Retail Dollar Sales of All Grooming Products Consumed by Men, and of Male-Specific Grooming Products, 2004-2009 (In Billions)

Male-Specific Value of All Grooming Year Grooming Products Products Consumed by Men* $ % Change $ % Change 2009 $5,558 5.8% $14,053 4.5% 2008 5,243 7.3 13,448 6.3 2007 4,896 7.5 12,651 6.6 2006 4,554 8.9 11,868 9.1 2005 4,182 10.0 10,878 8.8 2004 3,802 12.0 9,998 13.6 Total Growth, 2004-2009 = – 46.2% – 40.6% CAGR,** 2004-2009 = – 7.9% – 7.1% * Retail value of all grooming products consumed by men includes sales of both male-specific and non-male-specific products. ** Compound annual growth rate. Source: Packaged Facts

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A Difficult Market for Men’s Grooming, U.S. Finally Opens Up

Whether loved or hated for its wealth, its politics, its material excesses, the United States is one of a very few countries that initiates the fashion, pop culture and societal trends that the whole world follows; France, Italy, Japan, and the United Kingdom are among the others. In 2009, U.S. influence rests largely on the nation’s high level of commerce: With a GDP of $14.3 trillion, purchasing power parity amounts to $47,000 per capita.

The U.S. male population is 151.2 millon, as of July 2009. The sector comprises 31.6 million boys age infancy through 14; 102.7 million men age 15-64; and 16.9 million who are 65 or older.

To reiterate, U.S. HBC marketers have been anticipating a boom in sales of men’s grooming products ever since the tumultuous 1960s, when the Sexual Revolution and the Women’s Liberation movement began to seriously modify gender roles. For example, when Alberto- Culver’s Consort hairspray for men was rolled out in the 1970s, marketers expected an explosion of male-specific brands and products, but were disappointed, for use of Consort was viewed by many men as effeminate – although many other men welcomed the product.

In the 1980s and 1990s, the men’s grooming product assortment widened, along with America’s heightening sophistication about fashion, appearance, health, and lifestyle. However, men largely retained their inhibitions, so that sales of items beyond the usual men’s deodorant, shave cream, and razors, increased at a snail’s pace – until the 2000s: Suddenly, there was a broader context for the men’s HBC market, as pop-prestige retailers – Paris-based Sephora had opened its first U.S. store in 1998 – popularized an open-sell format that got rid of intimidating sales clerks behind glass counters, thus giving male customers less cause to be shy about purchasing, say, an eye cream.

At first, pop-prestige retailers sold brands positioned on universal conditions or concerns, as opposed to gender, age bracket, or race; in 2009, products positioned in those latter ways have since been re-included in many upscale stores’ product mixes, Sephora’s among them. In addition, the overall trend to green-consciousness, together with fears of carcinogens and other toxins, has been driving sales of natural/organic personal care products, most of which are unisex. And in the few years leading up to the fourth quarter 2008 crash of financial markets around the globe, as unemployment rates climbed, many men strove to look younger on job interviews. At the same time, Unilever and Procter & Gamble have positioned Axe and Old Spice on crude humor, successfully appealing to teen and twentysomething men.

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Reality television shows such as the Bravo cable network’s Queer Eye for the Straight Guy, have also been a positive factor in men’s grooming sales.

In a word, it has taken a painfully gradual 40 years for most American men to feel that it is okay to try that eye cream or moisturizer or fancy shave balm. And it is only in the 2000s that a combo of sophistication, initial trials of unisex brands, male-friendly (open-sell) retail formats, economic necessity, health and green-consciousness – and even the skincare advice that is broadcast to men on high-profile television programming – all harmoniously converge to supercharge men’s grooming product sales in the United States.

Because he lives in one of the world’s style-setting countries, the American male’s expanded HBC usage will keep influencing his counterparts in other countries to use the same or similar products. If HBC brand managers perceive men’s grooming products’ penetration of the United States as a very rough model by which the degrees of penetration of other countries may be gauged, these managers need some idea of the U.S. incidence of men’s use of several product-types. In Chapter 8, The Consumer, Packaged Facts presents extensive demographic data from Experian Simmons. Such data reveal not only degrees of penetration of consumer-bases by several men’s grooming product-types, but may also indicate the relative sales-potential for each.

One infers from the Experian Simmons data that there are still tens of millions of American men who have yet to include premium or prestige versions of basic grooming product-types in their daily regimens – and that many more have never even thought of trying skincare items on the order of anti-aging serums, depilatories, home microdermabrasion kits, toners, etc.

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No. 2: Japan

Japanese Men’s Grooming Market Reaches $6.3 Billion in 2009

Packaged Facts estimates that the retail value of all grooming products consumed by Japan’s men is reaching almost $6.3 billion in 2009. [Table 3-4] This reflects, in part, a deceleration of growth to rates of 5% or less, from 2006 onward, as a result of the economic strains – rising unemployment, for example – that presaged the worldwide financial crashes of the fourth quarter 2008. The slower forward progress further reflects that millions of Japan’s men were early adopters of more complex grooming regimens, and that subsequent to first- time trials, while many kept up such regimens, others rejected them, or opted to use only selected products. Thus sales are “finding their level.”

The figure of $6.3 billion is a respectable 26% higher than that for 2004, meaning that the five-year dollar increment is working out to be $638.0 million. The compound annual rate of growth (CAGR) for 2004-2009 is thus almost 5%.

Male-Specific Brands Break $3.0 Billion Mark

Japanese purchasing of male-specific grooming products is surpassing the $3.0 billion milestone in 2009, despite that advances have settled in the 3%-4% range since 2007. [Table 3-4] Here, too, national economic pressures, and the fact that the men of Japan were in the forefront of use of a broader array of grooming items, have dampened growth.

Male-specific grooming products sales have climbed a total of nearly 27% in the period 2004-2009. That good progress transposes to a CAGR of, again, almost 5%.

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Table 3-4 Japan's Retail Dollar Sales of All Grooming Products Consumed by Men, and of Male-Specific Grooming Products, 2004-2009 (In Billions)

Male-Specific Value of All Grooming Year Grooming Products Products Consumed by Men* $ % Change $ % Change 2009 $3,042 3.0% $6,256 3.0% 2008 2,953 3.0 6,074 3.5 2007 2,867 3.5 5,869 4.0 2006 2,770 6.3 5,643 5.0 2005 2,606 8.4 5,374 8.0 2004 2,404 10.2 4,976 8.0 Total Growth, 2004-2009 = – 26.5% – 25.7% CAGR,** 2004-2009 = – 4.8% – 4.7% * Retail value of all grooming products consumed by men includes sales of both male-specific and non-male-specific products. ** Compound annual growth rate. Source: Packaged Facts

Japanese Ingenuity, Feminization, Koizumi-ization Drive Sales

In 2009 Japan, as elsewhere in the world, sales of men’s grooming products are propelled by a heightened appreciation of prestige and pop-prestige grooming products, by the need for older men to compete with their younger colleagues for jobs, and by natural or organic formulations that – like the prestige versions – command higher pricetags.

Packaged Facts forecasts that men’s grooming products will sell more briskly in Japan again, as the world’s recession lifts. As one of the major industrialized countries, Japan has one of the largest GDPs, at $4.3 trillion in 2008, in terms of purchasing power parity; which breaks out to $34,200 per capita. The male population is 62.0 million, as of July 2009. There are 8.8 million boys age 14 or younger; 41.2 million men age 15-64; and just under 12.0 million 65 or older.

Overall, the Japanese population has been decreasing; in the 12 months ended with July 2009, it has decreased by 0.2%, to 127.1 million. The new ruling party in the Japanese parliament, the Democratic Party of Japan, has thus proposed that parents be paid $3,400 annually, for every child they have, according to CNN.com (September 4, 2009).

Japanese ingenuity is another factor; the entire world is fascinated in turn by Japan’s own fascination with micro-niche products such as eyeglasses outfitted with the equivalent of windshield wipers; virtual pets and plants that require virtual care; and on a more practical

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plane, all sorts of home and “prosumer” electronics. In the field of men’s grooming, this gadget-love results, for example, in successful male-specific shampoo brands; in the rest of the world, such brands have more limited potential. In the Far East, Japan has the largest haircare market.

In his incisive book Branded Male: Marketing to Men (Kogan Page Publishers, Philadelphia, 2008), Mark Tungate cites results from a survey that L’Oreal conducted on behalf of its Lancome skincare brand-operation. Of the 20,000 respondents, European men typically said they used skincare products to look “dynamic.” American men said they wanted “a business and social advantage.” Japanese men seemed to acknowledge their inner states of being first, when they sought to “feel confident,” but then added that they also wanted to “look younger.”

That desire to appear younger stands out in Japan, which is home to the world’s oldest population. Senior citizens – age 65 and older – accounted for 22% of Japanese in 2007.

Mr. Tungate goes on to note that Japan’s wives and girlfriends have pushed their men to try some of the same products and even procedures that they themselves use. As a result, Tokyo’s Isetan department store has converted one entire selling-floor to men’s grooming. The feminine influence is also credited with the appearance of beauty salons for men. Dandy House is the leader in that niche; founded in the 1980s, it is now a 59-outlet chain.

And Prime Minister Junichiro Koizumi’s reign, which lasted till September 2006, was an influence, too, because he was a dashing, handsome fellow, as decscribed by Business Week (issue of December 11, 2006): “With his Beethoven locks, thin build, and dapper choice of suits, Koizumi was something of a heartthrob with women voters…” Indeed, one source, the Yano Research Institute, Tokyo, maintains that sales of “men’s beauty products,” which are largely skincare items, doubled during the period 2000-2006. Mr. Koizumi first became Prime Minister in 2001.

The narcissism often attributed to the United States’ Generations Y and Z, has overtaken young Japanese men, as it has overtaken the youth of many industrialized countries. Time Asia (October 2005), observed that, “Narcissism is in, thanks to economic growth, higher disposable incomes, shifting gender roles, and fashion and cosmetics industries eager to expand their customer bases.”

The Japanese nation as a whole accounts for 20% of world consumption of skincare products – more than any other nation on earth, according to Euromonitor International – though it accounts for only about 2% of world population. Sales of skincare products, for both men

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and women in Japan, totaled $13.1 billion in 2007. Euromonitor’s explanation is that the Japanese are greying, they have high disposable incomes, and they have keen interests in health and beauty issues. Packaged Facts adds that the Japanese are the world’s most avid consumers of skin lighteners, which globally, according to Packaged Facts, is a $1.5 billion segment.

Of Japan-based players in the country’s men’s grooming market, Kao Corporation, Lion Corporation, and Shiseido, Ltd. stand out as being active internationally. All three sell men’s grooming products. Kao and Lion are discussed in the Competitive Profiles section of Chapter 5, The Marketers.

Among prestige retailers are Sogo Co., Ltd., and The Seibu Department Stores, Ltd., both owned by Millennium Retailing. Shiseido is also active in retail, with brand-dedicated stores and salons.

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No. 3: France

All Grooming Items Used by French Men Valued at $4.6 Billion in 2009

Sales of all grooming products consumed by men in France will amount to more than $4.6 billion at retail in 2009, according to Packaged Facts. [Table 3-5] During the whole period 2004-2009, sales jumped by a very good 31%, or $1.1 billion. As a result, the compound annual rate of growth (CAGR) neared 6%, for the same five-year span.

Smaller increases of 4%-5% were realized in the latter three years 2007, 2008, and 2009, due to French men’s thorough familiarity with a broad range of grooming products – after much stronger growth earlier in the 2000s. Also, sales growth was impeded eventually by signs of economic strain, preceding the global financial meltdown of the fourth quarter of 2008.

French Male-Specific Grooming Market Reaches $1.6 Billion

During 2004-2009, sales of male-specific grooming products in France have fared even better than sales of all HBC used by men there, and are expected by Packaged Facts to finish the five years above the $1.6 bilion mark at retail. [Table 3-5] This represents a total jump of 44%, adding $498.0 million to marketers’ coffers. The CAGR for 2004-2009 is thus nearly 8%.

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Table 3-5 France's Retail Dollar Sales of All Grooming Products Consumed by Men, and of Male-Specific Grooming Products, 2004-2009 (In Billions)

Male-Specific Value of All Grooming Year Grooming Products Products Consumed by Men* $ % Change $ % Change 2009 $1,632 6.0% $4,621 4.0% 2008 1,540 3.0 4,444 4.7 2007 1,495 6.2 4,244 4.2 2006 1,408 8.9 4,073 6.1 2005 1,293 14.0 3,839 9.0 2004 1,134 9.8 3,522 11.0 Total Growth, 2004-2009 = – 43.9% – 31.2% CAGR,** 2004-2009 = – 7.6% – 5.6% * Retail value of all grooming products consumed by men includes sales of both male-specific and non-male-specific products. ** Compound annual growth rate. Source: Packaged Facts

France at World’s Heart of Men’s Fashion, Skincare Industries

Given that urban French men are exposed to the fashion industry from birth, and that their country is also home to many of the world’s leading skincare marketers and brands, it is not surprising that these men are so receptive to premium-to-prestige versions of basics such as deodorant, shaving cream, and shampoo. They are also more inclined to use diverse bath and skincare products.

Broadly speaking, French men can afford to indulge. Their country’s GDP is $2.1 trillion (as of 2008), in purchasing power parity, or $32,700 per capita.

French males are 31.5 million, made up of 6.1 million boys age infancy through 14; 21.0 million men age 15-64, and 4.4 million, 65 or older.

Perhaps because so many famed HBC marketers are based in France, the world’s men – or their wives and girlfriends – think to look to this country for what is perceived to be the best in men’s grooming products. Just a few of these marketers are Ales Groupe (with PhytoMen), Inter Parfum (with the Nickel brand), L’Oreal (The Body Shop, Kiehl’s, Lab Series), and LVMH (Sephora). L’Oreal is the largest cosmetics marketer in the world, while LVMH is the largest marketer of luxury goods. LVMH’s Sephora is at once the trailblazing pop-prestige retail chain that employs an unintimidating open-sell format – in which expensive HBC is on the open shelves, not guarded by chic clerks stationed behind counters –

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and a private label. In 2009, Sephora has fattened its men’s grooming assortment to at least 17 brands, from Anthony Logistics to Zirh.

As is the case with most every country, France has become increasingly green-minded. Because natural or organic personal care products carry premium-to-prestige pricetags, this trend is another key driver of men’s grooming sales. French-based CosmeBio is an organization working toward the establishment of natural/organic HBC standards; the approximately 250 member-firms include ingredients suppliers, manufacturers, marketers, and distributors. CosmeBio (www.CosmeBio.org) also certifies organic content; approved products are awarded use of its seals on labeling.

One also looks to France for HBC products on the cutting edge. For example, in October 2008, Laboratoires Didier Rase introduced a namesake-branded collection of 11 men’s skincare SKUs formulated to stimulate testosterone production, thereby rejuvenating skin that has suffered the drying effect of age. Phytoandrozyme, extracted from magnolia plants, is the key ingredient in the collection’s shave cream and skincare items. All of the SKUs are prestige-priced, at about $30-$75.

Another example is the male version of L’Oreal’s popular Yves Saint Laurent Beaute Touche Eclat concealer-pen. The product is joined by an Anti-Fatigue Treatment, a push-up stick with bamboo; and Healthy Look Moisturizer, a gel with a bit of tint. All three SKUs are sold under the L’Homme Yves Saint Laurent line-extension. Each is priced above $30.

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No. 4: Germany

All Grooming Products Used by German Men Valued at $4.5 Billion in 2009

Packaged Facts calculates that the retail value of all grooming products used by Germany’s men will break the $4.5 billion mark in 2009, as the result of a recession-pressured 4% advance. [Table 3-6] The peak, pre-recession advances for 2004-2009 were the 9%-10% achieved during the period’s first couple of years.

The total advance for 2004-2009 is thus over 36%, or $1.2 billion, while the compound annual growth rate (CAGR) for the same five years is set at over 6%.

German Male-Specific Grooming Market Reaches $1.5 Billion

The German market for male-specific grooming products is about to brush $1.5 billion at retail, by the end of 2009. [Table 3-6] Growth has more momentum here than in the broader sphere of all grooming products used by men: The total gain for the period 2004-2009 is amounting to 49%, or $488.0 million. The CAGR for the same five years is above 8%.

Table 3-6 Germany's Retail Dollar Sales of All Grooming Products Consumed by Men, and of Male-Specific Grooming Products, 2004-2009 (In Billions)

Male-Specific Value of All Grooming Year Grooming Products Products Consumed by Men* $ % Change $ % Change 2009 $1,484 4.5% $4,514 3.8% 2008 1,420 7.5 4,349 5.8 2007 1,321 10.0 4,110 6.8 2006 1,201 9.0 3,848 6.9 2005 1,102 10.6 3,600 8.6 2004 996 11.0 3,315 9.5 Total Growth, 2004-2009 = – 49.0% – 36.2% CAGR,** 2004-2009 = – 8.3% – 6.4% * Retail value of all grooming products consumed by men includes sales of both male-specific and non-male-specific products. ** Compound annual growth rate. Source: Packaged Facts

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Natural/Organic, Status Brands Drive Grooming Sales in Germany

In the Germany of 2004-2009, the men’s grooming market has posted very good progress, as described above. The country displays a matrix of traits that are causing its residents, particularly its 40.5 million men, to embrace use of a greater range of personal care items, as well as use of those that are premium or prestige-priced:

German HBC sales, in general, are driven by natural/organic brands, not to mention by mainstream brands that have gone semi-natural – that is, featuring one or a few natural or organic ingredients within otherwise natural formulations. In a separate report entitled Natural and Organic Personal Care Products in the U.S. (July 2009), Packaged Facts estimates that Germany accounted for a third of natural/organic HBC sales in Western Europe and the United Kingdom in 2008; that third equaled about $2.0 billion.

The German people may be especially receptive to natural/organic products, given that use of natural or semi-natural herbal confections, teas (tisanes), and remedies, is a quaint custom that survives into the 2000s. The country is also famous for its laws defining the purity of foods and beverages. As for certification of natural/organic formulation, Manheim-based Bundersverband Deutscher Industrie und Handelsunternehmen (BDIH) sets demanding requirements that have been met by a handful of U.S. marketers – Aubrey Organics among them – plus, of course, by German-based marketers such as WALA Heilmittel GmbH, which sells the world renowned Dr. Hauschka prestige brand, and which formulates products with botanicals grown in its own gardens.

In other words, many German men are “hard-wired” for green thinking.

In 2009, the sociopolitics of the reunification of East and West Germany continue to play a role in the ascent of men’s grooming products, even though it has been 20 years since the Berlin Wall was taken down. October 3, 2010 will mark the 20-year anniversary of the legislated reunification of the two Germanies. Because East Germans, who suffered bleaker lifestyles pre-reunification, were assimilated into a more affluent society, it is logical to assume a higher level of excitement regarding availability of quality brands, and often, a greater awareness of premium and prestige brands, which may be called status brands.

These psychographic traits make the German consumer base even more attractive to international marketers of men’s grooming products. The traits complement the facts that the German economy is the fifth-largest in the world, with a 2008 GDP of $2.9 trillion, in purchasing power parity; this breaks out to a per capita share of $34,800.

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Again, as of July 2009, male Germans number 40.5 million. Boys age infancy-14 are 5.8 million, men 15-64 are 27.7 million, and seniors 65 and older are 7.0 million.

Other notes:

• German-based Beiersdorf AG claims to be the leader in male-specific skincare in its home country, with the Nivea for Men extension of the world-famous Nivea brand.

• One foreign mega-marketer that is banking on the German HBC marketplace is Procter & Gamble, which fields brands there such as Gillette for men, and Olay for women. P & G has diversified across price-tiers in the 2000s, and the German market seems fertile ground for rollouts of newly acquired U.S. upscale brands The Art of Shaving, and the naturally-formulated Zirh.

• L’Oreal has expanded its L’Oreal Men Expert collection with Feuchtigkeitspflege Anti-Augenringe, which combats dark circles under the eyes. And Estee Lauder has extended its German offering of Lab Series for Men, specifically with roll-on Moisture Gel, also for use around the eye.

• After struggling in Germany for years, Wal-Mart exited the country in 2006. The world’s largest retailer was unable to compete with the Aldi chain, and with Dusseldorf-based Metro’s 550 Real stores.

• Of all European nations, Germans are well known to have the strongest preference for private labels.

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No. 5: Brazil

Brazilian Men’s Grooming Market Reaches $4.4 Billion in 2009

Sales of all grooming products consumed by Brazil’s men are amounting to $4.4 billion at retail, in 2009, according to Packaged Facts. [Table 3-7] This sum reflects a 6% increase for the year – relatively strong, given the global economic recession that is still in effect as this report goes to press in September 2009.

The total increase for dollars yielded by all grooming products consumed by Brazilian men during the entire period 2004-2009 is consequently an excellent 42% – for a full $1.3 billion added to the retail gross in five years. The compound annual growth rate (CAGR) for the same span of years is therefore more than 7%.

Brazilian Male-Specific HBC in Push to $1.4 Billion

Brazil’s male-specific grooming products have been even much stronger performers. During 2004-2009, sales in this mode are anticipated to have jumped by almost 57%, or by $501.0 million, to finish the period at close to $1.4 billion. [Table 3-7] The corresponding CAGR for 2004-2009 is a macho 9%.

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Table 3-7 Brazil's Retail Dollar Sales of All Grooming Products Consumed by Men, and of Male-Specific Grooming Products, 2004-2009 (In Billions)

Male-Specific Value of All Grooming Year Grooming Products Products Consumed by Men* $ % Change $ % Change 2009 $1,388 9.9% $4,404 6.0% 2008 1,263 7.3 4,155 6.6 2007 1,177 10.1 3,897 6.5 2006 1,069 8.9 3,659 8.3 2005 982 10.7 3,379 9.0 2004 887 12.6 3,100 9.0 Total Growth, 2004-2009 = – 56.5% – 42.1% CAGR,** 2004-2009 = – 9.4% – 7.3% * Retail value of all grooming products consumed by men includes sales of both male-specific and non-male-specific products. ** Compound annual growth rate. Source: Packaged Facts

Brazil the Style-Setter, and Prime Source of Exotic Ingredients

Brazil merits closer attention on the part of men’s grooming marketers from around the world: With a 2008 GDP of $2.0 trillion, which breaks out to $10,100 per capita (in purchasing power parity), here is the wealthiest of BRIC nations. The male component of population is 98.3 million; fully 27.1 million are boys in infancy through age 14, while 65.8 million are men age 15-64, and 5.4 million are 65 or older. But aside from Brazil’s worthiness as a target, it is also poised to make a greater splash on the world HBC scene, with its own powerful brands, and with control of the Amazon rainforest, which is a prime source of exotic HBC ingredients – babassu, Brazil nuts, uruku, and many others – for marketers around the globe.

Accordingly, Brazilian HBC brands led by Natura are reportedly gaining ground in Mexico and the rest of Latin America. According to Euromonitor International, Natura is Brazil’s leading direct-sold brand, though it is also sold in brick-and-mortar stores. The brand is distributed in Europe, with France a stand-out market. Natura Cosmeticos SA had contemplated attacking the U.S. market in 2008, but opted instead to restructure at home, to increase earnings. Cosmetics International (May 2008) has reported that the company’s U.S. campaign is rescheduled for 2009, though recession could delay things further.

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Natura-branded products are mostly beauty items for women. However, Natura extensions for men include the Ekos Castanha line, encompassing hair oil, body wash, shampoo, and body oil or cream; “castanha” is the Portugese word for “Brazil nut.” Natura Ekos Castanha is premium-to-prestige-priced.

Brazil’s reputation for style-setting dates back generations. Images of sexy supermodels sunning themselves on the country’s beaches are in the entire world’s consciousness, and may help us all to welcome future ad impressions touting Brazilian beauty products – or men’s grooming products.

As for green-mindedness and Fair Trade issues, the Brazilian private sector has realized the rainforest’s value to the rest of the world, both in terms of industry, and of oxygenating the atmosphere. Brazilian companies are thus increasingly positioning themselves and their brands on natural/organic ingredients, on green manufacture, on sustainability, and even Fair Trade with its own indigenous peoples. Again, this enhances Brazil’s attractiveness to international HBC marketers, while at the same time, it enhances the Brazilian-based companies’ attractiveness to consumers living outside Brazil.

Also noteworthy:

• According to published data from Euromonitor International, sales of skincare products (as used by both men and women) rose 128% in Brazil during 2002-2007, to reach $2.6 billion.

• Many OTC pharmacy skincare brands, also known as “dermocosmetics,” have originated in France; but now pharmacy brands are becoming popular in Brazil. Among these are L’Oreal’s Vichy Laboratoires and La Roche-Posay Laboratoire Pharmaceutique, and Ales Groupe’s Lierac. Of these three brands, only Lierac offers a male-specific range, but the dermocosmetic trend, in Brazil and elsewhere, should be noted.

• Men’s (and women’s) deodorant sales are bullish in Brazil, because of the national love for fragrance; that is, those who cannot afford their favorite perfumes or colognes, make sure to use a nicely scented deodorant, instead. GCI International (August 2009) cites Euromonitor’s estimate of deodorant retail sales at $2.9 billion in 2008, which represented an 18% gain. Extrapolating from the published data, Brazil may be accounting for as much as one out of every five deodorant dollars spent by consumers worldwide. Upgrades to deodorant sprays, and to natural formulations are

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adding to value. Yet despite the fact that the Brazilian economy has become stronger in the 2000s, there are many millions of the country’s residents who are too impoverished to purchase deodorant, let alone perfume. The answer: Marketers have the option of fielding sample-size versions of their deodorants (in small sticks, for example, as Unilever has sold Rexona deodorant in India).

• Natura is the leading deodorant brand in Brazil. Unilever’s Rexona is also in the top ranks, thanks to a brand-emphasis on costlier sprays, as opposed to Natura’s cheaper pump versions.

• Brazilian mass-retailers of HBC include Droga Raia, Drogaria Sao Paulo, Drogasil, Farmais, Onoffe, and Pague Menos. “Parapharmacies,” of which there may be 60,000, are a notable retail phenomenon; these are pharmacies that are not authorized to sell prescription medications.

• Sao Paulo-based Beraca Sabara Quimicos E Ingredients LtdA is both an HBC marketer and ingredients supplier. A peek at its ingredients catalog underscores the advantage that Brazilian firms enjoy, in terms of readily sourcing exotica: Beraca trades in acai palm tree berries, andiroba tree oil, Brazil nuts, cupuacu tree wax- butter, murumuru tree butter, and many others.

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No. 5: China [rank sic]

Chinese Men’s Grooming Market Also Hits $4.4 Billion in 2009

In terms of retail sales of all grooming products consumed by men, Packaged Facts finds that China approximately ties with Brazil, at $4.4 billion in 2009. [Table 3-8] Chinese sales have pushed upward 46% during 2004-2009, expanding by $1.4 billion. The resulting compound annual growth rate (CAGR) is 8% – stunning for a country with such a low per capita income.

Male-Specific Products Approach $1.0 Billion Mark

Packaged Facts further estimates that the Chinese market for male-specific grooming products is reaching $951.0 million at retail in 2009. [Table 3-8] Individual annual increases have been strong since 2004 and even earlier; the peak increase for 2004-2009 is 2005’s nearly 15%.

For the whole period 2004-2009, total sales growth in the Chinese male-specific grooming arena is touching the 59% mark; while the CAGR for the same timeframe is roughly 10%.

Table 3-8 China's Retail Dollar Sales of All Grooming Products Consumed by Men, and of Male-Specific Grooming Products, 2004-2009 (In Billions)

Male-Specific Value of All Grooming Year Grooming Products Products Consumed by Men* $ % Change $ % Change 2009 $951 6.6% $4,426 5.0% 2008 892 7.9 4,215 7.0 2007 827 8.2 3,939 7.0 2006 764 11.2 3,681 10.6 2005 687 14.5 3,329 10.0 2004 600 9.2 3,026 6.9 Total Growth, 2004-2009 = – 58.5% – 46.3% CAGR,** 2004-2009 = – 9.7% – 7.9% * Retail value of all grooming products consumed by men includes sales of both male-specific and non-male-specific products. ** Compound annual growth rate. Source: Packaged Facts

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China’s Westernization, Respect for Upscale HBC

The numbers are staggering: China has a GDP of $7.8 trillion, which translates into just $6,000 per capita (purchasing power parity, in 2008). However, the GDP grew 10% in 2008 alone. The country’s population tops 1.3 billion, as of July 2009, and males are a force of 688.4 million; boys age infancy-14 number 140.9 million, men 15-64 number 495.7 million; and men 65-and-older number 51.8 million. Though still ruled by a frequently repressive Communist regime, China is rapidly moving toward a greater degree of up-to-date industrialization; it is developing a huge middle class; and unlike India, has tolerated foreign chain retailers’ activities, even those of Wal-Mart, which typically squashes local competitors.

The consumer base in China is markedly skewed to male gender, reports BMJ (April 10, 2009), better known as the British Medical Journal. The country’s 2005 census showed that in the under-20 age bracket alone, there were 32.0 million more young men than women. As of the year of the census, there were 119 boys born for every 100 girls. This compared to an average of 107 boys for every 100 girls, in more industrialized countries. Many Chinese parents are perpetuating the ancient agrarian preference for male children, and are aborting female fetuses. Ironically, the abortions are also pressured by strict government-imposed limits upon childbearing.

In 2000, according to published data compiled by Asia Demographics, only 2% of Chinese urban households had incomes of over 50,000 yuan ($6,000); but in 2010, the share could approach 13% of urban households, thus accounting for 27% of all income in China’s cities. However, 60% of the populace lives in rural areas, where incomes continue to lag behind those of city-dwellers. Yet even these outer-circle Chinese – numbering over 600.0 million – are targetable, if HBC marketers are willing to offer smaller pack-sizes of bath, deodorant, haircare, shaving, and skincare products. Even one-or-two-use sachets and trial-sizes may be precious luxuries to the impoverished – while marketers can make up for sacrificed price- points by turning over millions more of these smaller units, than they would of full-size units in richer, though less populous countries.

One sure sign that the Chinese middle class is expanding, is that sales of magazine advertising space have been rocketing in that country: Print media may be giving way to digital formats in most of the rest of the world, but according to the International Federation of the Periodical Press (IFPP), sales of magazine ad space in China doubled during 2001-

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2006, to $375.0 million. The Federation further projected that sales jumped to $515.0 million in 2008.

Male primping is another sign of a rising middle class. In the Factors in Future Growth section of Chapter 2, The Worlwide Men’s Grooming Market, Packaged Facts mentioned the Korean kkotminam (flower men), young men who spend inordinate numbers of hours beautifying themselves, including hours spent in beauty salons. The Chinese equivalent is the aimei nanren (love beauty men), young men who wear makeup and get manicures and pedicures. Make no mistake, this group is not out to shock “the establishment” with wild hairstyles and makeup, as western nations’ punks of the 1970s and 1980s intended; the goal of the aimei nanren is to beautify themselves – to make their skin and hair perfect. They are not easily quantified, but it is probable that these young men are a small core group who are more important in terms of their influence upon millions of other Chinese men who may be moved to expand the range or quality of grooming products used in their daily regimens.

Packaged Facts observes that China, with its own traditional natural medicines and treatments, may also be receptive to natural/organic personal care brands, provided that such brands are as efficacious as their mainstream counterparts.

Other interesting points:

• Among marketers of China-specific brands with potential in men’s grooming are Jiangsu Longliqi Bioscience Co., Ltd.; La Fang International; French-based L’Oreal SA, which acquired the leading department store beauty brand, Yue-Sai, in 2004; and Japanese-based Shiseido Co., Ltd., which launched the Aupres brand in the early 1990s, at about the same time that Yue-Sai first appeared. …All four of these marketers are well-poised to make bigger splashes in men’s HBC, whether or not they already offer such products at all.

• Jiangsu Longliqi fields the Longliqi brand in China, but in 2009 is more active as a contract manufacturer of all manner of personal care items, for clients from around the world. The company claims sales of over $600.0 million.

• L’Oreal sells Yue-Sai mainly in China, where the brand is recognized by 98% of consumers, thanks to its namesake creator Yue-Sai Kan, who is Chinese-American, and a famous television talk show host in China. Rumors about a major Yue-Sai men’s grooming extension have been circulating for years, but such an extension has not yet materialized in a big way.

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• Shiseido has been positioning the diverse Aupres line on its Super Whitening Serum; the company operates in China via a joint venture called Shiseido Liyuan Cosmetics Co., Ltd. The Shiseido JS line-extension for men comprises facial cleansers, toners, moisturizers, and a lipstick-style concealer, all of which carry pricetags in the $15- $63 range.

• As noted earlier in this report, Japan is the biggest Asian market for skin lighteners, but Chinese and Indian prosperity is expected to drive world demand in the coming years. Packaged Facts estimates global lightener retail sales at $1.5 billion in 2009.

• As China’s personal care industry grows, Packaged Facts predicts that it will become more savvy about modern marketing and branding. As a result, Chinese-originated men’s grooming brands will be exported to countries in the West, enriching said industry. It follows that it may eventually become less cost-effective for foreign marketers to outsource manufacture to China.

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No. 6: The United Kingdom

Grooming Products Used by Brits Valued at $4.3 Billion in 2009

The men of the United Kingdom are consuming over $4.3 billion worth of grooming products – whether male-specific, female-specific, unisex, or general-use – in 2009, according to Packaged Facts’ own estimate. [Table 3-9] The retail sum is almost 36% greater than that for 2004, meaning that British sales of all grooming products used by men have been fattened by well over $1.1 billion, in just five years.

The compound annual growth rate (CAGR) for this sales mode is thus more than 6% for the same span of years, 2004-2009. Such progress should be viewed as quite good, because of the large dollar base, plus the fact that the United Kingdom is home to only 30.3 million and boys. This supports the idea that British men have been using grooming product-types new to them, including facial anti-aging serums and post-shave balms; as well as the idea that they are willing to spend more for premium or prestige brands.

British Male-Specific Grooming Market Reaches $1.5 Billion in 2009

Packaged Facts also estimates that British retail sales of male-specific grooming products have climbed by almost a third during 2004-2009; by the close of the period, we anticipate that the male-specific mode will reach nearly $1.5 billion. [Table 3-9] Consequently, the total dollar increment over the same five years is foreseen to be $359.0 million. The male- specific CAGR for 2004-2009 is almost 6%.

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Table 3-9 The United Kingdom's Retail Dollar Sales of All Grooming Products Consumed by Men, and of Male-Specific Grooming Products, 2004-2009 (In Billions)

Male-Specific Value of All Grooming Year Grooming Products Products Consumed by Men* $ % Change $ % Change 2009 $1,470 3.8% $4,341 2.9% 2008 1,417 6.1 4,219 6.0 2007 1,335 4.0 3,980 7.2 2006 1,284 6.6 3,712 5.5 2005 1,204 8.4 3,519 10.0 2004 1,111 9.8 3,199 9.9 Total Growth, 2004-2009 = – 32.3% – 35.7% CAGR,** 2004-2009 = – 5.8% – 6.3% * Retail value of all grooming products consumed by men includes sales of both male-specific and non-male-specific products. ** Compound annual growth rate. Source: Packaged Facts

Plenty of Room for British Men to Experiment with New HBC

In 2009, the United Kingdom is a hot spot in the global men’s grooming market. Dovetailing with its male population’s willingness to try a greater range of product-types, the country’s economy fosters such initial trials: The British GDP is $2.2 trillion, or $36,600 per capita (in terms of purchasing power parity, in 2008).

Again, British men number 30.3 million, on the global scale not a large sector, but given its relative lack of familiarity with many of the expanded range of men’s grooming products (as opposed to French, Italian, and Korean male sectors), one that still holds lots of dollar potential. Over 5.2 million British males are boys 14 or younger; 20.8 million are men 15-64; and 4.3 million are 65 or older.

In 2008, for example, even spray deodorant sales were up in the United Kingdom by a boisterous 6%, according to Euromonitor, which maintains that the European/U.K. market for deodorant is quite mature. Also, the United Kingdom’s masses have become increasingly green-conscious; U.S. natural/organic personal care brands such as Hain Celestial’s Jason, and Colgate-Palmolive’s Tom’s of Maine, are reportedly selling very well.

The largest British chain druggist, Alliance Boots PLC, which owns 3,200 Boots stores, was once known for its selection of quaint semi-natural products, similar to those common in Germany. But in 2009, the retailer is more modernized; now its more clearly defined

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natural/organic private labels include Botanics Organic skincare products, introduced in October 2007 with 90%-100% organic ingredients. Botanics, as well as No. 7, a Boots label since 1935, are sold in the United States, through mass retailers CVS and Target. As of September 2009, Alliance Boots has not extended its private labels with men’s grooming products, but is ideally stanced to do so; the retailer does sell such branded products from British and foreign marketers. (For a more detailed discussion of Alliance Boots, see the Retailer Profile in Chapter 7, Distribution and Retail.)

Other notes about the British men’s grooming market:

• Supporting the observation that British men are following the global trend to use a more diverse range of grooming products, is a factoid from the medical sphere that demonstrates heightened preoccupation with appearance: The British Association of Aesthetic Plastic Surgeons reports that men’s cosmetic surgeries increased by almost 18% in 2007 alone. Another pertinent factoid: British department store Selfridge’s will be stocking Equmen, an Australian brand of shape-controlling men’s underwear – the equivalent of girdles and other slimming “ladies’ things.”

• Outside the parameters of “green,” U.S. traditional hairdressing brand Brylcreem is reputed by its owner Combe, Inc., to be the leader in its segment in the United Kingdom.

• London-based marketer and retailer Molton Brown Ltd. is a player to watch. In the fall of 2009, it is introducing a 23-SKU men’s grooming collection that includes eight new items, as well as reformulations and/or repackaging of some existing ones. As this report goes to press in September 2009, men’s products are forecast by Molton Brown itself to account for 15%-25% of the full year’s possible $131.3 million in revenues. In its home country and in the United States, men’s products will account for 15% and 18% of company sales, respectively, while in Japan, they will account for 25%. Molton Brown has 50 British stores, and six U.S. stores. Wholesale accounts include 250 prestige doors in the United States, among them Neiman Marcus, Blue Mercury, and Saks Fifth Avenue. Molton Brown was acquired by Kao Corporation in 2005, for $300.0 million. The sellers were Bridgepoint Capital, a European private equity fund, and various of Molton Brown’s own managers. ...A few of the new products are a Body Scrub Bar, $22, Re-Charge Black Pepper Shave Oil, $29, and Active Cassia Body Deodorant, $34.

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No. 7: Italy

Italian Men’s Grooming Market Reaches $3.6 Billion in 2009

Packaged Facts sets the retail value of all grooming products consumed by Italy’s men at almost $3.6 billion in 2009. [Table 3-10] Growth has been slower in Italy, perhaps because the men – like their Japanese fellows – have a longer history of more sophisticated daily grooming regimens. Sales have had time to “find their level,” following upon waves of consumers’ first-time trials. The global recession that kicked off the fourth quarter of 2008 has also tempered demand. Yet here is a solidly appearance-and-fashion-conscious market that should yield substantial men’s grooming sales for generations to come.

The total advance in retail sales of all grooming products consumed by men in Italy is surpassing 27% over the entire period 2004-2009. The compound annual growth rate (CAGR) for the same five years thereby transposes to just under 5%.

Italian Male-Specific HBC in Climb to $1.0 Billion

Italy’s men are expected to consume $963.0 million worth of male-specific grooming products at retail in 2009, according to Packaged Facts. [Table 3-10] The total advance for 2004-2009 will be fair, at less than 22%. The CAGR for the like timeframe will be 4%.

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Table 3-10 Italy's Retail Dollar Sales of All Grooming Products Consumed by Men, and of Male-Specific Grooming Products, 2004-2009 (In Billions)

Male-Specific Value of All Grooming Year Grooming Products Products Consumed by Men* $ % Change $ % Change 2009 $963 3.5% $3,558 2.9% 2008 930 3.3 3,454 4.9 2007 901 1.3 3,293 5.0 2006 889 4.5 3,136 4.1 2005 851 7.7 3,012 7.7 2004 790 9.0 2,797 6.4 Total Growth, 2004-2009 = – 21.9% – 27.2% CAGR,** 2004-2009 = – 4.0% – 4.9% * Retail value of all grooming products consumed by men includes sales of both male-specific and non-male-specific products. ** Compound annual growth rate. Source: Packaged Facts

Growth Slows in Italy, But (Green) Potential Still Big

Italy can be viewed as relatively well-penetrated by marketers of sophisticated men’s grooming products, thanks in part to the parallel of Italy’s style-setting fashion design houses (Armani, Ermenegildo Zegna, Fendi, Gucci, et al) that, as a group, have dressed the world’s men for at least a century. The supposition that fashion-conscious men will pay more attention to the appearance of hair and skin is logical; the idea that the same men will pay more money for premium and upscale grooming products is just as logical.

Some Italian men do have the cash: Italy’s 2008 GDP is $1.3 trillion (expressed as purchasing power parity), and the breakout per capita is $31,000, which is enough affluence for a healthy degree of prestige activity.

But most telling is the fact that the country’s men number just 28.5 million, of which 4.1 million are boys age infancy-14; 19.5 million are men 15-64; and the remaining 4.9 million are 65 or older. Indeed, marketers of men’s grooming products have covered and penetrated Italy well; however, despite sales growth that has been slower than in France, Germany, Spain, or the United Kingdom, Packaged Facts foresees that Italy still harbors significant potential for shrewd HBC players.

One drag on men’s grooming sales has been the global recession’s dampening effect on Italians’ purchasing of natural/organic products – which in the 2000s have driven HBC sales

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in many countries. While few hard data on Italy’s national level of green-consciousness were available for this report, the country has 1.2 million hectares devoted to organic farming, more than any of the other 26 European Union (EU) member-countries. And according to data compiled by Italian state agency ISMEA with the help of AC Nielsen, sales of organic foods increased by 10% in 2007, and by 5% in 2008, finishing the latter year at €2.0 billion. Thus in 2009, there is ample green-consciousness – a real context – upon which natural/organic HBC marketers, including those that offer men’s grooming items, can build demand, especially as the recession lifts.

Interesting developments in the men’s grooming market in Italy:

• Collistar S.p.A introduced Collistar Linea Uomo Senior in 2008, a brand with one collection for the older man’s face, and another for his body, thereby catering to Italy’s aging male population. Additionally, Collistar has rolled out shave foam extensions Idratante Lenitiva Sensibili (soft moisturizing foam for sensitive skin) and Idratante Addolcente Barbe Dure (softening foam for tough beards). All the products join existing after-shave lotions, anti-aging treatments, and facial moisturizers and cleansers; plus, for the body, self-tanners, spray and stick deodorants, and male depilatories.

• Acqua di Parma, established in 1916 to make scent for men to use on their handkerchiefs, has come to be better known for fragrances used by actresses Sharon Bullock and Sharon Stone. In 2009, however, the brand’s after-shave lotion, after- shave balm, and moisturizers are being sold through Sephora stores around the world, from shelving in the pop-prestige retailer’s newly expanded men’s grooming departments. Acqua di Parma was acquired by Paris-headquartered luxury goods giant LVMH, in 2001. LVMH is the largest luxe marketer in the world, and is the owner of Sephora.

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No. 8: Spain

Spanish Men’s Grooming Market Touches $3.1 Billion in 2009

In the Spain of 2009, retail sales of all grooming products consumed by men are estimated by Packaged Facts to exceed $3.1 billion, representing a 5% increase for the year. [Table 3-11] Growth has been dampened by the global economic recession, and starting with 2007, by the waning of the novelty factor; the double-digit increases during the years 2004-2006 undoubtedly reflect – to an unknown degree – men’s first-time trials of various products beyond the usual shave cream, disposable razors, shampoo, and deodorant. Obviously, some men have incorporated the items new to them, such as bronzer or eye cream or concealer, into their grooming regimens, while other men have not.

The total increase for sales of all grooming products consumed by men during 2004-2009 is a striking 45%, for an added $963.0 million, again, at retail. The compound annual growth rate (CAGR) in effect during the same period is no less impressive, at almost 8%.

Spain’s Male-Specific HBC Business Expands to $700 Million

Male-specific grooming products are anticipated to yield $734.0 million over the full year 2009. [Table 3-11] Packaged Facts thus fixes the total increase for the whole period 2004- 2009 at a muscular 44%, or $224.0 million.

In the male-specific sales mode, too, the CAGR for 2004-2009 approaches a strong 8%.

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Table 3-11 Spain's Retail Dollar Sales of All Grooming Products Consumed by Men, and of Male-Specific Grooming Products, 2004-2009 (In Billions)

Male-Specific Value of All Grooming Year Grooming Products Products Consumed by Men* $ % Change $ % Change 2009 $734 5.6% $3,129 5.0% 2008 695 7.2 2,980 6.0 2007 648 7.1 2,811 6.0 2006 605 8.0 2,652 10.0 2005 560 9.9 2,411 11.3 2004 510 9.5 2,166 10.9 Total Growth, 2004-2009 = – 43.9% – 44.5% CAGR,** 2004-2009 = – 7.6% – 7.6% * Retail value of all grooming products consumed by men includes sales of both male-specific and non-male-specific products. ** Compound annual growth rate. Source: Packaged Facts

Spain Breaks Macho Mold

Spanish men’s acceptance of a broad array of premium-to-prestige-priced grooming products should gladden the hearts of HBC marketers around the globe: These men are breaking away from the spell of traditional Latin machismo – or they are modifying it – in order to moisturize their skin, to apply night cream, to color their hair, to shave with razors that are design works of art, and etc. As in the rest of the world, rising geen-mindedness is a positive influence, for it not only causes Spaniards to hope that HBC is packed using recycled plastic, paper, and metal, it also drives them to spend extra for natural/organic formulations. In a 2009 press release, Euromonitor observes that Spain’s men, as a group, have not reduced spending on grooming products during the planet-wide economic slump that began in the fourth quarter of 2008.

Spain’s men do have the power to spend. Their country’s 2008 GDP (purchasing power parity) stands at almost $1.4 trillion, and the per capita share of that is $34,600. Marketers should be aware, however, that here is a relatively small pool: The male population of Spain is 19.8 million, of which over 3.0 million are boys 14 and under, 13.7 million are men age 15- 64, and 3.1 million are senior citizens age 65 or older.

Facial skincare is not the largest men’s grooming segment in Spain, but extrapolating from published AC Nielsen and other data, Packaged Facts estimates that it has retail value of at

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least $100.0 million in 2009. This approximates 40% of all skincare sales in Spain. Nivea for Men, sold through mass, is the leading male-specific brand. L’Oreal’s namesake-branded L’Oreal Men Expert, and the same marketer’s prestige brand Biotherm Homme are also observed to be among the top ranks. Cosmetics International (May 22, 2009) reports that Biotherm Homme has a 60% share of sales in its niche – compared to 40% shares in nine other EU countries, and a 70% share in Asia. Seventy Biothrem Homme SKUs are available in Spain; over 500,000 units of just one SKU, Age Fitness wrinkle-fighter, were sold in less than five months, upon its introduction in early 2009.

El Pats, the best-circulated newspaper in Spain, conducted a survey in 2007 that found a record 29% of Spanish men used some kind of cosmetic or skincare product. The users were skewed to the 25-44 age bracket, and to high levels of education. Two years later, there is every reason to assume that the 29% has grown by a few points, reflecting the world men’s grooming picture in 2009.

Other reports concerning the men’s grooming market in Spain:

• The Edge Malaysia (January 26, 2009) cites a Synovate survey that determined that 96% of Spanish men use deodorant, compared to 95% of South African men, and 94% of Brazilian men, but only about half of Malaysian men.

• Alliance Boots, the British-based chain drug retailer, has signed a two-year deal to distribute mass-market HBC brands to independent pharmacies in Spain. Products include many L’Oreal skincare items, and suncare and weight-loss lines. The contract was signed in mid-2009. Alliance Boots’ Spanish subsidiary is Alliance Healthcare Espana.

• Demonstrating the importance of Spain in the European and adjacent HBC markets, Avon is integrating its British and Spanish marketing operations, so that they function as one. The purpose of the move is to better target western Europe, North Africa, and the Middle East, according to International Cosmetic News (ICN; April 1, 2009).

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No. 9: Russia

Russian Men’s Grooming Market Reaches $2.9 Billion in 2009

The Russian men’s grooming market is the third-largest of the BRIC countries, after Brazil and China. Packaged Facts estimates that the retail value of all grooming (or beauty or unisex) products consumed by Russian men will reach more than $2.8 billion by the end of 2009, thanks to a 5% increase. [Table 3-12] The world’s financial crashes of the fourth quarter of 2008, and the signs of strain that preceded it, have caused annual increases to taper during 2004-2009. The total increase for the five years is thus calculated at 49%, however – for an added $938.0 million. The compound annual growth rate (CAGR) for the same period is set at an equally boisterous 8%.

Male-Specific HBC Grows to $645 Million

Growth in the male-specific aspect of the Russian men’s grooming market has been even stronger. Forecast by Packaged Facts to reach $645.0 million by 2009’s close, the retail value of male-specific grooming products will have gained a total of 59% over the period 2004-2009, for an added $239.0 million. [Table 3-12] The CAGR, in this case, is therefore nearly 10% for the same timeframe.

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Table 3-12 Russia's Retail Dollar Sales of All Grooming Products Consumed by Men, and of Male-Specific Grooming Products, 2004-2009 (In Billions)

Male-Specific Value of All Grooming Year Grooming Products Products Consumed by Men* $ % Change $ % Change 2009 $645 6.1% $2,848 5.0% 2008 608 7.8 2,712 6.9 2007 564 10.5 2,537 8.0 2006 511 10.5 2,349 11.3 2005 462 13.8 2,111 10.5 2004 406 13.0 1,910 11.5 Total Growth, 2004-2009 = – 58.9% – 49.1% CAGR,** 2004-2009 = – 9.7% – 8.3% * Retail value of all grooming products consumed by men includes sales of both male-specific and non-male-specific products. ** Compound annual growth rate. Source: Packaged Facts

Rising Incomes, Luxe and Green Trends, Drive Men’s Grooming

Reporters to the world’s news media have flocked to Russia to cover a modern-day gold rush, following manufacturers, chemical suppliers, venture capitalists, retailers, packaged goods marketers, entrepreneurs, and sundry other individuals and corporate entities seeking to cash in as the Russian middle class continues springing to life – or at least that was the case until the collapse of the world’s financial markets in the fourth quarter of 2008. In 2009, Russia is of course affected by the global recession, yet Packaged Facts believes that Russian men are persisting in their consumption of a greater range of grooming products, propelling sales upward, if not at pre-recession rates of progress. The market should return to faster growth, as the Russian economy revives.

This view is supported by the particular set of factors that built up the Russian HBC business, in general, during 2004 through 2008: A rising middle class, the novelty of luxury (or status) brands, and a mushrooming green-consciousness that favors natural/organic products. Often allied with green thinking, Fair Trade positionings are also respected in Russia. These same factors helped to nearly double the retail value of the Russian fragrance and cosmetics market during 1998-2008, to $10.6 billion at the end of the ten years, according to published Euromonitor data. In terms of rubles, said market increased by 463%. [sic]

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Russia’s GDP (in terms of purchasing power parity) is estimated at over $2.2 trillion for 2008; this sum breaks out as $15,800 per capita. As of July 2009, Russia’s men are thought to number 64.5 million; boys through age 14 are estimated at over 10.6 million, men 15-64 at 48.0 million, and men 65 or older, at 5.9 million.

The “insurance” here is that acquired tastes for luxe or status brands, as well as for natural/organic brands, are essectially irreversible; once a nation becomes designer-aware, or savvy to the carcinogens and other toxins in non-natural products, there is no going back. In the HBC realm, the worst scenario is that such a nation will be forced to alternate splurges on luxe or natural/organic brands with purchases of mass-retailed brands, to save money. But the underlying appetites will remain... Packaged Facts has made the same observations about Americans, and about the East Germans absorbed into a reunified Germany.

Selected facts pertinent to competing in the Russian men’s grooming market:

• As of 2009, Unilever claims to have invested $1.0 billion in its Russian operation, which employs 6,500 people. Unilever’s men’s HBC brands fielded there include Axe deodorant, and bath and bodycare products; Rexona, the world’s best-selling deodorant, in separate lines for men and for women; and Timotei haircare products with fruit and herb botanicals. Timotei is extended with Timotei Men regular and anti-dandruff shampoo.

• Despite the world’s move toward digital advertising media, Russia and the other three BRIC countries are expected to see increases in buys of space and time in traditional print and broadcast media, in 2010. GroupM, which is the cororate parent of the WPP group of ad agencies, predicts that Emerging Europe, inclusive of eastern Europe and Russia, will make media buys of $15.4 billion in 2010. That level will exceed the region’s estimated buys in 2009 by almost 3%. (eMarketer, June 29, 2009) In contrast, the entire world’s media buys are expected to slip by more than 1% in 2010, to $410.6 billion.

• According to CosmeticsInRussia.com, shaving products accounted for 88% of men’s HBC in 2006, while haircare and bath/body products accounted for 10%. Skincare was encompassed within the tiny 3% remainder. The same source notes that men had already begun to purchase male-specific makeup, for example, BPI’s Le Male Tout Beau brand, distributed in Russia by Selective XXI. The most popular male makeup types are concealer and mattifying powder. In the shaving products category, Procter

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& Gamble’s Gillette brand and Energizer Holdings’ Schick brand dominate manual razor sales.

• Sampling is an HBC marketing practice in many countries, but in Russia, sampling of men’s grooming preparations often targets women who either do the shopping for their households, or who may give their fathers, sons, brothers, boyfriends, and husbands birthday gifts, Christmas gifts, or any gifts. Valex M, for example, is the Russian distributor of a women’s cosmetic line called Cellcosmet. Valex M offers thousands of women sample sizes of the line’s male-specific extension, Cellmen toiletries. Cellmen is positioned to conservative men over age 40. Estee Lauder has promoted Clinique M the same way, allowing women to take home samples for their men to try.

• The Moscow department store TSUM includes an Only for Men department in its selling-floor planogram. Designed to give self-conscious male shoppers the illusion of privacy, the department sells 20 premium or prestige skincare and makeup brands. Only for Men does not sell perfumery.

• The weeks leading up to each of Russia’s winter holidays are critical to marketers of men’s grooming products, for retailers are supposed to reap 40% of their sales for the entire year during these periods. Christmas and New Year’s Eve are followed by the Russian equivalent of Father’s Day, on February 23.

• French-based Yves Rocher is a pharmacy-oriented marketer/brand in much of the world, but in Russia, it is also a retail marquee. Yves Rocher entered Russia in 1991, and by 2009 has at least 175 stores across the country; plus it maintains presences in mass and prestige. The company sells a men’s extension that includes deodorant, shaving preparations, hair and body shampoo, shower gels, and other products.

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No. 10: India

Indian Men’s Grooming Market Reaches $2.0 Billion in 2009

India, the world’s second most populous country after China, is the poorest component of BRIC (Brazil, Russia, India, and China). Retail sales of all grooming (or beauty or unisex) products consumed by Indian men is amounting to just under $2.0 billion in 2009, on the wings of a near 5% increase. [Table 3-13] The total increase over the span 2004-2009 will therefore be a very good 33%, realizing $489.0 million. The compound annual growth rate (CAGR) will consequently be about 6%.

Male-Specific Grooming Items Reach $820 Million

In the male-specific grooming products mode, India is attaining $820 million at retail in 2009, also thanks to a near 5% increase. [Table 3-13] That will bring the total improvement for 2004-2009 to over 32%, or $200.0 million. Such good progress transposes to a CAGR of – again – close to 6%.

Table 3-13 India's Retail Dollar Sales of All Grooming Products Consumed by Men, and of Male-Specific Grooming Products, 2004-2009 (In Billions)

Male-Specific Value of All Grooming Year Grooming Products Products Consumed by Men* $ % Change $ % Change 2009 $820 4.5% $1,969 4.5% 2008 784 5.0 1,884 5.2 2007 747 3.0 1,791 5.9 2006 725 7.8 1,691 6.0 2005 673 8.5 1,595 7.8 2004 620 7.7 1,480 8.5 Total Growth, 2004-2009 = – 32.3% – 33.0% CAGR,** 2004-2009 = – 5.8% – 5.9% * Retail value of all grooming products consumed by men includes sales of both male-specific and non-male-specific products. ** Compound annual growth rate. Source: Packaged Facts

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India a Youthful Nation, With Rising Middle Class

India has a rapidly expanding middle class, despite its poverty. The country’s GDP for 2008 is estimated at almost $3.3 trillion in purchasing power parity, but because population approaches 1.2 billion, the sum breaks out to just $2,800 per capita. The good news is that the GDP was up nearly 7% in 2008, and according to The Wall Street Journal (August 14, 2009), India is recovering from the late 2008 world financial collapse at a much faster rate than the United States. In June 2009, the paper reports, Indian manufacturing production was up 8% versus the previous June – even as the United States struggled to keep shrinkage of its GDP to 1%, during the second quarter of 2008.

India’s population also skews youthful, which is good news for HBC marketers seeking to inculcate brand loyalty, as young men and women are the first generation to become acquainted – at least on a mass scale – with the kinds of grooming and beauty regimens common in more affluent countries. The median age of Indians is only about 25, making them vulnerable to all sorts of exciting advertising and marketing campaigns. Because they have access to the same technologies as westerners, teen and twentysomething Indians are also connected, hip, and appreciative of many different cultures, from U.S. hip-hop lifestyles, to the elegant European Old World. Rising from poverty, many Indians treasure prestige HBC brands, for both the sense of luxury, and the status they impart.

Indian men number 600.9 million, as of July 2009. Boys age infancy through 14 are a force of 190.1 million. Men 15-64 number 381.4 million, and men 65 and older, a relatively tiny 29.4 million.

The dichotomy between India’s rich and poor demands that HBC marketers think in dual mindsets. One can easily find prestige brands such as L’Oreal’s anti-aging Biotherm Homme skincare products, as well as mass-retailed brands such as Beiersdorf’s Nivea for Men, in urban centers – Mumbai, Delhi, etc. But most of the 57% of Indians (as of 2008) who live outside of cities, are terribly poor. As stated elsewhere in this report, however, these Indians can be targeted, too, by offering them value-priced brands in smaller packs – deodorant in mini-sticks and roll-ons, or moisturizers in foil sachets. Unilever has fielded Rexona deodorant to Indians, using mini-sticks of both the brand’s male and female-specific formulations. This tactic suits rural retail venues, many of which are families’ living rooms, where literally an armload of products of any kind – including food – may constitute a “store’s” entire inventory.

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Interestingly, western mega-retailers, among them Bentonville, Arkansas-based Wal-Mart, the world’s largest, are setting up operations in India. Yet foreign firms are prohibted from establishing chains. As a result, Wal-Mart and others are partnering with local entities to establish wholesale venues that look and operate exactly like Wal-Mart’s big-box stores in the United States, complete with vast parking lots and shopping cart depots. The strategy is to offer those small retailers huge assortments of goods at low prices; the small retailers then profit from reselling the goods to their customers, hopefully passing on some of the savings, too. The first of Wal-Mart’s wholesale store in India is called Best Price Modern Wholesale. The local partner is Bharti Enterprises Ltd.

Mumbai-based drug-maker Elder Pharmaceuticals is an example of an Indian men’s grooming products marketer that has its eye on international expansion. Through its Elder Healthcare Ltd. subsidiary, the company sells OTC grooming and beauty brands, as well as remedies. In March 2009, it launched a men’s deodorant called Fuel for Men, the initial product in a line that also includes shaving and haircare products. Interestingly, the contract manufacturer, VLCC, is not in India, but in France. The deodorant comes in three scents, Ignite Flame, Unravel Mystery, and Arouse Passion, priced at Rs140 each. VLCC is an acronym for the more unwieldy Vandana Luthra Curls and Curves.

Elder expects that Fuel for Men will capture up to 8% of the Indian men’s grooming market, in 2010. The company also expects it to become a global brand, beginning with distribution in Sri Lanka, followed by the Middle East, and then Western Europe.

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The Rest of the World (ROW)

Men’s Grooming Sales in ROW Climb to $7.1 Billion in 2009

Packaged Facts estimates that retail sales of all grooming products consumed by men in the rest of the world (ROW) will approach $7.1 billion by the end of 2009. [Table 3-14] Total growth for the period 2004-2009 will be a very good 36%, for an added $1.9 billion. The compound annual growth rate (CAGR) will thus be 6%, for the same five years.

Male-Specific Grooming in ROW Reaches $976.0 Million

In ROW’s male-specific “sub-market” for grooming products, retail sales will hit $976.0 million by the end of 2004-2009. [Table 3-14] The total five-year gain will be a rousing 41%, or $286.0 million. The CAGR will therefore be 7% for that same period.

Table 3-14 Rest of World's (ROW's) Retail Dollar Sales of All Grooming Products Consumed by Men, and of Male-Specific Grooming Products, 2004-2009 (In Billions)

Male-Specific Value of All Grooming Year Grooming Products Products Consumed by Men* $ % Change $ % Change 2009 $976 4.9% $7,059 3.0% 2008 930 6.0 6,854 5.7 2007 878 6.0 6,484 7.5 2006 828 8.5 6,032 6.3 2005 763 10.6 5,674 9.1 2004 690 10.0 5,201 8.2 Total Growth, 2004-2009 = – 41.4% – 35.7% CAGR,** 2004-2009 = – 7.2% – 6.3% * Retail value of all grooming products consumed by men includes sales of both male-specific and non-male-specific products. ** Compound annual growth rate. Source: Packaged Facts

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ROW Hot Spots

ROW should not be dismissed as a miscellany of countries/regions that are on the fringe of the men’s grooming market, but rather as a group of viable such markets, many of them with lots of dollar potential.

Among ROW hot spots:

• Indonesia, which has a population of 240.3 million, about 120.1 million of them male, as of July 2009. The per capita share of the country’s 2008 GDP equals $3,900, in terms of purchasing power parity (PPP). Packaged Facts estimates the Indonesian beauty/grooming market at roughly $2.0 billion at retail, in 2009.

• Mexico, which accountancy Ernst & Young (International Cosmetic News; ICN, October 1, 2008), says will have one of the top seven economies in 2050, accompanied by BRIC (Brazil, Russia, India, and China), Indonesia, and Turkey. Mexico is home to 111.2 million, of which 54.6 million are male. The per capita share of the 2008 Mexican GDP (PPP) is relatively high for a developing economy, at $14,200.

• Though plagued by political unrest, the Middle East. The region is being targeted by HBC marketers from around the globe. According to data compiled by Epoc Messe Frankfurt, and published in the April 14, 2008 issue of Middle East and North Africa Report (Amman, Jordan), the beauty and grooming industry in the Middle East was worth $2.1 billion in 2007, including salon services. The per capita beauty/grooming spend is calculated at AED1,225 (Arab Emirates dirhams), or $333, claimed by Epoc Messe to be the highest in the world.

• South Korea, which has only 24.3 million males, but a per capita share of 2008 GDP (again, PPP) that works out to be $26,000. Fully 94% of South Korean men use skincare products, according to a study by L’Oreal. The country is also home to the kkotminam, young men who believe in self-beautification; they spend hours on their skin, getting salon facials, and even applying makeup.

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Chapter 4 Insights and Opportunities

Highlights

• Machismo remains in effect in many countries/regions of the globe, but is gradually moderating itself, and thus men’s collective resistance to use a bath additive or eye cream or facial masque is lessened. Arising from male hormones, macho attitudes are here to stay – but increasingly, they are superseded, or at least balanced, by materialism, and by everyone’s equal access to information.

• The rise of middle classes in many countries is creating more disposable income, which fosters a spirit of adventure, and a willingness to try unfamiliar product types. Solid middle-income strata also enable the establishment or improvement of distribution networks and retail infrastructures, as is presently happening in India and Indonesia, for example.

• Ernst & Young has predicted that in 2050, the planet’s seven central economies will be those of BRIC (Brazil, Russia, India, and China), plus those of Indonesia, Mexico, and Turkey (as cited by International Cosmetic News, or ICN; October 1, 2008).

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Insights and Opportunities

How the Men’s Grooming Market Will Keep Rocking During Recession

Although most HBC players appear to be excited about the progress of the planet-wide men’s grooming business during 2004-2009 – 37% total growth to $61.3 billion, or for male- specific products only, 42% growth to $19.7 billion, according to Packaged Facts – there are still a few cynics who maintain that prolonged economic recession will greatly impede the male-specific aspect of this market, which they deem to be largely unnecessary, or a bit of a fad, in the first place.

Some other analysts take a middle-of-the-road stance. For example, Ali Dibadj, Senior Analyst at Sanford C. Bernstein, commented to Brandweek (issue of May 18, 2009) that men’s grooming product sales have indeed been outpacing women’s beauty product sales. But then he warned that it remains “a very small base,” and added, "Male grooming has been a nascent segment for the past 20 years and it remains so. It's really a question of, 'Can you get males to start thinking more about their looks than they currently do?'"

Packaged Facts is far more enthusiastic about the men’s grooming products market. While prolonged recession would certainly not be a help to sales, there are reasons to be optimistic that men all over the world are now ready to use a greater range of such products in their daily grooming regimens:

• The rise of middle classes in many countries is creating more disposable income, which fosters a spirit of adventure, and a willingness to try unfamiliar product types. Solid middle-income strata also enable the establishment or improvement of distribution networks and retail infrastructures; India and Indonesia, for instance, both identified by Packaged Facts as men’s grooming “hot spots,” are just updating their product paths to consumers. Pricing strategies beyond the low end are also

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enabled, giving marketers room to field multiple brands in a country/region, positioning them variously within low, middle, or upscale price-tiers.

• Technology, the great equalizer, is empowering even some of the remotest, most disenfranchised peoples on earth to access the same information as marketers based in the richest countries. Even illegal immigrants dependent on “shadow economies” have access to the Internet, and to each other, via mobile. Nations within other nations are thus united and more clearly defined by technology, and as a result, have become more targetable. In turn, HBC marketers of any size can market men’s grooming products to earthlings of any socioeconomic status, by means of websites, mobile, television home shopping networks (HSN, QVC, etc.), flash-mobbing, viral videos, guerilla marketing, product placement, digital advertising (banner ads on websites, text messaging), traditional mass media ads, traditional public relations efforts, sports sponsorships, ads in videogames, and so on. Paradoxically, marketing to the entire world’s men – or women or children – is now possible via the cost- effective, even free micro-marketing to demographic niches, which the latest uses of technology allow.

• Naturally or organically formulated toiletries, inclusive of men’s grooming products, were sweeping the world prior to the fourth quarter 2008 collapse of financial markets in one country after another. In a separate Packaged Facts report titled Natural and Organic Personal Care Products in the U.S., we describe how and why consumers’ loyalty to natural/organic HBC transcends even the same consumers’ doubts that such products are not yet as effective, and not any safer, than mainstream versions. Therefore, sales of natural/organic HBC, again, including men’s grooming items, are expected to return to double-digit growth rates, as the worldwide recession lifts. Green-manufactured and/or green-transported HBC affords similar positioning, as does HBC featuring ingredients sourced in developing countries, according to Fair Trade principles. …Packaged Facts observes burgeoning demand for natural/organic/green-manufactured/Fairly-Traded HBC in many countries/regions, including BRIC (Brazil, Russia, India, China), as well as in established markets in the affluent West – Europe, and the United States and Canada, for example.

• In 2009, it is no secret that luxury goods of many types have suffered during the ongoing recession. Even many of the wealthiest persons have cut down on luxe purchases, if only because they do not wish to stand out from the crowd. But any analyst that prognosticates the death of the luxe goods marketplace would have to

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ignore almost 40 years of heightened public awareness of designer names – the first to be emblazoned on clothing was Jordache, which appeared on the back pockets of jeans in the United States, in the late 1970s – and of prestige brands of haircare, skincare, and makeup. Men and women living in western countries have become increasingly sophisticated about appearance, especially since luxe HBC retailers brought prestige brands to the masses in what Packaged Facts calls the pop-prestige channel, exemplified by The Body Shop, dedicated to its namesake brand; and by Sephora, which offers hundreds of brands, with dozens of men’s grooming brands featured at the chain since mid-2009. The point is that recession cannot defeat the wealthy West’s acquired taste for luxury; it is human nature. Americans and Brits and Germans may be alternating purchases of luxe men’s grooming brands with mass-marketed versions, to save pennies, but there is no going back on their new tastes. As the recession lifts in the West, upscale men’s grooming brands will thrive; in developing markets, including all four BRIC countries, such brands will be greeted with all the enthusiasm accorded to them in the United States in the early 2000s, when Sephora stores were proliferating across the country.

All of these favorable market place trends are discussed in more detail elsewhere in this report, particularly in the Factors in Future Growth section within Chapter 2, The Worldwide Men’s Grooming Market.

Economic Power Already Shifting to Developing Countries

The world’s media constantly remind us that the four BRIC countries are home to the biggest chunks of world population. Pertinent to our discussion, BRIC residents include almost 1.5 billion men, as of July 2009, or about 44% of the world’s 3.4 billion men. And as noted earlier in this report, accountancy Ernst & Young has predicted that in 2050, the planet’s seven central economies will be those of BRIC (Brazil, Russia, India, and China), plus those of Indonesia, Mexico, and Turkey (as cited by International Cosmetic News, or ICN; October 1, 2008).

The question is, do these circumstances affect men’s grooming marketers on a local level, and/or in the short term? Packaged Facts answers emphatically, yes.

For example, Packaged Facts has also noted in this report that the Wall Street Journal (August 14, 2009) has compared a number of economic indicators, only to conclude that the United States, the mightiest country of all, was recovering from the financial crashes of the

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fourth quarter 2008 more slowly than China, India, and other traditionally “disadvantaged” countries, at least as of mid-2009. The shift of economic power among the countries of the world has clearly already begun – even if the ultimate result will be different than what Ernst & Young has forecast for 2050.

Packaged Facts advises that marketers of men’s grooming marketers, no matter where they are located in the world, seek to establish or strengthen international involvements now. Some HBC executives – especially those originating brands within the traditional natural food/HBC channel in the United States – have confided to this analyst that they are so busy educating their home-countries’ shoppers about the benefits of their products, that their foreign involvements are passive, managed or licensed by local firms. But the changing balance of wealth has already stimulated men’s grooming product activity in countries East and West, and in First and Third Worlds, as detailed in Chapter 3, The Top Ten Men’s Grooming Markets.

Already, some western marketers may be finding it slightly more difficult – that is, more expensive – to outsource manufacture to the Far East, because firms there are looking to expand their coverage across Asia, or to the rest of the world. Japan’s Kao Corporation, for example, owns the U.S.-based Jergens skincare brand, and in 2005, acquired London- headquartered Molton Brown, a marketer, retailer, and prestige brand sold in 70 countries; Lion, also Japan-based, is concentrating on long-term expansion in other directions, into Southeast Asia, and across China.

To sum up, the historical pattern of HBC brands flowing from affluent industrialized countries to the rest of the world is about to morph. Message to marketers: Get ready for the first brands to travel successfully from developing countries to Europe, Japan, and the United States and Canada, in the not-so-distant future.

Recognize the Modernity of BRIC and Other Developing Nations

Images of chaos after natural disasters, of poverty, refugee camps, starvation, war – these are what come to a Westerner’s mind when one hears the phrases, “Third World,” “developing countries,” “BRIC countries,” or “emerging economies.” To be sure, the heartbreaking images are truthful, but more and more often they portray life only in city slums and rural areas. Major cities, even in the states of India, usually have a district or high street where prestige/pop-prestige HBC, and other upscale products, for example, designer clothing, are available to shoppers.

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And still one pictures a core urban neighborhood surrounded by a dark misery that threatens like a tsunami – unless one has travelled to major cities in developing countries, or lived there; in that case, it becomes clear that prestige and pop-prestige are influential in Brazil or China in the same way that they are in the United States or the United Kingdom. Prestige brands become status brands to the middle class, and inevitably influence the formulations and packaging of value brands sold through mass-retail channels (mainstream supermarkets, chain drugstores, and mass merchandisers).

In similar ways, the developing countries’ middle-class lifestyles are thoroughly influenced by foreign products, design, and sports and entertainment trends, particularly those of the United States and Canada, Europe, and Japan. The result is shockingly familiar scenes of young Chinese playing basketball, of actors in Bollywood musicals rapping, or of Russian teens playing Pearl Jam-type music in garage bands.

How to Impress a Male Consumer – Finally, We Know

Men in the United States are only now embracing many grooming product-types, particularly skincare items such as facial moisturizers and night creams, anti-aging serums, eye preparations, and so on. It has taken almost 50 years for U.S. marketers to “crack the code” for impressing men here, and perhaps as long in many other countries, for example, the United Kingdom. Marketers are still working hard to increase levels of penetration; according to Experian Simmons, 40.3 million men use moisturizer, for example. The number is impressive, but translates into a 38% share of all U.S. adult males, which leaves lots of potential.

In contrast, 94% of South Korean men use 1.9 skincare products in their grooming regimens, according to a study by L’Oreal. And Japanese men are already past the novelty stage of skincare product use; the overall Japanese population (men and women) accounts for about one out of every five of the world’s skincare product retail dollars.

In short, more of the world’s men are accepting use of a greater range of grooming items, in large part because of the following advertising or product positioning:

Convenience/Multifunctionality

Men do not want to spend more than a few minutes on personal grooming. There is a demand for products that are convenient and easy to use; consequently, multifunctional

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products that perform up to three tasks in a man’s grooming regimen, are helping to drive sales in many countries/regions. A prime example is Beiersdorf’s Nivea for Men Active-3, which is at once shower gel, shave gel, and shampoo.

Broad Humor and Raunchy Sex

There is nothing new about using humor and sex to sell deodorant or after-shave lotion or haircolor to men. In the 1960s, Brylcreem television spots showed men applying the styling product to their hair, then getting the girl, while a chorus of women sang:

Bryl-creem, a little dab'll do ya, Use more, only if you dare, But wa-atch out, The gals will all pursue ya,– They'll love to put their fingers through your hair.

Bryl-creem, a little dab'll do ya, Bryl-creem, you'll look so debonair. Bryl-creem, the gals will all pursue ya, They'll love to run their fingers through your hair.

By 2009, a number of men’s grooming product marketers have successfully positioned on broad humor and raunchy sexual situations, following the example of Unilever and its handling of the Axe bodycare brand (known as Lynx in Australia, Ireland, and the United Kingdom). Axe’s television commercials and viral videos depict women displaying animal natures, as they are attracted to men who have used the body spray, body wash, or other products. Some of the efforts on Axe’s behalf are charming, like a British spot for Axe Dark Temptation, which turns a young user into a man of chocolate, who is nibbled by the women of London as he strolls about; other Axe ads and promo materials have featured women in bikinis being “sploshed” head to toe with water, mud, or condiments. Procter & Gamble has followed suit with Old Spice; for instance, by running a web page consisting of a single photo of a man’s armpit with long hair from which rain clumps of deodorant, to assist the launch of Old Spice Ever Clear.

Of questionable taste, perhaps, but frat-boy humor is one of the major tactics spearheading sales of mass-marketed men’s grooming products used by teens and twentysomethings.

Risque humor and overtly sexual situations in advertising co-exist with the more traditional themes of masculine power and seriousness that can be summed up in the declaration, “Let’s get down to business!”

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Culture-Specific Products and Packs

Marketers must of course modify strategies for various countries, according to societal peculiarities. As noted above, both South Korean and Japanese men are heavy consumers of skincare products. Also, men (and women) in Brazil love scent, but turn to scented deodorant when they cannot afford perfume. In Russia, half the customers at the Express Manicure chain of nail salons have been observed to be men, by a reporter writing for Women’s Wear Daily (May 9, 2008).

In India and China, many people can only afford HBC products in what Westerners would call travel sizes – mini-sticks and roll-ons, foil sachets, small bottles, etc. Unilever, for example, has accommodated Indians with such mini-packs of Rexona, a value-tier deodorant sold in separate versions for men and women.

A Global Demand for Natural/Organic HBC

Natural or organic formulations have driven men’s grooming product sales around the world, throughout the 2000s, as Packaged Facts has amply discussed near the top of this section. However, this factor deserves special emphasis.

In 2008, according to Packaged Facts’ report Natural and Organic Personal Care Products in the U.S., domestic sales of natural/organic HBC reached $6.6 billion at retail, having grown a total of 57% during the period 2004-2008. The U.S. figure will jump 76% by 2014, to $11.7 billion.

On a global basis, the natural/organic HBC market was valued at $20.8 billion at retail in 2008, reflecting a 51% increase during 2004-2008. Packaged Facts projects 2014 sales of $36.0 billion, 73% above the sum for 2008.

In 2009, natural/organic HBC’s amazing double-digit annual gains are believed to be dampened by recession to 5%-9% in various natural/organic product segments – still very strong progress for such large dollar bases. Natural/organic-oriented consumers, as mentioned above, are extremely loyal to the concept, and as economic conditions improve, growth will power up again to double-digit rates, in the United States and Canada, as well as in many other countries.

It should be noted that, in 2009, most natural/organic grooming products are positioned on unisex use, although that is expected to change in the coming years. Aubrey Organics is one

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marketer that already offers a male-specific line-extension called Aubrey Organics Men’s Stock; it comprises deodorant, haircare products, shave cream, and skincare items such as moisturizer and eye cream.

In February 2009, Packaged Facts conducted its own online survey of 2,600 U.S.-resident adults. Asked if they use natural/organic personal care products, men who answered “Yes” constituted 44% of users, or 20% of the whole respondent base; as opposed to women answering “Yes,” who were 56% of users, or 26% of the whole base.

Pass the Manscara, Joe! Makeup for Men Is Here

Most people react with shock or derision when they are told that some marketers have introduced makeup for men. Yet apart from the tiny minority of men who simply like to “put on their faces,” far greater numbers of men are being introduced to makeup use in quite logical ways. L’Oreal, for example, issued a men’s version of its popular Yves Saint Laurent Beaute Touche Eclat concealer-pen, in 2008. The pen retails at about $30. Other marketers, among them Marek Cosmetics, offer concealer in lipstick-like twist-up canisters; Marek’s, branded 4Voo, sells for $40. Lipcolor is sometimes delivered in the form of lip balms, in various types of packaging. Clearly, multifunctionality is makeup’s steppingstone to a level of sales that will win it recognition as a viable men’s grooming category.

And yet, some marketers are already attempting to trailblaze, with full-fledged men’s makeup brand-lines. Marek’s 4Voo is such a line, as is Taxi Cosmetics’ Taxi. SKUs of the latter brand, sold in mass in the United Kingdom, include Disguys concealer, Guyliner eyeliner, TaxiPure mineral foundation, and yes, Manscara.

As mentioned earlier in this report, male beautification, involving makeup, is practiced in China by the trendy aimee nanren (love beauty men). Their South Korean counterparts are the kkotminam [sic] (flower men). See, again, the Factor in Future Growth section of Chapter 2, for more discussion.

Male-Specific Haircare Products Will Be Next Big Trend

Many in the HBC industry agree that the men’s haircare category will see lots of male- specific new product activity, worldwide, beginning in 2009, and continuing into the future. Before 2009, most men’s haircare products were styling preparations, while male-specific shampoo, conditioner, and various hair treatments were rare, except in Japan, where they

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have been marketed for some time. But after the 2009 rollout of such products extended from the Axe (or Lynx) brand, the floodgate of new haircare products is about to burst.

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Chapter 5 The Marketers

Highlights

• Increasingly, marketers of HBC to women are extending their brands with male- specific collections or they are minting or acquiring entirely separate brands for men. Marketers specialized solely in men’s grooming products are numerous in absolute terms, and yet they remain a small minority in the competitive field.

• Marketers that originally built their brand equity in the natural food/HBC retail channel tend to avoid male-specificity, preferring instead to offer unisex deodorant, shave cream, etc. Aubrey Organics is one notable exception, with its organic Men’s Stock extension.

• It is a small group of non-specialized marketers, however, that dominate many of the top rankings in the bath products, deodorant, shaving products, haircare, and skincare categories of the men’s grooming market: The diversified leaders include, in alphabetical order, Combe, Energizer Holdings, Johnson & Johnson, P&G, Royal Philips, Unilever, and others.

• Marketers selling men’s grooming products through QVC in one of the four countries in which it entertains consumers with the old “hard sell,” may be able to facilitate international expansion by securing air time in other countries. Likewise with HSN.

• In 2009, Procter & Gamble is the premier men’s grooming marketer on the planet, thanks to its Global Gillette division, acquired in 2005. Gillette is the leader in the U.S. disposable razor (or shaver) segment of the shaving products category. Gillette is also an international force in bath products, deodorant, and skincare.

• P&G’s The Art of Shaving brand was bought for $60 million, or twice its annual sales. The brand appears on upscale shaving and skincare products, as well as on high-end versions of Gillette Fusion razors. The Art of Shaving is also a retail marque appearing on a chain of at least 36 men’s grooming shops. The Zirh brand is packaged to look more high-tech and industrial, as if to suggest that the contents reinforce men’s masculinity.

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• Unilever claims that Axe is the best-selling men’s toiletry, worldwide. The brand debuted in 1983 in France. In Australia, Ireland, and the United Kingdom, Axe is known as Lynx. Unilever further claims that its Rexona deodorant is the best-selling deodorant, again, worldwide.

• Beiersdorf’s Nivea brand is the top beauty and skincare brand in the world, and thus the Nivea for Men extension is the top men’s facial care brand in the world. Nivea for Men certainly dominates the men’s skincare field in its home country, Germany, and in Europe.

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The Marketers

Most Men’s Grooming Players Specialize in HBC

Packaged Facts observes that most marketers of men’s grooming products are specialized in health and beauty care (HBC) products (L’Oréal, for example). Some marketers position only to women (Jurlique), or unisexually (Kiss My Face), or to both genders separately (Société Bic) – though all of these marketers know that men are using the same skincare products or shave cream or shampoo that women buy for themselves and that they supply to their households.

Increasingly, marketers to women are extending their brands with male-specific collections (Johnson & Johnson with Neutrogena Razor Defense), or they are minting or acquiring entirely separate brands for men (Lion has issued the Pro Tec men’s haircare brand, and Procter & Gamble bought both The Art of Shaving and Zirh).

Marketers specialized solely in men’s grooming products (Jack Black) are numerous in absolute terms, and yet they remain a small minority in the competitive field. Marketers that have originally built their brand equity in the natural food/HBC retail channel (Hain Celestial, Kiss My Face) tend to avoid male-specificity, preferring instead to offer unisex deodorant, shave cream, etc. Aubrey Organics is one notable exception, with its organic Men’s Stock extension.

…But Diversified Marketers Dominate Rankings

It is a small group of non-specialized marketers, however, that dominate many of the top rankings in the bath products, deodorant, shaving products, haircare, and skincare categories of the men’s grooming market. The nature of diversification ranges from interests in pharmaceuticals, wound care, and medical diagnostics, in the cases of Johnson & Johnson (Neutrogena Razor Defense, Rogaine), Combe (Just for Men), and others; to involvements in broad ranges of consumer goods, such as batteries, disposable diapers, foods, household cleaners, or pet foods, in the cases of Energizer Holdings (Schick), Procter & Gamble (Gillette, Old Spice, Tag), and Unilever (Axe).

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Direct Sellers

There are men’s grooming marketers of every size and type that sell products via direct media, whether e-tail websites, magazine ads, mail-order catalogs, television home shopping networks (QVC, HSN, others), or television infomercials. In the 2000s, television home shopping, once regarded as a low-class retail channel, now regularly sells prestige beauty products, and some prestige men’s grooming products; QVC sells Nickel, for instance, and HSN sells Ahava for Men, The Art of Shaving, Boss, Clarins Men, Clean, Grooming Lounge, Marilyn Miglin M for Men, and a real curiosity, It Cosmetics’ Abs in a Box for Men. The Box, which has an MSRP of $69, contains makeup for men to use on their chests and abdomens, to give the illusion of well-defined, “six-pack” musculature.

Marketers selling men’s grooming products through QVC in one of the four countries in which it entertains consumers with the old “hard sell,” may be able to facilitate international expansion by securing air time on QVC in the other three countries. The company’s networks are in Germany, Japan, the United Kingdom, and its home country, the United States. Likewise with HSN; men’s grooming marketers may be able to follow the HSN connection to networks in Canada, Germany, Italy, Japan, the Phillipines, the United Kingdom, and the United States.

There is also the modern door-to-door salesperson, exemplified by the 5.8 million “sales associates” who sell the Avon brand, around the world. The term “multilevel marketing” is applied to such groups of salespeople who are not only paid commissions on the items they sell, but also for recruiting others to become salespeople, too. Indeed, Amway has long been a multilevel marketer, and Avon itself is in the process of converting to a multilevel system.

Key Mergers and Acquisitions

The following mergers, acquisitions, and divestments have helped to shape the men’s grooming market as we know it in 2009:

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• In June 2009, P&G picked up two prestige men’s grooming brands, The Art of Shaving and Zirh, within a two-week period. The Art of Shaving brand was bought for $60 million, or twice its annual sales. The brand appears on upscale shaving and skincare products, as well as on high-end versions of Gillette Fusion razors. The Art of Shaving is also a retail marque appearing on a chain of at least 36 men’s grooming shops, some of which are called “barber spas,” because they offer shaves, haircuts, and facials. The Zirh brand is packaged to look high-tech, industrial, as if to suggest that contents reinforce men’s masculinity. Zirh SKUs include anti-aging products, moisturizers, hairdressings, and others.

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male-specific brands or brand extensions to be acquired by Unilever are Brylcreem hairstyling products (deal covers Brylcreem’s European distribution only), Duschdas for Men shower gel and deodorant; Sanex for Men bath, shaving, and skincare products; and others.

Table of Marketers and Brands

The following table lists some leading – and simply interesting – marketers of men’s grooming products, and their representative brands. [Table 5-1] The selection includes marketers from Brazil, the Far East, France, Germany, Spain, The United Kingdom, The United States and Canada, and other corners of the world.

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Table 5-1 Selected Marketers of Men's Grooming Products, and Their Representative Brands, 2009

Marketer/Brand Description Ales Groupe Shaving gel for sensitive skin, body splash, after-shave; hair and PhytoMen body shampoo with coconut, aloe vera; sold through Sephora American International Industries Haircare products sold through barber shops, as well as beauty supply outlets, and mass; non-aerosol pump hairspray, hairdressings, deodorant; also, shaving products, among them Lilac Vegetal after-shave, the brand's signature product, and a Pinaud Clubman travel kit that lists for $14; generally value-priced, example is 16-ounce jar of Styling Gel that retails for $7.68; brand dates back to France, in 1810; celebs Bob Hope and Kirk Douglas have been users Amway Global Facial cleansing foam, shave gel, after-shave; 1 oz. skin Tolsom smoothing gel sells for $20; sold through a multilevel marketing network Anthony for Men 2-in-1 Shave Cream, Foaming Face Wash, Face Scrub, Rescue Anthony Action Gel Treatment, Rescue Eye Stick, plus shampoo, moisturizer, all $20-$25; Traveller Kit is $225 Line of men's toiletries named after human needs or desirable traits; Energy Shower Gel, Courage Shave Cream, Strength Anthony Body Essentials Shower Gel, Spirit Body Spray, Energy Bar Soap; retails at $8- $22 Extensive selection of grooming products includes anti-acne and anti-aging preps, bath products, cleansers, moisturizers, Anthony Logistics shampoo, conditioner, styling gel, razors and other shaving products, suncare; prestige-priced; a percentage of sales is donated to research in the fight against prostate cancer For active men; shave cream, lip balm, hand cream, face scrub, Anthony Sport face lotion, cleanser, eye cream; retails at $8-$22 At Last Naturals Extensive array of men's shaving, skincare products; facial cleansers, body scrub, moisturizer; haircare products with Lucky Tiger natural ingredients to stimulate hair growth; Menthol and Mint Vanishing Cream comforts irritated skin and sells for $8.15 Lucky Tiger Barber Shop Classics Styling products for men, value-to-premium-priced Aubrey Organics, Inc. Comprehensive line of natural, vegan, and preservative-free shave creams, shave balms, after-shave, face scrub, Aubrey Men's Stock moisturizers, eye creams, shampoo, scalp tonic, hair gel; deodorant with vitamin C priced at $7.50; all packed and shipped fresh Avon Products, Inc. The company's signature after-shave conditioner; value-priced Avon at $4.50 Continued on next page

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Table 5-1 [cont.]

Marketer/Brand Description Avon On Duty Deodorants value-priced at 99¢ Avon PROextreme Maximum Performance Collection of products for men with problem skin Avon PROsport Daily Performance Men's toiletries for shaving and other daily grooming rituals Black Suede After-shave conditioner; value-priced at $4.50 After-shave conditioner; premium-priced; name licensed from Christian Lacroix NOIR for Him famed fashion designer After-shave conditioner, body wash, and deodorant body spray; Derek Jeter Driven premium-priced; name licensed from New York Yankee baseball star After-shave conditioner, roll-on antiperspirant; value-priced at Mesmerize for Men $4.50 After-shave conditioner, body wash; premium-priced; name Patrick Dempsey UNSCRIPTED licensed from star of ABC's Grey's Anatomy Perceive for Men After-shave conditioner; value priced at $4.50 Tomorrow for Him After-shave, hair and body wash Designer name after-shave conditioner, body wash; premium- U by Ungaro for Him priced; licensor is famed fashion house Hair and body wash, after-shave liquid and conditioner; anti- Wild Country perspirant Beiersdorf AG Deodorant, in separate versions for men and women; sold in 8 X 4 Germany, The Netherlands, Turkey, the Middle East, North Africa, and Pakistan Bath, haircare, shaving, and skincare products, with selected Florena Men ingredients naturally-sourced; extended from Florena brand; sold in Germany Prestige skincare line comprises anti-aging preps, moisturizers, cleansers, toners, home dermabrasion, etc.; no SKUs la prairie formulated for men, but many are co-positioned as suitable for men; upscale-priced, some SKUS retail at $300-plus Skincare for men: Cleansers, shaving toiletries, bath items, Nivea for Men haircare products, deodorant; extensive SKUs all in same deep blue packagings Société Bic Popular low-end yellow disposable shavers, sometimes sold in quantities of dozens, in plastic bags; also, Bic 3 triple-blade model, sold in Africa, Europe, Near and Middle East; Bic Comfort 3 is triple-bladed, with DualStrip impregnated with aloe and vitamin E, for sensitive skin, and sold in Asia, Europe, Latin Bic America, North America, and Oceania; Bic Comfort 3 Advance, which has a heavier handle, is promoted with limited editions featuring logos of U.S. college sports teams; Bic 3 and its line- extensions come in darker colors, four shavers to a pack; the Bic Soleil line of shavers is for women Billy Jealousy LLC Bath, skincare, shaving, and haircare products from Texas; sold Billy Jealousy through Sephora Continued on next page

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Table 5-1 [cont.]

Marketer/Brand Description Bulldog/The Little Wing Trading Co., Ltd. Line of 11 naturally-formulated products, including moisturizer, shave cream, body wash, facial cleanser, facial scrub, post- shave balm; SKUs include a few versions for sensitive skin; from Bulldog United Kingdom, where Bulldog is priced at $4.39-$8.79; sold through Boots, Debenham's, Planet Organic, Sainsbury's, Tesco, Waitrose, Whole Foods; company claims 1,800 mass- retail doors Church & Dwight Co., Inc. Extension of famous women's depilatory brand; in Speed Cream, which removes hair in three minutes; Body Cream, Nair for Men which takes eight minutes; and Spray, which takes four minutes; retails at $8.50, $6.95, and $8.00, respectively Clarins SA Clarins prestige skincare, bodycare, suncare brand extended Clarins Men with men's collection of shaving and skincare products The Clorox Company, Burt's Bees, Inc., subsidiary Earth-friendly line of men's products scented with herbs; bar soaps, body wash, hair gel, stick deodorant, shave cream, Burt's Bees moisturizing after-shave, shave soap; after-shave balm retails at $12 Collistar S.p.A. Shaving and skincare products for older men, in separate Linea Uomo Senior collections for face and body; positioned to Italy's greying population The Colomer Group, Colomer USA subsidiary American Crew Haircare for men; premium-priced, sold through mass Organic haircare products, including conditioner, treatments, m.o.p. [for Modern Organic Products] shampoo, styling products; unisex; premium-priced, sold through mass; Colomer is based in Spain Combe, Inc. Traditional favorite after-shave, in Classic Ice Blue, Ice Sport, Aqua Velva Musk, and a vitamin-enriched, alcohol-free version dubbed Ice Balm Said to be first mass-marketed men's haircare product, rolled out in 1930s in United States; in Original, Blue (to enhance grey hair), and Power Hold creams; also said to be the leading men's Brylcreem hairstyling product in the United Kingdom; in 2010, European distribution of Brylcreem will transfer from Sara Lee Corporation to Unilever; Combe will continue to sell brand in Bolivia, Canada, Paraguay, Peru, Uruguay, Venezuela, and The United States Haircolor that gradually covers grey, with repeated use, so that Grecian Formula no one will suspect the user of dyeing his hair… Grecian 5 Haircolor that takes just five minutes to apply Claimed to be best-selling haircolor in world, formulated to target grey hair, for a natural look; application said to take just five Just for Men minutes; among SKUs are gels for coloring facial hair, such as beards, moustaches, sideburns, eyebrows Continued on next page

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Table 5-1 [cont.]

Marketer/Brand Description Just for Men Touch of Gray Formula that leaves a little grey, for an even more natural look Pre-shave preps that stand whiskers up, for cutting them closer Lectric Shave to skin; in Original with Soothing Green Tea Complex, Ultra Gel, and Tenderface varieties Round soap bar formulated to foam up when placed at bottom of Williams Mug Soap mug and whisked with shaving brush Energizer Holdings, Inc., Schick Wilkinson-Sword subsidiary Disposable razors, including ST Slim Twin, Xtreme 3 and Quattro models, with two, three and four blades, respectively; manual razors include Quattro Titanium, Quattro Midnight, Schick Xtreme 3 Subzero, and Intuition Plus; the Intuition Plus has three blades, and a solid preparation of Cucumber Melon shave soap, which lathers the skin when in use; blades and shave soap refillable; also, women's razors The Estée Lauder Cos., Inc. Paraben-free, "nature-inspired" shave cream; after-shave balm; Shaving Ritual set with shampoo bar; new aromatherapeutic collection extended from Pure-Formance haircare line includes Aveda Men grooming clay, conditioner, exfoliating shampoo, all with essential-oil composition for scalp health; 5.0-ounce tube of Firm Hold Hair Gel lists for $20; sold through Aveda stores and salons, and Aveda boutiques at department stores Face Soap with Dish, Liquid Face Wash in Regular or Extra Strength, Age Defense Hydrator SPF 15, Daily Eye Hydrator, Clinique Skin Supplies for Men Acne Solutions Emergency Gel, M Cover Concealer, M Lotion, Cream Shave, M Shave Aloe Gel, Antiperspirant-Deodorant, Non-Streak Bronzer, and more; priced at about $12-$45 Men's skincare line comprised mainly of shaving-related Lab Series Skincare for Men products, plus Instant Moisture Gel, Age Rescue Face Lotion Collection extended from brand positioned on wellness and power to soothe, includes Easy Slider Pre-Shave Oil, Blade Runner Energizing Shave Cream, Fire Fighter "to take the burn Origins for Men out," and Skin Diver body wash, scrub, and soap bar; variously with cucumber, eucalyptus, chamomile, active charcoal; sells at $12.50-$19.50 The Hain Celestial Group, Inc. Moisturizing Cream Shave; 8-ounce tube retails for $6.45; all- Alba Botanica natural, with organic herbs All-natural 6-in-1 Shaving Lotion Beard and Skin Therapy, After- Jason Shave Tonic Men's collection in striking orange packagings includes shave Zia Men cream, face scrub, Triple Action Face/Hair/Body Wash, anti- acne cream, eye cream, etc.; all-natural Henkel KGaA, Dial Inc. subsidiary Attraction Enhancing Body Wash, in Clean Rinsing and Moisture Dial Magnetic Rich varieties; positioned on being "pheromone infused," to attract women; sold through mass Continued on next page

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Table 5-1 [cont.]

Marketer/Brand Description The first aerosol deodorant, introed in 1960, now available in four extensions: Sport, in Invisible Solid, Clear Gel, Aerosol Deodorant, Aerosol Antiperspirant & Deodorant; Xtreme, in PowerStripe Solid, Power Gel, Clear Stick; Fast Break Power Right Guard Stripe, Power Gel; and Clinical, with Dry Tek Protection System said to provide the maximum level of active ingredient allowed by FDA, in Invisible Solid, and Aerosol; sold through mass brand once owned by Gillette, and acquired in 2006 by Henkel, after Gillette was itself acquired by Procter & Gamble, in 2005 Herban Cowboy Certified vegan and organic line features shave cream, deodorant, bar soap, and after-shave balm; widely available, Organic Grooming through Whole Foods, Wegmans, Amazon.com, The Vitamin Shoppe, Drugstore.com, etc. Inter Parfums, Inc. Morning-After Rescue Caffeine-Free Gel; Eye Contour Lift, with wheat and soy proteins; Mug Shot Masques, with herbs, vitamins, collagen, and anti-free radicals; Refrigerated Eye Gel Nickel Mask; Body Cooler Moisturizer; Cold Sweat Deodorant; shaving products; from France, prestige-priced at $15-$30; Nickel brand also appears on a budding chain of men's spas Jack Black LLC Shave cream, after-shave balms, gels; skincare items, including new Rx Skincare Series extension, encompassing anti-aging Skin Serum, Eye Rescue, etc.; shampoo, conditioner, Jack Black hairdressings; deodorant, body washes, face and body washes; prestige-priced; Pit Stop Antiperspirant, for example, retails at $15 for 2.75-ounce stick Johnson & Johnson Various haircare, skincare, bath and body products that are positioned on unisex use are also gathered for co-positioning to Neutrogena men, on men's grooming pages within www.neutrogena.com; sold through mass-retail channels Skincare line includes Invigorating Face Wash, Invigorating Hair & Body Wash, Age-Fighter Face Moisturizer SPF 15; Razor Neutrogena Men Defense collection comprises Shave Gel, Skin Clearing Shave Gel, Face Scrub, Post Shave Lotion; sold through mass-retail channels OTC hair growth prep extended from prescription version; active Rogaine ingredient is minoxidil Juice Beauty, Inc. Certified organic skincare items include moisturizer, cleanser, astringent, toner, exfoliants, peels, and suncare items; unisex, Juice Beauty but various SKUs are gathered on a Juice Beauty web page, and co-positioned as a collection for men; prestige-priced Continued on next page

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Table 5-1 [cont.]

Marketer/Brand Description Kamins Dermatologics, Inc. Skincare line with BioMaple, isolated from sap of maple trees by Canadian chemist Ben Kamins; extension called Male includes B. Kamins, Chemist moisturizer, eye cream, shave balm, etc.; prestige-priced at $23- $48 Kao Corporation Men's extension of famous facial skincare and cleansing strip line includes washes, scrubs, cleansing strips; premium-priced; sold Biore Men mainly through mass, in China, Japan, Hong Kong, Indonesia, Malaysia, Singapore, Taiwan, Thailand, Vietnam Men's extension of German haircare brand comprises a shampoo Guhl Man for normal or fine hair, and an anti-dandruff shampoo; available in Germany, The Netherlands Broad selection of shaving products, bath products, haircare products, skincare products, manual razors; prestige-priced, e.g., Cassis Energy Sport Body Spray retails at about $33; sold at Molton Brown Molton Brown-dedicated stores, of which the flagship is in London; distributed in Australia, Germany, Japan, Singapore, The United Kingdom, The United States Kiss My Face Corporation Shave creams, deodorant, shampoo, moisturizers, some tinted; exfoliants, scrubs, shower gels, fruit-flavored lip balms, bar soaps; Kiss My Face all SKUs natural or organic; positioned on unisex use; available in natural food/HBC channel, mass, other channels; distributed to 14 countries outside United States and Canada Korres Natural Products For men, botanical, herbal, and/or homeopathic-based facial cleansers, moisturizers, shower gel, anti-aging serums, facial cleansers, bath and body products; ingredients include jojoba beads, fig, basil, lemon, watermelon, magnesium, bamboo powder, cinnamon, thyme, echinacea, others; sold through prestige outlets, including Henri Bendel, and Korres' own stores; premium-to- prestige-priced; sold also through Whole Foods; as of January Korres 2011, the Korres brand will be distributed in the United States by Johnson & Johnson, under a license in effect through 2019; Juniper & Rum Showergel is priced at $13 for 8.5-ounces in a pump dispenser; imported from Greece; Korres operates a chain of namesake-branded pharmacies in that country, plus pop-prestige- style Korres stores in New York, Helsinki, London, Paris, Vienna, and cities in eight other countries Lescoja Corporation Skincare products, plus shave gel; Complete Face and Head Care Matte for Men Lotion with SPF 25 is for use on the entire head, sells for $25; sold through Sephora Lion Corporation Gel shampoo, Mud Spa conditioner, spray tonic to help prevent hair Pro Tec HEAD loss, Impact Jet spray that cleans hair follicles, and Shampoo Brush Pro Tec STYLE Deodorant Mist, and liquid Deodorant Soap Continued on next page

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Table 5-1 [cont.]

Marketer/Brand Description L’Oréal SA Premium-to-prestige-priced skincare products, including home skin peel kits; extended from Biotherm skincare line for women, Homme is claimed to be world's best-selling line of its type; cleansers, moisturizers, anti-aging preps, Age Refirm Eye Force eye cream, Biotherm Homme Age Fitness Night Recharge night cream, shave gel or foam; Hydra DetO2x collection comprises cleanser, moisturizer, eye gel SKUs that retail at $18-$29; available in many countries, but in United States and Japan, is sold online only For Men extension features Hemp moisturizer, Maca Root deodorant, eye cream, shave cream, etc.; shampoo, conditioner, The Body Shop beeswax hairdressing; many ingredients sourced from developing countries; sold through namesake chain of pop-prestige stores Skincare, haircare, makeup brand originated in 1851 in New York's East Village neighborhood; many formulations are herbal-focused; men's items include face wash, face scrub, cleanser, toner, astringent, pre-shave oil, shave cream, shampoo, conditioner, body Kiehls 1851 wash, deodorant, etc.; prestige-priced, for example, deodorant is $16 for a 2.5-ounce tube, while Ultimate Man bar soap is $12.50 for 7.0-ounce size; sold through prestige outlets, and dedicated Kiehls stores Power Clean cleanser, Oil Controller, Hydra Power moisturizer, L’Oréal Paris Men's Expert after-shave balm, various other cleansers, moisturizers, and wrinkle-fighters New haircare collection positioned on thickening and strengthening L’Oréal Paris Vive for Men hair; shampoo, dandruff shampoo, Thickening & Grooming Foam or Gel Hairstyling products in cream, gel, spray forms, repositioned to L’Oréal Paris Studio Line men, in black containers Grooming products for Black men encompass Magic Shave razorless hair removal system, which avoids razor Bumps; Sportin' Waves pomade for short hairstyles; Dark & Natural five-minute permanent haircolor, in Jet Black tint only; Sta Sof Fro, softener Soft Sheen-Carson and conditioner for natural hairstyles, in spray or gel lotion forms; Sportin' Style "maintenance" collection includes Anti-Dandruff Shampoo, Conditioning Gel, Moisturizing Scalp Cream, and Sheen Intensifier LVMH (Moet Hennessy-Louis Vuitton) Colonia spray deodorants, Collezione Barbiere Exfoliating Cleanser, shave cream or gel, after-shave lotion or balm, Colonia Acqua di Parma shampoo, body creams and sprays; all prestige-priced; Collezione Barbiere manual shaver and stand with shaving brush sell at about $240; sold through Harrod's Pop-prestige chain's namesake private label appears on men's Sephora skincare products; example is Weekend kit with shower gel, shave foam, moisturizer, facial cleanser, all in travel sizes; priced at $30 Continued on next page

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Table 5-1 [cont.]

Marketer/Brand Description Marek Cosmetics, Inc. Skincare line for men: Confidence Corrector, a concealer in lipstick-style cylinder, about $40; Dynamic Lift Treatment, in pump, 4Voo $100; Rejuvenating Under Eye Gel, $80; Face & Body Bronzer, $60; Lip Maximizing Serum in pen dispenser, $45; sold at Harrod's, in London The Mentholatum Co., Inc. Expansive grooming line positioned to young men; bath products, Mentholatum for Men deodorant, lotions, washes, scrubs, shave creams, etc.; available in Asia and Pacific Rim countries Medicated pads for fighting acne, lotions, scrubs; positioned to adolescent boys; available in Asia and the Pacific Rim, Africa, Oxy Australasia, Japan, Latin America, Mexico, the United States and Canada Natura Cosmeticos SA Brazil's most popular direct-sold beauty brand, extended with male- suitable Ekos Castanha collection ("castanha" means Brazil nut); SKUs include Hair Oil, Three-Phase Shower Oil (three grades of oil layered in one bottle), Body Oil Elixir, Shampoo, others; retails at Natura roughly $14-$31; distributed in Latin America, Mexico, Europe – notably in France; also sold through brick-and-mortar stores; Natura brand-dedicated stores are in Bogota, Buenos Aires, Paris, Sao Paulo Nature's Cure, Inc. Homeopathic remedy for acne; various SKUs in line treat either face or body acne; face treatments are formulated separately for men and women; for treatment of either gender's acne, tablets that are swallowed have a systemic effect complementing the topical Nature's Cure effect of a benzoyl peroxide cream; tablets and cream are sold together, often in blister packs; in U.S market, Nature's Cure has been sold extensively via direct media, including television infomercials; also sold through mass-retail channel's brick-and- mortar stores, with words "as seen on T.V." displayed on label New Wave Fragrances LLC Skincare products, deodorant, shampoo, etc.; deodorant is priced True Religion at $15; sold through Nordstrom, Sephora The Procter & Gamble Co. Upscale shaving and skincare products, including both toiletries and high-end versions of Gillette Fusion manual razors; also, a The Art of Shaving chain of brand-dedicated stores, some of which are dubbed "barber spas" that offer shaves, haircuts, facials, etc.; acquired in 2009 Series, a line of foil shavers that deliver 10,000 micro-vibrations per minute; Series 5 and 7 shavers feature a Power Comb for lifting hard-to-cut whiskers around mouth and chin; some models have Braun flexing heads and foils; some come with Clean & Renew system, which cleans, sanitizes, lubricates, and recharges the shavers; Series 1 lists at $60, Series 7 at $270 Disposable, manual, and battery-operated vibrating razors, spray Gillette and stick deodorant, shave gel, skin scrubs Continued on next page

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Table 5-1 [cont.]

Marketer/Brand Description Skincare for men; moisturizer, after-shave balm for sensitive skin, Gillette Complete Skincare etc. Five-blade razor introduced in 2005; available in both manual and Gillette Fusion battery-powered vibrating models; a trimmer blade for moustaches and sideburns is "hidden" behind a lubricating strip Manual razor with three blades; available in M3 Power model; Gillette Mach 3 introduced in 1998 Men's traditional toiletries brand encompasses antiperspirant, deodorant, body wash, and body spray, all extended from Old Spice after-shave and cologne; goes head-to-head with Unilever's Old Spice Axe/Lynx, via "gross-out" ads designed to reach teen and twentysomething men; premium-priced, sold through mass-retail channels since 1930s Body spray that first appeared in 2005; in 2009, the revised Tag Body Spray collection features packs with likenesses of basketballer Carmelo Anthony, rapper Ludacris, skateboarder Rob Dyrdek Prestige line of men's skincare and haircare products; anti-aging, Zirh moisturizing, styling products, etc.; bar soaps are $15, shave cream or gel is $22.50; acquired in 2009 The Real Shaving Company Ltd. Shave creams, gels, and oils; pre-shave and post-shave products; The Real Shaving Company premium-priced; from England Royal Philips Electronics NV Electric shavers, each model has rotary head with three blades: 6000 Series, the most basic, sells at about $40; 7000 Series shavers have ultra-thin heads, for $63-$80; 8200 Series shavers are rechargeable, and are $101-$140; Arcitec model has Flex & Pivot Action head, retails at $240; Nivea for Men models dispense Philips Norelco shave cream from reservoirs in Flex & Pivot Action Heads, and are priced at $80-$156 Also: Bodygroom body hair shaver, with foil blade that can be fitted with interchangeable heads for shaving underarms, back, groin, etc. Also: Electric clippers for cutting and styling the hair on one's head Sante Naturkosmetik GmbH, Avea Organics distributor Sante Homme Natural haircare collection for men, from Germany The Tend Skin Company Shave cream, deodorant, razor bump remedies; available at Tend Sephora Unilever Body spray, body wash, spray and stick antiperspirants, shower gel; positioned to teen and twentysomething young men, often on the basis of crude humor that reinforces the idea that women are attracted like flies to the scent of Axe users; claimed to be the Axe world's best-selling brand of its kind; sold through mass Also: Men's haircare line introduced in 2009; shampoo, conditioner, plus 2 in 1 shampoo-conditioner; stylers in putty, cream, paste, pomade forms Continued on next page

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Table 5-1 [cont.]

Marketer/Brand Description Antiperspirant in separate formulations for men, women, and girls; as of summer 2009, the Degree Men V12 SKU has yellow and Degree black automotive design on label, and is endorsed by NASCAR driver Dale Earnhardt, Jr.; sold through mass The name used for Axe products in Australia, Ireland, and The Lynx United Kingdom Claimed to be world's top-selling deodorant; has separate product ranges for men and women; value-priced; sachet-size packs of Rexona Rexona in stick form have been issued for sale in countries with developing economies, for example, India Extension of TIGI Bed Head haircare brand, acquired in 2009; B for Men includes shampoo, dandruff shampoo with zinc pyrithione, TIGI B for Men conditioner, and styling products; styling products sold in cream, gel, wax, paste, and spray forms; premium-priced Men's extension of famous petroleum jelly brand comprises three lotions: Fast Absorbing Body & Face Lotion, Extra Strength Body & Vaseline Men Face Lotion, Extra Strength Hand Lotion; the Hand Lotion can also be used on elbows, feet, and knees; in dark blue stand-on end tubes, squeeze bottles, and pump dispensers; sold through mass Men’s hairstyling creams; rights to distribute brand in Europe to be acquired from Sara Lee Corporation in 2010, in deal announced in Brylcreem September 2009; Combe, Inc., will continue to distribute Brylcreem in North and South America; sold through mass retail channels German bath additives and shower gel brand, extended with Duschdas Duschdas for Men shower gel and deodorant Bath and skincare products brand extended with Sanex for Men, Sanex including deodorant (spray or roll-on), face wash, moisturizer, shave cream, and shower gel Source: Packaged Facts

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The Competitive Situation

News Flash! Predatory West and Patiently Suffering Developing World to Trade Positions!

For centuries, European and U.S. companies have been built upon exploitation, first of colonies with rich natural resources, and then of countries with meager infrastructures and weak economies of their own. But in the 2000s, that dynamic shows signs of balancing and smoothing out, as developing countries gain in stature, due to wildly expanding populations, the rise of middle classes, the novelty of materialism, a heightening awareness of prestige or status brands, and access to digital technologies that, indeed, make the world smaller.

The global recession kicked off by the collapse of financial markets in the fourth quarter of 2008 appears to be easing, as of this writing in September 2009. But earlier in this report, Packaged Facts cited a Wall Street Journal article (August 14, 2009) that compared a number of economic indicators, only to conclude that the United States, the mightiest country of all, was recovering more slowly than China, India, and other traditionally “disadvantaged” countries. We have also noted the Ernst & Young forecast that in the year 2050, the world’s seven central economies will be those of the BRIC countries (Brazil, Russia, India, China), plus those of Indonesia, Mexico, and Turkey (accountancy Ernst & Young, as cited by International Cosmetic News, or ICN; October 1, 2008).

At Packaged Facts’ presstime, it seems that the 2008-2009 recession has only enhanced the shift of economic power to developing countries – though granted, the shift is merely in its beginning stage. But concretely, well before 2050, and perhaps by 2015, HBC players based in emerging economies will not just be competing locally, but on the global scene, too, exporting their own high-profile brands of men’s grooming (as well as women’s beauty) products to affluent Europe and North America. Japan can hardly be called emerging or developing, but already, two Japanese HBC players, Kao and Lion, have stated their intents to take their brands global; both companies are already intimately involved in selling HBC in China and some poorer countries in the Far Eastern region. Kao owns U.S.-based Jergens, and British-based Molton Brown.

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At the same time, of course, U.S. and European – and to a lesser extent, Japanese – corporate giants are expanding operations in developing countries/regions, especially BRIC, to ensure their participation in the expected economic booms there. Thus the flow of low-end, premium, and prestige brands still runs from North America and Europe, outward. To reiterate, it may be easiest to transfer prestige brands from one country’s upscale channels to another’s, because foreign origin – and mystique – is basic to many prestige brands’ appeal. Natural/organic and/or Fair Trade brands should also be finding warmer receptions internationally, as green thinking sweeps the planet. Brands intended for sale through mass channels (supermarkets, chain drugstores, and mass merchandisers) are the toughest to transfer between affluent countries, partly because of mass retailers’ high slotting fees; yet value-specialist Unilever has proven that mini-sticks and mini-roll-ons of Rexona deodorant, in both men’s and women’s versions, are welcome – and profitable to field – in countries such as India, where prestige HBC is available in urban centers, but where low-end deodorant is a luxury in rural areas.

Some countries – France, Italy, the United Kingdom, the United States, and sometimes Japan – enjoy reputations as style-setters, which facilitate these countries’ forays into new markets. But as local economies keep improving, so will cultural pride, fostering native HBC brands. Given the efficacy of such brands, rising middle classes will seem ambivalent, at once seeking the brands used by the rest of the world, even while embracing local brands as a matter of national or ethnic pride.

Some marketers of men’s grooming products (or other HBC) are preoccupied with first, coverage of their home territories, and then, with optimum penetration of those territories. This particularly characterizes U.S. natural/organic HBC marketers that must still struggle to educate Americans about the superior healthfulness and safety of their products. However, Packaged Facts reminds all men’s grooming products marketers that, in the coming years, the rising middle classes in developing countries will not sit and wait for a greater assortment of U.S., European, or Japanese brands to reach them. Instead, they will invent their own.

P&G, Uni, Beiersdorf, Avon Among Top Grooming Marketers in World

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However, Packaged Facts makes the following observations about the competitive situation in the global men’s grooming market:

• In 2009, Procter & Gamble is the premier men’s grooming marketer on the planet, thanks to its Global Gillette division, acquired in 2005, for $53.4 billion. In the company’s fiscal 2009, which ended with June, P&G’s male-specific grooming sales were down 9%, to $7.5 billion. Gillette is the leader in the U.S. disposable razor (or shaver) segment of the shaving products category. The non-disposable Gillette Fusion five-blade manual razor has swept the manual and battery-operated razor segments, to become a billion-dollar brand, while Braun is prominent among brands of electric razors. Gillette is an international force in bath products, with Old Spice body wash and Tag body spray; in deodorant, with Gillette and Old Spice; and in skincare, again with Gillette, but also with The Art of Shaving, and Zirh. Trade press has frequently mentioned that P&G and Unilever together account for one third of the world’s sales of bath products – in that category, Old Spice goes head-to-head with Unilever’s Axe brand. P&G has also ventured into prestige men’s grooming, via acquisition of both The Art of Shaving and Zirh brands within a two-week period in June 2009. Overboxed Gillette Fusion shaving kits are also being sold through pop- prestige retailer Sephora.

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• Natura is Brazil’s strongest local brand. Geared mainly to women, a few products, among them the Ekos Castanhas (Brazil nuts) collection, are co-positioned to men. One of Natura’s major rivals is O Boticario. Natura also happens to be Brazil’s largest direct marketer of HBC.

Six Competitive Profiles Follow…

The following six competitive profiles are designed to capture the corporate personalities of key players in the global men’s grooming market. They are Avon, Beiersdorf, Kao, Lion, Procter & Gamble, and Unilever.

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Competitive Profile: Avon Products, Inc.

Company Details Descriptions Ownership Public Avon Products, Inc. 1345 Avenue of the Americas Headquarters New York, NY 10105-0196 Phone: (212)282-5000 www.avon.com Net Sales, 2008 $10.7 billion Bath products (body wash, shower gel), Men’s Grooming Involvements, Per Product deodorant, shaving products (shave Category cream), skincare products (moisturizer, facial cleanser, etc.) Avon M – The Men’s Catalog; Avon PROextreme Maximum Performance for problem skin, Avon PROsport Daily Men’s Grooming Brands Performance for everyday shaving and other grooming; Derek Jeter shaving and skincare products; Patrick Dempsey shaving and skincare products Direct sales through global network of 5.8 million independent sales associates, and Men’s Grooming Sell-Through Channels through dozens of websites in local languages Number Employees 42,005 staffers, as of December 30, 2008

Net Sales Leap to $10.7 Billion in 2008

California Perfume Co., the small business started in New York by David H. McConnell in 1886, first used the Avon brand-name in 1928; the company grew to achieve nearly $10.7 billion in net sales in 2008. Relying on a force of independent sales associates – typified by the phrase, “the Avon lady” – Mr. McConnell could boast of 10,000 in the United States, by 1906. In 2009, there are at least 5.8 million associates, worldwide.

The $10.7 billion was a substantial 8% higher than net sales in 2007, and 38% higher than net sales in 2004. Net income stood at $875.3 million in 2008, up 65% over the sum in 2007. Growth rates would have been even more glowing, were it not for the planet-wide financial crashes in the fourth quarter of 2008.

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As of 2008, Avon was organized according to four segments: Beauty contributed over 71% of the year’s net sales; Fashion, over 17%; Home, almost 11%; and Other, 1%. The Beauty segment, which includes men’s grooming products, yielded $7.6 billion.

Latin America Loves Avon

At the beginning of 2009, Avon maintained operations in 66 countries, and its products had distribution in 44 more.

In 2008, Latin America accounted for the largest regional share of the company’s $10.7 billion in net sales – over 36%. [Table 5-2] North America was distantly second, with just 23%.

Yet in terms of net income, Latin America yielded 46% of 2008’s almost $1.5 billion. And Central and Eastern Europe, accounting for 23% of net income, eclipsed North America’s 14%.

Table 5-2 Share of Avon Products, Inc.'s Net Sales and Net Income, by Region, 2008

Net Sales Net Income Region $ % Share $ % Share Latin America $3,884.1 36.3% $690.3 46.3% North America 2,492.7 23.3 213.9 14.3 Central and Eastern Europe 1,719.5 16.1 346.2 23.2 Western Europe, the Middle East, and Africa 1,351.7 12.6 121.0 8.1 Asia and the Pacific Rim 891.2 8.3 102.4 6.9 China 350.9 3.3 17.7 1.2 Total $10,690.1 100.0% $1,491.5 100.0% Source: Avon Products, Inc.

Outlook for 2009 Depends on Avon’s Holiday Season

Avon felt the recession’s pinch in the first half of 2009, as net sales dropped 11% versus the first half of 2008 – to $4.6 billion.

Net income was $202.1 million in the first half of 2009, representing a 52% slide.

Given the economic climate, and unfavorable currency exchange rates, Avon could be deemed a good performer, if it reckons only that net sales for the whole of 2009 are maintained at or near 2008 levels. That would call for a restorative 11% dollar increase in the

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second half of 2009, versus the first half of the same year. Such increases cannot be guaranteed, but there is hope in the end-of-year holiday season. Many Avon products are ideal for Christmas, Channukah, and Kwaanza gift-giving; this includes men’s grooming products.

Knocking on Doors Around the World: We Sell Grooming Aids — Plus Jobs!

To capitalize on the trend to men’s greater awareness – and use – of available grooming products, Avon has clearly defined the men’s pages on its website; published Avon M – The Men’s Catalog, on a quarterly basis, since 2004; run tie-ins with the NASCAR auto-racing circuit and National Football League (NFL); and secured licenses from two male heartthrobs, Patrick Dempsey, star of ABC’s Grey’s Anatomy, and Derek Jeter, shortstop for the New York Yankees baseball team. Considering them as walking HBC brands, both Mr. Dempsey, who signed on in May 2008, and Mr. Jeter, who has been aboard since 2006, may hold more appeal for women than for men, but this suits the Avon direct-selling situation; the 5.8 million sales associates are predominantly women who sell to women. Of course, women often buy grooming items for their husbands, boyfriends, brothers, or sons, either as gifts, or more stereotypically, because they carry on the tradition of being the principal shoppers in their households. (However, men are getting more involved in shopping for their households. See Chapter 8, The Consumer, for more information.)

Presumably many women purchase Avon’s men’s items as impulse add-ons to their own orders.

The Patrick Dempsey Unscripted collection includes after-shave conditioner, body wash, and eau de toilette spray. Derek Jeter Driven has after-shave balm, body wash, body spray, deodorant, eau de toilette spray, face wash, fragrance, moisturizer with SPF15, scrub, and shave gel within its lineup. Prices run from $6.75 to $32.00. Both offerings are limited to basics, as are other Avon men’s collections branded Avon, Avon On Duty, Black Suede, Blue Rush, Iron Man, Perceive for Men, Signature, Ungaro M, Wild Country, and others. The company has ventured rather gingerly into men’s skincare, and seems just as tentative about prestige; its highest-priced grooming products are fragrances, but some deodorants are sold online for as little as 99 for 1.7-ounce packs bearing the Ironman brand, or $1.99 for 2.6- ounce packs branded Black Suede. Avon tends not to gear its men’s collections to haircare, except in the cases of some body washes or shower gels that can double as shampoo.

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The experience with value-pricing gives Avon, like Unilever, a head start in developing countries.

Avon PROextreme Maximum Performance for problem skin, and Avon PROsport Daily Performance for everyday shaving and other grooming, are both fuller skincare lines for men, with acne fighters, after-shave balm, face washes, lip balm, lotions, moisturizer, scrubs, shave gel, and so on. Yet the company is conservative here, too, preferring to safely follow a little bit behind industry trends, rather than to be a trendsetter. In September 2009, it is even difficult for consumers to find adequate info on the Web about these two collections – or for that matter, about many Avon products. This may be in deference to the sales associates; consumers must ask them about the products.

Any discussion of Avon’s competitive stance in 2009 would be incomplete without noting that in the 2000s, the company’s direct-sales force has been offered financial incentives to recruit friends or relatives or acquaintances to become sales associates themselves, in a program called Sales Leadership. Thus Avon’s selling mode is slowly being converted from simply knocking on doors, to multilevel marketing. For that reason, changes in the number of sales associates are often presented right next to changes in dollar sales, in company literature. In 2008, for example, Active Representatives increased by 7%. There were 500,000 in the United States alone.

Sales Leadership was instituted in 2005 in five markets, according to Avon. By the end of 2008, it was operative in 30 markets.

To further motivate sales associates, Avon has increased commissions and bonuses by $200 million since 2005. Advertising in support of the Avon brand has also been maintained at higher levels of media expenditure, which was about $130 million in 2005, but $400 million in 2008 – meaning that sales associates encounter greater demand for the products they sell. Avon also invests substantially in research and development; in 2008, the amount was $70 million.

The cover of Avon’s 2008 Annual Report does not portray the company’s products, or beautiful people who have used them. Instead, the cover is a photo-portrait of Dawn Parrino, a professional Avon rep who earned $800 in her first week selling, back in 1997. The title of the Report: The Avon Opportunity.

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Oh, Boy, It’s Fred, the Avon Man!

It may surprise some readers that a number of Avon sales associates are men. U.S. members of the Baby Boom generation, age 46-63 in 2009, may remember “the Avon lady” ringing the doorbell. But there were roughly 13,000 Avon men in 2007, according to the Associated Press/USA Today (September 30, 2007). In the two years since that figure was reported, the number of Avon men has undoubtedly expanded, at least in the United States.

The USA Today article cited the example of a construction worker who sold Avon at his work-sites – grooming products for the men, and beauty products, fragrance, and lingerie as gifts for the women in their lives; and the example of an ex-Marine who joined his wife in selling over $100,000 worth of Avon per year.

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Competitive Profile: Beiersdorf AG

Company Details Descriptions Ownership Public Beiersdorf AG Unnastraße 48 D-20245 Hamburg Headquarters Germany Phone: +49 (40) 4909-0 Fax: +49 (40) 4909-3434 www.beiersdorf.com Net Sales, 2009 €6.0 billion Bath products (shower gel), haircare (shampoo, styling gel or paste), deodorant, Men’s Grooming Involvements, Per Product shaving products (after-shave balm, shave Category cream or foam or gel), skincare products (moisturizer, eye roll-on, facial cleanser, oil controller, scrubs, etc.) Men’s Grooming Brands 8 X 4, Florena Men, Nivea for Men Mainly mass retail (supermarkets, chain Men’s Grooming Sell-Through Channels drugstores, mass merchandisers) Number Employees 21,766, as of December 30, 2008

Sales at Record €6 Billion in 2008

Hamburg, Germany-headquartered Beiersdorf posted sales of slightly under €6 billion in 2008, making it the world’s largest company specialized – mostly – in skincare. The sum was an improvement of more than 8% over sales in 2007. Beiersdorf posted excellent progress, in fact, over the whole span 1999-2008, having started the nine years with sales of €3.6 billion.

Profit was €567 million in 2008, for a 28% gain on profit posted in 2007.

Beiersdorf organizes its businesses into two segments, Consumer and tesa [sic], which contributed 86% and 14% of sales in 2008. tesa is a subsidiary that manufactures and markets adhesive tapes for both consumer and industrial uses.

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Europe is Beiersdorf’s Stronghold

Beiersdorf’s stable of brand names may be household words all over the globe, but the company’s home territory, Europe, accounted for 68% of the 2008 sales figure. Africa/Asia/Australia accounted for 18%, and the Americas, for 14%.

Outlook for 2009 Is Mixed

In the first half of 2009, Beiersdorf transacted sales of more than €2.9 billion, which was down nearly 5% from the first half of 2008. Profit also suffered; at €189 million during January-June 2009, it was down over 35%.

As of September 2009, there are many signs that the global economy is improving, though North America’s bounce-back is lagging behind that of BRIC (Brazil, Russia, India, and China). Because Beiersdorf derives such a high share of it sales from activities in regions/countries other than the United States and Canada, and because the second half of 2009 includes the end-of-year gift-giving season, it is possible that the company will maintain full-year sales at the 2008 level, or will at least limit a decrease to a point or two. In the event of a real jump in consumer confidence, the 2009 forecast could be more promising.

Blue-Chip Nivea the World’s Best-Selling Men’s Skincare Brand

The Nivea brand is a marketer’s dream; globally known, with a 125-year history, and a core product – plain white Nivea moisturizing cream, packed in simple, elegant, iconic blue and white – that Americans and Europeans over 30 may nostalgically recall was always on Mom’s vanity table. Beiersdorf declares that Nivea is the “number one skincare and beauty brand in the world,” and that it leads in facial skincare in Europe as a whole, and in Germany, its country of origin. The company shrewdly allows for consumers’ perception of Nivea as an “old reliable” skincare brand; this element of positioning is reflected in the fact that, in 2008, readers of the European editions of Reader’s Digest, a conservative publication, voted Nivea the most trusted skincare brand in Europe, for the eighth consecutive year.

And yet Beiersdorf allocates 2%-3% annually on product research and development – €149 million in 2008. The company extends its core brand very carefully, responsive to marketplace trends, but with a knack for making the extensions as classic as the original Nivea cream. Nivea for Men, the world’s leading male-specific skincare line, has been curried in just that fashion.

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As this Packaged Facts report goes to press in September 2009, there are at least 67 Nivea for Men products: Five facial cleansers; 11 shave gels, foams, or creams; eight post-shave balms or treatments; 11 facial moisturizers or oil controllers; eight shampoos or hairdressings; six shower gels or bodycare lotions; and 18 deodorants. Fifteen of the products, or 22% – more than one in five – are tagged as new, on Beiersdorf’s international website.

Nivea for Men products are value-to-premium-priced. The Revitalizing Eye Cream with CoQ10, for example, sells at $9.49, at first glance, a premium pricetag – but that buys 6.5 ounces, or triple the amount in packs under prestige brands.

The new products demonstrate that the Nivea brand is being extended with a view to the latest trends in men’s HBC: The haircare collection, for example, includes shampoo SKUs, dandruff shampoo, and Aqua Gel, Speed Power Gel, and Real Style Paste dressings. The small, but effective collection banks on the HBC industry’s general consensus of opinion that men’s haircare is a potential growth category in many parts of the world, for instance, the Far East. The Real Style Paste, and Hair Recharge shampoo and tonic SKUS, are all new.

Other new Nivea for Men products are also timely, for example, spray deodorant SKUs, and the Silver Protect series of spray, roll-on, and stick deodorants. The sprays meet the demand for this form in many parts of the world, including in Brazil, the largest national consumer of deodorant. Silver Protect wisely is the one Nivea for Men item that departs from traditional blue pack-motif, as if to attract more shoppers to all those blue facings in the HBC aisle. The sprays also add price-points. Multifunctionals such as Active 3, a shower gel, shampoo, and shave gel, all in one SKU, and Revitalizing Double Action Shaving Gel Q10 [sic], a combination shave gel and CoQ10 skin treatment, meet the demand for products that save men time in their daily grooming regimens.

Beiersdorf has partnered with Royal Philips Electronics, to develop the Nivea for Men electric shaver, which dispenses shave cream from a reservoir in the shaver’s flexing, three- rotary-blade head. The shaver, also branded Philips Norelco, comes in three models that sell for $80-$156 on Philips’ various own websites.

Beiersdorf also partners with Kao, in a 50-50 joint venture called Nivea Kao, set up to distribute Nivea products in Japan.

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Other Beiersdorf Brands Bolster Cachet of Nivea for Men

Consumers might not realize that they are all Beiersdorf-owned, but in mass-retail situations in which the company’s brands can be shelved together, the effect can be monumental: Nivea for Men next to time-honored Nivea, both available worldwide; Eucerin skincare products, which have more of a quasi-medical image, also a global brand; Florena and Florena Men bath, haircare, shaving, and skincare products with natural botanicals, sold in Germany; Slek, S-Dew, Maestro, and Hair Song haircare brands sold in China, gained in Beiersdorf’s 2007 acquisition of C-Bons Hair Care; 8 X 4 deodorant, in separate versions for men and women, sold in Germany, The Netherlands, Turkey, the Middle East, North Africa, and Pakistan; and Labello lipcare products, sold in Europe.

Hansaplast wound care products are probably shelved in other store departments in mass.

Clearly, Beiersdorf has a powerful roster of brands that it can pitch, in any combination it chooses, to mass retailers in any country.

In prestige, Beiersdorf sells the high-end La Prairie brand. Sold worldwide, the brand’s 100- plus skincare, makeup, and fragrance products top out at about $300 at retail. The company sells a second prestige brand, SBT skincare treatments, in Austria, Germany, Greece, Russia, and Switzerland.

New Factory in Shanghai to Make Nivea Mightier in Far East

In June 2009, Beiersdorf opened a new Nivea manufacturing facility in Shanghai. The factory is initially cranking out Nivea and Nivea for Men products at the rate of 15,000 tons per year, though full capacity is 25,000 tons. The new factory will help ensure Beiersdorf’s competitiveness in the Far East, including in Japan, which accounts for 2% of the world’s population, but 20% of skincare consumption; and in China, where an expanding middle class accounts for a greater and greater component of the country’s huge population, which is 1.3 billion – of whom 688.4 million are male – as of July 2009.

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Competitive Profile: Kao Corporation

Company Details Descriptions Ownership Public

Kao Corporation 14-10, Nihonbashi Kayabacho 1-chome Chuo-ku, Tokyo 103-8210 Headquarters Japan Phone: 03-3660-7111 www.kao.com Net Sales, fiscal 2009 (through March 31, $13.0 billion 2009) Bath products, haircare (shampoo, conditioner), shaving products (after- Men’s Grooming Involvements, Per Product shave, manual razors, shave cream), Category skincare products (moisturizer, facial cleanser, etc.) Men’s Grooming Brands Biore Men, Molton Brown Mainly mass retail (supermarkets, chain drugstores, mass merchandisers), but also Men’s Grooming Sell-Through Channels prestige (upscale department stores) and pop prestige (Molton Brown brand- dedicated stores, Sephora, etc.) Number Employees 33,745, as of March 31, 2009

Net Sales of $13 Billion in Fiscal 2009

Founded in 1887, Tokyo-headquartered Kao is Japan’s premier marketer of personal care products; in the fiscal year (FY) that ended with March 31, 2009, the company posted net sales brushing the $13 billion mark. The sum reflected a 3% decrease compared to that for FY2008. Net income for FY2009 was $656.2 million, likewise down about 3%. (Kao presents annual net sales and income in both Japanese yen and U.S. dollars. The exchange rate is keyed to March 31, or to the end of each fiscal year. Selected other breakouts are expressed in yen only.)

During the period FY1999-FY2009, Kao’s net sales broke the ¥1.0 trillion mark for the first time in FY2007, then peaked at over ¥1.3 trillion in FY2008.

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Kao organizes its activities according to four business segments: In FY2009, Beauty Care accounted for a full 46% of net sales (in dollars), Fabric and Home Care for almost 22%, Human Health Care, 15%, and Chemicals (for industrial use), over 17%.

The Beauty Care segment, which includes men’s grooming products, had net sales of $6.0 billion in FY2009, for a decrease of more than 6%. Kao further identifies three Beauty Care subsegments – Prestige, Premium Skincare, and Premium Haircare.

Kao Strongest at Home

Kao’s home country of Japan accounted for 75% of net sales in FY2009, or $9.7 billion. Asia and Oceania accounted for 13%, Europe for 11%, and North America for less than 8%. These shares add to 107%; intra-company transactions accounted for the seven extra points.

Looking at Kao’s performance by region/country, net sales suffered a 2% drop in Japan, but Asia and Oceania gained 2%. However, Europe and North America saw net sales plummet by 9% and 11%, respectively.

Kao Upscales Beauty/Grooming Business, Aims to Conquer Asia, Then World

A look at Kao’s international activities during the 2000s shows that the company has been diversifying via two acquisitions that have skewed its brand-mix a little more toward prestige. In early 2006, Kao picked up Kanebo Cosmetics for ¥410 billion. The move quadrupled Kao’s cosmetics sales to ¥288 billion, raising the company to the second rank in cosmetics in Japan, behind Shiseido. Personal care products had accounted for about a quarter of Kanebo’s Cosmetics’ sales in 2005. Kanebo’s 60 brands include Silk soap, and Raphatie skincare products. The Kanebo namesake brand itself is sold at department stores and other upscale outlets in Japan, the rest of Asia, Europe, and North America.

Kao had been fighting L’Oréal in the bidding war for Kanebo since 2003. Three other buyout entities bought the other components of Kanebo, which were Confectionery, Food, and Health-oriented businesses.

The other prestige brand, Molton Brown, was purchased by Kao in 2005, for $300 million. The sellers were Bridgepoint Capital, a European private equity fund, and various of Molton Brown’s own managers. Wholesale accounts include 250 prestige doors in the United States, among them Neiman Marcus, Blue Mercury, and Saks Fifth Avenue. Molton Brown has 50

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British stores, and six U.S. stores. As this report goes to press in September 2009, men’s products are forecast by Molton Brown itself to account for 15%-25% of the full year’s possible $131.3 million in revenues. In the brand’s home country England and in the United States, men’s products will account for 15% and 18%, respectively, while in Japan, they will account for 25%.

In 2009, Molton Brown is included in pop-prestige retailer Sephora’s newly expanded men’s grooming departments.

In the United States, Kao owns Kao Brands Co., formerly Andrew Jergens Co., which it acquired in 1988. The subsidiary sells Jergens hand and body lotions; Curel hand and body moisturizing lotions, added in 1998; Ban antiperspirant, acquired from Chattem, Inc., in 1999; and John Frieda haircare products, added in 2002. Thus Kao is no stranger to U.S. mass channels. Another connection to the West is the company’s 50-50 venture with Beiersdorf AG, called Nivea-Kao; the entity distributes the German firm’s brands in Japan, including Nivea for Men. And another connection to Germany, in particular, is Kao’s ownership of the Guhl haircare brand that originates there, and that is also sold in Germany. Marketed as a premium brand through mass channels, Guhl has resonated well with German youth. The Guhl line is extended with two Guhl Men shampoo SKUs, one for normal or fine hair, and one that fights dandruff.

But while orchestrating its U.S. and European activities with great care, Kao is thinking generations into the future, tackling the developing markets – BRIC (Brazil, Russia, India, China), for example, and Indonesia – rather than the most affluent countries of 2009. The company’s stated goal is to realize a stable of powerful pan-Asian brands, in anticipation of a new world economy centering on those five developing markets just listed. If anyone doubts the wisdom of such foresight, a report from accountancy Ernst & Young, cited by International Cosmetic News (ICN; October 1, 2008), agrees with that scenario, adds Mexico and Turkey, for a total of seven central economies, and sets the year of full global transformation at 2050.

Already, Kao’s pan-Asian contenders include:

• Asience haircare products, formulated for Asians. Introduced in Japan in 2003, the brand has since rolled out in Hong Kong, Shanghai, Singapore, and Taiwan.

• Biore skincare products, a favorite in Japan, but well known in other Asian countries, the United States and Canada, and Latin America. Introduced in 1980, Biore

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cleansing strips were soon a smash in the United States, and were followed by body wash, facial cleanser, moisturizer, and so on. In its FY2009, Kao claimed great results with Biore Men, a collection that includes a facial scrub that features black beads and white beads, for exfoliating and “energizing” male skin; as well as a deep cleanser, an acne-fighter, Active Refresh SKU, and of course, cleansing strips for men.

• Feather shampoo and other haircare products, already a presence in Southeast Asia and East Asia.

• Kanebo and Molton Brown prestige brands, described above. The former is gaining ground in China and other Asian countries; the latter is already sold in 70 countries.

• Sofina skincare products, already popular in Japan, and finding wider distribution in Asia.

• Guhl consumer haircare products, described above, and Goldwell professional haircare products, both from Germany, and the John Frieda brand, from the United States. These brands could lend worldliness and sophistication – and additional price-tiers – to Kao’s pan-Asian strategy.

Other Kao Products

Other Kao consumer products include makeup, haircolor, cooking oils, salad dressings, mayonnaise-type dressings, beverages, oral care products, feminine hygiene products, disposable diapers, adult incontinence products, laundry detergents, dishwashing detergents, fabric softeners, and household cleaners.

Kao also offers a wide range of chemicals for use by industry; as well as products for restaurants and medical institutions.

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Competitive Profile: Lion Corporation

Company Details Descriptions Ownership Public Lion Corporation 3-7, Honjo 1-chome Sumida-ku Headquarters Tokyo 130-8644 Japan Phone: +81-3-3621-6211 www.lion.co.jp Net Sales, 2008 ¥338.2 billion Men’s Grooming Involvements, Per Product Bath products, deodorant, haircare Category Pro Tec HEAD haircare products (shampoo, conditioner, products to help Men’s Grooming Brands prevent hair loss); also, Pro Tec Style deodorant, body mist spray Mainly mass retail (supermarkets, chain Men’s Grooming Sell-Through Channels drugstores, mass merchandisers) Number Employees 5,774, as of December 31, 2008

Net Sales of ¥338.2 Billion in 2008

Established by Tomijiro Kobayashi in 1891 as a firm speculating in the raw materials for soap and matches, Lion is now a diversified packaged goods maker and marketer, a chemical company, and is even involved in the construction industry, via an engineering subsidiary. Tokyo-headquartered Lion’s net sales were ¥338.2 billion in 2008 (about $3.4 billion), down 1% from 2007. The world economic recession, difficult currency exchange rates, and higher manufacturing costs were blamed for the decrease.

Net income in 2008 was just over ¥3.0 billion (or $30.4 million) – 44% below the sum for 2007.

Of the four business segments that constitute Lion, Household Products is the largest, having yielded more than 48% of 2008 net sales. Healthcare accounted for over 40%, Chemicals for over 9%, and Other, for 2%.

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The Healthcare segment incorporates Beauty Care (beauty and grooming products), which accounted for almost 11 points of Healthcare’s 40% share of 2008 net sales. Oral Care accounted for over 16%, and Pharmaceutical Products, for close to 14 points.

The Beauty Care subsegment had sales of ¥35.5 billion (equaling about $354.8 million) in 2008, reflecting a gain of just 1%. To reiterate, the subsegment includes products for both men and women.

Lion has two mottos: One is, “Fulfilling a spirit of love.” The second is, “From good morning to good night, more dreams for your life.”

Lion Most Active in Eight Countries, All in Far East

Lion’s 26 subsidiaries are said to conduct business with the world at large, but virtually all 2008 net sales were transacted in nine countries or territories, each located in the Far East. The company reveals that Japan accounted for 86% of net sales in 2008, while the other Asian involvements accounted for the remaining 14%.

The nine countries/territories are China, Hong Kong, Indonesia, Japan, Malaysia, Singapore, South Korea, Taiwan, and Thailand. (Control of Hong Kong was handed over by the British to the People’s Republic of China in 1997, but local government remains semi-autonomous.)

Lion’s principal men’s grooming brand is Pro Tec: Pro Tec HEAD is for haircare, and Pro Tec STYLE comprises spray deodorant and liquid deodorant soap. Women’s or unisex brands that may also particularly appeal to men are Free & Free haircare products, and OCT Serapie Medicated Scalp-Care shampoo and conditioner. Both are sold through mass and other lower-end channels.

In Outlook for 2009, Lion Struggles

Lion’s net sales during the first half of 2009 were ¥152.4 billion, down nearly 6% from the same period in 2008. Net income for January-June 2009 was posted as almost ¥1.1 billion, down by more than 31%. The company’s own projection for the full second half is ¥340.0 billion, representing an increase of less than 1%.

Thus Lion may keep struggling this year – though a gradually improving global economy could help it to outperform its own forecast, by a point or two. The company could further

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benefit from successfully extending its brands’ coverage across Asia, and from deepening the same brands’ penetration of Asian markets in which they already compete.

Manufacturer/Marketer Emphasizes Asia, Partners With Western Firms

Lion is notable in the Asian HBC market for several reasons:

• Lion has spent over a century getting to know the nations of the Far Eastern region intimately. For this reason, the company has been able to license the distribution of Germany-based Henkel KGaA’s household products in the region; Japan-based rival Kao’s Ban deodorant, in Asia and Oceania; and U.S.-based Bristol-Myers Squibb Company’s Bufferin analgesic in Japan and certain countries in Asia and Oceania.

• Like Unilever, Lion is best acquainted with the mass retail channel, and with other lower-end outlets for its brands. Prestige and pop prestige may be on the rise in the Far East, but accommodating the masses will provide Lion with solid foundations as it expands its distribution footprint to cover more Asian countries.

• Lion’s leverage with retailers is demonstrated by the fact that it leads the toothbrush and toothpaste market in Japan, with brands such as Clinica, Dentor Systems, and Dent Health.

• Lion’s company literature makes no mention of contract manufacturing for marketers based outside the region. And yet the company obviously places heavy emphasis on manufacturing capability and capacity – another reason why foreign firms may wish to partner with Lion.

• Lion is an aggressive product developer and marketer. In 2007 and 2008, the company spent almost ¥9 billion in each year on research and development; about ¥20 billion in each year on advertising; and nearly ¥85 billion in each year on promotions and trade incentives.

Other Lion Consumer Brands

Some other Lion’s consumer brands are Bathtology bath products; Gussumin and Kyupurun health beverages, sold via direct media; KireiKirei body washes, mouthwash, soaps, and wipes; Mouhatsuryoku hair nourishment treatments; Shokubutsu-Monogatari (Plant Story)

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body washes, conditioner, shampoo, and soaps; and Soft-in-One combination shampoo and conditioner.

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Competitive Profile: The Procter & Gamble Company

Company Details Descriptions Ownership Public The Procter & Gamble Co. One Procter & Gamble Plaza Cincinnati, OH 45202 Phone: (513)983-1100 www.pg.com Headquarters Global Gillette division Prudential Tower Boston, MA 02199 Phone: (617)421-7000 www.gillette.com Net Sales, fiscal 2009 (through June 30, $79.0 billion 2009) Bath products (body wash, body spray), deodorant (antiperspirant, deodorant), haircare (styling products), shaving Men’s Grooming Involvements, Per Product products (after-shave, disposable razors, Category electric razors, manual razors, shave cream, shaving accessories), skincare products (moisturizer, facial cleanser, etc.) The Art of Shaving, Braun, Gillette, Old Men’s Grooming Brands Spice, Tag Body Spray, Zirh Principally mass retail (supermarkets, chain drugstores, mass merchandisers), Men’s Grooming Sell-Through Channels but also prestige (upscale department stores, brand-dedicated stores) and pop prestige (The Body Shop, Sephora, etc.) Number Employees 138,000, in 80 countries

Net Sales Slip to $79.0 Billion in Fiscal 2009

The world’s largest packaged goods concern, Procter & Gamble reports net sales of just over $79.0 billion for the fiscal year (FY) ended with June 30, 2009. This vast sum was 3% down from the $83.5 billion reported for FY2008. A small decrement in percentage terms, but translating to a whopping $4.5 billion, the company’s rare slip was clearly triggered by the worldwide recession set off by the crash of financial markets in September and October 2008. P&G’s 3% retreat sent shock waves through the company’s army of stockholders, who had seen net sales jump by over 9%, or $7.0 billion, during FY2008 – and indeed, net sales had jumped by 125% during FY1998-FY2008, largely due to acquisition: Clairol was purchased

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in 2001, and a majority interest in Wella AG, in 2003. P&G made its biggest acquisition ever, in 2005 – Gillette, which cost $53.4 billion. Former CEO A.G. Lafley’s entrepreneurial spirit also boosted sales during the 2000s.

Ironically, because P&G products are sold to consumers in virtually every country in the world, the company blames a strengthening U.S. dollar for much of the negative impact on FY2009 net sales.

However, net earnings were actually up 11% in FY2009, to more than $13.4 billion. The profit margin on net sales was therefore above 14%, which maintained the double-digit profit level that had been in effect since FY2003.

P&G is organized in three Global Business Units (GBUs). In FY2009, the Beauty GBU accounted for precisely a third of net sales, the Health and Well-Being GBU (comprising Health Care, Snacks, and Pet Care) for 21%, and the Household Care GBU (Baby Care, Fabric Care, Family Care, and Home Care), for over 47%. These shares add to 101%; a corporate charge accounts for the extra percentage-point.

P&G breaks out the Beauty GBU’s total net sales of $26.3 billion into nearly $18.8 billion yielded by Beauty products for women, and over $7.5 billion yielded by Grooming products mostly for men (women’s razors/shavers are also included here). The Grooming figure was down 9% from FY2008; yet the segment contributed $1.5 billion to company net earnings in FY2009, which equaled 13% of the company total.

To explain the 9% drop in Grooming sales, P&G points to strong gains by the Fusion manual shaver, which were more than offset by declines in Braun small appliance sales, including electric shavers. Adding to the turbulence in FY2009 were price increases of 5%, but Braun’s problems, and again, recession and unfavorable currency exchange rates, proved insurmountable negatives.

Regardless, in 2009, P&G is the world leader in men’s grooming, followed by Unilever.

Almost a Third of Sales Transacted in Developing Countries

With operations in 80 countries, and distribution of its brands in almost all of the 265 countries on earth, P&G is a true globalist, and certainly a masterful one. But not wishing to release detailed geographical sales data, the company has noted in its literature only that, in FY2008, the United States accounted for 40% of net sales, and developing countries, among

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them BRIC (Brazil, Russia, India, and China), for 30%. The remaining 30% was presumably transacted mainly in Australia, Canada, Europe, Japan, the United Kingdom, and a few other relatively prosperous countries.

P&G Has Planet’s Most Powerful Brand Portfolio

As of the close of P&G’s FY2008, the company had over 300 brands in its worldwide portfolio, of which 23 were “billion-dollar” brands. These were Actonel, Always, Ariel, Bounty, Braun, Charmin, Crest, Dawn, Downy, Duracell, Gain, Gillette, Gillette Fusion, Head & Shoulders, Iams, Mach 3, Pampers, Olay, Oral-B, Pantene, Pringles, Tide, and Wella. A 24th brand, Folgers coffee, had sales of $2.0 billion annually, but was sold in June of FY2008, to Smucker’s.

Twenty more brands had sales in the $500-$999.9 million range. A sampling of this second echelon includes Aussie, Camay, Clairol, Clairol Herbal Essences, Cover Girl, Ivory, Olay, Old Spice, Pantene, Redmond, Safeguard, and Secret.

P&G fields over 100 brands in the United States alone.

The Noxzema skincare and shave cream brand was sold in September of FY2009, to Alberto- Culver Co.

The King of Mass Takes Men’s Grooming into Prestige

The brands named above are sold primarily through the mass retail channel (mainstream supermarkets, chain drugstores, mass merchandisers), but in 1995, when A.G. Lafley was still a brand manager at P&G, he discovered that a Max Factor extension in Japan contained an anti-aging ingredient called pitera. Mr. Lafley shifted the emphasis from Max Factor to the extension name, SK-II. He also emphasized pitera cream. As a result, P&G’s first foray into prestige beauty products soon resulted in its dominating it in Japan; by 2000, SK-II had eclipsed even the Shiseido brand there. In 2009, SK-II is still marketed in Asia as a Max Factor extension; elsewhere, SK-II is its own brand

The seminal SK-II, with items retailing in the $65-$300 range, set the stage for the company’s later involvement in prestige men’s grooming products, under the aegis of the Art of Shaving and Zirh brands, both sold through pop-prestige retail chain Sephora.

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Also, though one does not think of Gillette as a prestige brand, Gillette Fusion overboxed shaving kits are shelved in the new men’s grooming displays at Sephora. As of press time in September 2009, the kits are selling for $100 at a Sephora just two blocks from New York’s Wall Street.

The Art of Shaving and Zirh Added to Prestige Roster

P&G acquired both The Art of Shaving and Zirh brands within a two-week period in June 2009. Both brands are male-specific, prestige-priced, and sold through a variety of prestige and pop-prestige outlets, including, as just mentioned above, Sephora.

The Art of Shaving product mix is extensive and diverse. Among bath products are Body Wash, Body Scrub, and Body Soap (priced at $18 per 6-ounce bar), and others. Shaving toiletries include Shaving Cream, Pre-Shave Oil, and After-Shave Balm; each comes in Unscented, Lavender, Lemon, and Sandalwood versions. The haircare offering includes Shampoo, Conditioner, and Hair Gel SKUs. Skincare products range from Moisturizer and Eye Gel, to After-Shave Mask and Ingrown Hair Night Cream. Razors are priced from $100 for a manual model, to $325 for an electric one that sports a headlight for illuminating wrinkles or fine whiskers. All of the razors are co-branded Gillette Fusion Chrome.

The Art of Shaving is also a retail marque; P&G’s acquisition included 36 brand-dedicated stores, of which 13 are described as “barber spas,” where a man can get a shave starting at $35. In addition, the product-line is sold through upscale department stores such as Barney’s, Neiman Marcus, and others. About 10% of sales are transacted online.

The Art of Shaving was founded in Miami, in 1996. In 2009, P&G paid $60 million for the company, which has annual sales of about $30 million. The two companies first dealt with one another in 2007, during the process of co-branding those high-end Gillette Fusion Chrome razors.

Whereas The Art of Shaving is positioned on elegance and retro style, Zirh is intended to have an elegant, but more modern brand image, via bold high-tech typefaces on labeling, and via some use of natural ingredients. A few Zirh-branded products are shower gel, deodorant, shave cream or gel, Razor Burn Relief Kit, shampoo, conditioner, styling gel, and anti-aging preparations that incorporate alpha-hydroxy acids (AHAs). All are prestige-priced, with most SKUs priced at less than $50, but many SKUs in a new extension, Zirh Platinum, are priced at $125. Zirh Platinum is focused largely on fighting wrinkles and other signs of age.

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The financial details of P&G’s purchase of Miami-based Zirh Holdings LLC (founded in 1995) were not made public.

Both The Art of Shaving and Zirh add a new price-dimension to P&G’s men’s grooming strategy. Also, both brands are highly exploitable at the retail level; their images complement one another, and The Art of Shaving chain is equipped to introduce men to luxurious products and services.

Bye Mr. Lafley, Hello Mr. MacDonald: A Spiritual Shift

As this report goes to press in September 2009, P&G has a new CEO, Robert A. “Bob” MacDonald, who took the reins on July 1. Formerly the company’s COO, Mr. MacDonald’s promotion signals that shareholders and some management-level staffers had become disenchanted with his predecessor’s philosophy of innovation, and his tendency to think way “outside the box.” That predecessor was A.G. Lafley, who was CEO from 2000 through mid- 2009. Mr. Laffley is famous for questioning and innovating everything – not just products, but corporate procedures.

Professor Hal Gregersen, writing at Forbes.com on July 15, 2009, said that, “Day after day, week after week, year after year, you could (and still can) find Lafley acting just like an innovative founder entrepreneur. He challenged the status quo with constant questions. He regularly observed consumers in their homes and in the marketplace to see first-hand how well P&G delivered on those two moments of truth. He constantly talked with people inside and outside P&G to gain new views, so he could bring the outside in to P&G and take the inside out. He acted like an innovator as he worked nonstop to establish an organization that thrived on innovation.”

Examples include Mr. Lafley’s fostering the genesis of SK-II as an international brand; and in the oral care arena, the acquisition of Dr. Johns’ Spinbrush from three inventors named John, and the subsequent smash hit rollout of the product renamed Crest Spinbrush, just four months later. He shook things up in the corporate sphere, by transferring executives from countries where P&G still had to fight for share, to countries – including the United States – where he felt management had come to take the company’s stature for granted. And managers charged with oversight of subsidiaries were moved out of their luxurious offices in Cincinnati, to offices “on location.” The Clairol and Gillette acquisitions, among many others, also happened under Mr. Lafley’s reign.

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But as P&G struggled like every other company with the worst recession in generations, there was a clamor for change at the top. Now as Mr. MacDonald settles in as CEO, his style seems much more conservative. His experience as COO may help him to address bottom-line cost control, and to refocus the company on core interests. His investiture as CEO coincides with the pending sell-off of P&G’s pharmaceuticals business to Ardee, Ireland-based Warner Chilcot, for $3.1 billion. (If the deal is finalized, as expected, by the end of 2009, the sale will include one of P&G’s billion-dollar brands, Actonel anti-osteoporosis medication.) At the same time, the company has quietly issued a more basic version of Tide laundry detergent, in a nod to the recession.

Most telling of all, Mr. Lafley’s vivid language has been toned down. While Mr. MacDonald has already spoken at analysts’ conferences of the need to keep innovating, there is no trace of Mr. Lafley’s incendiary phrases such as “disruptive innovation” – which he coined to describe new products that could inspire whole new markets – a good thing. The bottom line, however, in terms of our discussion here, is that both Mr. MacDonald and Ed Shirley, Vice Chairman, Global Beauty and Grooming, have identified men’s grooming as a growth area for P&G. Because of the huge dollar potential, the company’s activity in men’s grooming may be allowed to exhibit some of Mr. Lafley’s legacy of dynamism and entrepreneurship.

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Competitive Profile: Unilever

Company Details Descriptions Ownership Public Unilever PLC Unilever House 100 Victoria Embankment London EC4Y 0DY Phone: +44 (0) 20 7822 6719 Fax: +44 (0) 20 7822 5511 Headquarters Unilever NV Weena 455, P.O. Box 760 3000 DK Rotterdam The Netherlands Phone: +31 (0) 10 217 4000 Fax: +31 (0) 10 217 4798 www.unilever.com Net Sales, 2008 €40.5 billion Bath products (body wash, body spray), Men’s Grooming Involvements, Per Product deodorant (antiperspirant, deodorant), Category skincare products Axe/Lynx, Brylcreem (Europe only), Men’s Grooming Brands Degree, Duschdas, Rexona, Sanex, Vaseline Men Principally mass retail (supermarkets, Men’s Grooming Sell-Through Channels chain drugstores, mass merchandisers) Number Employees 174,000, in 100 countries

Turnover of €40.5 Billion in 2008

Unilever is unique among the world’s major packaged goods marketers, because it is actually two companies, each with separate governance; yet the two function as a single corporate entity, insofar as that is possible: Unilever PLC is headquartered in London, and Unilever NV, in Rotterdam.

In 2008, Unilever’s consolidated turnover was over €40.5 billion, or less than 1% compared to 2007. However, the company stresses the same increment in terms of “underlying growth,” (also known as “organic growth”) which it calculates at well over 7%. The higher percentage was mitigated by unfavorable currency exchange rates in many countries, by the

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balancing out of divestments versus acquisitions, and by the world financial crash that occurred during the fourth quarter of 2008.

During the recession that has worn on through September 2009, Unilever has had an advantage over many of its rivals in personal care, for almost all of its brands are value- priced. Some consumers may be loyal to Unilever products; but given the taste for upscale HBC that the world acquired in the late 1990s and early 2000s, other consumers likely deem these products of sufficient quality to serve as alternates to be used in between splurges on prestige versions.

Net profit in 2008 neared €5.3 billion, up 28%, or by €1.1 billion.

Unilever’s four self-designated business segments are Savory Dressings and Spreads, which accounted for 35% of the 2008 turnover figure; Personal Care, which accounted for 28%; Ice Cream and Beverages, for 19%; and Home Care and Other Operations, for 18%. The share for the Personal Care segment, encompassing men’s grooming products, as well as beauty and oral care products, translated into almost €11.4 billion, or less than 1% higher than in 2007.

Personal Care’s operating profit was just over €1.8 billion in 2008, as opposed to just under that level in 2007 – for an increase of about 2%.

Asia, Africa, Eastern Europe Jointly Account for Largest Share of Sales

Unilever reports that the Asian-African-Central-European-Eastern-European region – inclusive of many developing countries, BRIC (Brazil, Russia, India, and China) among them – accounted for a 36% share of turnover in 2008. The Americas had nearly a 33% share, and Western Europe, almost 32%.

Interestingly, however, the region with the largest share of turnover accounted for the smallest amount of operating profit – €1.7 billion. The Americas yielded the most substantial operating profit, at €2.9 billion.

Outlook for 2009: Turnover Stable in First Half…

At close to €20.0 billion, Unilever’s turnover for the first half of 2009 was essentially stable compared to the similar period in 2008. Net profit, again for the first six months of 2009, fell 31% to €1.6 billion.

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Considering that major global rival Procter & Gamble saw sales decline in the face of recession during the first half of 2009, Unilever did well to maintain its level of turnover, without growth. In fact, Unilever claims underlying, or organic growth of more than 4%. While P&G’s many premium brands suffered during the first half, Unilever’s lower-end brands fared relatively well.

Packaged Facts forecasts that Unilever will finish 2009 at its 2008 level of turnover, or somewhat higher.

A Value-Oriented Marketer With 13 Mega-Brands

Another comparison of Unilever with P&G: P&G boasts a roster of 23 mega-brands that have annual sales of more than $1 billion, versus Unilever, which controls 13 such brands, each with sales above €1 billion.

Unilever’s force of 13 star-brands includes Axe/Lynx bath products and deodorant, Rama/Blue Band margarine, Dove dishwashing and beauty products, Flora/Becel margarines, Heartbrand ice cream, Hellman’s mayonnaise, Knorr dry soups and sauces, Lipton tea, Lux soap, Omo laundry detergent, Rexona deodorant (including Sure and Degree deodorants), Sunsilk haircare products, and Surf laundry detergent. Lesser-grossing, but still key personal care brands include Clear dandruff shampoo, Lifebuoy soap, and Suave haircare products.

Unilever fields a total of roughly 400 brands, to P&G’s 300. Unilever’s 25 best-selling brands accounted for 70% of its 2008 turnover.

In 2008, Unilever sold its U.S. laundry products business to Vestar, for $1.5 billion, and Bertolli olive oil to Grupo SOS for roughly $900.0 million. These and other divestments are helping Unilever to refocus on more profitable operations.

Unilever’s Strengths in Men’s HBC: Axe Body Spray, Rexona Deodorant…

Make no mistake – the world’s men use far more of Unilever’s (or any major HBC marketer’s) unisex, general-use, or maybe even female-specific personal care products, than they do the company’s male-specific products. Yet Unilever has paved the way for marketing grooming products to teen and twentysomething men, with its brand management of Axe, which is known in Australia, Ireland, and the United Kingdom as Lynx.

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Axe/Lynx is claimed to be the world’s leading male-specific toiletries brand. First introduced in 1983 in France, Axe is now sold in 60 countries. According to Unilever, the brand holds leading shares of sales in “several European and Latin American markets,” and key shares in Asian and U.S. markets. Axe body spray was rolled out in the United States in 2002; it was soon joined by Axe deodorant, body wash, hair gel, and shower gel, all in a variety of scents. As noted in Chapter 2, The Market, crude humor, usually highly sexual, sells Axe/Lynx in print and innumerable television commercials. The latter may be viewed at www.unilever.com, or at www.youtube.com; they will run for years as viral videos that cost Unilever nothing to broadcast during their long afterlife. One example is a 30-second spot run on British television as of December 2008; the spot was made on behalf of Lynx’s Dark Temptation extension, which contains chocolate: A young man, seen at his bathroom mirror, sprays himself with Dark Temptation, and becomes covered with a thick coat of chocolate. He goes out for a stroll about London, followed, licked, and bitten by crowds of beautiful woman. On a bus, one takes a bite out of his chocolate buttock.

Unilever also banks on gender-specific versions of deodorant brands. Rexona, first formulated by a pharmacist and his wife in 1908 Australia, is available in separate product ranges for men and women. It is vaunted to be the best-selling deodorant in the world, in terms of both absolute dollars, and unit volume. In Europe and Latin America, Rexona is extended with Rexona Teens, targeting a demographic that normally aspires to use the same brands as twentysomethings. Rexona is also extended with limited edition packagings to celebrate male or female-specific events or themes; for example, Rexona Crystal has been introduced as an alternative to sticks and roll-ons that may leave a white residue that shows up on dark clothing. The Crystal form is sold in Europe, Latin America, and North America.

One reason Unilever derives so much of its turnover from developing countries is its tactic of offering deodorant in mini-stick, mini-roll on, and lotion sachet forms. Good for only a few use-occasions, such packs are better affordable by populations that may have only a few dollars to spend on beauty or grooming, on an annual basis, per capita. The mini-sticks have been a success in India, for example. The marketing of these packs often involves programs designed to educate consumers about their use in daily hygiene.

Degree deodorant is also fielded in gender-specific ranges. In the United States and Canada, Degree ranges are Men, Women, and Girl. In 2009, Degree Men V12 is an antiperspirant and deodorant stick in a container with yellow-and-black graphics that suggest the markings on a race car. At www.degreemen.com, the product is tied in with the NASCAR circuit; the endorser pictured there is stock-car driver Dale Earnhardt, Jr.

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Clear’s history is noteworthy, because dandruff shampoo sales are driven by male consumers in some countries. The brand is competing with P&G’s Head & Shoulders dandruff shampoo in the Far East, where the latter is the leading shampoo in China. Clear is making inroads, rapidly building share. Clear was formulated by Unilever in Bangkok and Shanghai, in 1972, then introduced initially in India, Indonesia, Thailand, and Vietnam. Dandruff shampoo accounts for half the world’s $40 billion in shampoo sales, according to Business Week (February 15, 2008).

Uni and TIGI

In January 2009, Unilever acquired the TIGI haircare brand from three brothers, Anthony, Bruno, and Guy Mascolo, for $411.5 million. The sale includes such well known products as TIGI Bed Head, Catwalk, and S-Factor shampoo, conditioner, and styling products, all unisex-positioned, plus TIGI B for Men. The latter collection includes shampoo, conditioner, an anti-dandruff shampoo with zinc pyrithione, and stylers in cream, gel, paste, spray, and wax forms. Sold through mass, TIGI is now one of Unilever’s few relatively premium brands.

Prior to purchase, Dallas, Texas-based TIGI had annual sales of $250.0 million, and employed 550 people in Australia, Germany, Italy, the United Kingdom, and the United States. A fourth brother, London-based Toni, will retain the Toni & Guy brand and chain of salons that spawned TIGI.

Unilever Buys Some Sara Lee Personal Care Brands

On September 25, 2009, Unilever announced that it agreed to purchase certain of Sara Lee Corporation’s personal care brands, for approximately $1.9 billion. Not all of the brands that are to be transferred are male-specific or even male-oriented; in fact, more are female- specific or unisex. Yet, given that 15% of sales of the brands are derived from activities in Indonesia, The Philippines, South Africa, and other developing countries, the acquisition is highly significant for marketers of men’s grooming products, for Unilever’s power in the developing world is enhanced when it comes to both sheer brand equity and to leverage with retailers.

The group of transferring brands derives the most sales from the United Kingdom, followed by the Netherlands. Warren Ackerman, an analyst with Evolution Securities, told the Financial Times (September 25, 2009) that Unilever’s share of skin cleanser sales in Europe

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will jump 10 points, from 13% to 23%, widening the gap between itself and Beiersdorf, Colgate, Henkel, and others.

Some of the brands in the Unilever-Sara Lee agreement are Brylcreem men’s hairstyling products (European distribution only – Combe will continue to distribute Brylcreem in the United States and Canada, as well as in Bolivia, Paraguay, Peru, Uruguay, and Venezuela); Duschdas, a German bath products brand, extended with Duschdas for Men shower gel and deodorant; Radox bath products, deodorant, and skincare products, available in Australia, Czech Republic, Ireland, and The United Kingdom; Sanex bath and skincare products, including Sanex for Men bath, shaving, and skincare products; and Zwitsal, a Dutch brand of babycare products.

The brands sold to Unilever yielded annual sales of about $1.0 billion, which in Sara Lee’s FY2009 accounted for 55% of that company’s adjusted operating income from Sara Lee’s International Household and Body Care segment. Brands remaining under the aegis of this segment include Ambi Pur air care products, Kiwi shoe polish and other shoe care products, Ridsect insecticides, and White King bleach.

The deal is expected to be finalized during 2010.

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Chapter 6 Global Product Trends

Special Note: Intros of Men’s Grooming Preparations Overlap Intros of Men’s Shaving Products

This chapter presents counts of new men’s grooming product introductions made by marketers during the two-year period September 6, 2007 to September 6, 2009. The counts are provided by Product Launch Analytics, a Datamonitor service, and are broken out by country, by marketer, and by claims on labels, also called “tags.”

Two sets of data are presented, on men’s toiletries (or “preparations”), and on men’s shaving products. Because there may be some overlap between these sets – a shave gel, for instance, is both a toiletry and a shaving product – they are kept separate, and should not be totaled.

For more discussion of international men grooming markets, see Chapter 3, The Top Ten Men’s Grooming Markets.

Why Total Counts Vary by Breakout

There are obvious discrepancies between the totals at the bottoms of separate tables that focus on country, marketer, and claims/tags. These discrepancies arise from the introduction of one new product in multiple countries; and also, the licensing of a product’s manufacture and/or distribution, again, in multiple countries. The practice of giving one new product multiple, country-specific brand-names (Axe, for example, is called Lynx, in Australia, Ireland, and the United Kingdom), only complicates the counts further.

SKUs versus Reports

Reminder: SKU is the abbreviation for “stock keeping unit.” Every variation of a product, meaning every scent, flavor, package size, etc., is a separate SKU. Thus a single new deodorant brand with five scents, each in versions for men and women, and each of those versions sold in either a spray or roll-on form, would account for 20 SKUs.

Numbers of new SKUs may vary by country and company, because the same SKUs may be introduced in more than one country at a time. In the tables listing key words – tags – on labels, the counts pertain to new product reports by Product Launch Analytics, not individual

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SKUs. It often happens that one report may reference multiple SKUs, sometimes an entire new brand-line.

U.S., U.K., Canada Lead Intros of Men’s Grooming Preps

During the two-year period September 6, 2007 to September 6, 2009, there were 1,273 introductions of new men’s grooming preparations, worldwide, according to Product Launch Analytics. [Table 6-1] As one might expect, the highest numbers of the new preps were seen in relatively affluent western countries: The United States had 226 SKUs roll out, the United Kingdom, 132, and Canada, 100. Germany and Spain followed, with 71 and 62, respectively. Spain edged out Russia, which, with 61 new SKUs, was the busiest BRIC country in this space.

The predominance of affluent countries here may be explained by the fact that men’s grooming preps encompass both low-end and expensive prestige versions of bath products, deodorant, and haircare and skincare products. Since the 1990s, more and more of the world’s men have become acquainted with prestige grooming preps, whether or not they can always afford them; as with many acquired tastes, there is generally no going back to cheaper preps, at least not happily.

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Table 6-1 Numbers of New Men's Grooming Preparations SKUs, by Country, September 6, 2007-September 6, 2009

Country No. of SKUs United States 226 United Kingdom 132 Canada 100 Germany 71 Spain 62 Russia 61 Italy 58 France 56 India 54 Brazil 47 Pakistan 38 Thailand 25 Argentina 22 Saudi Arabia 22 Ukraine 19 Poland 16 Australia 14 Portugal 14 Czech Republic 13 Turkey 13 Algeria 12 Mexico 12 United Arab Emirates 11 Hong Kong 9 New Zealand 8 Switzerland 8 Belgium 8 Bolivia 8 Austria 7 Japan 7 Latvia 7 Hungary 6 Kenya 6 China 5 Belarus 5 Taiwan 5 Peru 5 Chile 5 Continued on next page

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Table 6-1 [cont.]

Country No. of SKUs Colombia 5 South Africa 5 Netherlands 5 Finland 4 Greece 4 Vietnam 4 Venezuela 4 Indonesia 3 Uruguay 3 South Korea 3 Israel 3 Egypt 3 Slovakia 3 Slovenia 2 Romania 2 Bulgaria 2 Croatia 2 Ireland 2 Sweden 2 Norway 1 Luxembourg 1 Ecuador 1 Philippines 1 Nigeria 1 Iran 1 Iraq 1 Jordan 1 Lebanon 1 Oman 1 Qatar 1 Cyprus 1 Others 3 World 1,273 Source: Product Launch Analytics, a Datamonitor service. Reproduction, resale, or other distribution of this content is expressly prohibited without the written permission of the publisher. This material is reprinted with permission.

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P&G, Beiersdorf Are Most Prolific Introducers of Preps

Organized by marketer, the number of new men’s grooming preps was 1,073, during the two- year period September 6, 2007 to September 6, 2009. [Table 6-2] U.S.-based Procter & Gamble and Germany-based Beiersdorf were the most frequent introducers; P&G’s new SKUs were counted at 171, and Beiersdorf’s at 112. L’Oréal was a distant third, with 50, and another significant gap separated Unilever, with 28. Interestingly, the fifth most prolific marketer was located in Asia Minor, between East and West, and somewhere between affluence and poverty: Turkey-based Evyap Sabun introduced 27 roll-outs.

Among direct-sellers, the Swedish firm Oriflame was tops, with 23 new SKUs, outclassing Avon and its 18.

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Table 6-2 Numbers of New Men's Grooming Preparations SKUs, Worldwide by Company, September 6, 2007-September 6, 2009

Company No. of SKUs The Procter & Gamble Co. 171 Procter & Gamble 104 Art of Shaving 22 The Art of Shaving 19 Procter & Gamble Australia Pty. Ltd. 10 Procter & Gamble Co. 5 Procter & Gamble International Operations, S.A. 5 Procter & Gamble Czech Republic s.r.o. 4 Procter & Gamble Prestige Products 1 Procter & Gamble-Rakona, s.r.o. 1 Beiersdorf AG 112 Beiersdorf 98 Beiersdorf (Thailand) Co., Ltd. 4 Beiersdorf AG 3 Beiersdorf S.A.C. Peru 3 Nivea Kao 2 Beiersdorf AG Hamburg 2 L’Oréal SA 50 L’Oréal 32 SoftSheen-Carson LLC 8 The Body Shop 5 Yves Saint Laurent Parfums 2 The Body Shop France 1 L’Oréal DPGP S.A. 1 L’Oréal USA, Inc. 1 Unilever 28 Unilever 25 Unilever Home & Personal Care UK 2 Unilever Sverige AB 1 Evyap Sabun, Yag, Gliserin San. ve Tic. A.S. 27 S. C. Johnson & Sons, Inc. 25 S. C. Johnson & Sons, Inc. 8 S.C. Johnson & Son 17 Oriflamme 23 Oriflame 11 Oriflame Cosmetics (Thailand) Ltd 5 Oriflame Kozmetik 3 Oriflame UK Ltd. 3 Oriflame Cosmetics (Thailand) Ltd. 1 Continued on next page

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Table 6-2 [cont.]

Company No. of SKUs Coty, Inc. 20 Coty 16 Coty Prestige 4 Avon Products, Inc. 18 Avon Products 16 Avon 2 LVMH Moet-Hennessy Louis Vuitton 17 The Estée Lauder Cos., Inc. 16 Estée Lauder 14 Estée Lauder, S.A. 2 Clarins 13 Clarins 10 Clarins GmbH 2 Clarins (UK) Ltd. 1 L'Occitane 12 L'Occitane en Provence 4 L'Occitane Thailand Ltd 1 L'Occitane 7 Space NK, Ltd. 11 Alen Mak AD 9 E Shave, Inc. 9 Perio Inc. 9 Shiseido 9 Shiseido 6 Shiseido France 3 Truefitt & Hill 9 Mandom 8 Creighton's PLC, The Real Shaving Co. subsidiary 8 Real Shaving 3 Real Shaving Co. 5 Sara Lee 7 TenderCare International, Inc. 7 Dirk Rossmann GmbH 7 Henkel 7 Aubrey Organics 7 Carrefour 6 Carrefour 4 Carrefour Argentina S.A. 2 Clorox Co., Burt's Bees, Inc., subsidiary 6 Continued on next page

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Table 6-2 [cont.]

Company No. of SKUs Boticario 6 Edwin Jagger 6 Dermalogica, Inc. 6 VI-John Group 6 Limited Brands 6 Mary Kay Cosmetics 6 Mary Kay Cosmetics 4 Mary Kay Cosmetics Mexico, S.A. de C.V. 1 Mary Kay Cosmetics (U.K) Ltd. 1 Modum Kompaniya 5 The King of Shaves Company Ltd 5 Dermal Group 5 Ind. e Com. de Cosmeticos Natura Ltda. 5 Jack Black 5 Surya Nature, Inc. 5 Surya Brasil 3 Surya 2 Algabo S.A. 4 Juicy Couture 4 Hypermarcas S.A. 4 Bulgari 4 Dolce & Gabbana 4 Escentual 4 Fancl 4 Gap, Inc. 4 The BULLDOG 4 Tesco-Global Aruhazak Zrt. 4 Universal Group 4 Versace 4 Roger & Gallet 4 Laboratoires Didier Rase 4 Lavera Natural Cosmetics 4 Mankind Direct Ltd. 3 Mavive SpA 3 Rubella S.p.A. BG 3 Reamir & Co. 3 Primal Earth 3 Perio, Inc. 3 Woody's Quality Grooming 3 Ultra Skincare Limited 3 Continued on next page

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Table 6-2 [cont.]

Company No. of SKUs Super-Max 3 Topline Concepts 3 Shahnaz Herbals 3 Rin Chokechai Co., Ltd. 3 STS Holding Group Ltd. 3 Enliven Health & Beauty 3 Insto Cosmetics Pvt. Ltd 3 Groupe Lea Nature 3 Helan Cosmesi di Laboratorio 3 J.L. Morison India Ltd. 3 Al Abdullatif Establishments 3 AceCosmeticsIndia 3 Arm Kozmetik San 3 Codaa Switzerland AG 3 Codaa Switzerland AG. 3 Comindex JBC Sp. z o.o. 3 Boots 3 Briceline Cosmetics S.A. 3 Cawa Poland Ltd. 2 Biochimica spa 2 BodyTools 2 Yves Rocher 2 Clio Designs Inc. 2 Crabtree & Evelyn 2 Dabur Group 2 Dalan Kimya Endustri A.S. 2 Société Bic 2 Bic 1 Bic Brasil S.A. 1 Beaute Prestige Int. 2 Australia Luster Beauty & Health Pty., Ltd. 2 Billy Jealousy, LLC 2 Aero Pharma Pvt Ltd. 2 Ahava 2 Anthony Logistics 2 Alticor 2 HydraMe Skin Nutrition 2 INDUFARAS 2 Jasper Conran 2 Kaufland Warenhandel GmbH & Co. KG 2 Continued on next page

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Table 6-2 [cont.]

Company No. of SKUs L' Erbolario 2 Godrej Consumer Products Ltd. 2 Groupe Les Mousquetaires 2 Gucci 2 Guest Men 2 H. KRULL & C. S.P.A. 2 Eveline Cosmetics 2 Fynsk s.l.n.e. 2 G.H. Primavera 2 Farmacia Urban Healing 2 Dr Lewinn's Skincare 2 dm-drogerie markt GmbH & Co. KG 2 Cosmopharm Ltd. 2 Decleor 2 Decleor UK Ltd. 2 Shoppers Drug Mart 2 SkinnySkinny 2 Schwarz Unternehmensgruppe 2 Shanghai Gillette Co., Ltd. 2 Valmari Cosmeticos 2 Your Own Brand GmbH 2 Zvonko Paris 2 Prada Parfums 2 Lider Kozmetik San ve Tic Ltd. Sti 2 Radiohms Agencies Ltd 2 Rudolf Dankwardt GmbH 2 Max Lavender Swat. 2 Matis UK 2 Mz Cosmeticos Ltda. 2 Narciso Rodriguez 2 Natural Grooming Co. 2 Johnson & Johnson 2 Laboratorium Kosmetyczne Dr. Irena Eris SA 2 L'Oval S.A. 2 Laboratoires Multaler 2 Other Marketers, Each With One New SKU 108 Total 1,073 Source: Product Launch Analytics, a Datamonitor service. Reproduction, resale, or other distribution of this content is expressly prohibited without the written permission of the publisher. This material is reprinted with permission.

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“Men,” “Upscale,” “Natural” Are Most Common Tags on Preps’ Labels

The most common label tags on new men’s grooming preps during the two-year span September 6, 2007 to September 6, 2009 were “men” – of course – mentioned in 551 reports out of 1,069; “upscale,” or words to that effect, in 108 reports; and “natural,” in 45 reports. [Table 6-3] “Organic,” though far more clearly defined, is four more notches down the list, occurring in 24 reports.

Table 6-3 Numbers of New Men's Grooming Preparations Reports, Worldwide by Product Claims/Tags on Labels, September 6, 2007-September 6, 2009

Claim/Tag No. of Reports* Men 551 Upscale 108 Natural 45 High Vitamins 38 No Alcohol 28 Sensitive Skin 27 Organic 24 Private Label 18 Licensed 16 Fresh 15 No Fragrance 15 No Artificial Color 14 High Antioxidants 14 Pure 13 No Paraben 10 No Animal 10 No Allergy 9 Women 8 No Preservatives 8 High Minerals 7 No Petrochemicals 7 Instant 6 Reusable 6 Quick 5 Vegan 4 Recyclable 4 No Fluorocarbons 4 Biodegradable 3 Recycled Materials 2 Ethnic 2 Continued on next page

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Table 6-3 [cont.]

Claim/Tag No. of Reports* High Protein 2 No Formaldehyde 2 No Genetic Modification 2 Real 2 Novelty 1 High Amino Acids 1 No Chemicals 1 Disposable 1 High Omega-3 1 Anti-Aging 1 Long-Lasting 1 High Omega-6 1 Fair Trade 1 Refill 1 Others 30 Total 1,069 * Reports often list multiple new SKUs. Source: Product Launch Analytics, a Datamonitor service. Reproduction, resale, or other distribution of this content is expressly prohibited without the written permission of the publisher. This material is reprinted with permission.

Shaving Product Intros: U.S., Canada, Brazil Are Top Trio

Of 610 new men’s shaving product SKUs introduced in the two-year timeframe of September 6, 2007-September 6, 2009, the United States accounted for 158 of them, Canada for 65, and Brazil, 48. [Table 6-4]

Brazil’s occupation of the third rank may reflect cultural leanings ranging from rigorous hygiene, to stylish appearance, and to the use of scented shave cream (similar to the use of scented deodorant) to substitute for costly fragrance products. Among other developing countries, ninth-ranked Russia is the next most prolific introducer of shaving products, with 32 new SKUs.

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Table 6-4 Numbers of New Men's Shaving Product SKUs, by Country, September 6, 2007- September 6, 2009

Country No. of SKUs United States 158 Canada 65 Brazil 48 Spain 42 France 38 Italy 37 United Kingdom 36 Germany 33 Russia 32 Japan 12 Portugal 8 India 7 Belgium 6 Argentina 6 Turkey 6 Poland 6 Switzerland 6 Australia 5 Mexico 5 Belarus 5 Greece 5 Austria 4 Bolivia 4 Ukraine 4 Hong Kong 4 Netherlands 4 New Zealand 3 Romania 2 Hungary 2 Cyprus 2 South Africa 2 Finland 2 Norway 2 Luxembourg 2 Egypt 1 Saudi Arabia 1 Venezuela 1 Continued on next page

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Table 6-4 [cont.]

Country No. of SKUs Slovenia 1 Taiwan 1 Croatia 1 Czech Republic 1 World 610 Source: Product Launch Analytics, a Datamonitor service. Reproduction, resale, or other distribution of this content is expressly prohibited without the written permission of the publisher. This material is reprinted with permission.

P&G, Beiersdorf Biggest Introducers of Shaving Products, Too

In men’s shaving products, as in grooming preps, P&G, Beiersdorf, and L’Oréal were the leading triumvirate of introducers over the two-year period September 6, 2007-September 6, 2009. [Table 6-5] Of 462 new SKUs, P&G accounted for 68, Beiersdorf for 47, and L’Oréal for 23.

Among direct-sellers, multilevel marketer Avon is fourth, with 17 SKUs, while here rival Oriflame is found many, many ranks down, with four SKUs. Mary Kay Cosmetics also introduced four men’s shaving SKUs.

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Table 6-5 Numbers of New Men's Shaving Product SKUs, Worldwide by Company, September 6, 2007-September 6, 2009

Company No. of SKUs The Procter & Gamble Co. 68 Procter & Gamble 39 Art of Shaving 18 Procter & Gamble International Operations, S.A. 5 Procter & Gamble Co. 3 Procter & Gamble Australia Pty. Ltd. 2 Procter & Gamble Prestige Products 1 Beiersdorf AG 47 Beiersdorf 45 Nivea Kao 2 L’Oréal SA 23 L’Oréal 11 SoftSheen-Carson LLC 8 The Body Shop 4 Avon Products, Inc. 17 Avon Products 16 Avon 1 Shiseido 12 Shiseido 10 Shiseido France 2 The Estée Lauder Cos., Inc. 12 Estée Lauder, S.A. 9 Estée Lauder 3 Evyap Sabun, Yag, Gliserin San. ve Tic. A.S. 10 Creighton's PLC, The Real Shaving Co. subsidiary 10 The King of Shaves Company Ltd 10 E Shave, Inc. 9 Limited Brands 8 LVMH Moet-Hennessy Louis Vuitton 8 Clarins 8 SkinnySkinny 8 Unilever 7 Aubrey Organics 7 L'Occitane 6 Monte & Monte (Aust) Pty Ltd 6 Natural Grooming Co. 6 Pola Orbis Holdings 6 Continued on next page

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Table 6-5 [cont.]

Company No. of SKUs Coty. Inc. 6 Coty 4 Coty Prestige 2 Surya Nature, Inc. 5 Surya 2 Surya Brasil 3 Modum Kompaniya 5 Ind. e Com. de Cosmeticos Natura Ltda. 5 Jack Black 5 Baudelaire, Inc. 5 Boticario 5 Briceline Cosmetics S.A. 5 Dermalogica, Inc. 5 Dirk Rossmann GmbH 5 Fancl 4 The Clorox Co., Burt's Bees, Inc., subsidiary 4 Hypermarcas S.A. 4 Laboratoires Didier Rase 4 Mary Kay Cosmetics 4 Oriflame 4 Reamir & Co. 3 Sara Lee 3 Valmari Cosmeticos 3 Woody's Quality Grooming 3 Helan Cosmesi di Laboratorio 3 Enliven Health & Beauty 3 Decleor 3 Escentual 2 Guest Men 2 HydraMe Skin Nutrition 2 Kaufland Warenhandel GmbH & Co. KG 2 Korres 2 L' Erbolario 2 Narciso Rodriguez 2 Yves Rocher 2 Shoppers Drug Mart 2 Space NK, Ltd. 2 Laboratoires Multaler 2 BodyTools 2 Boots 2 Continued on next page

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Table 6-5 [cont.]

Company No. of SKUs Beaute Prestige Int. 2 Ahava 2 Alticor 2 Farmacia Urban Healing 2 G.H. Primavera 2 Godrej Consumer Products Ltd. 2 Groupe Lea Nature 2 Groupe Les Mousquetaires 2 Dalan Kimya Endustri A.S. 2 Clio Designs Inc. 2 Anthony Logistics 2 Ceu de Menta 2 Zvonko Paris 2 Tesco-Global Aruhazak Zrt. 2 Carrefour 2 Carrefour 1 Carrefour Marinopoulos S.A. 1 Parfuemerie Douglas GmbH 1 Petersburg Products Int. JSC 1 Pitambari Products Pvt. Ltd. 1 Sundial Brands 1 TenderCare International, Inc. 1 Willow Beauty Products Ltd 1 Grupo Bertin 1 AminoGenesis 1 Ankur Products 1 Alford & Hoff 1 Biochimica spa 1 Centros Comerciales Carrefour, S.A. 1 L'Oval S.A. 1 Malhotra Shaving Products (P) Ltd. 1 Mann & Schroeder GmbH 1 Nate B, LLC 1 Organic Pharmacy 1 Matis UK 1 L'Arnee Cosmetics 1 Johnson & Johnson 1 Henkel 1 Hudson Bay Company 1 World 462 Source: Product Launch Analytics, a Datamonitor service. Reproduction, resale, or other distribution of this content is expressly prohibited without the written permission of the publisher. This material is reprinted with permission.

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On Shaving Products, Too, Most Common Tags Are “Men,” “Upscale,” “Natural”

No surprise that “men” was the most frequently observed label tag on men’s shaving products launched in the two-year frame September 6, 2007-September 6, 2009. “Men” was mentioned in 193 of Product Launch Analytics’ reports. “Upscale,” or similar words, were mentioned in 47 such reports, and “natural,” in 34 reports. [Table 6-6]

Table 6-6 Numbers of New Men's Shaving Product Reports, Worldwide by Product Claims/Tags on Labels, September 6, 2007-September 6, 2009

Claim/Tag No. of Reports* Men 193 Upscale 47 Natural 34 No Alcohol 21 Organic 18 High Vitamins 15 Private Label 10 No Artificial Color 10 No Paraben 10 Sensitive Skin 8 High Antioxidants 8 No Fragrance 8 No Animal 8 No Allergy 7 Fresh 7 Women 7 Reusable 6 Licensed 6 Pure 6 High Minerals 5 No Preservatives 5 Recycled Materials 4 Recyclable 3 Anti-Aging 3 No Genetic Modification 3 No Petrochemicals 3 High Amino Acids 2 No Chemicals 2 No Formaldehyde 2 Continued on next page

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Table 6-6 [cont.]

Claim/Tag No. of Reports* High Protein 2 Ethnic 2 Vegan 2 Refill 2 Biodegradable 2 Fair Trade 1 Long-Lasting 1 No Perfumes 1 Quick 1 Instant 1 Kids 1 Others 4 World 481 * Reports often list multiple new SKUs. Source: Product Launch Analytics, a Datamonitor service. Reproduction, resale, or other distribution of this content is expressly prohibited without the written permission of the publisher. This material is reprinted with permission.

Many New Products Are Fast-Acting, Convenient, Multifunctional

As of September 2009, Packaged Facts observes that new men’s grooming products, of any type, often share three attributes: They are fast-acting; they are easily used – i.e., convenient – and they are multifunctional, allowing men to combine aspects of their daily grooming regimens. The three attributes boil down to one main one: accommodating men’s impatience with grooming procedures by saving them time.

The examples are endless, but just two are Jack Black All-Over Wash for Face, Hair, and Body, with Wheat Protein and Panthenol, a vegan formulation that retails at $14 for a 6.0- ounce tube; and the waterproof Gillette M3 Power battery-operated razor, which vibrates to lift whiskers for a faster, closer shave, even while one is showering.

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Media Old and New

The Alternatives and the Viral

In addition to advertising in traditional print media such as magazines, newspapers, and Sunday newspaper supplements (i.e., rotogravures, and freestanding inserts known as FSIs), as well as in traditional electronic media, namely the four television formats (network, spot, cable, and syndicated programming) and two radio formats (network and spot), HBC marketers of all ranks and types are making use of alternative media, often at very little or no cost. With savvy production, a marketer’s television commercial or promotional video may also “go viral,” and play for years on the Internet, as streamed by YouTube.com, or as copied – albeit illegally – by individuals, who then embed the content in their blogs, social network profile pages, and personal websites.

Another advantage of alternative marketing is that it can cost effectively reach small audience components – the millions of offbeat folks whom traditional mass marketing must necessarily pass over – to justify the greater expense. At the same time, digital platforms can be engineered to track numbers of consumers clicking on an ad, logging onto a site, or buying products online, thus instantly tracking ad impressions and their effectiveness. Tracking the ultimate effect of traditional ad media upon shoppers in brick-and-mortar stores can take weeks, or even months.

Here are some of the alternative platforms available to men’s grooming marketers in 2009:

• Blogs: Marketers large and small are establishing blogs, are placing banner ads or pop-ups on blogs, or are simply posting announcements or comments on blogs. The latter practice has become highly popular; small men’s grooming marketers may have staffers monitor hundreds of blogs, not only to gauge consumers’ reactions to products, but also to post good opinions of products, or more straightforwardly, to offer free samples or discount coupons to push brands. Participation in blogs costs nothing; marketers in various product categories are monitoring as many as 200 of the top blogs in every segment and niche in which they compete. Some small marketers – natural/organic HBC specialists, for instance – are depending entirely on

the blog scene. However, with such heavy HBC marketer-traffic on blogs, one has to wonder if some consumers are tuning out.

• Flash Mobs: In the 1960s, loosely organized “happenings” or “love-ins” brought revelers together in parks or at parties, for body painting, lovemaking, impromptu theatre, concerts, parades, and so on. These events seemed to occur spontaneously. Fifty years later, flash mobs are often corporate-instigated, and employ some means of displaying brand logos, or of distributing samples.

• Guerilla Marketing: Surprise tactics on city streets, sometimes outside the bounds of good taste, can be called “guerilla.” But this mode can be risky, as demonstrated the night of January 30, 2007, when a New York ad agency covertly clamped black boxes bearing an obscure logo to the undersides of highway bridges in Boston. Outfitted with blinking lights to animate the logo, the boxes were perceived as possible bombs during the morning rush hour. Thus the campaign backfired as the ad agency was reviled by Boston police on the national news. The campaign had been intended to support Aqua Teen Hunger Force, a Turner Broadcasting System series that airs on The Cartoon Network. Similar boxes were found in New York, Los Angeles, and six other major cities. The incident is pertinent to this discussion, because the cartoon series is a favorite of young males.

• Internet Websites: A few lesser HBC marketers are still frustrating consumers by having neither corporate websites, nor websites covering their full rosters of brands. Site content can include contact info, retailer locators, interactive pages, games, promo material, mission statements, green and Fair Trade policies, details about sweepstakes and contests, e-tail functions, and links to sites for a company’s other divisions or brands. ...And if the Internet seems indispensible now, it still holds vast untapped potential in 2009 – only 1.0-1.3 billion people, or 15%-20% of everyone on earth, go online, according to Packaged Facts’ estimate, based on Central Intelligence Agency data. Among men’s grooming marketers, Unilever, Procter & Gamble, and Henkel/Dial all offer comic interactive web pages and/or videos that target the world’s teen and twentysomething men, at www.theaxeeffect.com, www.oldspice.com, and www.getmagnetic.com. Warning: Some of the material is quite raunchy.

• Product Placement: Placing a men’s body wash, deodorant, shaver, or other grooming product in a scene in a film or television show is not new to the 2000s, but

is an increasingly popular complement to other ad and promo efforts. Some placements are as expensive as high-profile media buys; for example, having actor Pierce Brosnan, as James Bond, drive a BMW Z8, drink Smirnoff vodka, wear Omega watches, and use other branded products in MGM’s The World Is Not Enough (1999), earned the studio $100 million in fees. But the idea that all placements are expensive is wrong. Some placements are cheap, or even free. Some placements of products in magazines’ fashion layouts, for example, may be bartered or free – and if the products enhance a film/television scene, there may likewise be no charge. As the men’s grooming market continues to thrive, placements of the products are likely to become more frequent, globally speaking.

• Mobile (Cellular): Here is a sales and marketing medium neglected in most of the world, whether because of lack of infrastructure or consumer awareness, or both. In 2009, the Japanese are the masters of mobile. They use their phones to surf the Internet, to pay for goods in stores, and to order goods online. They can also receive ads and marketers’ special promo offers, by e-mail or by text-messaging. There were 2.2 billion cellphones in the world in 2005, and 107.3 million in Japan in 2007, according to the CIA. Couple the latter number with the fact that Japan accounts for 20% of the world’s skincare product consumption, as estimated by Euromonitor International, and there is obvious potential for men’s grooming marketers that advertise or direct-sell their products via mobile in that country. In the future, mobile may also enable marketers to reach consumers even in regions suffering political unrest, for example, the Middle East, where land-lines are often unreliable.

• Restroom Walls: A phenomenon in major U.S. cities, posters (“one-sheets”) touting liquor, condoms, or men’s grooming brands are hung in frames or lightboxes mounted in bar foyers and men’s restrooms. The presentation resembles that of some outdoor ads. Henkel markets Dial Magnetic Attraction Enhancing Body Wash in this way, in an ad headlined, “Don’t get a ‘No.’ Get a definite ‘Maybe.’” Similar ads are also seen indoors at gyms, train stations, air terminals, and concert halls.

• Second Life: In 2009, San Francisco-based Linden Research, Inc.’s Second Life 3-D virtual world has proved disappointing to corporate sponsors such as Nike and Coca Cola, which have pulled out of it. While still enjoyed by one million people every month, Second Life’s future best potential is in its use for long-distance corporate conferencing, as it is used now by IBM and Northrop Grumman.

• Social Networks: Marketers or brands can stake out profile (or group) pages on Bebo.com, Facebook.com, Myspace.com, and other social networking websites. Networking “friends” can receive coupons, newsletters, product news, promo offers, and so on. Specialized networking websites can also help marketers to micro-market; ShootingPeople.org is for filmmakers, Creative HotList is for advertising and media creatives, and so on. According to Trendcentral’s e-bulletin for September 8, 2009, those making the best use of Twitter, which allows one to exchange messages of no more than 140 characters, are bloggers directing Twitterers to their blogs. The Japanese flair for mobile also dovetails naturally with Twitter, because of its short messages, or “tweets.”

• Ads in Videogames: With U.S. videogame sales up 19% to $21.3 billion in 2008, according to the NPD Group, and with U.S. adult players tending to be men whose average age is 35, according to the Centers for Disease Control (CDC), men’s grooming marketers would be wise to consider ads placed in game software, or at least ad and promo tie-ins with appropriate game titles. In August 2008, for example, P&G announced that it would partner with EA Sports, a subsidiary of famous game- maker Electronic Arts, Inc., of Redwood City, California, to create an interactive promotion. (Electronic Arts had sales of $3.7 billion in the fiscal year ended with March 2008.) EA Sports then developed and produced a global online gaming competition in support of P&G’s shaving products, especially the Gillette Fusion manual shaver line. PGA champion Tiger Woods acted as a spokesperson for the event. Finals were held in Tampa, FL, in January 2009, with Mr. Woods and other star athletes in attendance.

As one can see, the latest media choices overlap both the advertising and promotional spheres – appropriately reflecting the holisitic marketing approach that many consultancies are recommending for success in the 2000s.

Global Ad Expenditure in Decline in 2009

In a June 2009 press release, GroupM, the corporate parent of the WPP group of ad agencies, projected that advertisers’ expenditures for media space and time would decline almost 6% in 2009, to $416.4 billion, on a global basis. GroupM further projected that media buys would slip again in 2010, by more than 1%, to $410.6 billion, not including ad production costs.

The worldwide economic recession, and shifts to less expensive tactics utilizing digital media, are identified by Packaged Facts as causes for the decline.

However, GroupM also prognosticates that Western Europe and North America will be the only regions experiencing a global decline in media buys in 2010. All other regions, and especially BRIC countries (Brazil, Russia, India, China), will see higher spending on media.

As mentioned in Chapter 3, The Top 10 Grooming Marketers, the International Federation of the Periodical Press (IFPP) reports that sales of magazine ad space in China doubled during 2001-2006, to $375 million. The Federation further projected that sales jumped to $515 million in 2008.

For smaller and midrange men’s grooming marketers, this may be an ideal time to negotiate lower ad rates. Previously, most such marketers could not afford even discounted remnant and/or regional buys.

Updating Traditional Media

While the alternative media described above are ever more popular with HBC marketers, including those active in men’s grooming products, traditional mass media still account for the lion’s share of expenditure for ad space and time – on a worldwide scale, if not in every country. However, traditional media have begun to morph with the times: As already noted, an ad format similar to outdoor has found its way inside bars and gyms. In 2009, augmented reality (AR) has added gimmickry to magazines, via chips that impart motion to the images on the covers; when the magazines are held up to webcams, the rudimentary movement can be observed on computer screens. And on September 18, 2009, Entertainment Weekly will be the first magazine to be published with a paper-thin, video-player insert. The player will contain 40 minutes of content in support of CBS’ Monday night shows, and also commercials touting Pepsi Max, a high-caffeine soft drink positioned to men. The video-in-a-magazine ploy itself, as designed by OMD’s Ignition Factory, is also meant to impress men.

Only copies of Entertainment Weekly home-delivered in Los Angeles and New York will contain the video-player insert.

Men’s Grooming Ads, Websites Use Crude Humor or Muscles-of-Steel Approach

By now, Unilever’s positioning of Axe bath and body, deodorant, and as of 2009, haircare products, is on comedy, often of the gross-out variety. In a highly suggestive Spanish- language television commercial set in a cantina in Mexico, a young man dances while shaking giant maracas, to give a pretty woman the idea that he has large testicles. In the past, www.theaxeeffect has featured “sploshing” – that is, covering bikini-clad women with everything from pizza sauce to mud to gravy – in posted videos. (Again, Axe is known as Lynx in Australia, Ireland, and the United Kingdom.) And P&G, to promote the idea that new Old Spice Ever Clear deodorant leaves no residue, presents www.residueisevil.com, a disturbing one-page website that shows a man’s luxurious underarm hair, with globules of white residue falling from it. Even Royal Philips is getting into the act, with a video running on the company’s www.shaveeverywhere.com website; the video stars a man in a bathrobe who talks to us about the Philips Bodygroom body shaving system. He refers repeatedly to shaving his genitals, but his obscene language is bleeped dozens of times.

At the other extreme are ads that appeal to men’s sense of virility, their desire to seem strong and ready and able. Many of P&G’s ads for Gillette portray a perfectly muscled man before the bathroom mirror, shaving or applying deodorant quickly and surely. If the ads have voice-overs, the announcer is always deep-voiced and serious.

In between these two extremes are some charming, touching, or ingenuously funny television spots that have become viral hits on marketers’ websites or on YouTube.com:

The Spirit of Hai Karate Returns: We Can’t Fight Off All These Babes!

Most Axe videos involve men fighting off – or submitting to – the hundreds of beauties that rush to them, attracted by the scent of the product. This harks back to Hai Karate commercials of the 1960s, in which delighted men had to use karate to fend off the women who attacked them. In one such Axe spot, we see sexy women running from everywhere. Cut to a man who has just used an Axe product, solemnly walking to the middle of a sandy beach. He raises his arms to the sky, and waits, while the hundreds of women converge on him...

The Charming Man of Chocolate

In yet another Axe viral video hit viewable on YouTube.com, Axe is actually Lynx, because the video was produced as a television commercial for broadcast in the United Kingdom: We watch a young man apply Lynx Dark Temptation deodorant – which turns him into a man of chocolate. As he strolls about London, women are drawn to him; one even takes a bite out of his backside.

“We All Have Doubts... We All Have Confidence”

A good-natured Gillette general image spot portrays a young man finding the courage to approach a young lady in a restaurant. The announcer asks whether the young man will succumb to doubt, or whether he will be confident. The scene is intercut with New York Yankees baseball star Derek Jeter and champion golfer Tiger Woods, both succeeding at their sports. The tag: “The best a man can get.”

In a 2009 Axe spot re-shot in various languages, a young waitress writes her phone number in ketchup, on a man’s sandwich. Versions of the romantic spot have aired in Europe and Indonesia.

Chapter 7 Distribution and Retail

Highlights

• In 2009, most U.S. unit volume still travels along the standard four-step path – manufacturer to marketer to wholesaler to retailer – or is shipped directly to stores. Direct store delivery is increasingly used, as chains continue to dominate the mass retail scene across the United States.

• The smallest men’s grooming marketers that sell through stores (as opposed to the Internet) tend to rely on DSD, but must consider using wholesalers as their distribution footprints expand. Distributors’ services, such as promotion administration or seeing that point-of-purchase materials are properly displayed, are huge advantages.

• Television home shopping networks, as a group, have upgraded their image in the 2000s, so that they have replaced much of the kitsch previously sold, with luxury goods, including prestige HBC. QVC has television home shopping networks in Germany, Japan, The United Kingdom, and the United States; while HSN has networks in Canada, Germany, Italy, Japan, the Phillipines, the United Kingdom, and the United States.

• Americans are finally getting the chance to order goods direct, via mobile devices. Apple’s latest iPhones accommodate marketers’ special applications that enable consumers to access catalogs of HBC, apparel, housewares, etc. Until now, the Japanese have been far ahead of other nations in such use of the medium.

• Opponents of Wal-Mart’s category-killing big-box stores will cheer the government of India for having legislated that foreign retailers be prohibited from establishing chains of stores. Yet Wal-Mart – and other retailers that want to gain footing in the enormous Indian market – has opted to partner with a local firm to open big-box stores that sell at wholesale to local retailers.

• The world’s networks of spas and salons offer excellent promotional opportunities for men’s grooming products marketers. In 2007, for example, Estée Lauder introduced the first men’s line-extension of the Aveda brand. The company

supported the U.S. rollout with 85,000 samples distributed to consumers via 6,000 salons. In Russia, marketers routinely give samples of men’s grooming products to thousands of women, some of whom will buy the products as gifts..

• REACH, a body of regulations enacted into law by the European Union on June 1, 2007, is designed to prevent the use of dangerous ingredients in consumer products manufactured within the EU’s 27 countries, or the importation of such ingredients (or products containing them) into the EU – especially if there are reasonable substitutes for the offending ingredients.

Distribution

U.S. Product Paths: Classic Four-Step, DSD, Rack-Jobbing, “Direct”

In 2009, the wealthiest society in the world offers a variety of models for distribution of men’s grooming products, and of HBC products, in general. Most U.S. unit volume still travels along the standard four-step path – manufacturer to marketer to wholesaler to retailer – or is shipped directly to stores. The latter path, called DSD (for direct store delivery) is increasingly used, as chains continue to dominate the mass retail scene (mainstream supermarkets, chain drugstores, and mass merchandisers) across the United States. DSD often suits marketers, because shipping to individual stores or to chain retailers’ central warehouses affords economies of scale, by cutting out wholesalers and their commissions. In fact, powerful chain retailers often demand DSD to save on transport, storage, labor, and administrative costs, in addition to enhanced category management in stores. DSD is particularly helpful to retailers with everyday low price policies (EDLP), for their savings are passed on to the consumer, boosting unit turnover.

However, even marketers that heavily rely on DSD also use distributors, because these firms know their territories intimately, and can help increase penetration, especially of small outlets such as independent grocers, druggists, and mom-and-pop stores. Distributors can also administer promotions, and they can complement marketers’ own efficient consumer response (ECR) programs, which are designed to keep inventories lean all along the path from raw materials procurement to perfectly custom-tailored mixes of SKUs on store shelves. Modern distributors also link warehouse stock-tracking systems with checkout scanners, for fast order turnaround and fewer out-of-stocks.

The smallest men’s grooming marketers that sell through stores (as opposed to the Internet) tend to rely on DSD, but must consider using wholesalers as their distribution footprints expand. For this sector, distributors’ services, such as promotion administration or seeing that point-of-purchase materials are properly displayed, are huge advantages. This observation applies to the ever-burgeoning natural food/HBC channel, and to prestige and pop-prestige channels, as well as to the three mass channels.

Rack-jobbing, a third means of distribution, is defined here as various degrees of on-site category management as practiced by a combination of delivery driver and/or route salesperson. The man or woman may be responsible for proper stocking, returns, and fine- tuning retailers’ product mixes to best suit impulse purchasing by local populations who may skew to certain age brackets, ethnicities, or even gender.

Rack-jobbing is probably least used to move men’s grooming products; however, its best use may be to maintain shelvings in store departments that present intricate assortments of SKUs, for example, disposable, manual, and electric shavers and their numerous replacement heads, blade cartridges, and accessories. Or rack-jobbing may be used by distributors that know here is the smartest way to do business with certain retailers that, left to their own devices, would not give HBC departments proper attention.

The fourth men’s grooming (or other HBC) product path is direct-to-consumer sales. “Direct” reaches consumers via “door-to-door” salespersons, Internet websites, mail-order catalogs, magazine ads, mobile, television infomercials, and television home shopping networks (such as HSN, MSN Shopping, and QVC). In cyberspace, direct has actually become a degree indirect, because whether or not a shave cream or shaver or men’s eye cream is sold through a marketer’s own website, it may also be sold by an army of third-party e-tailers from Amazon.com to Drugstore.com to Wal-Mart.com. Consumers shopping for the best deals may not always care who owns which website, as long as they are getting the lowest price, and the lowest shipping and handling charges.

It is also important to note that television home shopping networks, as a group, have upgraded their image in the 2000s, so that they have replaced much of the kitsch previously sold with luxury goods, including prestige HBC. As noted earlier in this report, QVC sells Nickel, for instance, and HSN sells Ahava for Men, The Art of Shaving, Boss, Clarins Men, Clean, Grooming Lounge, and Marilyn Miglin M for Men (all as of September 2009). QVC has television home shopping networks in Germany, Japan, The United Kingdom, and the United States; while HSN has networks in Canada, Germany, Italy, Japan, the Philippines, the United Kingdom, and the United States.

And Americans are finally getting the chance to order goods direct, via mobile (also called cellular). Apple’s latest iPhones accommodate marketers’ special applications (“apps”) that enable consumers to access catalogs of HBC, apparel, housewares, or whatever products. Until now, the Japanese have been far ahead of other nations in such use of the medium.

Finally, no discussion of U.S. distribution paths would be complete without mentioning the modern door-to-door salesperson, exemplified by the 600,000 “sales associates” – 5.8 million around the globe – who sell the Avon brand. Avon’s value-to-premium-priced products make it a force in men’s grooming, in many countries.

Marketers Must Take Proactive Role in Meeting EU’s REACH Requirements

As defined in the glossary near the beginning of Chapter 2, REACH is an approximate acronym for Registration, Evaluation, Authorization, Restriction of Chemical Substances, a body of regulations enacted into law by the European Union on June 1, 2007. This law is designed to prevent the use of dangerous ingredients in consumer products manufactured within the EU’s 27 countries, or the importation of such ingredients (or products containing them) into the EU – especially if there are reasonable substitutes for the offending ingredients.

The Helsinki-located European Chemicals Agency (ECHA) is responsible for administering REACH stipulations, which require that ingredients be registered, their safety documented, and their use approved. In 2009, many of the world’s HBC manufacturers, marketers, and importers/exporters – whether headquartered in or out of Europe – are worried that ECHA’s registration of tens of thousands of ingredients in its database, together with the demands of the approval process, will necessitate expensive product reformulations. The full complement of REACH regulations, however, are being phased in over an 11-year period that stretches through 2018. To initiate the registration/approval process, visit http://echa.europa.eu/.

In a July 23, 2009 webinar sponsored by Virgo Publishing’s Inside Cosmeceuticals magazine, Mindy Goldstein, Ph.D., urged the global HBC industry to act as swiftly and proactively as possible, to prevent being shut out of Europe, or at least to prevent costly delays.

In her introductory speech, and in answering questions from webinar attendees, Dr. Goldstein made the following valuable points:

• To avoid disaster, deal with REACH far in advance of your company’s target date for rolling out a brand. This may allow time for correspondence with ECHA, and for modifying product formulations to secure that agency’s approval of their sale in the EU.

• The registration/approval process involves submitting a dossier of pertinent documents, including any write-ups of clinical studies. But ECHA checks only 5% of dossiers for compliance with REACH requirements.

• Your company needs to establish a REACH-ready team that logs on to the ECHA website every day. The team should include a chemist or product formulator, research and development support personnel, an information technology specialist – in short, everybody. You must keep up with REACH requirements, as they evolve. On the subject of challenging ECHA to accept a controversial ingredient, Dr. Goldstein was emphatic: “Questionable ingredients probably won’t be approved,” she warned. “If it needs authorization, remove it from your product. If an ingredient might be restricted, remove it.”

• Foods and prescription drugs are not under ECHA’s jurisdiction. But some ingredients that are classed as prescription drugs in the United States, are classed as cosmetics in the EU, and are thus subject to registration with ECHA.

• Animal-tested ingredients may or may not be approved. However, it is preferable for all concerned, that registrants simply supply the paperwork on animal tests performed in the past by other marketers. The idea is to limit such testing, insofar as that is possible. However, detractors of REACH and ECHA say that the very idea of mandating registration and approval of so many thousands of ingredients will result in an upsurge of new product testing on animals.

• In the case of natural extracts, they must be extracted by natural means, that is, by hand. If either ethanol or Co2 is used in the extraction process, then the extract can no longer be considered natural.

• Marketers must register shipments that hold one or more tons of certain ingredients. A one-ton shipment of a product that incorporates butylene glycol along with 20 other ingredients, for example, probably does not have to be registered. But a five- ton shipment comprising five one-ton shipping containers of that same product does have to be registered.

• When consulting ECHA literature, one should be aware that EU-based parties are referred to therein as “manufacturers,” and foreign-based parties are referred to as “importers.”

• Insisting that ingredients suppliers and their wares be already registered with ECHA will save a marketer lots of time, effort, and money.

In India, Foreign Retail Chains Must Convert to Wholesale

Opponents of Wal-Mart’s category-killing big-box stores will cheer the government of India for having legislated that foreign retailers be prohibited from establishing chains of stores. Yet Wal-Mart – and other retailers that want to gain footing in the enormous Indian market of almost 1.2 billion people – has opted to partner with a local firm to open big-box stores that sell at wholesale to local retailers. This approach is workable, because many small Indian retailers are farmers or artisans who earn extra pennies by selling a few products out of their living rooms.

Travelers to India and other BRIC countries (Brazil, Russia, and China) are often shocked at the modernity of the cities and at the plenitude of world-famous brands, including prestige brands, that one finds in stores. But the retail situation outside cities is quite different. The Economist (February 12, 2009) presents a vivid example: In central India, near Gulbarga in the state of Karnataka – or a five-hour drive North of Hyderabad – a shop is maintained in “a dimly lit corner of a family house. The goods are kept in plastic jars; one of snacks, three of sweets, two of chickpeas, 20 teabags, three packs of washing powder—22 products in all. The family also runs a scrap-metal business and earns between $2 and $4 a day. During a two-hour visit, two customers came by. One bought a box of incense, the other a single cigarette.”

In this case, foreign marketers of men’s grooming products will cheer Wal-Mart for having figured out how to do business in India. The fact that the country’s GDP breaks out at a mere $2,800 per capita does not mean that Indian men must go without access to a greater range of grooming products. Operations like Wal-Mart’s are springing up to effectively extend marketers’ distribution footprints, smoothing and widening the flow of products to the countryside. As India’s middle class continues to burgeon, so will per capita share of the GDP, and HBC expenditure, too. In the interim, marketers are selling smaller sizes of HBC, for instance in mini-sticks, mini-roll-ons, and foil packets or sachets. Unilever claims success in this regard in India, selling Rexona deodorant in the mini-stick form. Rexona, said to be the world’s best-selling deodorant brand, is available in both male-specific and female- specific versions. (See the Competitive Profile of multinational packaged goods giant Unilever, within Chapter 5, The Marketers.)

Wal-Mart’s wholesale stores are under the Best Price Modern Wholesale retail marque. The first store opened in May 2009, in Amritsar, and looks quite like an American Wal-Mart retail store, with a vast parking lot, shopping cart depot, and so on. Both foods and general merchandise are counted among the 6,000 products initially stocked; 90% of inventory is claimed to be locally sourced. Another 10-14 Best Price Modern Wholesale stores, each with floor space of 50,000-100,000 square feet, are projected to open by 2012.

Wal-Mart is also offering customers an extensive schedule of in-store retailing workshops, all to foster local prosperity. In addition, hygiene workshops are offered to caterers, grocers, restaurants, and other businesses that handle food.

Wal-Mart’s Indian partner is Bharti Enterprises Ltd., the owner of the Easy Day retail chain. Their joint venture is Bharti Wal-Mart Private Ltd.

Philips Fine-Tunes Out-of-Pack Display

Royal Philips has rethought its recommended shelf sets for small appliances, including Philips Norelco electric shavers, and Sonicare electric toothbrushes. According to the March 2009 issue of e-zine CPG Matters, the company is giving up portions of shelved stock to make room for Philips items to be displayed “out of box.” Based on shopper focus group data, the idea is to satisfy curiosity about the products, by allowing consumers to handle them.

Staffed or unstaffed, out-of-box displays have already been driving sales to a greater degree; the strategy has actually been employed by Philips since 2005, and is continually being refined.

John Carter, Director of Strategic Consumer Intelligence at Royal Philips’ Domestic Appliances and Personal Care unit, told CPG Matters that, “The learnings were so well received by our retail partners, we have… moved on to developing in-store executions, including revised shelves and upgraded in-store communications.”

In reaction to an excerpt of the CPG Matters article that appeared in the March 5, 2009 edition of RetailWire, Doron Levy, President of Captus Business Consulting, warned that Philips or its retailers had better be sure that the demo displays are backed up with lots of extra batteries and extension cords. “Consumers will make more of a connection with the product if they see it live in action,” he said. “Shiny things that blink will always sell faster

than a colorful box with a price tag. Philips… has been rolling out products that are indeed price sensitive and offer value to the customer. Being able to touch, taste and feel will encourage the customer to buy as opposed to browse. Chains like Costco, Best Buy and Brookstone rely on out-of-the-box demos to move merchandise. The only caveat is that we must make sure all the demos are functioning, which in itself is a full time job in some stores… When nothing happens when you press a button, the first instinct for the consumer is to walk away. Most will not ask for help.”

Retail Focuses and Retailer Profiles Follow

In the rest of Chapter 7, Packaged Facts first covers, in a Retail Focus section, the trend to men’s spas, salons, and shave emporia, and the influence of these channels upon men’s grooming products. Following that section are two Retailer Profiles, of Paris-based LVMH/Sephora and Moscow-based Mercury Group/TSUM.

Retail Focus: Spas, Salons, and Shave Emporiums

Men’s Grooming Products Have Increased Sell-Through in Service Channels

The main thrust of business in spas and salons – services ranging from haircuts and facials to pedicures and massages – is outside the parameters of this report. However, in the 2000s, as more and more men all over the world have broadened their horizons to include regular visits to both unisex and men-only spas and salons, grooming product sell-through has also increased in these establishments, many of which have retail counters. Depending upon a spa’s scale of operation, the counter may be one shelf of skincare products by the cash register, or a staffed boutique with a full range of skincare, haircare, and even makeup products available. At the most modest of day spas, customers who are there to indulge themselves may be easily persuaded to purchase a moisturizer or shampoo as an add-on. He or she may rationalize, “I’m already spending $250 on this couple of hours of luxury... What’s another $35 for a product that might bring back this sense of peace at home?”

Granted, most of the products sold at unisex spas/salons are purchased by women as impulse add-ons, but this does not preclude purchases of men’s grooming items, because many women are still cast in the traditional role of principal shopper for their household. In other words, some of the volume sold through spas/salons is consumed by men who have never visited these places in their entire lives.

The world’s network of spas and salons also offers excellent promotional opportunities for men’s grooming product marketers. In 2007, for example, Estée Lauder introduced the first men’s line-extension of the Aveda brand. The company supported the U.S. rollout with 85,000 samples distributed to consumers via 6,000 salons. In Russia, marketers routinely give samples of men’s grooming products to thousands of women, some of whom will buy the products as gifts; Estée Lauder is again the example, having sent out thousands of samples of Clinique M, to Russian women.

Spas include luxury resort spas that cost consumers from a few hundred dollars to $5,000 or more for a single day (and night); medical spas that offer not only the usual beauty and massage treatments, but also medical procedures; day spas that range from the expensive and the exclusive, at hotels, country clubs, and in upscale shopping areas, to the neighborhood

day spa offering treatment packages for under $100; beauty salons that offer spa services; and even local Korean Tui Na massage parlors of the type – some legal, some not – that are springing up all over the United States. But according to the International Spa Association (ISPA), most establishments are day spas that offer a few hours of escape. ISPA says that 79% of U.S. spas were day spas in 2008.

Worldwide, spas had revenues of $60.3 billion, in 2007, per the Global Spa Economy Report 2007, which was commissioned by the Global Spa Summit, and researched and assembled by Stanford Research Institute (SRI). The Report also mentioned that the 2007 revenues were 16% higher than in 2006; if one applies a conservative 10% increase for 2008, the updated figure is $66.3 billion. If spa revenues are decreasing during recession-strapped 2009, they will have to drop by more than 15% to return to their level in 2007.

Various sources report that retail counters yield 0%-15% of a spa’s revenues. If one applies a cautious factor of just 5% to the spa industry’s 2008 global revenues, and then 10% to the resulting $3.3 billion – to roughly allow for male patronage of spas – one arrives at a low-ball estimate of $332.0 million, which is the retail value of all products (formulated for men or women) purchased at spas, but consumed by men at home. This estimate is hardly scientific, and yet may be a valuable relative measure for marketers. As for an historical growth pattern, global spa revenues advanced at double-digit rates in the 2000s, at least until the fourth quarter 2008 collapse of financial markets.

The Global Spa Summit/SRI also found that there were 71,600 spas on this planet, as of 2007.

ISPA also reports that the number of U.S. spas increased by 24% during the 12 months ended with June 2008, finishing the period at 18,100. These operations transacted sales of $10.9 billion in 2007.

Spas often position on the use of prestige or natural/organic haircare and skincare products in their treatments. The same brands may be sold at spa retail counters, but when brands originally intended for use by spa professionals are repackaged for retail, they are not recognized by spa clientele.

In the minefield that is modern life, spas provide escape for an hour or a few days as well as human contact, as a masseur works out a kink in one’s back or as ladies chat in the sauna. But men tend to demand relative privacy, according to Importance-Performance Analysis

with Benefit-Based Segmentation in a Spa Setting, a study published by Conrad N. Hilton College in 2008.

Old Customs, New Customs Shape Retail/Service Outlets

On one hand, the global men’s grooming market has been driven, in part, by the same metrosexuals, übersexuals, and retrosexuals – Packaged Facts calls the latest incarnation of the sensitive male “Mr. Balance” – who may be visiting spas/salons, of their own accord. It is clear, therefore, that a small core group of men are influencing millions of others who are curious about more advanced haircare and skincare. HBC marketers are paying attention, and some are fostering men’s use of such products via retail formats that are new to the world’s masses. These formats, in some countries, may resemble women’s beauty parlors, in that facials, manicures, pedicures, etc., are among services offered. This describes certain men’s beauty chains in the Far East, particularly in Japan and South Korea.

But even in those countries, marketers and retailers are finding that men are frequently still shy about services that might be perceived by others as feminine. As a result, some brick- and-mortar men’s grooming retail sites are now retail-and-service hybrids that indeed offer expensive packaged products, plus services that may include haircuts, shaves, facials, manicures, and massages, but all within a store ambience that is an upscale variation upon that of the traditional barber shop. The Art of Shaving’s store prototype is a good example of what Packaged Facts dubs the “modern shave emporium.” New York-based Truman`s Gentlemen`s Groomers is more identifiably a spa-oriented business, but customers are reminded of their masculinity by sports programming on television, the freedom to smoke cigars, and the chance to get a great shoeshine.

Developments in Selected Countries

The following notes are relevant to men’s grooming product sell-through in retail situations that also offer grooming services:

China

In 2009, the spa industry is jealously eyeing the Chinese scene, for this market with a population of over 1.3 billion already considers upscale skincare products to be signs of wealth and sophistication. Most spas there are day spas, at which 84% of visitors choose to get facials, at an average cost of CNY176.7 – or $26. These year-2008 data from CatchOn &

Company, Ltd. show that even a developing economy such as China’s can foster a craving for an exalted, prestige-priced personal care product or service.

In the rest of the world, spa-goers tend to choose massages. In U.S. hotels, for example, massage is the top source of spa income, per Atlanta, Georgia-based PKF Hospitality Research’s 2007 Trends in the Hotel Spa Industry.

As described elsewhere in this report, China’s aimei nanren (“love beauty men”) are young men who spend hours in beauty salons, getting skin treatments, manicures, and so on. Their object is not to be rebellious, nor to look like women, but simply to self-beautify. The beauty salons serving them may or may not be a viable channel for men’s grooming products. But the aimei nanren have high visibility, and are certainly inspiring some Chinese men to take better care of skin and hair.

Japan

In a society in which spas naturally evolved from public baths, chains of male beauty salons are well established. Founded in Japan in the 1980s, Dandy House is the leading chain, with 59 doors. Mark Tungate points out in his book Branded Male: Marketing to Men (Kogan Page 2008) that wives and girlfriends have been instrumental in getting the men of some countries to visit male beauty salons, or their equivalent. The founders of Dandy House were indeed motivated by their own observations of women criticizing their men’s appearance and hygiene.

Russia

Women’s Wear Daily (May 9, 2008) has reported that manicures have become surprisingly popular with Russian men. The Express Manicure chain of small nail salons offers manicures for 600 rubles, or about $25. Half of the customers are observed to be male. An anonymous exec interviewed by the WWD reporter commented, as he waited for his nails to dry: “Here, it's very anonymous. You sit down and it is very cheap, it's 600 rubles, and within 15 to 20 minutes, while your wife is shopping somewhere, you get your nails done. You look tidy, you look good. And men do love looking good."

South Korea

South Korea’s kkotminam (flower men) are the country’s version of the aimei nanren, with one important difference: The kkotminam are much better covered by media in other parts of

the world. They are pictured, for example, on Google Images. In this case, too, these young men are probably not numerous enough to justify sell-through of their favorite products in spas and salons – but again, it is logical to assume that they are spurring South Korean men, who already have incidences of skincare product use in the ninetieth percentile, to think a little more about their grooming regimens.

As of September 2009, several viral videos featuring kkotminam can be viewed on YouTube.com.

The United Kingdom

The Molton Brown brand, which appears on both beauty and grooming products sold in more than 70 countries, is also a retail and spa marque. The plant-based products are sold in prestige and pop-prestige channels, including at Sephora stores. The products are also sold through Molton Brown spas set up in partnership with hotels and resorts in Cyprus, the French West Indies, Germany, Ireland, Italy, Spain, and The United Kingdom. And there are Molton Brown day spas in the English towns Kent and Manchester.

London-born Molton Brown has been owned by Japan-based Kao Corporation since 2005, when Kao acquired the brand from Bridgepoint Capital, a European private equity fund, and certain of the brand’s own managers, for $300 million. Existing accounts include 250 U.S. prestige doors, for example, Neiman Marcus and Saks Fifth Avenue. As of September 2009, there are at least 50 Molton Brown stores in the United Kingdom, and at least six in the United States. And as mentioned in the Competitive Profile: Kao Corporation within Chapter 5 of this report, men’s grooming products are expected to account for 25%, or about $33 million, of Molton Brown’s projected sales of $131.3 million for 2009.

Also in London, among various men’s day spas, Wholeman stands out, because of its holistic approach to men’s health; a naturopath is available to consult on nutrition and the use of herbs. Founded by a former Selfridge’s marketing executive, Bob Ager, in November 2006, in the fashionable Mayfair district near the center of London, Wholeman’s first floor, which fronts on Bond Street, is stocked with prestige men’s grooming brands, which join the Wholeman private label on elegant shelving. The roster includes American Crew, Biotherm Homme, Hommage, Korres, Molton Brown, Moxie for Men, REN, and others. Products include bath products, deodorant, and haircare, shaving, and skincare products. The shaving department encompasses shave cream and other preparations, and also high-end manual and

electric shavers. The Wholeman spa is located on the second floor, accessed via a spiral staircase.

Another well known spa in Mayfair is The Refinery, which opened in 2000, and which has grown to a mini-chain of at least three sites in London, including management of the barber shop at Harrod’s department store. There is also a solitary The Refinery in Tokyo. The sites have retail counters that sell a namesake-branded skincare line first introduced in 2004, in conjunction with Aromatherapy. While Wholeman is definitely spa-oriented, The Refinery is another good example of the modern shave emporium.

The United States

Men’s grooming products sold through U.S. men’s spas, salons, and shave emporia range from the relatively value-priced Pinaud brand also sold through traditional barbershops, to prestige brands such as Billy Jealousy, Clinique M, Nickel, Ole Henricksen, Tend, Zirh, and others. Vertically integrated prestige brands that are also retail store or spa marques include P&G’s The Art of Shaving, Kao’s Molton Brown, and Inter Parfum’s Nickel.

North America accounted for half of Inter Parfum’s sales in 2008. Nickel grooming products are sold through a variety of U.S. and Canadian prestige outlets, including Sephora, and a few Nickel spas, like the one in New York’s West Village.

Also in New York, Truman’s Gentlemen’s Groomers is a combination spa and shave emporium that delivers old-school services such as haircuts, massages and shoeshines as well as facials and manicures in an elegant setting. The operation has a retail counter selling the Truman’s private-label line of men’s grooming products, and Anthony Logistics, The Art of Shaving, Baxter of California, Kiehl’s 1851, MD Skincare, M.O.P., Nioxin, Schwarzkopf Mess-Up, and others. As of September 2009, both the private label and eight brands named here are also sold via the Truman’s website, www.trumans-nyc.com.

But The Art of Shaving stands to be the most high-profile U.S. shave emporium in the coming years, thanks to the deep pockets of its new corporate parent; P&G bought the brand in June 2009, for $60 million. Founded in Miami in 1996, The Art of Shaving had built up an extensive, diverse product line that spans all five men’s grooming product categories (bath products, deodorant, haircare products, shaving products, and skincare products). In addition, the purchase included 36 brand-dedicated stores, of which 13 are described as “barber spas,” where a man can get a shave starting at $35. In addition, the product line is sold through

upscale department stores such as Barney’s, Neiman Marcus, and others. About 10% of sales are transacted online.

The Art of Shaving has a site within Bloomingdale’s flagship department store in New York. Perhaps breaking from the upscale atmosphere of the rest of the store, televisions tuned to sports channels and plush seating induce men to sit and wait patiently for their turn in the barber chair.

What was it about The Art of Shaving that caught P&G’s attention? The truth is that the two companies had already been working together since 2007 during the process of co-branding high-end The Art of Shaving Gillette Fusion Chrome razors that are now sold through both The Art of Shaving and Sephora chains.

Retail Focus: Mercury Group/TSUM

Company Details Descriptions Ownership Public Mercury Group TSUM 103779 Moscow Headquarters St. Petrivka 2 Russia Phone: 933-73-00 Fax: 933-73-01 www.tsum.ru Sales, 2008 RUB9.8 bill As retailer: Men’s bath products, Men’s Grooming Involvements, Per Product deodorant, haircare, makeup, shaving Category products (both preparations and manual shavers), skincare As retailer, sells The Art of Shaving and The Art of Shaving Gillette Chrome Men’s Grooming Brands Fusion, Jean Paul Gaultier Monsieur, Truefitt & Hill, Zirh, others TSUM department store on Moscow’s Men’s Grooming Sell-Through Channels Red Square; e-tail through website Number Employees Unknown

TSUM Has Sales of RUB9.8 Billion in 2008

Tsentralniy Universalniy Magazin (or Central Department Store) had sales of over RUB9.8 billion in 2008, which converted to $395.5 million in 2008 currency (but to just $323.7 million in 2009). The figure in rubles was 46% higher than in 2007, and in U.S. dollars, was 50% higher.

Net profit in 2008 amounted to RUB81.1 million, or $3.2 million in that year ($2.7 million in 2009).

On paper, TSUM is designated as a joint stock venture named TSUM Trading House. Mercury Group, which owns a slight majority of the shares in TSUM, had sales of about $1.4 billion in 2008, according to Reuters (June 18, 2009).

Given the continuing global economic recession, Mercury expects its Group-wide sales to fall 20%-25%, or back to 2007 levels, by the end of 2009.

Mercury a Luxe Goods Retailer, TSUM Its State-Owned Showpiece

Mercury Group is Russia’s largest retailer of luxury goods, and is often cited as the country’s “gateway” to the Russian marketplace for such goods. The company counts four important luxe outlets among its holdings; The Tretyakov Projezd, the Barvikha Luxury Village, and TSUM department store, all located in Moscow, plus the newly acquired (as of October 2008) Phillips de Pury & Company, an international auction house for contemporary art.

Mercury’s rise has been meteoric, having been built up from a single jewelry shop over a 16- year period, beginning in 1993. The Tretyakov Projezd exemplifies the character of the Mercury method; the mall offers Dolce & Gabana, Gucci, and Prada fashions, alongside Bentley and Ferrari automobiles.

Mercury is profiled in this report because it has maintained a brisk business in prestige men’s grooming brands, notably through the legendary TSUM department store on Moscow’s historic Petrovka Street. TSUM has a department dubbed Only for Men.

Situated next to the theatre housing the Bolshoi Ballet, the state-owned TSUM building has monumental stature in Russian history. It was built in neo-Gothic style by two Scotsmen, Andrew Muir and Archibald Mirrielees, in 1857. In 1922, it was first occupied by TSUM, as a Soviet-operated department store that became internationally famous for its half-empty shelves and drab Soviet goods.

But TSUM has always been a marvel, because of its architecture and massiveness. It is said to rival its luxe retail competitor GUM, which, located on Red Square, contained 1,200 separate stores a century ago. GUM is now operated by Bosco di Cilegi, a firm named after Chekhov’s play, The Cherry Orchard. International media occasionally report on the “war” of TSUM versus GUM.

Once it took over TSUM early in this decade, Mercury embarked on a plan to add buildings behind the legendary structure, and parking levels beneath it.

TSUM Features Department Called Only for Men

The Only for Men department at TSUM is notable for both its prestige and pop-prestige brand assortment, and for its location on the store’s planogram. Only for Men is purposely tucked away on a higher story of the building, where men who may still be shy about purchasing a moisturizer, anti-aging serum, or male-specific color cosmetic, can enjoy relative privacy while they shop.

Some of the brands carried by TSUM are:

• Acqua di Parma • John Varvatos

• The Art of Shaving • La Mer

• The Art of Shaving Gillette • Lancome Homme Chrome Fusion • Nickel • Biotherm Homme • Shiseido Men • Cellmen • Transvital for Men • Clinique M • Truefitt & Hill • Geo. F. Trumper • Zirh • Jean Paul Gaultier Monsieur

Retailer Profile: Moët Hennessy-Louis Vuitton (LVMH)/Sephora

Company Details Descriptions Ownership Public LVMH Group (Moët Hennessy-Louis Vuitton) 22 Avenue Montaigne 75008 Paris France Phone: 33 (0)1 44 13 22 22 Fax: 33 (0) 1 44 13 22 23 www.lvmh.com

LVMH, Inc. 19 East 57th Street New York, NY Phone: (212)931-2700 Fax: (212) 931-2730 Headquarters Sephora USA LLC subsidiary First Market Tower 525 Market Street, 11th floor San Francisco, CA Phone: (415)284-3400 Fax: (415)284-3434

Sephora.com LLC First Market Tower 525 Market Street, 3rd floor San Francisco, CA Phone: (415)348-3200 Fax: (415)977-2946 www.sephora.com Revenue, 2008 €17.2 billion As marketer-retailer: Men’s bath Men’s Grooming Involvements, Per Product products, deodorant, haircare, makeup, Category shaving products (both preparations and manual shavers), skincare Sephora Men, a private label; Acqua di Parma, owned by LVMH; plus e-tailer of Men’s Grooming Brands at least 26 other men’s brands, and dozens of other unisex brands that are male-suitable LVMH’s own chain of Sephora pop- Men’s Grooming Sell-Through Channels prestige stores, and Sephora.com Number Employees 77,000, as of December 2008

Revenue Climbed to €17.2 Billion in 2008

Paris-headquartered LVMH is the world’s largest marketer of luxury goods, having reported revenue of close to €17.2 billion in 2008. This was viewed as 4% higher than the almost €16.5 billion reported in 2007. However, organic growth – allowing for “comparable structure and exchange rates” – was calculated at 7%.

Profit from recurring operations was €3.6 billion in 2008, up 2%.

Despite the onset of global economic recession in the fourth quarter, and the rising unemployment rates that presaged it, LVMH achieved gains in four of its five luxury product/business segments: Wines & Spirits, with 18% of 2008 revenue as reported, was the backslider, with a 3% retreat in euros; Fashion & Leather Goods, with a 35% share of revenue, Selective Retailing, with almost 26%, Perfumes & Cosmetics, with 17%, and Watches & Jewelry, with 5%, each had revenue gains in the 5%-7% range.

…But LVMH’s Resilience Gives Way to Struggle by Mid-2009

As this report is published in September 2009, the first half-year’s results are available from LVMH. Revenue was practically stagnant, rising a mere 0.2% from just under €7.8 billion in January-June 2008, to just over that amount in January-June 2009. But according to the company itself, that slight increase transposes to a 7% loss, if one calculates organic growth, again, to read the effect primarily of unfavorable currency exchange rates. Net profit also suffered during the first half of 2009, dropping 23% to €687.0 million.

But LVMH had described its first quarter 2009 performance as “resilient.” The company managed a 0.4% increase, to €4.0 billion. This followed upon a 4% increase in revenue, to €5.2 billion, during the fourth quarter of 2008 – a quarter that contained both the crash of financial markets, and the holiday gift-giving season.

Gloomy Prospects for Luxe Goods, But Sephora’s Strong Worldwide

The Selective Retailing segment, which includes Sephora stores, had revenue growth of 5% in 2008, but was claimed to have organic growth of 9%. The segment’s 26% share of revenue translated into nearly €4.4 billion. Yet the segment’s profit from recurring operations was down 9%, to €388.0 million. Sephora was the segment’s driver (as opposed to a struggling DFS Galleria), expanding its store chains in several countries, and maintaining

same-store sales levels. Sephora’s online business achieved strong increases in China, France, and the United States.

LVMH opened 144 new stores in 2008, bringing the total to 1,053. Sephora stores accounted for 898 of the total, with 215 in the United States, and the rest in 22 other countries.

The greatest share of Selective Retailing revenue in 2008 – 38% – was transacted in the United States. Another 35% was transacted in Europe, 22% in Asia (only three points of that share were yielded by industrialized, affluent Japan), and 5% in the rest of the world (ROW).

The truest measure of LVMH’s retail expertise may be the fact that the Selective Retailing segment had first quarter 2009 revenue amounting to €1.0 billion, or 7% more – in the doldrums of the world’s recession – than in the first quarter of 2008. In terms of organic growth, however, the 7% became -1%; yet the latter decrease was still good news, because it was not precipitous.

The relatively strong performance of the company’s luxury retail segment in late 2008 and early 2009 may also demonstrate that the masses have developed a genuine appetite for pop prestige beauty and grooming products, particularly as they are marketed by Sephora.

Sephora Steering HBC Industry to Focus on Men’s Grooming

Packaged Facts has frequently acknowledged that Sephora is a trailblazer: The Body Shop may have invented the open-sell planogram (expensive beauty products out on open shelves, not guarded by intimidatingly chic clerks behind counters) in its single-brand pop-prestige stores, back in the 1970s. But it was Sephora, with hundreds of upscale brands in every store, that put the “pop” in prestige, with a product mix positioned not on age, race, ethnicity, or gender, but on universal conditions or concerns; thus women of every color or creed – and men – were choosing the same shampoo, on the basis of relieving dryness of the scalp; or they chose the same anti-aging serum, because it was claimed to reduce wrinkles; and so on.

Sephora was founded in France in 1969, was acquired by LVMH in 1996, opened its first U.S. store in New York in 1997, and set up its e-tail arm, Sephora.com, in 1999.

In the United States, the craze that the chain sparked for upscale personal care products peaked in 2004. It is in the years since that Sephora has demonstrated its resilience, yes, but most of all, its responsiveness to marketplace and societal trends. For example, the retailer began stocking ethnic-suitable products, serving certain ethnic-specific skincare, haircare,

and makeup needs – though still tending to the universal; PhytoRelaxer is positioned more on straightening extremely curly hair, than it is on straightening African Americans’ hair; and Bare Escentuals makeup is positioned more on a range of tints to match every skin pigment, than it is on tints for specific races. The approach has proven highly influential in the ethnic HBC marketplace. Similarly, Sephora recognized that the world wanted safer, purer personal care and beauty products. The chain quietly built its natural HBC assortment, then made a huge splash with the April 2009 Naturally Gorgeous campaign that emphasized 1,400 natural or organic products that bore the new Naturally Sephora green seal of approval. The 1,400 products were under 31 brands that ranged from Boscia to Yu-Be.

Then in summer 2009, the assortment of men’s grooming brands in Sephora stores seemed to explode from hardly any, to about 30. For example, a New York Sephora, located just a couple of blocks from Wall Street, began to display all of the men’s brands on a wall near the front of the store. Once again, Sephora has made a move that not only propels a selection of brands to record sales, but that will also influence the global HBC industry’s development, marketing, and merchandising of men’s grooming products.

As of September 2009, Sephora sells the following 26 male-specific brands or brand- extensions:

• Acqua di Parma • Jean Paul Gaultier Monsieur

• Anthony Logistics • John Varvatos

• The Art of Shaving • Juicy Couture

• The Art of Shaving Gillette • Korres*

Fusion Chrome • Lab Series

• Benefit Cosmetics You Rebel • Matte for Men

• Billy Jealousy • Ole Henriksen*

• Clarins Clarinsmen • Peter Thomas Roth

• Clinique M • PhytoMen*

• Cosmedicine • Sephora Men

• Dior • Shaveworks

• Dr. Brandt • Tend Skin • Givenchy Man • True Religion

• Jack Black* • Zirh

* Natural formulation, bears Sephora’s Naturally Sephora seal of approval.

In addition, Sephora sells dozens of other brands that are positioned as unisex, or as male- suitable.

Other LVMH Brands

Aside from the Sephora private label and retail marque, LVMH owns over 60 other brands, most of them in the luxury sphere. Acqua di Parma, acquired in 2001, is an Italian fragrance brand that has been extended with men’s grooming preparations. A further sampling: Dom Perignon, Krug, and Moët & Chandon champagnes; Hennessy cognac; Louis Vuitton fashions, and luggage and other leather goods; Fendi, Givenchy, Kenzo, and other brands of fashions, shoes, and/or leather goods; Benefit, Dior, Fresh, Guerlain, Sephora, and other cosmetics, personal care, and fragrance lines; Chaumet, Fred, TAG Heuer, and other brands of jewelry and watches; and La Bon Marche department stores, DFS Galleria department stores for international travelers and other “select retailing” chains.

Chapter 8 The Consumer

Highlights

• BRIC (Brazil, Russia, India, China) accounts for four out of the top five male populations in the world. The BRIC subtotal of men and boys comes to almost 1.5 billion.

• China, fifth on the retail dollar scale in 2009, has the largest number of men and boys – 688.4 million. India, though 10th in sales, is second here, with its 600.9 million men and boys. The United States, which hosts the biggest men’s grooming market at retail, is home to 151.2 million males.

• Advertising Age (August 27, 2009) has reported that American men have proven to be much more responsive to signs that the U.S. economy is improving than women have been. In April 2009, Performics, part of Publicis Groupe's VivaKi Nerve Center, surveyed 300 people in the course of preparing its 2009 Online Buyer Economic Trend Study. At that time, 53% of men and 53% of women agreed that they were worse off financially than they were in April 2008. But a few months later, a skew to male optimism developed: 53% of women continued to say they were worse off, but only 38% of men still said so.

• A survey of 400 German men, conducted in early 2008 by the Nuremberg office of U.S-headquartered Information Resources, Inc., revealed that 60% believed that male-specific brands were more effective for them to use. (Cosmetics Design- Europe.com, April 3, 2008) And the same survey found that 87% bought their own personal care products – contrary to male custom in many other countries. Young men are particularly independent; only about 6% of those under 30 allow women to buy such products on their behalf.

• In 2008, Synovate surveyed 10,000 of the world’s men and women on the subjects of appearance and personal care. (The Edge Malaysia, January 26, 2009) The respondents were from Australia, Brazil, Canada, China, France, Greece, Malaysia, Russia, South Africa, Spain, the United Kingdom, and the United States. Among the published Synovate data was the finding that face wash was the most popular

grooming item, used by 57% of respondents. Hair gel, mousse, or spray was used by 55%, whitening toothpaste by 54%, deodorant by 52%, and mouthwash by 43%.

• American society has changed: According to MRI data published on the AC Nielsen website in July 2009, almost 21% of men were the primary shoppers for their households in 1991. But in 2009, that percentage has risen 10 points, to over 31%.

About Men and Their Grooming Habits

China’s Men Are Largest of World’s Top 10 Grooming Markets

In Chapters 2 and 3, Packaged Facts ranks the world’s top 10 national men’s grooming markets, and details the market conditions in each. Table 8-1 re-ranks these leaders according to male population.

The remaining BRIC countries, Brazil and Russia (fifth and ninth in retail dollars, respectively), round out the top five in male population, with 98.3 million and 64.5 million.

Thus BRIC (Brazil, Russia, India, China) accounts for four out of the top five male populations in the world. The BRIC subtotal of men and boys comes to almost 1.5 billion.

Table 8-1 Numbers of All Males (Men and Boys) in Top 11 National Markets for Men's Grooming Products, as of July 2009 Rank in Market/ Rank in No. Entire Retail Sales Country No. of Males Males Population 5 China* 1 688,376,749 1,338,612,968 10 India 2 600,886,425 1,166,079,217 1 The United States 3 151,205,402 307,212,123 5 Brazil* 4 98,271,218 198,739,269 9 Russia 5 64,529,760 140,041,247 2 Japan 6 61,956,584 127,078,679 4 Germany 7 40,480,932 82,329,758 3 France 8 31,496,101 64,057,792 6 The United Kingdom 9 30,267,602 61,113,205 7 Italy 10 28,490,614 58,126,212 8 Spain 11 19,798,323 40,525,002 Subtotal 1,815,759,710 3,583,915,472 ROW 1,597,230,778 3,123,077,680 Total World 3,412,990,488 6,706,993,152 * Brazil and China share the fifth rank in retail sales. Source: The CIA World Factbook; Packaged Facts

Men of Spain, South Africa, Brazil Tend to Be Vainest

In 2008, Synovate surveyed 10,000 of the world’s men and women on the subjects of appearance and personal care. (The Edge Malaysia, January 26, 2009) The respondents were from Australia, Brazil, Canada, China, France, Greece, Malaysia, Russia, South Africa, Spain, the United Kingdom, and the United States.

In the part of the survey titled Men: Beauty or Brawn, or Both?, male respondents were asked if their looks mattered very much to them. Most occupied with their looks were South African men, for 61% answered yes. The share of Brazilian men answering in the affirmative was 55%, and of Russian men, 53%. Malaysian men ranked fourth, at 43%.

The three nationalities who had the lowest incidences of such vanity were Australians, with only 12% concerned about their looks, followed by U.S. men, with 15% thus concerned, and Canadian men, with 16%.

Men More Optimistic Than Women About U.S. Economy

Advertising Age (August 27, 2009) has reported that American men have proven to be much more responsive to signs that the U.S. economy is improving, than women have been. In April 2009, Performics, part of Publicis Groupe's VivaKi Nerve Center, surveyed 300 people in the course of preparing its 2009 Online Buyer Economic Trend Study. At that time, 53% of men and 53% of women agreed that they were worse off financially than they were in April 2008. But a few months later, a skew to male optimism developed: 53% of women continued to say they were worse off, but only 38% of men still said so.

One explanation proposed in the Ad Age article is that women account for 80% of household spending – complementing the Performics finding that 73% of women vouch that the recession has fundamentally changed the way they think about saving, as opposed to 57% of men. A second explanation, by Marti Barletta, CEO, TrendSight Group, and the author of Marketing to Women, is that women, as a group, simply tend to be more pessimistic. As she told the trade paper, “If we can't get women to feel more hopeful and confident about the future, it's going to have significant implications [for the U.S. economy]."

U.S. Men Likelier Than Women to Buy Brands, Instead of Private Label

The 2009 edition of the National Marketing Institute’s (NMI’s) annual publication Healthy Aging/Boomer Database, released in July 2009, was based on interviews with more than 3,100 U.S. adults, conducted in January of the same year. Perhaps the single most important finding was that men are more inclined than women to buy branded products, as opposed to private-label ones: Roughly 50% of men said they most often buy brands, while only about 25% of women could say that.

Presumably, this is because women are more often responsible for shopping for their households; the NMI also finds that two thirds of women are principal shoppers for their households in 2009, and the other third are men. In 2000, the ratio was 80%:20% – thus men are doing more of the shopping, but women still do the lion’s share of it. The spending power of American men is $1.0 trillion, according to NMI, but women are entrusted with the tiresome task of stretching their households’ grocery and personal care dollars.

German Men Say They Buy Their Own HBC

A survey of 400 German men, conducted in early 2008 by the Nuremberg office of U.S- headquartered Information Resources, Inc., revealed that 60% believed that male-specific brands were more effective for them to use. (Cosmetics Design-Europe.com, April 3, 2008) And the same survey found that 87% bought their own personal care products – contrary to male custom in many other countries. Young men are particularly independent; only about 6% of those under 30 allow women to buy such products on their behalf.

The 87% of German men who buy their own personal care items contrasts with the 65% of Malaysian men who buy their own, according to the Synovate survey; another 16% of Malaysian men use HBC purchased by wives/girlfriends, and 11% are supplied by their moms and sisters.

BRIC Men Are the Most Aware of New Personal Care Products

In 2008, Datamonitor surveyed men about their awareness of new personal care products; the men lived in 15 countries: Australia, Brazil, China, France, Germany, India, Italy, Japan, Korea, The Netherlands, Russia, Spain, Sweden, United Kingdom, and The United States. The results were reported by KamCity.com, on March 11, 2009. Overall, just 9% of men said that they “actively monitor new products,” and 55% said they do not. In the middle were the 36% of men who said they “keep an eye out for new products.”

Of all the men interviewed, residents of BRIC countries (Brazil, Russia, India, and China), had the highest incidences of those actively tracking intros of new personal care products. Almost 21% of Brazilian men were active trackers, as were 12% of the Russians, 31% of Indians, and 13% of Chinese. The only other country with double-digit incidence was Germany, with over 10% of its men actively tracking.

In every one of the 15 countries, double-digit shares of the men said that they “keep an eye out for new products.”

Typical Grooming Regimens

According to AskMen.com’s The Great Male Survey 2008, 41% of respondents said that their overall regimen constituted “basic daily hygiene, a regular haircut, and additional skincare.” Almost as many, 37%, said that their overall regimen was “basic daily hygiene and a regular

haircut.” Another 16% cited just “basic daily hygiene.” But 5% were real primpers, listing “basic daily hygiene, a regular haircut, additional skincare, and manicure and pedicure.”

A mere 1% cited other regimens.

Face Wash, Hairdressings World’s Most Popular Grooming Products

Among the published Synovate data was the finding that face wash was the most popular grooming item, used by 57% of respondents. Hair gel, mousse, or spray was used by 55%, whitening toothpaste by 54%, deodorant by 52%, and mouthwash by 43%.

Deodorant Use: Men of Spain, South Africa, Brazil Have Highest Incidences

The same Synovate survey determined that Spain’s men displayed the highest incidence of deodorant use, 96%. The Spaniards edged out South Africans, 95% of whom use deodorant, and who in turn edged out Brazilians , who have a 94% incidence of use.

This contrasted with the “more than half” of Malaysian men who use deodorant.

Goatees – Really?! – Are U.S. Men’s Favorite Facial Hair Style

According to Wahl Clipper Corporation (PR Newswire, August 9, 2009), 64.0 million American men let their facial hair grow for at least part of the year. The goatee is most popular, with 25.0 million wearers. Moustaches and beards are worn by 17.0 million and 13.0 million, respectively.

U.S. Men Take on More of Household Shopping

American society has changed: According to MRI data published on the AC Nielsen website in July 2009, almost 21% of men were the primary shoppers for their households in 1991. But in 2009, that percentage has risen 10 points, to over 31%.

The same article quoted an ESPN study that interpreted Nielsen data on men’s shopping habits during 2006-2008. The study found that in 2008, men shopping for themselves accounted for 86% of retail dollars spent on men’s haircolor, 84% of spending on depilatories, 83% of spending on gin, and 81% of spending on scotch whisky. Men also accounted for 80% of the expenditure for “pre-shave cosmetics.”

The U.S. Men’s Grooming Product Consumer

About Simmons Data

In this section on U.S. consumers of men’s grooming products, the consumer data analyzed by Packaged Facts has been gathered by Experian Simmons, located in New York City. Each quarter, the firm surveys thousands of American men and women concerning their own or their households’ purchasing habits. The respondents represent a statistically accurate cross- section of the population; the spring 2009 survey data cited here were projected from the answers given by 25,318 persons age 18 and older – 11,153 were men – who spoke on behalf of the nation’s roughly 221.8 million adults, who live in about 112.0 million households. Of the national total of adults, almost 107.4 million are men, who are of course emphasized here. The remaining 114.4 million adults are women.

For the purposes of this report, Experian Simmons data on the purchase or use of men’s grooming products are presented in terms that characterize the habits or lifestyles of individual adult male survey respondents, not especially those of the households in which respondents live.

…And How to Use Them

Packaged Facts here presents Experian Simmons data pertinent to men’s use and/or purchase of men’s grooming products. Sets of data are laid out in master tables that detail numerous factors: To portray “demographic characteristics favoring purchase or use,” Simmons determines relative importance of factors such as gender, age, education, and so on, by use of an index system: If 20% of the overall sample of male adults reports use of Product X, the baseline index of 100 is set to that 20% rate. If, for example, 30% of those age 18-24 say they use that same product, then this demographic segment is assigned an index of 150 – meaning that men 18-24 are 50% more incident among such users than at the national average rate.

The index thus describes proportionate tendencies, likelihoods, skews, biases, but not the absolute numbers. That is to say, Asian-American adults may have a higher index of use of Product X than Whites have, though in absolute terms, there is probably a far larger pool of White adults using Product X.

Packaged Facts recognizes the general rule that an index of 110 or higher denotes significantly above-average incidence of use. (Conversely, an index of 90 or below denotes significantly below-average incidence, or “resistance.”) However, the rule is not followed rigidly here; a common-sense analysis of the data must allow for a little flexibility and intuition, for the sake of greater accuracy and completeness. Thus in tables, indices of 106- 109 are usually rendered as significant, too, via the same grey shading that marks higher indices. For marketers seeking to enter new regions or product categories, these three or four index points are not a trivial matter – profitability could depend on them.

A word of caution: It would seem logical to assemble groups of factors with high indices into what appear to be “profiles” of the consumers or consumer-households most receptive to the specified products. But one should approach each factor – each tendency – as being entirely independent of any other, at least initially. Sometimes one can indeed arrive at a consistent, coherent profile of product purchase or purchaser, but sometimes the demographic picture is more fragmented. Again, the truest pictures of purchase or use are derived from a mix of common sense, intuition, and thoughtful reasoning.

In the demographic profiles tables presented in this chapter, Packaged Facts uses grey shading to spotlight notable factors.

The Survey’s Overall Gauge

Table 8-2 presents Experian Simmons’ projections of numbers of U.S. adult males by age of respondent, race, household income bracket, etc. The firm used these projections as yardsticks for analysis of the data gathered during its spring 2009 survey.

Marketing Regions Defined

Some data in this chapter pertain to U.S. marketing regions, which are broken out as follows. Please note that Alaska and Hawaii are excluded from Experian Simmons’ surveys.

Northeast

Connecticut, Delaware, District of Columbia, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Pennsylvania (except counties included within the East Central region), Rhode Island, Vermont, and northern Virginia counties (Arlington, Fairfax, Loudoun, and Prince William).

East Central

Indiana (excluding Lake and Porter counties), Kentucky, Michigan, Ohio, selected Pennsylvania counties (Allegheny, Armstrong, Beaver, Butler, Clarion, Crawford, Erie, Fayette, Forest, Greene, Indiana, Jefferson, Lawrence, Mercer, Venango, Warrren, Washington, and Westmoreland), and West Virginia.

West Central

Colorado, Illinois, selected Indiana counties (Lake and Porter), Iowa, Kansas, Minnesota, Missouri, Montana, Nebraska, North Dakota, South Dakota, Wisconsin, and Wyoming.

Southeast

Alabama, Florida, Georgia, Mississippi, North Carolina, South Carolina, Tennessee, and Virginia (except counties included within the Northeast).

Southwest

Arkansas, Louisiana, New Mexico, Oklahoma, and Texas.

Pacific

Arizona, California, Idaho, Nevada, Oregon, Utah, and Washington.

Table 8-2 Projections of Numbers of U.S. Adult Males,* by Demographic Factor, 2009 (In Thousands)

Factor No. of Men % All U.S. Men Total/Base 107,380 100% Gender Male 107,380 100% Female 0 0 Age 18-24 12,261 11% 25-34 17,828 17 35-44 20,188 19 45-54 22,412 21 55-64 17,402 16 65-74 10,122 9 75+ 7,166 7 Generations Gen. Y, 18-29 20,172 19% Gen. X, 30-44 30,105 28 Baby Boomers, 45-64 39,814 37 Seniors, 65+ 17,289 16 Race/Hispanic Origin White 75,352 70% African American 10,244 10 Asian 4,379 4 Other Race 1,637 2 Hispanic 15,606 15 Education Grade School 5,086 5% Did Not Graduate HS 34,789 32 HS Grad 41,727 39 Some College Experience 28,327 26 College Grad 15,634 15 Grad School Experience 13,552 13 Employment Status Part Time 8,935 8% Full Time 66,052 62 Self-Employed 9,681 9 Retired 16,533 15 Student 2,085 2 Homemaker 485 1 Continued on next page

Table 8-2 [cont.]

Factor No. of Men % All U.S. Men Occupation Management/Financial 12,351 12% Professional/Technical 12,430 12 Sales 7,643 7 Office/Admin. Support 4,595 4 Labor 36,938 34 Marital Status Single (Never Married) 28,117 26% Married 63,900 60 Divorced/Separated 12,098 11 Widowed 3,264 3 Marketing Region Northeast 19,536 18% East Central 13,169 12 West Central 16,252 15 Southeast 20,983 20 Southwest 13,898 13 Pacific 21,545 20 Household Income (000) Under $25 15,321 14% $25-$50 23,608 22 $50-$75 21,320 20 $75-$100 16,408 15 $100-$150 16,132 15 $150+ 14,591 14 Household Size (No. of Persons) One 12,053 11% Two 39,103 36 Three or Four 37,431 35 Five or More 18,793 18 Children in Household (Age) No Child Present 68,721 64% Any Children Present 38,659 36 Under 2 6,849 6 Two-5 12,923 12 Six-9 12,279 11 Ten-11 6,813 6 Twelve-17 15,787 15 Continued on next page

Table 8-2 [cont.]

Factor No. of Men % All U.S. Men Residence House 85,755 80% Rented House 11,362 11 Condo/Co-op 3,822 4 Rented Apartment 12,603 12 * Persons age 18 and older. Source: Experian Simmons' Study of Media & Markets, Summer 2009; This material used with permission.

Hispanics May Be of Any Race

In population projections from Experian Simmons, other research firms, the U.S. Census Bureau, or other government agencies, Hispanics may be counted separately as an ethnicity, not as a race; or they may be counted as blended in with various races, because Hispanics may be of any race.

In this chapter, for the sake of clarity, Packaged Facts presents Experian Simmons data in which Hispanics are counted separately. However, Table 8-3 is structured to show adult population components by principal racial groups, by Hispanic origin, and by Hispanics’ overlap with other races, based on Census Bureau data. For example, there were 20.4 million male Whites of Hispanic origin in 2008. This group accounted for almost 92% of Hispanic men. Another 1.2 million men were of Black Hispanic heritage; this sector accounted for about another 5%.

Table 8-3 Projection of U.S. Population, by Race and Gender, 2008-2020 (In Thousands) 2008-2014 2008-2014 Race/Ethnicity/Gender 2008 2014 2020 CAGR Total Growth White 241,833,786 251,276,477 0.6% 3.9% 260,628,943 Males 122,316,275 126,954,452 0.6 3.8 131,641,410 Females 119,517,511 124,322,025 0.7 4.0 128,987,533 White (Non-Hispanic) 200,070,576 203,152,407 0.2% 1.5% 205,936,229 Males 101,877,154 103,330,714 0.2 1.4 104,731,547 Females 98,193,422 99,821,693 0.3 1.7 101,204,682 Hispanic Origin* 45,416,032 52,451,520 2.4% 15.5% 59,755,555 Males 22,275,159 25,796,647 2.5 15.8 29,449,513 Females 23,140,873 26,654,873 2.4 15.2 30,306,042 African-American 39,479,212 42,433,173 1.2% 7.5% 45,365,095 Males 20,634,420 22,118,513 1.2 7.2 23,594,438 Females 18,844,792 20,314,660 1.3 7.8 21,770,657 Asian** 13,506,440 15,724,872 2.6% 16.4% 17,988,162 Males 7,080,203 8,304,619 2.7 17.3 9,550,864 Females 6,426,237 7,420,253 2.4 15.5 8,437,298 All Other Races*** 8,778,208 10,223,076 2.6% 16.5% 11,822,346 Males 4,416,030 5,136,688 2.5 16.3 5,924,528 Females 4,362,178 5,096,388 2.6 16.8 5,897,818 Ethnic Subtotal**** 103,527,070 116,505,191 2.0% 12.5% 129,868,317 Males 52,569,774 59,183,558 2.0% 12.6% 65,979,693 Females 50,957,296 57,331,633 2.0% 12.5% 63,888,624 Overall Population 303,597,646 319,667,598 0.9% 5.3% 335,804,546 Males 154,446,928 162,514,272 0.8% 5.2% 170,711,240 Females 149,150,718 157,153,326 0.9% 5.4% 165,093,306 * Persons of Hispanic heritage may be of any race. Almost 2.4 million, or 5.2%, are of Black heritage. Among Hispanic men, about 1.2 million, or 5.4%, are of Black heritage. ** Includes Pacific Islanders. *** Includes Native Americans, Hawaiians, persons of mixed races, others. **** Includes Hispanics, African Americans, Asians, Other Races, and White Hispanics. Source: U.S. Department of Commerce, Bureau of the Census; Packaged Facts

The U.S. Male Consumer of Bath Products

Over 67.0 Million Men Use Body Wash

According to Experian Simmons, about 67.0 million U.S. men age 18 or older use body wash. [Table 8-4] This sector equals 62% of all U.S. men

Youth, Affluence Are Skews in Body Wash Use

Experian Simmons’ set of data on men’s use of body wash shows signs that relative youthfulness, and affluence, both favor such use. [Table 8-4] Regarding age, the incidence of body wash decreases with each successively older bracket; but those men age 18-44 are incident among the base of consumers at significantly above-average rates. Logically then, full-time students also stand out.

Incidence of body wash use increases along with household income – though only men living in households earning $100,000-$150,000 occur here to a significantly above-average degree.

Table 8-4 Demographic Characteristics Most Favoring Use of Body Wash by Men, 2009 (Male Adults* in Thousands)

N.B.: Grey shading indicates that factor has significantly above-average incidence. No. Men Body Wash Factor Index Using % All U.S. Men Total/Base 67,006 62% 100 Gender Male 67,006 62% 100 Female 0 0 0 Age 18-24 8,778*** 8% 115 25-34 12,490 12 112 35-44 13,397 12 106 45-54 14,075 13 101 55-64 9,740 9 90 65-74 5,573 5 88 75+ 2,954 3 66 Generations Gen. Y, 18-29 14,144 13% 112 Gen. X, 30-44 20,520 19 109 Baby Boomers, 45-64 23,814 22 96 Seniors, 65+ 8,527 8 79 Race/Hispanic Origin White 45,051 42% 96 African American 7,640 7 120 Asian 3,246 3 119 Other Race 965 1 94 Hispanic 9,942 9 102 Education Grade School 3,030 3.0% 95 Did Not Graduate HS 22,033 21 101 HS Grad 26,617 25 102 Some College Experience 18,120 17 103 College Grad 9,584 9 98 Grad School Experience 7,492 7 89 Employment Status Part Time 5,115 5% 92 Full Time 43,011 40 104 Self-Employed 5,639 5 93 Retired 8,412 8.0 82 Student 1,441 1 111 Homemaker 324 ** 107 Continued on next page

Table 8-4 [cont.]

N.B.: Grey shading indicates that factor has significantly above-average incidence. No. Men Body Wash Factor Index Using % All U.S. Men Occupation Management/Financial 7,647 7% 99 Professional/Technical 8,062 8.0 104 Sales 4,958 5 104 Office/Admin. Support 2,821 3 98 Labor 24,096 22 105 Marital Status Single (Never Married) 16,749 16% 95 Married 42,205 39 106 Divorced/Separated 6,933 6 92 Widowed 1,119 1 55 Marketing Region Northeast 12,030 11% 99 East Central 9,082 8 111 West Central 10,078 9 99 Southeast 12,879 12 98 Southwest 9,180 9 106 Pacific 12,611 12 94 Household Income (000) Under $25 8,935 8% 93 $25-$50 13,253 12 90 $50-$75 13,648 13 103 $75-$100 10,782 10 105 $100-$150 10,896 10 108 $150+ 9,491 8 104 Household Size (No. of Persons) One 3,575 3% 48 Two 23,868 22 98 Three or Four 25,867 24 111 Five or More 13,695 13 117 Children in Household (Age) No Child Present 39,236 37% 91 Any Children Present 27,770 26 115 Under 2 4,878 5 114 Two-5 9,613 9 119 Six-9 8,931 8 117 Ten-11 5,048 5 119 Twelve-17 11,587 11 118 Continued on next page

Table 8-4 [cont.]

N.B.: Grey shading indicates that factor has significantly above-average incidence. No. Men Body Wash Factor Index Using % All U.S. Men Residence House 54,065 50% 101 Rented House 8,229 8 116 Condo/Co-op 1,946 2 82 Rented Apartment 7,520 7 96 * Persons age 18 and older. ** Less than 0.5%; sample size may be too small to be reliable. *** Read as follows: Almost 8.8 million men age 18-24 use body wash; this sector equals 8% of all U.S. men. The same sector's index of body wash use is 115; that is, men age 18-24 are incident among users at 15% above the national average rate, always set to 100. Source: Experian Simmons' Study of Media & Markets, Summer 2009; This material used with permission.

Dove, Bath & Body Works Body Washes Most Popular with Men

Unilever claims that Axe is the world’s best-selling male-specific toiletry, but in the United States, the same company’s Dove non-male-specific body wash is used by 13.4 million men. [Table 8-5] This use pre-dates the anticipated U.S. rollout of a Dove line for men, possibly in 2010. Second-preferred is Bath & Body Works’ namesake private label, with 11.9 million users. Suave is third, with 7.9 million men using the brand.

Table 8-5 Men's Use of Body Wash, by Brand, 2009 (Male Adults* in Thousands)

Brand No. Men Using % All U.S. Men Aveeno 3,561 3% Axe 4,654 4 Bath & Body Works 11,850 11 The Body Shop 1,096 1 Calgon 1,112 1 Caress 5,334 5 Clairol Herbal Essences 1,483 1 Dial 6,603 6 Dove 13,435 13 Irish Spring 3,929 4 Ivory 2,234 2 Jergens 1,590 1 Lever 2000 2,342 2 Neutrogena 2,705 3 Olay 6,734 6 Old Spice 4,904 5 Shower to Shower 1,480 1 SoftSoap 4,266 4 St. Ives 2,183 2 Suave 7,852 7 Tone 1,246 1 Yardley 736 1 Zest 3,595 3 Private Label 4,938 5 Other 11,735 11 Total/Base** 67,006 62% * Persons age 18 and older. ** Column adds to more than total, due to respondents' use of multiple brands. Source: Experian Simmons' Study of Media & Markets, Summer 2009; This material used with permission.

The U.S. Male Consumer of Deodorant

More Than 97.1 Million Men Use Deodorant

The U.S. adult male base of deodorant consumers exceeds 97.1 million, according to Experian Simmons. [Table 8-6] This base is 90% of all U.S. men.

Only Office Workers Stand Out in Deodorant Use

Use of deodorant by men is so widespread, occurring among such a diverse cross-section of Americans, that there is only one standout characteristic in the demographic data set: Men who work in administrative support jobs – as office help – have significantly greater-than- average incidence among deodorant users. [Table 8-6]

Table 8-6 Demographic Characteristics Most Favoring Use of Deodorant by Men, 2009 (Male Adults* in Thousands)

N.B.: Grey shading indicates that factor has significantly above-average incidence. No. Men Deodorant Factor Index Using % All U.S. Total/Base 97,130 90% 100 Gender Male 97,130 90% 100 Female 0 0 0 Age 18-24 11,106 10% 100 25-34 16,931** 16 105 35-44 18,501 17 101 45-54 20,372 19 100 55-64 15,495 14 98 65-74 8,894 8 97 75+ 5,830 5 90 Generations Gen. Y, 18-29 18,585 17% 102 Gen. X, 30-44 27,954 26 103 Baby Boomers, 45-64 35,867 33 100 Seniors, 65+ 14,724 14 94 Race/Hispanic Origin White 69,663 65% 102 African American 9,205 9 99 Asian 2,550 2 64 Other Race 1,412 1 95 Hispanic 14,143 13 100 Education Grade School 4,260 4.0% 93 Did Not Graduate HS 31,832 30 101 HS Grad 38,181 36 101 Some College Experience 26,152 24 102 College Grad 14,291 13 101 Grad School Experience 11,784 11 96 Employment Status Part Time 7,932 7% 98 Full Time 60,868 57 102 Self-Employed 8,886 8 101 Retired 14,037 13 94 Student 1,881 2 100 Homemaker 450 ** 103 Continued on next page

Table 8-6 [cont.]

N.B.: Grey shading indicates that factor has significantly above-average incidence. No. Men Deodorant Factor Index Using % All U.S. Occupation Management/Financial 11,558 11% 103 Professional/Technical 11,291 11 100 Sales 6,899 6 100 Office/Admin. Support 4,414 4 106 Labor 33,680 31 101 Marital Status Single (Never Married) 25,599 24% 101 Married 57,805 54 100 Divorced/Separated 10,983 10 100 Widowed 2,744 3 93 Marketing Region Northeast 17,410 16% 99 East Central 12,141 11 102 West Central 15,010 14 102 Southeast 19,220 18 101 Southwest 12,857 12 102 Pacific 18,810 18 97 Household Income (000) Under $25 13,357 12% 96 $25-$50 21,237 20 99 $50-$75 19,701 18 102 $75-$100 15,082 14 102 $100-$150 14,843 14 102 $150+ 12,910 12 98 Household Size (No. of Persons) One 10,935 10% 100 Two 35,039 33 99 Three or Four 34,565 32 102 Five or More 16,591 15 98 Children in Household (Age) No Child Present 61,666 57% 99 Any Children Present 35,465 33 101 Under 2 6,312 6 102 Two-5 12,065 11 103 Six-9 11,514 11 104 Ten-11 6,206 6 101 Twelve-17 14,413 13 101 Continued on next page

Table 8-6 [cont.]

N.B.: Grey shading indicates that factor has significantly above-average incidence. No. Men Deodorant Factor Index Using % All U.S. Residence House 78,149 73% 101 Rented House 10,091 9 98 Condo/Co-op 3,304 3 96 Rented Apartment 11,026 10 97 * Persons age 18 and older. ** Read as follows: Over 16.9 million men age 25-34 use deodorant; this sector equals 16% of all U.S. men. The same sector's index of deodorant use is 105; that is, men age 25-34 are incident among users at 5% above the national average rate, always set to 100. Source: Experian Simmons' Study of Media & Markets, Summer 2009; This material used with permission.

Old Spice, Speed Stick, Right Guard, Degree Deodorants Most Used by Men

The Experian Simmons data further reveal that Old Spice is the deodorant brand most widely used by men – by almost 23.2 million, to be exact. [Table 8-7] Speed Stick places second, with a user-base of nearly 17.6 million. Right Guard and Degree follow, with 15.0 million and 14.8 million.

Table 8-7 Men's Use of Deodorant, by Brand, 2009 (In Thousands of Adults*; Recent 12 months)

Brand No. Men Using % All U.S. Men Adidas 3,249 3% Arm & Hammer UltraMax 2,568 2 Arrid XX 3,242 3 Axe 7,406 7 Ban 2,521 2 Brut 3,837 4 Degree 14,820 14 Dove 2,527 2 Dry Idea 597 1 Gillette Series 6,186 6 Mitchum 2,954 3 Old Spice 23,171 22 Right Guard 14,952 14 Secret 3,256 3 Speed Stick 17,586 16 Suave 2,266 2 Sure 2,249 2 Tag 1,227 1 Other 9,186 9 Total/Base** 97,130 90% * Persons age 18 and older. ** Column adds to more than total, due to respondents' use of multiple brands. Source: Experian Simmons' Study of Media & Markets, Summer 2009; This material used with permission.

The U.S. Male Consumer of Haircare Products

About 97.4 Million Men Use Shampoo; 31.0 Million Use Conditioner

Fully 97.4 million men age 18 or older use shampoo, according to Experian Simmons data. [Table 8-8] And just under 31.0 million use hair conditioner. These bases account for 91% and 29% of all American men, respectively.

Asian Race Only Pronounced Factor in Men’s Shampoo Use

Shampoo is used by such a broad cross-section of U.S. males that no demographic characteristic has notably above-average incidence – except one: Men of Asian race are found among shampoo users at a rate that is just barely significant. [Table 8-8]

Youth, Low Income Characterize Men Who Use Conditioner

The data set on men’s consumption of hair conditioner is skewed to relative youth, with 18- 34-year-olds featured, as well as full-time students. [Table 8-8] Dovetailing with this youngish cast are signs of less affluence, for example, the twin concentrations of those men living in households earning under $25,000, and of those who do not yet own their homes.

Residence in the southwestern or Pacific states also encourages male use of conditioner.

Table 8-8 Demographic Characteristics Most Favoring Use of Shampoo and Conditioner by Men, 2009 (Male Adults* in Thousands)

N.B.: Grey shading indicates that factor has significantly above-average incidence. Shampoo Conditioner Factor No. Men % All No. Men % All Index Index Using U.S. Men Using U.S. Men Total/Base 97,407 91% 100 30,997 29% 100 Gender Male 97,407 91% 100 30,997 29% 100 Female 0 0 0 0 0 0 Age 18-24 11,177 10% 100 3,931 4% 111 25-34 16,476*** 15 102 5,896 5 115 35-44 18,456 17 101 5,980 6 103 45-54 20,638 19 102 6,660 6 103 55-64 15,711 15 100 5,117 5 102 65-74 9,042 8 98 2,171 2 74 75+ 5,908 6 91 1,243 1 60 Generations Gen. Y, 18-29 18,444 17% 101 6,675 6% 115 Gen. X, 30-44 27,665 26 101 9,131 9 105 Baby Boomers, 45-64 36,348 34 101 11,777 11 102 Seniors, 65+ 14,950 14 95 3,414 3 68 Race/Hispanic Origin White 69,885 65% 102 19,048 18% 88 African American 7,697 7 83 3,659 3 124 Asian 4,205 4 106 1,906 2 151 Other Race 1,414 1 95 488 ** 103 Hispanic 14,073 13 99 5,837 5 130 Education Grade School 4,246 4% 92 1,409 1% 96 Did Not Graduate HS 31,261 29 99 9,618 9 96 HS Grad 37,541 35 99 11,526 11 96 Some College Experience 26,039 24 101 8,851 8 108 College Grad 14,626 14 103 4,346 4 96 Grad School Experience 12,331 11 100 3,498 3 89 Employment Status Part Time 7,983 7% 98 2,601 2% 101 Full Time 60,878 57 102 19,036 18 100 Self-Employed 8,896 8 101 2,754 3 99 Continued on next page

Table 8-8 [cont.]

N.B.: Grey shading indicates that factor has significantly above-average incidence. Shampoo Conditioner Factor No. Men % All No. Men % All Index Index Using U.S. Men Using U.S. Men Retired 14,382 13 96 3,669 3 77 Student 1,879 2 99 636 1 106 Homemaker 439 ** 100 ** ** ** Occupation Management/Financial 11,678 11% 104 3,572 3% 100 Professional/Technical 11,677 11 104 3,721 3 104 Sales 7,273 7 105 2,228 2 101 Office/Admin. Support 4,263 4 102 1,344 1 101 Labor 33,078 8 82 10,536 10 99 Marital Status Single (Never Married) 25,567 24% 100 9,302 9% 115 Married 58,598 55 101 16,389 15 89 Divorced/Separated 10,552 10 96 4,552 4 130 Widowed 2,691 3 91 753 1 80 Marketing Region Northeast 17,659 16% 100 5,343 5% 95 East Central 12,146 11 102 3,614 3 95 West Central 15,055 14 102 3,948 4 84 Southeast 18,890 18 99 5,764 5 95 Southwest 12,742 12 101 4,373 4 109 Pacific 19,187 18 98 7,176 7 115 Household Income (000) Under $25 13,096 12% 94 5,396 5% 122 $25-$50 21,129 20 99 6,860 6 101 $50-$75 19,508 18 101 5,881 5 96 $75-$100 15,249 14 102 4,162 4 88 $100-$150 14,946 14 102 4,328 4 93 $150+ 13,480 13 102 4,371 4 104 Household Size (No. of Persons) One 10,508 10% 96 3,719 3% 107 Two 35,706 33 101 10,255 10 91 Three or Four 34,342 32 101 10,591 10 98 Five or More 16,851 16 99 6,431 6 119 Children in Household (Age) No Child Present 62,191 58% 100 19,159 18% 97 Any Children Present 35,217 33 100 11,838 11 106 Under 2 6,198 6 100 2,308 2 117 Continued on next page

Table 8-8 [cont.]

N.B.: Grey shading indicates that factor has significantly above-average incidence. Shampoo Conditioner Factor No. Men % All No. Men % All Index Index Using U.S. Men Using U.S. Men Two-5 11,666 11 100 3,728 3 100 Six-9 11,446 11 103 3,607 3 102 Ten-11 6,286 6 102 2,200 2 112 Twelve-17 14,514 14 101 4,942 5 108 Residence House 78,432 73% 101 23,204 22% 94 Rented House 10,101 9 98 4,002 4 122 Condo/Co-op 3,481 3 100 1,229 1 111 Rented Apartment 10,853 10 95 4,598 4 126 * Persons age 18 and older. ** Less than 0.5%; sample size may be too small to be reliable. *** Read as follows: Almost 16.5 million men age 25-34 use shampoo; this sector equals 15% of all U.S. men. The same sector's index of shampoo use is 102; that is, men age 25-34are incident among users at 2% above the national average rate, always set to 100. Source: Experian Simmons' Study of Media & Markets, Summer 2009; This material used with permission.

Men’s Preferred Shampoo Brands Are Head & Shoulders, Suave

U.S. adult men’s favorite shampoo brand is Head & Shoulders – the anti-dandruff brand that is claimed to work with regular use – has a following of almost 17.9 million. [Table 8-9] Suave is the second favorite, used by 16.5 million. A wide gap separates these brands from the third most popular, Pantene Pro-V, which has 8.5 million male users.

Table 8-9 Men's Use of Shampoo, by Brand, 2009 (In Thousands of Adults*; Recent 7 Days)

Brand No. Men Using % All U.S. Men Alberto VO5 2,759 3% Aussie 1,722 2 Aveda 513 1 Avon 956 1 Bath & Body Works 758 1 Clairol Herbal Essences 2,223 2 Denorex 976 1 Dove 4,142 4 Finesse 1,357 1 Garnier Fructis 3,288 3 Head & Shoulders 17,851 17 Infusium 23 619 1 Johnson's Baby Shampoo 1,617 2 L'Oreal 1,407 1 Matrix and Matrix Biolage 1,046 1 Neutrogena 3,158 3 Nexxus 1,083 1 Pantene Pro-V 8,526 8 Paul Mitchell 1,150 1 Pert Plus 6,760 6 Redken 554 1 Selsun Blue 2,279 2 Suave 16,514 15 Sunsilk 707 1 Thermasilk 757 1 Tresemme 3,814 4 White Rain 2,575 2 Other Brands 17,694 16 Private Label 7,904 7 Total/Base** 97,407 91% * Persons age 18 and older. ** Column adds to more than total, due to respondents' use of multiple brands. Source: Experian Simmons' Study of Media & Markets, Summer 2009; This material used with permission.

Men’s Conditioner Faves: Suave, Pantene, Head & Shoulders

The popularity of brands among the U.S. male consumer base for hair conditioners differs significantly from that for shampoo. [Table 8-10] Men most often choose Suave conditioner, which has over 5.5 million users. Pantene Pro-V is second most popular, with about 4.0 million users, while Head & Shoulders ranks third, with 3.2 million.

Table 8-10 Men's Use of Conditioner, by Brand, 2009 (In Thousands of Adults*; Recent 7 Days)

Brand No. Men Using % All U.S. Men Alberto VO5 2,092 2% Aussie 987 1 Avon 692 1 Bath & Body Works 560 1 Clairol Herbal Essences 1,205 1 Dove 2,328 2 Finesse 742 1 Garnier Fructis 1,618 2 Head & Shoulders 3,198 3 Infusium 23 581 1 L'Oreal 628 1 Matrix and Matrix Biolage 808 1 Neutrogena 1,236 1 Nexxus 837 1 Pantene Pro-V 3,955 4 Paul Mitchell 591 1 Suave 5,538 5 Sunsilk 522 1 Thermasilk 580 1 Tresemme 2,024 2 White Rain 1,333 1 Other Brands 6,699 6 Private Label 1,854 2 Total/Base** 30,997 29% * Persons age 18 and older. ** Column adds to more than total, due to respondents' use of multiple brands. Source: Experian Simmons' Study of Media & Markets, Summer 2009; This material used with permission.

Over 26.5 Million Men Use Hairstyling Products

Experian Simmons finds that upwards of 26.5 million adult males – or a quarter of all adult males living in the United States – use hairstyling creams, gels, or lotions. [Table 8-11]

Styler Use Decreases with Age, Increases with Income

As is the case in the data set on men’s use of body wash, men’s use of hairstyling products is favored by youngish-to-middle age within the 18-44 bracket, and by being a full-time student. [Table 8-11] In fact, incidence of use once again tapers off as age increases, while it trends higher with household income. However, significantly higher-than-average incidence of styler use begins only at the $100,000 level.

Residence in the Southwest, or in one of the Pacific coastal states, also fosters notable use of stylers by men.

Table 8-11 Demographic Characteristics Most Favoring Use of Hairstyling Creams, Gels, and Lotions by Men, 2009 (Male Adults* in Thousands)

N.B.: Grey shading indicates that factor has significantly above-average incidence. Hairstyling Products Factor No. Men Using % All U.S. Men Index Total/Base 26,528 25% 100 Gender Male 26,528 25% 100 Female 0 0 0 Age 18-24 3,924*** 4% 130 25-34 6,474 6 147 35-44 5,749 5 115 45-54 4,453 4 80 55-64 2,867 3 67 65-74 1,994 2 80 75+ 1,067 1 60 Generations Gen. Y, 18-29 6,760 6% 136 Gen. X, 30-44 9,387 9 126 Baby Boomers, 45-64 7,320 7 74 Seniors, 65+ 3,061 3 72 Race/Hispanic Origin White 16,385 15% 88 African American 1,989 2 79 Asian 1,422 1 131 Other Race 364 ** 90 Hispanic 6,339 6 164 Education Grade School 1,227 1% 98 Did Not Graduate HS 7,754 7 90 HS Grad 9,461 9 92 Some College Experience 6,411 6 92 College Grad 5,109 5 132 Grad School Experience 3,451 3 103 Employment Status Part Time 2,132 2% 97 Full Time 17,353 16 106 Continued on next page

Table 8-11 [cont.]

N.B.: Grey shading indicates that factor has significantly above-average incidence. Hairstyling Products Factor No. Men Using % All U.S. Men Index Self-Employed 2,156 2 90 Retired 2,623 2 64 Student 757 1 147 Homemaker ** ** ** Occupation Management/Financial 3,788 4% 124 Professional/Technical 3,558 3 116 Sales 2,087 2 111 Office/Admin. Support 1,510 1 133 Labor 8,441 8 93 Marital Status Single (Never Married) 8,238 8% 119 Married 15,001 14 95 Divorced/Separated 2,651 2 89 Widowed 639 1 79 Marketing Region Northeast 4,652 4% 96 East Central 2,686 3 83 West Central 3,732 3 93 Southeast 5,023 5 97 Southwest 3,811 4 111 Pacific 6,402 6 120 Household Income (000) Under $25 3,844 4% 102 $25-$50 5,568 5 95 $50-$75 4,747 4 90 $75-$100 4,179 4 103 $100-$150 4,268 4 107 $150+ 3,923 4 109 Household Size (No. of Persons) One 2,334 2% 78 Two 8,370 8 87 Three or Four 10,059 9 109 Five or More 5,764 5 124 Children in Household (Age) No Child Present 15,141 14% 89 Any Children Present 11,387 11 119 Continued on next page

Table 8-11 [cont.]

N.B.: Grey shading indicates that factor has significantly above-average incidence. Hairstyling Products Factor No. Men Using % All U.S. Men Index Under 2 2,421 2 143 Two-5 4,250 4 133 Six-9 4,094 4 135 Ten-11 1,926 2 114 Twelve-17 3,806 4 98 Residence House 20,717 19% 98 Rented House 2,999 3 107 Condo/Co-op 1,122 1 119 Rented Apartment 3,612 3 116 * Persons age 18 and older. ** Less than 0.5%; sample size may be too small to be reliable. *** Read as follows: Over 3.9 million men age 18-24 use styling products; this sector equals 4% of all U.S. men. The same sector's index of styling products use is 130; that is, men age 18-24 are incident among users at 30% above the national average rate, always set to 100. Source: Experian Simmons' Study of Media & Markets, Summer 2009; This material used with permission.

Most Chosen Brands for Styling Are LA Looks and Suave

The American adult male’s favorite hairstyling brand is LA Looks, with over 2.8 million users. [Table 8-12] Second most popular is Suave, with nearly 2.4 million users.

Only two other brands have user-bases of over 1.0 million: Alberto VO5 has almost 1.5 million users, and Dep has 1.4 million users.

Table 8-12 Men's Use of Hairstyling Products, by Brand, 2009 (In Thousands of Adults*)

Brand No. Men Using % All U.S. Men Alberto VO5 1,475 1% Aussie 672 1 Bed Head 701 1 Dep 1,402 1 Dove 842 1 Garnier Fructis 932 1 Got 2 B 778 1 LA Looks 2,846 3 L'Oreal Studio Line 943 1 Pantene Pro-V 961 1 Paul Mitchell 898 1 Redken 779 1 Suave 2,357 2 Tresemme 956 1 White Rain 668 1 Total/Base** 26,528 25% * Persons age 18 and older. ** Column adds to less than total, because brands used by fewer than 0.5% of men are not presented. Source: Experian Simmons' Study of Media & Markets, Summer 2009; This material used with permission.

Haircolor Used by 5.3 Million U.S. Men

U.S. men who use haircolor – male-specific formulations or otherwise – are a sector of about 5.3 million, or just 5% of all men in the country. [Table 8-13]

Men and Haircolor: Middle Age, White-Collar Pros, Lower Income Mark Use

As one might expect, men’s use of haircolor tends to be concentrated within the 35-64 age bracket. [Table 8-13] But certain other standouts are conflicting: White-collar professionals and sole proprietors display notably above-average incidence among those coloring their hair – in spite of the fact that the starring household income levels are $0-$25,000, and $50,000- $75,000, both low for the white-collar pro.

The fact that significant incidence of haircolor use abruptly stops at age 65 is a clue to the reason for this apparent split-skew. Many men who lose their jobs in middle age may attempt to look younger for job interviews, by dying their hair. This would explain the lower degree

of affluence, as income is interrupted; and it explains as well the suddenly weak incidence of haircolor use as of age 65 – the classic retirement age for residents of the United States, who qualify for Social Security pensions as early as age 62.

Table 8-13 Demographic Characteristics Most Favoring Use of Haircolor Products by Men, 2009 (Male Adults* in Thousands)

N.B.: Grey shading indicates that factor has significantly above-average incidence. Haircolor Factor No. Men Using % All U.S. Men Index Total/Base 5,295 5% 100 Gender Male 5,295 5% 100 Female 0 0 0 Age 18-24 401 ** 66 25-34 622 1% 71 35-44 1,181*** 1 119 45-54 1,319 1 119 55-64 1,139 1 113 65-74 456 ** 91 75+ 177 ** 50 Generations Gen. Y, 18-29 615 1% 62 Gen. X, 30-44 1,590 1 107 Baby Boomers, 45-64 2,458 2 125 Seniors, 65+ 633 1 74 Race/Hispanic Origin White 2,839 3% 76 African American 536 1 106 Asian 581 1 269 Other Race ** ** ** Hispanic 1,088 1 141 Education Grade School 295 ** 117 Did Not Graduate HS 1,765 2% 103 HS Grad 2,117 2 103 Some College Experience 1,522 1 109 College Grad 738 1 96 Grad School Experience 491 ** 73 Employment Status Part Time 446 ** 101 Full Time 3,082 3% 95 Self-Employed 565 1 118 Retired 709 1 87 Student ** ** ** Homemaker ** ** ** Continued on next page

Table 8-13 [cont.]

N.B.: Grey shading indicates that factor has significantly above-average incidence. Haircolor Factor No. Men Using % All U.S. Men Index Occupation Management/Financial 683 1% 112 Professional/Technical 680 1 111 Sales ** ** ** Office/Admin. Support ** ** ** Labor 1,509 1 83 Marital Status Single (Never Married) 1,338 1% 97 Married 2,713 3 86 Divorced/Separated 1,077 1 181 Widowed ** ** ** Marketing Region Northeast 907 1% 94 East Central 636 1 98 West Central 556 1 69 Southeast 1,176 1 114 Southwest 721 1 105 Pacific 1,284 1 121 Household Income (000) Under $25 1,351 1% 179 $25-$50 833 1 72 $50-$75 1,126 1 107 $75-$100 608 1 75 $100-$150 772 1 97 $150+ 605 1 84 Household Size (No. of Persons) One 555 1% 93 Two 2,079 2 108 Three or Four 1,761 2 95 Five or More 900 1 97 Children in Household (Age) No Child Present 3,340 3% 99 Any Children Present 1,955 2 103 Under 2 314 ** 93 Two-5 406 ** 64 Six-9 656 1 108 Ten-11 234 ** 70 Twelve-17 700 1 90 Continued on next page

Table 8-13 [cont.]

N.B.: Grey shading indicates that factor has significantly above-average incidence. Haircolor Factor No. Men Using % All U.S. Men Index Residence House 4,050 4% 96 Rented House 716 1 128 Condo/Co-op ** ** ** Rented Apartment 794 1 128 * Persons age 18 and older. ** Less than 0.5%; sample size may be too small to be reliable. *** Read as follows: Almost 1.2 million men age 35-44 use haircolor; this sector equals 1% of all U.S. men. The same sector's index of haircolor use is 119; that is, men age 35-44are incident among users at 19% above the national average rate, always set to 100. Source: Experian Simmons' Study of Media & Markets, Summer 2009; This material used with permission.

The U.S. Male Consumer of Shaving Products

Almost 72.3 Million Men Use Shave Cream

Experian Simmons projects that close to 72.3 million U.S.-resident adult males use shave cream. [Table 8-14] These men comprise 67% of all men resident here.

Southwesterners, Salesmen, Solo Households Influential in Shave Cream Use

Men’s use of shave cream is so prevalent in the United States that few demographic characteristics are incident in the user-base at significantly higher-than-average rates. But the Great Melting Pot does feature three such characteristics: Southwestern residency, occupations in sales, and households of just one person. [Table 8-14]

The three characteristics do not conspire to suggest any kind of distinct user-profile, again because of the vast number of men who shave, and the vast range of these men’s lifestyles, inherited cultures, and economic standings.

Table 8-14 Demographic Characteristics Most Favoring Use of Shave Cream by Men, 2009 (Male Adults* in Thousands)

N.B.: Grey shading indicates that factor has significantly above-average incidence. Shave Cream Factor No. Men Using % All U.S. Men Index Total/Base 72,279 67% 100 Gender Male 72,279 67% 100 Female 0 0 0 Age 18-24 7,221 7% 87 25-34 12,542*** 12 105 35-44 14,182 13 104 45-54 15,322 14 102 55-64 12,199 11 104 65-74 6,741 6 99 75+ 4,071 4 84 Generations Gen. Y, 18-29 12,880 12% 95 Gen. X, 30-44 21,066 20 104 Baby Boomers, 45-64 27,521 26 103 Seniors, 65+ 10,812 10 93 Race/Hispanic Origin White 52,719 49% 104 African American 5,786 5 84 Asian 2,065 2 70 Other Race 980 1 89 Hispanic 10,666 10 102 Education Grade School 3,325 3% 97 Did Not Graduate HS 23,376 22 100 HS Grad 28,280 26 101 Some College Experience 19,471 18 102 College Grad 10,489 10 100 Grad School Experience 8,891 8 97 Employment Status Part Time 5,795 5% 96 Full Time 46,042 43 104 Self-Employed 6,508 6 100 Continued on next page

Table 8-14 [cont.]

N.B.: Grey shading indicates that factor has significantly above-average incidence. Shave Cream Factor No. Men Using % All U.S. Men Index Retired 10,520 10 95 Student 1,172 1 83 Homemaker ** ** ** Occupation Management/Financial 8,445 8% 102 Professional/Technical 8,039 7 96 Sales 5,474 5 106 Office/Admin. Support 3,017 3 98 Labor 26,179 24 105 Marital Status Single (Never Married) 18,492 17% 98 Married 43,114 40 100 Divorced/Separated 8,524 8 105 Widowed 2,150 2 98 Marketing Region Northeast 13,413 12% 102 East Central 9,244 9 104 West Central 10,861 10 99 Southeast 13,966 13 99 Southwest 10,079 9 108 Pacific 13,564 13 94 Household Income (000) Under $25 10,290 10% 100 $25-$50 15,697 15 99 $50-$75 14,493 13 101 $75-$100 11,036 10 100 $100-$150 10,981 10 101 $150+ 9,781 9 100 Household Size (No. of Persons) One 8,647 8% 107 Two 25,988 24 99 Three or Four 25,481 24 101 Five or More 12,163 11 96 Children in Household (Age) No Child Present 46,535 43% 101 Any Children Present 25,743 24 99 Under 2 4,652 4 101 Two-5 8,993 8 103 Continued on next page

Table 8-14 [cont.]

N.B.: Grey shading indicates that factor has significantly above-average incidence. Shave Cream Factor No. Men Using % All U.S. Men Index Six-9 8,521 8 103 Ten-11 4,574 4 100 Twelve-17 10,239 10 96 Residence House 57,483 54% 100 Rented House 7,518 7 98 Condo/Co-op 2,570 2 100 Rented Apartment 8,635 8 102 * Persons age 18 and older. ** Less than 0.5%; sample size may be too small to be reliable. *** Read as follows: More than 12.5 million men age 25-34 use shave cream; this sector equals 12% of all U.S. men. The same sector's index of shave cream use is 105; that is, men age 25-34 are incident among users at 5% above the national average rate, always set to 100. Source: Experian Simmons' Study of Media & Markets, Summer 2009; This material used with permission.

Gillette, Barbasol, Edge Are Most Popular Men’s Shave Creams

Gillette is the most popular shave cream in the United States, with a user-base of close to 29.3 million men. [Table 8-15] Barbasol is second most popular, with 16.3 million users. Edge is the only other shave cream with an eight-digit-sized base, at 14.3 million users.

Table 8-15 Men's Use of Shave Cream, by Brand, 2009 (In Thousands of Adults*)

Brand No. Men Using % All U.S. Men Aveeno 1,626 2% Barbasol 16,272 15 Colgate 8,387 8 Edge 14,304 13 Gillette 29,271 27 Neutrogena 1,398 1 Noxzema 1,263 1 Old Spice 3,406 3 Skintimate 894 1 Soft Shave 721 1 Private Label 2,565 2 Total/Base** 72,279 67% * Persons age 18 and older. ** Column adds to more than total, due to respondents' use of multiple brands. Source: Experian Simmons' Study of Media & Markets, Summer 2009; This material used with permission.

More Than 40.7 Million Men Use Disposable Razors

According to Experian Simmons, over 40.7 million adult males living in the United States are bucking the trend to green thinking, by their use of disposable razors. [Table 8-16] The 40.7 million equal 38% of the country’s total pool of adult males.

Middle/Elder Age, Lower Income, Limited Education Favor Disposable Razor Use

The male consumer base for disposable razors contains significantly greater-than-average concentrations of those age 45-74 – a span that, in 2009, encompasses the Baby Boom Generation, who are age 45-64. [Table 8-16] In this data set, incidence of use heightens with each older age bracket, through 74; but incidence diminishes with each step upward in terms of household income. Only incomes of less than $50,000 are found here at notably above- average rates. Supporting the lack of affluence are educational skews to grade school or high school completion, but not to college experience. Interestingly, incidence of disposable razor use by men decreases as level of education becomes more exalted.

One impression of these characteristics is that they fit a non-green personality; that is, green consciousness has swept the world, but there remains, of course, those men who ignore or oppose the trend. This supports the existence of a stereotype – the older, less educated man who persists in consuming plastic needlessly.

Table 8-16 Demographic Characteristics Most Favoring Use of Disposable Razors by Men, 2009 (Male Adults* in Thousands)

N.B.: Grey shading indicates that factor has significantly above-average incidence. Disposable Razors Factor No. Men Using % All U.S. Men Index Total/Base 40,721 38% 100 Gender Male 40,721 38% 100 Female 0 0 0 Age 18-24 3,321 3% 71 25-34 6,207 6 92 35-44 7,138 7 93 45-54 9,825*** 9 116 55-64 7,392 7 112 65-74 4,353 4 113 75+ 2,484 2 91 Generations Gen. Y, 18-29 6,103 6% 80 Gen. X, 30-44 10,563 10 93 Baby Boomers, 45-64 17,218 16 114 Seniors, 65+ 6,837 6 104 Race/Hispanic Origin White 26,066 24% 91 African American 4,293 4 111 Asian 1,378 1 83 Other Race 562 1 91 Hispanic 8,397 8 142 Education Grade School 2,763 3% 143 Did Not Graduate HS 13,765 13 104 HS Grad 16,738 16 106 Some College Experience 10,571 10 98 College Grad 4,828 5 81 Grad School Experience 4,235 4 82 Employment Status Part Time 3,714 3% 110 Full Time 24,358 23 97 Self-Employed 3,731 3 102 Continued on next page

Table 8-16 [cont.]

N.B.: Grey shading indicates that factor has significantly above-average incidence. Disposable Razors Factor No. Men Using % All U.S. Men Index Retired 6,787 6 108 Student 592 1 75 Homemaker ** ** ** Occupation Management/Financial 3,860 4% 82 Professional/Technical 4,047 4 86 Sales 2,542 2 88 Office/Admin. Support 1,957 2 112 Labor 15,370 14 110 Marital Status Single (Never Married) 9,538 9% 89 Married 24,088 22 99 Divorced/Separated 5,450 5 119 Widowed 1,644 2 133 Marketing Region Northeast 6,982 7% 94 East Central 4,688 4 94 West Central 5,878 5 95 Southeast 7,689 7 97 Southwest 6,197 6 118 Pacific 8,503 8 104 Household Income (000) Under $25 7,262 7% 125 $25-$50 10,017 9 112 $50-$75 8,491 8 105 $75-$100 5,634 5 91 $100-$150 4,940 5 81 $150+ 4,377 4 79 Household Size (No. of Persons) One 5,216 5% 114 Two 14,393 13 97 Three or Four 13,441 13 95 Five or More 7,671 7 108 Children in Household (Age) No Child Present 25,939 24% 100 Any Children Present 14,782 14 101 Under 2 2,742 3 106 Continued on next page

Table 8-16 [cont.]

N.B.: Grey shading indicates that factor has significantly above-average incidence. Disposable Razors Factor No. Men Using % All U.S. Men Index Two-5 4,859 5 99 Six-9 4,500 4 97 Ten-11 2,839 3 110 Twelve-17 6,360 6 106 Residence House 31,143 29% 96 Rented House 4,675 4 108 Condo/Co-op 1,259 1 87 Rented Apartment 5,610 5 117 * Persons age 18 and older. ** Less than 0.5%; sample size may be too small to be reliable. *** Read as follows: Over 9.8 million men age 45-54 use disposable razors; this sector equals 9% of all U.S. men. The same sector's index of disposable razor use is 116; that is, men age 45-54 are incident among users at 16% above the national average rate, always set to 100. Source: Experian Simmons' Study of Media & Markets, Summer 2009; This material used with permission.

Disposable Razors: Gillette, Bic, Schick Most Widely Used by America’s Men

Gillette-branded disposable razors command a U.S. consumer base of 17.8 million men. [Table 8-17] Schick and Bic follow, with 11.9 million and 6.0 million users, respectively.

Table 8-17 Men's Use of Disposable Razors, by Brand, 2009 (In Thousands of Adults*; Recent 12 Months)

Brand No. Men Using % All U.S. Men Bic 11,858 11% Gillette 17,798 17 Schick 6,042 6 Other Brands 4,966 5 Private Label 5,004 5 Total/Base** 40,721 38% * Persons age 18 and older. ** Column adds to more than total, due to respondents' use of multiple brands. Source: Experian Simmons' Study of Media & Markets, Summer 2009; This material used with permission.

Nearly 40.5 Million U.S. Men Use Electric Razors

Experian Simmons projects that almost as many adult men who live in the United States use electric razors, as do those who use disposable ones. Men who have “gone electric” number almost 40.5 million, which translates into a 38% share of all U.S. men. [Table 8-18]

Electric Razor Users Skew Older, Non-Affluent – But Affluent, Too

The data set on electric razor use by adult men displays skews that, at first glance, are confusing. A skew to men age 65 and older, however, is quite clear. [Table 8-18] The importance of this group is reinforced by notably high incidences of retired men, widowers, and those living in small households – as well as by the fact that the household presence of kids is completely inconsequential here.

What confuses is the matrix of characteristics usually indicating affluence or the lack of it, for here the indicators are oddly split. The electric razor user-base exhibits significantly above- average incidence of those men living in households earning only $25,000-$50,000, while the $150,000 bracket is on the brink of such importance. Education is skewed to grade school, but additionally to a college degree. And white-collar occupation is a standout, though home ownership is not.

It is possible that this data set offers two coherent profiles, that of an affluent user, possibly a senior citizen, but just as possibly younger; and that of an older, apparently less affluent user. Seniors may have fixed incomes, but they should not in every case be assumed to be strapped for cash. Many have investments and savings apart from pensions, and may in actuality be considered affluent.

Further complicating the matter is that split between lower and higher education. Again, today’s seniors came of age in a time period when fewer Americans had the resources to attend college; many received their education on the job, or via the “school of hard knocks.”

Table 8-18 Demographic Characteristics Most Favoring Use of Electric Razors by Men, 2009 (Male Adults* in Thousands)

N.B.: Grey shading indicates that factor has significantly above-average incidence. Electric Razors Factor No. Men Using % All U.S. Men Index Total/Base 40,456 38% 100 Gender Male 40,456 38% 100 Female 0 0 0 Age 18-24 4,434 4% 96 25-34 6,277 6 93 35-44 7,646*** 7 101 45-54 7,524 7 89 55-64 6,306 6 96 65-74 4,477 4 117 75+ 3,792 4 140 Generations Gen. Y, 18-29 7,100 7% 93 Gen. X, 30-44 11,257 10 99 Baby Boomers, 45-64 13,830 13 92 Seniors, 65+ 8,269 8 127 Race/Hispanic Origin White 28,959 27% 102 African American 4,201 4 109 Asian 2,011 2 122 Other Race 622 1 101 Hispanic 4,578 4 78 Education Grade School 2,025 2% 106 Did Not Graduate HS 12,511 12 95 HS Grad 14,824 14 94 Some College Experience 10,346 10 97 College Grad 6,476 6 110 Grad School Experience 5,328 5 104 Employment Status Part Time 2,998 3% 89 Full Time 23,909 22 96 Self-Employed 3,626 3 99 Retired 7,536 7 121 Student 782 1 100 Homemaker ** ** ** Continued on next page

Table 8-18 [cont.]

N.B.: Grey shading indicates that factor has significantly above-average incidence. Electric Razors Factor No. Men Using % All U.S. Men Index Occupation Management/Financial 4,650 4% 100 Professional/Technical 5,102 5 109 Sales 2,798 3 97 Office/Admin. Support 1,768 2 102 Labor 12,245 11 88 Marital Status Single (Never Married) 10,442 10% 99 Married 24,503 23 102 Divorced/Separated 4,085 4 90 Widowed 1,426 1 116 Marketing Region Northeast 7,036 7% 96 East Central 4,612 4 93 West Central 6,292 6 103 Southeast 8,390 8 106 Southwest 5,039 5 96 Pacific 8,368 8 13 Household Income (000) Under $25 6,006 6% 104 $25-$50 9,564 9 108 $50-$75 7,479 7 93 $75-$100 6,082 6 98 $100-$150 5,570 5 92 $150+ 5,755 5 105 Household Size (No. of Persons) One 4,364 4% 96 Two 16,757 16 114 Three or Four 13,177 12 93 Five or More 6,158 6 87 Children in Household (Age) No Child Present 26,983 25% 104 Any Children Present 13,473 13 93 Under 2 2,387 2 93 Two-5 4,356 4 89 Six-9 3,926 4 85 Ten-11 2,263 2 88 Twelve-17 5,595 5 94 Continued on next page

Table 8-18 [cont.]

N.B.: Grey shading indicates that factor has significantly above-average incidence. Electric Razors Factor No. Men Using % All U.S. Men Index Residence House 32,631 30% 101 Rented House 4,155 4 97 Condo/Co-op 1,314 1 91 Rented Apartment 4,445 5 94 * Persons age 18 and older. ** Less than 0.5%; sample size may be too small to be reliable. *** Read as follows: Over 7.6 million men age 35-44 use electric razors; this sector equals 7% of all U.S. men. The same sector's index of electric razor use is 101; that is, men age 35-44 are incident among users at 1% above the national average rate, always set to 100. Source: Experian Simmons' Study of Media & Markets, Summer 2009; This material used with permission.

Philips Norelco the Most Popular Electric Razor with U.S. Men – By Far

Philips Norelco appears to dominate the U.S. electric razor market, with over 17.3 million men using the brand. [Table 8-19] The closest competing brand, Braun, has only 6.3 million users, thus edging out Remington, which has more than 6.1 million users.

Table 8-19 Men's Use of Electric Razors, by Brand, 2009 (In Thousands of Adults*)

Brand No. Men Using % All U.S. Men Braun 6,340 6% Conair 1,861 2 Philips Norelco 17,349 16 Panasonic 2,119 2 Remington 6,128 6 Wahl 1,896 2 Other Brands 3,793 4 Total/Base** 40,456 38% * Persons age 18 and older. ** Column adds to less than total, due to respondents' "I don't know" answers, or to answer fields left blank. Source: Experian Simmons' Study of Media & Markets, Summer 2009; This material used with permission.

U.S. After-Shave Users Number 37.9 Million

U.S. men who use after-shave lotion (and/or cologne, which is generally not covered in this report) are projected at 37.9 million, by Experian Simmons. [Table 8-20] This base translates into a 35% share of all men over age 18 who live in the United States.

After-Shave Use: Again, Boomers/Seniors, Low Income Featured

The Experian Simmons data on use of after-shave preparations by American men feature pockets of those in middle-to-elder age, and those with low household incomes. [Table 8-20] Here the incidence of use increases with each older age bracket; pronounced tendency to apply after-shave is found as of age 55, and continues right through 75-plus. This span encompasses many Baby Boomer men, who are age 45-64 in 2009, and seniors. Retired persons and widowers also stand out in the data set. The age factor is again complemented by skews to relatively low-to-middle household income of less than $75,000; and to less education, with schooling concentrated at the grade school and high school levels.

In this case, the data coherently suggest a typically older user – and a product with a geriatric image, no matter that some after-shave lotion brands may be positioned to younger men. As with electric razor use, the lack of higher education may reflect the fact that seniors grew up in an era when college attendance was the exception, not the rule. And the lower-to-middle household income range may be influenced in part by seniors’ fixed incomes, which do not reflect the advantages of house or condo/co-op ownership, or savings and investments.

Table 8-20 Demographic Characteristics Most Favoring Use of After-Shave Lotion by Men, 2009 (Male Adults* in Thousands)

N.B.: Grey shading indicates that factor has significantly above-average incidence. After-Shave Lotion Factor No. Men Using % All U.S. Men Index Total/Base 37,859 35% 100 Gender Male 37,859 35% 100 Female 0 0 0 Age 18-24 2,942 3% 68 25-34 5,613 5.0 89 35-44 5,832 5.0 82 45-54 7,115 7 90 55-64 7,289*** 7 119 65-74 5,658 5 159 75+ 3,410 3 135 Generations Gen. Y, 18-29 5,410 5% 76 Gen. X, 30-44 8,977 8 85 Baby Boomers, 45-64 14,405 13 103 Seniors, 65+ 9,067 8 149 Race/Hispanic Origin White 25,553 24% 96 African American 3,757 4 104 Asian 1,189 1 77 Other Race 590 1 102 Hispanic 6,753 6 123 Education Grade School 2,343 2.0% 131 Did Not Graduate HS 13,247 12 108 HS Grad 15,923 15 108 Some College Experience 10,073 9 101 College Grad 4,793 4 87 Grad School Experience 3,671 3 77 Employment Status Part Time 3,187 3% 101 Full Time 20,882 19 90 Self-Employed 3,690 3 108 Retired 8,044 7.0 138 Student 599 1 82 Homemaker ** ** ** Continued on next page

Table 8-20 [cont.]

N.B.: Grey shading indicates that factor has significantly above-average incidence. After-Shave Lotion Factor No. Men Using % All U.S. Men Index Occupation Management/Financial 4,105 4% 94 Professional/Technical 2,768 3.0 63 Sales 2,511 2 93 Office/Admin. Support 1,541 1 95 Labor 12,724 12 98 Marital Status Single (Never Married) 8,304 8% 84 Married 23,358 22 104 Divorced/Separated 4,715 4 111 Widowed 1,482 1 129 Marketing Region Northeast 6,238 6% 91 East Central 4,501 4 97 West Central 5,553 5 97 Southeast 8,043 7 109 Southwest 5,832 5 119 Pacific 7,164 7 94 Household Income (000) Under $25 6,440 6% 119 $25-$50 9,733 9 117 $50-$75 8,026 7 107 $75-$100 4,954 5 86 $100-$150 5,000 5 88 $150+ 3,706 3 72 Household Size (No. of Persons) One 4,622 4% 109 Two 15,105 14 110 Three or Four 12,303 11 93 Five or More 5,829 5 88 Children in Household (Age) No Child Present 25,454 24% 105 Any Children Present 12,405 12 91 Under 2 2,364 2 98 Two-5 4,111 4 90 Six-9 3,904 4 90 Ten-11 2,379 2 99 Twelve-17 4,635 4 83 Continued on next page

Table 8-20 [cont.]

N.B.: Grey shading indicates that factor has significantly above-average incidence. After-Shave Lotion Factor No. Men Using % All U.S. Men Index Residence House 29,371 27% 97 Rented House 3,972 4 99 Condo/Co-op 1,532 1 114 Rented Apartment 4,490 4 101 * Persons age 18 and older. ** Less than 0.5%; sample size may be too small to be reliable. *** Read as follows: Over 7.3 million men age 55-64 use after-shave lotion; this sector equals 7% of all U.S. men. The same sector's index of after-shave lotion use is 119; that is, men age 55-64 are incident among users at 19% above the national average rate, always set to 100. Source: Experian Simmons' Study of Media & Markets, Summer 2009; This material used with permission.

Old Spice Wins After-Shave Popularity Race

Of all after-shave lotions sold in the United States, Old Spice is on hand in more medicine cabinets than any other, with over 10.8 million men using the brand. [Table 8-21] This base is more than double the size of the base for second-most-popular Calvin Klein, which has 4.9 million users.

Calvin Klein heads up a second echelon of six brands that have user-bases in the 4.2-4.9 million range.

Table 8-21 Men's Use of After-Shave Lotion, by Brand, 2009 (In Thousands of Adults*)

Brand No. Men Using % All U.S. Men Adidas 3,604 3% Aqua Velva 4,403 4 Aramis 1,163 1 Avon 2,793 3 Bodman 828 1 Brut 4,627 4 Calvin Klein 4,855 5 Chanel 675 1 Christian Dior 774 1 Cool Water 3,715 3 Drakkar Noir 3,416 3 English Leather 2,210 2 Estee Lauder 538 1 Gillette 4,323 4 Giorgio Armani 2,869 3 Givenchy 950 1 Halston 1,096 1 Jovan 1,488 1 Kenneth Cole 2,160 2 Mennen 1,615 2 Nautica 3,206 3 Nivea for Men 2,157 3 Old Spice 10,843 10 Pierre Cardin 1,172 1 Preferred Stock 1,532 1 Ralph Lauren 4,376 4 Stetson 4,211 4 Tommy Hilfiger 3,119 3 Other Brands 24,211 23 Total/Base** 37,859 35% * Persons age 18 and older. ** Column adds to more than total, due to respondents' use of multiple brands. Source: Experian Simmons' Study of Media & Markets, Summer 2009; This material used with permission.

The U.S. Male Consumer of Skincare Products

Men Who Moisturize Number 40.3 Million

Experian Simmons data reveal that a large portion of American men – more than 40.3 million, or 38% – use moisturizer. [Table 8-22]

Gen X, High and Low Incomes Stand Out

In use of moisturizers by men, the 25-44 bracket (encompassing the whole 30-44 age span of Generation X) has above-average importance, but also, dual significance: Many Americans first achieve a little affluence in their 30s, start families, and even buy homes then. [Table 8- 22] On the other hand, the lower ranges of the 25-44 bracket include many men who are young enough to be still struggling financially; full-time students, for example, who are also standouts.

The split is particularly obvious in terms of household income, which skews to two brackets, under $25,000 and over $150,000. Grade school is the only level of education featured, reinforcing the former of those skews. Occupation, however, gibes with the split, for it is skewed to both white-collar professional men, and to office support staff.

Packaged Facts suggests an explanation for the ambivalent profile: There may simply be two fairly well-defined consumer-bases within the data set on moisturizer use by men. One of the bases is younger and more working class, while the other strives for – or already enjoys – an upscale lifestyle. It is tempting to say that the first base tends to use mass-marketed moisturizer brands such as Jergens or Nivea for Men, as opposed to the second base, which tends to use prestige brands such as Aveda Men or La Prairie; but this would ignore the fact of crossover use – principal shoppers of some low-income households may alternate purchases of high-priced HBC with value brands, to save money. And the shoppers for high- income households are certainly free to “go downscale.”

Table 8-22 Demographic Characteristics Most Favoring Use of Moisturizers by Men, 2009 (Male Adults* in Thousands)

N.B.: Grey shading indicates that factor has significantly above-average incidence. Moisturizers Factor No. Men Using % All U.S. Men Index Total/Base 40,314 38% 100 Gender Male 40,314 38% 100 Female 0 0 0 Age 18-24 4,312 4% 94 25-34 7,136*** 7 107 35-44 8,592 8 113 45-54 8,523 8 101 55-64 6,267 6 96 65-74 3,274 3 86 75+ 2,210 2 82 Generations Gen. Y, 18-29 7,482 7% 99 Gen. X, 30-44 12,558 12 111 Baby Boomers, 45-64 14,790 14 99 Seniors, 65+ 5,485 5 84 Race/Hispanic Origin White 22,614 21% 80 African American 6,563 6 171 Asian 2,438 2 148 Other Race 389 ** 63 Hispanic 8,210 8 140 Education Grade School 2,447 2% 128 Did Not Graduate HS 12,165 11 93 HS Grad 14,699 14 94 Some College Experience 10,432 10 98 College Grad 6,165 6 105 Grad School Experience 5,264 5 103 Employment Status Part Time 2,998 3% 89 Full Time 25,207 23 102 Self-Employed 3,784 4 104 Continued on next page

Table 8-22 [cont.]

N.B.: Grey shading indicates that factor has significantly above-average incidence. Moisturizers Factor No. Men Using % All U.S. Men Index Retired 5,242 5 84 Student 850 1 109 Homemaker ** ** ** Occupation Management/Financial 4,510 4% 97 Professional/Technical 5,338 5 114 Sales 2,361 2 82 Office/Admin. Support 1,903 2 110 Labor 13,583 13 98 Marital Status Single (Never Married) 11,070 10% 105 Married 22,947 21 96 Divorced/Separated 5,264 5 116 Widowed 1,034 1 84 Marketing Region Northeast 6,504 6% 89 East Central 4,748 4 96 West Central 6,210 6 102 Southeast 7,027 7 89 Southwest 5,656 5 108 Pacific 9,479 9 117 Household Income (000) Under $25 6,171 6% 107 $25-$50 9,134 9 103 $50-$75 7,679 7 96 $75-$100 5,756 5 93 $100-$150 5,779 5 95 $150+ 5,795 5 106 Household Size (No. of Persons) One 4,802 4% 106 Two 13,715 13 93 Three or Four 13,278 12 94 Five or More 8,520 8 121 Children in Household (Age) No Child Present 24,284 23% 94 Any Children Present 16,030 15 110 Under 2 2,990 3 116 Continued on next page

Table 8-22 [cont.]

N.B.: Grey shading indicates that factor has significantly above-average incidence. Moisturizers Factor No. Men Using % All U.S. Men Index Two-5 5,287 5 109 Six-9 5,411 5 117 Ten-11 3,348 3 131 Twelve-17 6,660 6 112 Residence House 31,126 29% 97 Rented House 4,899 5 115 Condo/Co-op 1,653 2 115 Rented Apartment 5,145 5 109 * Persons age 18 and older. ** Less than 0.5%; sample size may be too small to be reliable. *** Read as follows: Over 7.2 million men age 25-34 use moisturizer; this sector equals 7% of all U.S. men. The same sector's index of moisturizer use is 107; that is, men age 25-34 are incident among users at 7% above the national average rate, always set to 100. Source: Experian Simmons' Study of Media & Markets, Summer 2009; This material used with permission.

Men Who Moisturize Prefer Vaseline

Experian Simmons projects that Vaseline moisturizer has a 10.0 million-man consumer-base. [Table 8-23] Second-most-popular Jergens is far behind, with 4.1 million men using the brand. Aveeno is third, with 3.9 million men using.

Table 8-23 Men's Use of Moisturizers, by Brand, 2009 (In Thousands of Adults*)

Brand No. Men Using % All U.S. Men Aveeno 3,942 4% Avon 2,381 2 Bath & Body Works 1,197 1 Caress 632 1 Cetaphil 1,329 1 Curel 1,072 1 Dove 2,666 2 Eucerin 1,468 1 Jergens 4,128 4 Johnson & Johnson 2,707 3 Keri 857 1 Lubriderm 3,453 3 Neutrogena 1,871 2 Nivea 2,344 2 Olay 1,881 2 Pond's 898 1 St. Ives 1,261 1 Suave 2,801 3 Vaseline 10,048 9 Private Label 2,613 2 Total/Base** 40,314 38% * Persons age 18 and older. ** Column adds to more than total, due to respondents' use of multiple brands. Source: Experian Simmons' Study of Media & Markets, Summer 2009; This material used with permission.

Close to 32.1 Million Men Use Suncare Products

The U.S. adult male user-audience for suncare products stands at nearly 32.1 million. [Table 8-24] This sector accounts for 30% of all adult males residing in the United States.

Sunless Tanners Used by 503,000 American Men

The suncare products used by men include not only tanning preparations for use at the beach, and sunscreen/sunblock for use anywhere, but also tanning preps that do not require exposure to sun at all. Bronzers are thus included here, though they are sometimes classified as makeup. Sunless tanning preps are used by 503,000 of the men in the overall suncare products user-audience; these men account for just under 0.5% of all adult males.

White Race, Affluence Encourage Men’s Use of Suncare Products

As one might assume, Caucasians are the likeliest men to use suncare products. [Table 8-24] In addition, the expense for the cosmetic effect, together with the leisure time required for a visit to a beach or tanning salon, suggest an affluence that the Experian Simmons data confirm. Incidence of men’s use of suncare products rises in line with increased levels of household income, with significantly above-average incidence of use starting at $75,000. Concentrations of those men who are college-educated and/or working at white-collar occupations further support an impression of more disposable income.

There is one standout age bracket in men’s use of suncare products – 35-44, accounting for much of the Generation X span, which in 2009 is 30-44.

Table 8-24 Demographic Characteristics Most Favoring Use of Suncare Products by Men, 2009 (Male Adults* in Thousands)

N.B.: Grey shading indicates that factor has significantly above-average incidence. Suncare Products Factor No. Men Using % All U.S. Men Index Total/Base 32,089 30% 100 Gender Male 32,089 30% 100 Female 0 0 0 Age 18-24 2,376 2% 65 25-34 5,264 5 99 35-44 7,178*** 7 119 45-54 7,065 7 105 55-64 5,475 5 105 65-74 3,005 3 99 75+ 1,726 2 81 Generations Gen. Y, 18-29 4,487 4% 74 Gen. X, 30-44 10,332 10 115 Baby Boomers, 45-64 12,540 12 105 Seniors, 65+ 4,731 4 92 Race/Hispanic Origin White 27,152 25% 121 African American 863 1 28 Asian 1,072 1 82 Other Race 308 ** 63 Hispanic 2,676 2 57 Education Grade School 740 1% 49 Did Not Graduate HS 7,677 7 74 HS Grad 9,650 9 77 Some College Experience 8,628 8 102 College Grad 7,052 7 151 Grad School Experience 6,521 6 161 Employment Status Part Time 2,539 2% 95 Full Time 21,885 20 111 Self-Employed 2,930 3 101 Continued on next page

Table 8-24 [cont.]

N.B.: Grey shading indicates that factor has significantly above-average incidence. Suncare Products Factor No. Men Using % All U.S. Men Index Retired 4,636 4 94 Student 850 1 109 Homemaker 492 ** 79 Occupation Management/Financial 4,953 5% 134 Professional/Technical 5,631 5 152 Sales 2,821 3 123 Office/Admin. Support 1,554 1 113 Labor 9,016 8 82 Marital Status Single (Never Married) 7,523 7% 90 Married 20,619 19 108 Divorced/Separated 3,176 3 88 Widowed 771 1 79 Marketing Region Northeast 5,755 5% 99 East Central 3,863 4 98 West Central 5,045 5 104 Southeast 6,012 6 96 Southwest 3,615 3 87 Pacific 7,258 7 113 Household Income (000) Under $25 2,423 2% 53 $25-$50 4,828 5 68 $50-$75 6,149 6 97 $75-$100 5,809 5 118 $100-$150 6,006 6 125 $150+ 6,874 6 158 Household Size (No. of Persons) One 3,598 3% 100 Two 12,924 12 111 Three or Four 10,958 10 98 Five or More 4,610 4 82 Children in Household (Age) No Child Present 20,883 19% 102 Any Children Present 11,206 10 97 Under 2 1,745 2 85 Continued on next page

Table 8-24 [cont.]

N.B.: Grey shading indicates that factor has significantly above-average incidence. Suncare Products Factor No. Men Using % All U.S. Men Index Two-5 3,771 4 98 Six-9 3,962 4 108 Ten-11 2,282 2 112 Twelve-17 4,464 4 95 Residence House 26,666 25% 104 Rented House 2,220 2 65 Condo/Co-op 1,728 2 151 Rented Apartment 2,532 2 67 * Persons age 18 and older. ** Less than 0.5%; sample size may be too small to be reliable. *** Read as follows: Almost 7.2 million men age 35-44 use suncare products; this sector equals 7% of all U.S. men. The same sector's index of suncare product use is 119; that is, men age 35-44 are incident among users at 19% above the national average rate, always set to 100. Source: Experian Simmons' Study of Media & Markets, Summer 2009; This material used with permission.

Coppertone Still Men’s Favorite U.S. Suncare Brand

Coppertone, America’s traditional favorite suncare brand, is also the favorite of the country’s men. The brand has a male consumer-base of 12.8 million, which is well more than double the 5.9 million-man base commanded by the second-most-popular brand, Banana Boat. [Table 8-25]

Table 8-25 Men's Use of Suncare Products, by Brand, 2009 (In Thousands of Adults*)

Brand No. Men Using % All U.S. Men Aloe Sun 1,355 1% Aveeno 1,880 2 Avon 1,114 1 Bain de Soleil 625 1 Banana Boat 5,914 6 Bullfrog 2,086 2 Coppertone 12,790 12 Hawaiian Tropics 3,306 3 Neutrogena 3,429 3 No-Ad 2,344 2 Ocean Potion 558 1 Sea & Ski 1,235 1 Tropical Blend 1,709 2 Vaseline 629 1 Total/Base** 32,089 30% * Persons age 18 and older. ** Column adds to more than total, due to respondents' use of multiple brands. Source: Experian Simmons' Study of Media & Markets, Summer 2009; This material used with permission.

Facial Cleansers Used by 20 Million Men

Experian Simmons finds that slightly under 20 million U.S.-resident adult males – about one in five – use facial cleansers, medicated skincare products, toners, or similar products. [Table-8-26]

Youth, Middle Age, Affluence Favor Facial Cleanser Use by Men

The data set on men’s use of facial cleansers/medicated skincare products, toners, and other facial skincare preparations, features those consumers in the 18-44 bracket, which includes some teens, twentysomethings, and many men in middle age. [Table 8-26] The wide age span also encompasses that of Generation X (again, age 30-44 in 2009).

Use of these products is also favored by affluent men; the base contains notable pockets of those living in households earning $150,000 or more; and accordingly, those with college experience or a college diploma; and those who work at white-collar jobs, though office support staffers also stand out.

Table 8-26 Demographic Characteristics Most Favoring Use of Facial Cleansers/Medicated Products/Toners, Etc., by Men, 2009 (Male Adults* in Thousands)

N.B.: Grey shading indicates that factor has significantly above-average incidence. Facial Cleansers, Etc. Factor No. Men Using % All U.S. Men Index Total/Base 19,979 19% 100 Gender Male 19,979 19% 100 Female 0 0 0 Age 18-24 4,081*** 4% 179 25-34 4,964 5 150 35-44 4,068 4 108 45-54 3,068 3 74 55-64 2,184 2 67 65-74 974 1 52 75+ 641 1 48 Generations Gen. Y, 18-29 6,703 6% 179 Gen. X, 30-44 6,409 6 114 Baby Boomers, 45-64 5,252 5 71 Seniors, 65+ 1,615 2 50 Race/Hispanic Origin White 12,078 11% 86 African American 3,016 3 158 Asian 1,065 1 131 Other Race * * * Hispanic 3,554 3 122 Education Grade School 828 1.0% 87 Did Not Graduate HS 5,981 6 92 HS Grad 7,254 7 93 Some College Experience 5,462 5 104 College Grad 3,147 3 108 Grad School Experience 2,709 3 107 Employment Status Part Time 1,870 2% 113 Full Time 11,938 11 97 Self-Employed 1,460 1 81 Continued on next page

Table 8-26 [cont.]

N.B.: Grey shading indicates that factor has significantly above-average incidence. Facial Cleansers, Etc. Factor No. Men Using % All U.S. Men Index Retired 1,831 2 60 Student 859 1 221 Homemaker * * * Occupation Management/Financial 2,395 2% 104 Professional/Technical 2,684 3 116 Sales 1,414 1 99 Office/Admin. Support 1,102 1 129 Labor 6,131 6 89 Marital Status Single (Never Married) 8,242 8% 158 Married 9,274 9 78 Divorced/Separated 2,098 2 93 Widowed 365 ** 60 Marketing Region Northeast 3,330 3% 92 East Central 2,446 2 100 West Central 2,578 2 85 Southeast 3,807 4 98 Southwest 3,020 3 117 Pacific 4,214 4 105 Household Income (000) Under $25 3,003 3% 105 $25-$50 4,203 4 96 $50-$75 3,615 3 91 $75-$100 2,966 3 97 $100-$150 3,043 3 101 $150+ 3,150 3 116 Household Size (No. of Persons) One 2,205 2% 98 Two 6,263 6 86 Three or Four 7,689 7 110 Five or More 3,823 4 109 Children in Household (Age) No Child Present 12,572 12% 98 Any Children Present 7,407 7 103 Under 2 1,579 1 124 Continued on next page

Table 8-26 [cont.]

N.B.: Grey shading indicates that factor has significantly above-average incidence. Facial Cleansers, Etc. Factor No. Men Using % All U.S. Men Index Two-5 2,625 2 109 Six-9 2,438 2 107 Ten-11 1,170 1 92 Twelve-17 2,680 3 91 Residence House 15,137 14% 95 Rented House 2,677 2 127 Condo/Co-op 842 1 118 Rented Apartment 3,130 3 133 * Persons age 18 and older. ** Less than 0.5%; sample size may be too small to be reliable. *** Read as follows: Almost 4.1 million men age 18-24 use facial cleansers, etc.; this sector equals 4% of all U.S. men. The same sector's index of facial cleansers, etc., product use is 179; that is, men age 18-24 are incident among users at 79% above the national average rate, always set to 100. Source: Experian Simmons' Study of Media & Markets, Summer 2009; This material used with permission.

Neutrogena Facial Cleansers Are Tops with U.S. Men

In Experian Simmons’ data set on men’s consumption of facial cleansers, medicated skincare products, toners, etc., the Neutrogena brand is projected to have 2.2 million users. [Table 8-27] Clean & Clear is within striking distance, with 2.1 million men using; while Clearasil, third most popular, has almost 1.7 million men using.

Table 8-27 Men's Use of Facial Cleansers, Medicated Skincare Products, and Toners, Etc., by Brand, 2009 (In Thousands of Adults*)

Brand No. Men Using % All U.S. Men Aveeno 977 1% Avon 858 1 Biore 506 1 Cetaphil 585 1 Clean & Clear 2,085 2 Clearasil 1,692 2 Dove 768 1 Neutrogena 2,230 2 Noxzema 1,142 1 Olay 720 1 Oxy 615 1 Sea Breeze 769 1 St. Ives 865 1 All Other Brands 3,537 3 Private Label 1,317 1 Total/Base** 19,979 19% * Persons age 18 and older. ** Column adds to less than total, because brands used by fewer than 0.5% of men are not presented Source: Experian Simmons' Study of Media & Markets, Summer 2009; This material used with permission.

Appendix: Addresses of Selected Marketers

Alès Groupe At Last Naturals 99 Rue du Faubourg Saint Honoré, 401 Columbus Avenue 75008 Paris Valhalla, NY 10595 France Phone: (914)232-2058 Phone: +33 (0)1 34 23 50 00 Fax: (914)747-3791 Fax: +33 (0)1 34 23 50 01 www.getluckytiger.com www.alesgroupe.com Alès Group USA, Inc., subsidiary Aubrey Organics 1350 Avenue of the Americas, 6th floor 4419 North Manhattan Avenue New York, NY 10019 Tampa, FL 33614 Phone: (800)55-PHYTO or (800)557-4986 Phone: (800)282-7394 Fax: (866)588-7950 Fax: (813)876-8166 www.phyto-usa.com www.aubrey-organics.com Alès Group Canada subsidiary 1255 Rue Université, suite 1600 Avea Organics Montreal QC H3B3B6 P.O.Box 121 Canada Chesptow Phone: (514)932-3636 Gwent NP16 6WP Anthony For Men Wales 560 Broadway, suite 503 The United Kingdom New York, NY 10012 Phone: +44 (0)800 027 1102 Phone: (646)613-1600 Fax: +44 (0)709 202 1615 Fax: (646)613-8686 www.avea.co.uk www.anthony.com Anthony for Men Europe Avon, Inc. c/o Atout Cosmetics GmbH & CoKG 1345 Avenue of the Americas Hallerstrasse 5D New York, NY 10105-0196 20146 Hamburg Phone: (212)282-5000 Germany www.avon.com Phone: +49 (0) 40 67 10 60 94 Fax: +49 (0) 40 67 10 61 52 Beraca Sabara Quimicos E Ingredients Anthony for Men Australia LtdA c/o Male Specific Pty Ltd. Av. Engenheiro Luiz Carlos Berrini, 1297 47 Glenridge Avenue Cj. 52 - Brooklin Novo West Pennant Hills, NSW 2125 Sao Paulo Australia 04571-010 Phone: +61 (02) 9634 5541 Brazil Fax: +61 (02) 9634 6392 Phone: 0055 1155093700 Fax: 0055 1155093705

Beiersdorf AG/Nivea for Men Colomer Group Unnastraße 48 Carretera de Roda, 70-08500 VIC D-20245 Hamburg Barcelona Germany Spain Phone: +49 (40) 4909-0 Phone: +(34) 93 881 46 46 Fax: +49 (40) 4909-3434 www.colomer.es www.beiersdorf.com Colomer USA, Inc., subsidiary 5344 Overmeyer Drive Billy Jealousy, LLC Jacksonville, FL 32254 2140 Commerce Street Phone: (904)693-1200 Dallas, TX 75201 www.thecolomergroup.com Phone: (214)745-5500 Fax: (214)745-5505 Combe, Inc. www.billyjealousy.com 1101 Westchester Avenue White Plains, New York 10604 Church & Dwight Co., Inc. Phone: (800)873-7400 469 North Harrison Street www.combe.com Princeton, NJ 08543 Phone: (609)683-5900 Estée Lauder, Inc./Aveda Men www.churchdwight.com 767 Fifth Avenue New York, NY 10153 Clarins Phone: (212)572-4200 4, Rue Berteaux-Dumas www.elcompanies.com 92200 Neuilly-sur-Seine, France The Hain Celestial Group, Inc. Phone: +33-1-47-38-12-12 58 South Service Road Fax: +33-1-47-38-35-88 Melville, NY 11747 www.clarins.com Phone: (631)730-2200 www.hain-celestial.com The Clorox Company Avalon Natural Products subsidiary 1221 Broadway 1105 Industrial Avenue Oakland, CA 94612 Petaluma, CA 94952 Phone: (510)271-7000 Phone: (707)769-5120 www.thecloroxcompany.com www.avalonnaturalproducts.com Burt’s Bees, Inc., subsidiary Jason Natural Cosmetics subsidiary P.O. Box 13489 3515 Eastham Drive Durham, NC 27709 Culver City, CA 90232 Phone: (919)998-5200 Phone: (310)838-7543 www.burtsbees.com www.jason-natural.com

Collistar S.p.A. Via Pirelli, 19 - 20124 Milan Italy Phone: +39 02 677503 - Fax: +39 02 6775454 www.collistar.it

Henkel KGaA Johnson & Johnson Henkelstraße 67 One Johnson & Johnson Plaza 40589 Düsseldorf New Brunswick, NJ 08933 Germany Phone: (732)524-0400 Phone : +49 211 7970 www.jnj.com Fax : +49 211 7984040 The Dial Corporation subsidiary Juice Beauty, Inc. Henkel Consumer Goods, Inc. 38 Miller Avenue 19001 North Scottsdale Road Mill Valley, CA 94941 Scottsdale, AZ 85255 Phone: (415)457-4600 Phone: (480)754-3425 www.juicebeauty.com Fax: (480)754-3789 www.henkelna.com Kamins Dermatologics, Inc. 32 Union Sq East, suite E Herban Cowboy New York, NY 10003 P.O. Box 24454 Phone: (212)253-7126 Minneapolis, MN 55424 Phone: (952)303-4516 Kao Corporation Fax: (952)487-2317 14-10, Nihonbashi Kayabacho 1-chome www.herbancowboy.com Chuo-ku, Tokyo 103-8210 Japan

Phone: 03-3660-7111 Inter Parfums, Inc./Nickel www.kao.com 551 Fifth Avenue, suite 1500

New York, NY 10176 Kiss My Face Corporation Phone: (212)983-2640 144 Main Street Fax: (212)983-4197 P.O. Box 224 www.interparfumsinc.com Gardiner, NY 12525

Phone: (845)255-0884 Jack Black LLC www.kissmyface.com 2155 Chenault, suite 509 Carrollton, TX 75006 Phone: (877)766-3388 Korres Natural Products www.getjackblack.com K. Manou 20-26 116, 33 Athens Jean Paul Gaultier Monsieur Greece 30 Rue Saint Martin Phone: +(30) 210 756 5800 75003 Korres USA Paris 584 Broadway, suite 304 France New York, NY 10012 Phone: (+33)1 44 68 85 05 Phone: (212)226-5444 Fax: (+33)1 44 68 85 10 www.korres.com

Jiangsu Longliqi Bioscience Co., Ltd Lion Corporation Changnan Village, Xinzhuang Town 3-7, Honjo 1-chome 215555 Changshu, Jiangsu Sumida-ku China Tokyo 130-8644 www.longliqi.com Japan Phone: +81-3-3621-6211 www.lion.co.jp

Lescoja Corporation The Mentholatum Company, Inc. Matte for Men 707 Sterling Drive 4122 West Butterfly Mountain Drive Orchard Park, NY 14127 Marana, AZ 85653 Phone: (716)677-2500 www.matteformen.com Fax: (716)674-3696 www.mentholatum.com The Little Wing Trading Company Ltd.,/ Bulldog Natura Cosméticos S.A. Pall Mall Deposit Rod. Regis Bittencourt, Km 293, 124 - 128 Barlby Road Bldg. 1, Potuvera London 06850-000 Itapecerica da Serra The United Kingdom São Paulo Phone: 0208 969 6006 Brazil Fax: 0208 969 6272 Phone: +55-11-5694-7655 www.meetthebulldog.com Nature’s Cure, Inc. LVMH Group Moët Hennessy Louis 4096 Piedmont Avenue, suite 171 Vuitton Oakland, CA 94611 22 Avenue Montaigne Phone: (877)469-9487 75008 Paris Fax: (510)601-9998 France www.naturescure.com Phone: 33 (0)1 44 13 22 22 Fax: 33 (0) 1 44 13 22 23 New Wave Fragrances, LLC/True www.lvmh.com Religion LVMH, Inc. 4101 Ravenswood Road, suite 401 19 East 57th Street Fort Lauderdale, FL 33312 New York, NY 10022 Phone: (954)446-7994 Phone: (212)931-2700 Fax: (954)327-7176 Fax: (212)931-2730 www.newwavefragrances.com Sephora USA LLC subsidiary First Market Tower Ole Henriksen of Denmark, Inc. 525 Market Street, 11th floor 16554 Arminta Street San Francisco, CA 94105 Van Nuys, CA 91406 Phone: (415)284-3400 Phone: (818)787-9301 Fax: (415)284-3434 www.olehenriksen.com Sephora.com LLC subsidiary First Market Tower Peter Thomas Roth 525 Market Street, 3rd floor 460 Park Avenue, 16th floor San Francisco, CA 94105 New York, NY 10022 Phone: (415)348-3200 Phone: (212)581-5800 Fax: (415)977-2946 www.peterthomasroth.com www.sephora.com

Marek Cosmetics, Inc./4VOO 720 South Service Rd, Unit 3 Stoney Creek, Ontario L8E 5S7 Canada Phone: (905)769-4203 Fax: (905)643-0889

The Procter & Gamble Company Sante Naturkosmetik GmbH One Procter & Gamble Plaza Zur Kräuterwiese Cincinnati, OH 45202 31020 Salzhemmendorf Phone: (513)983-1100 Germany www.pg.com Phone: (05153) 809 06 Global Gillette division Fax: (05153) 809 40 Prudential Tower www.sante.de Boston, MA 02199 Phone: (617)421-7000 Societe Bic www.gillette.com 14 Rue Jeanne d'Asnières 92611 Clichy Cedex The Real Shaving Company Ltd. France 1210 Lincoln Road Phone: +33-1-45-19-52-26 Werrington Peterborough Fax: +33-1-45-19-52-99 PE4 6ND The United Kingdom The Tend Skin Company Phone: 01733 281000 2090 SW 71st Street Fax: 01733 281028 Terrace Bay G-9 www.realshaving.com Davie, FL 33317 Phone: (800)940-8423 Royal Philips Electronics Fax: (954)475-8426 N.V./Koninklijke Philips Electronics N.V. www.tendskin.com Amstelplein 2 Breitner Center Unilever PLC P.O. Box 77900 Unilever House 1070 MX Amsterdam 100 Victoria Embankment The Netherlands London Phone: +3120 59 77777 EC4Y 0DY or The United Kingdom Groenewoudseweg 1 Phone: +44 (0) 20 7822 6719 5621 BA, Eindhoven Fax: +44 (0) 20 7822 5511 The Netherlands Unilever NV www.philips.com Weena 455 Philips Electronics North America P.O. Box 760 Corporation subsidiary 3000 DK Rotterdam 3000 Minuteman Road The Netherlands Andover, MA 01810 Phone: +31 (0) 10 217 4000 Phone: (800)223-1828 Fax: +31 (0) 10 217 4798 www.usa.philips.com www.unilever.com