Consumer confidence is slowly returning to France's beleaguered C&T market, however manufacturers have to deliver on quality to satisfy today's more discerning consumer. Emma Reinhold reports
Like so many established beauty markets, 2008 was certainly a year the French C&T market would prefer to forget. C&T manufacturers and retailers have felt the bite of ‘la crise’ over the last 12 months as consumer confidence plummeted, sales dried up and fears of a long and painful recession became a reality.
Although 2008 has arguably been one of the most difficult years the C&T market has experienced in recent history, sales on the domestic market did not drop to the levels that were feared. According to Euromonitor International, consumption of C&T products in France during 2008 remained flat at €1,1154.4m, a growth of just 0.6% on the previous year. And in a time when flat is being hailed as the new growth, this could be seen as a significant lifeline.
The economic downturn has affected almost every sector in the C&T industry but premium products have been particularly affected as consumers trade down to cheaper brands that are perceived to offer greater value in a climate where price has become paramount. However the premium market managed to sustain positive current value growth according to Euromonitor, although at a much lower level than in recent years.
The effect of consumers limiting their expenditure has also resulted in a boost in sales for mass C&T products, as well as the increasing sophistication of retailers’ private label offer. Troubled retail group Marionnaud for instance has invested heavily in NPD with the launch of an organic skin care range, Bio par Marionnaud in 2008 and a new 32-sku bath range in October this year in an attempt to reposition itself as a more dynamic, younger brand. The new bath line features a shower cream, body lotion and body scrub available in eight fragrances including chocolate almond and plum fig. The retailer is also in the process of rolling out a revamped line of accessories for hair, nails and make-up application.
On the export side meanwhile sales were actually up, according to French trade body UBIFRANCE. “Export sales have been less affected by the economic crisis and although there was a slight decline in the last quarter of 2008, this was relatively minor,” explains Annick Lacocquerie, head of consumer goods & healthcare at UBIFRANCE.
She tells SPC that export sales reached €9.6bn in 2008, an average sales increase of 7.8% per year over the last ten years.
“There has been a pick up of sales in the second quarter of 2009 which is due to the expansion of sales to emerging markets such as Russia, China and the Middle East, as well as a boost in innovation and NPD, which is driven by demand for anti-ageing products,” continues Lacocquerie.
NATURAL SALVATION
Whilst most C&T sectors in France are struggling to just keep their heads above water, demand for natural and organic products continues to march forward at a relentless pace with product development increasingly extending out of the traditional skin care sector to include products for the body and hair, as well as fragrance and colour cosmetics.
A survey by CSA/Agence Bio in October 2008 found that 44% of French consumers bought at least one organic product per month, up from 42% in 2007. Furthermore research consultancy Organic Monitor says France is the fastest developing European country for natural and organic cosmetics.
“Natural products are intrinsically more reassuring and comforting when consumer confidence is low,” explains Claire Moulin, research analyst, Euromonitor International. “After years of cosmeceutical product rule, products that are actually enjoyable to use are making a comeback and should remain a sure fire bet for future development in the sector.”
“Organic brands are a new form of luxury and there is room for brands with a true story and strong differentiation,” adds Daniel Joutard, founder of organic skin care brand Aïny. “For these brands the crisis is clearly an opportunity to demonstrate their credibility without forgetting to innovate and be reactive. Consumers at the moment are very wary of false stories and money driven only businesses.”
However no sector is recession-proof and news that premium organic retailer Aepure has been forced to shut the doors of its Paris boutique after just six months of business shows that the French love affair with all things natural may not be as enduring in times of economic hardship.
Despite this product development has been widespread. Within the body care sector Nuxe introduced its first body care line, Bio Beauté that boasts organic certification from Ecocert. The range includes four skus – Nourishing Body Oil, Firming Body Oil, Nourishing Hand Cream and Refreshing Deodorant – and is based on Nuxe’s Pulpy Cosmetology, which features organic fruit extracts rich in fatty acids and antioxidants.
Similarly Yves Rocher relaunched its Plaisirs Nature Body collection with new formulations that emphasise a more natural positioning and tap into current consumer demand.
In fragrance L’Artisan Parfumeur has now launched two scents, Jatamansi and Côte d’Amour, which are certified by Ecocert and carry the Cosmébio label, while in the hair care sector La Biosthétique debuted a comprehensive natural hair care and styling range. The brand has also expanded this range into skin care with a line of cleansers, toners and moisturisers for the face and body. Ingredients include coral algae, mineral and trace elements from springs in the Black Forest.
And in colour cosmetics Bourjois is hoping to bring the natural trend into the mainstream with the launch of Une, a new natural make-up brand for the mid-selective channel. The majority of products in the 19 sku range have been certified organic by Ecocert and are said to be free of synthetic colours, fragrances, parabens or GMO ingredients. The line includes mineral powders, blushers, mascaras and lip products, while the packaging can be refilled to reduce waste.
But skin care remains the real draw for C&T manufacturers and a greater number of ‘conventional’ brands are launching organic lines. Spa brand Thalgo has developed its first line certified by Ecocert and approved by Cosmébio. The Terre & Mer range features a blend of active marine ingredients including algae, mineral salts and trace elements, combined with Mediterranean plant extracts and essential oils. Products include a cleanser, toner, face scrub, anti-ageing moisturiser and serum.
The natural and organic trend has also successfully filtered down to the mass market with brands such as Ushaïa launching an organic shower gel and Vademecum debuting a bio toothpaste. Private label has also been a key area for the growth of the natural and organic sector and 2008 saw a slew of retailers launching lines.
PERFORMANCE PRINCIPLE
While the natural and organic trend is enjoying growth in France despite the challenging economic climate, product efficacy is still the key driver for consumers, and nowhere is this more evident than in skin care. According to ECM, results-driven, anti-ageing skin care is still the most popular product category, and as consumers become more educated about their skin care purchases, their demands are becoming more complex.
Manufacturers in both the mass and premium sectors are responding with increasingly sophisticated skin care products which seek to replicate the effects of cosmetic procedures.
At the mass end, retailer Sephora has developed its first dermatologist inspired skin care range, Skinbeauty. The line is the result of a two-year partnership with a Swiss cosmeceutical brand and includes True Radiance Peel, an at-home skin peel kit and Perfecting Serum, which can be used alone or after the peel treatment.
RoC meanwhile has launched Retin-Ox Wrinkle Correxion, a new anti-wrinkle range claimed to focus on the cause of wrinkles including the slowdown of cellular turnover, the decrease of collagen and the degradation of elastin. Products include a day moisturiser, night cream, intensive serum and an eye cream, said to be proven to reduce the appearance of wrinkles by 30% in eight weeks.
And Vichy has targeted both young and menopausal consumers with the launch of two new skin care ranges. Aqualia Antiox is designed to improve the skin’s surface, even out the complexion and impart a radiant glow and features three skus containing vitamin C, E and and Pure Citrus Polyphenol, a powerful antioxidant. Central to the line is Pro-Youth Fresh Treatment, a 21-day treatment comprising Pure Citrus Polyphenol concentrate and a separate sachet of 10% pure vitamin C, designed to be mixed together before application.
For the over 50s Vichy has extended its NeOVADIOL range to include NeOVADIOL Gf, claimed to redensify the skin’s extracellular matrix and reinforce its natural barrier action.
While the skin care offer at the mass end is becoming increasingly sophisticated, premium positioned brands are having to up the technology stakes and impart a little extra to their products. An interesting offshoot of this is the development of more sensorially attractive products which offer cutting edge efficacy with a twist of pleasure.
“In the last five years skin care products that conformed to the pleasure principle have often been perceived as frivolous and less effective,” says Moulin. “However in the gloomy economic climate of 2008 an austere efficacious product is not enough. Consumers are becoming pickier in their purchases, forcing manufacturers to refine and narrow their offer. They are no longer looking for several different products to fulfil different needs but are seeking credibility and pleasure in one product.”
Dior’s new Multi-perfection Instant Rescue Eye Treatment, part of the brand’s Capture Totale range, features a palladium coated applicator tip, which is designed to be massaged around the eye area to help reduce the appearance of dark circles and under-eye puffiness.
And more functional pharmaceutical brands such as Bioderma by Laboratoires Bioderma and Clarins owned Kibio’s organic range are beginning to marry dermatological expertise with ‘pleasurable’ textures, packaging and scents.
The trend is also evident in the super premium market with Caudalie’s new anti-ageing cream, Premier Cru, its most expensive product to date. The cream claims to help reduce the appearance of wrinkles, age spots as well as addressing loss of firmness and skin dryness thanks to a blend of resveratrol, viniferine and polyphenols.
Bulgari’s new Merveilleuse skin care range meanwhile is described as a high-tech beauty programme combining “tactile pleasure with comfort, protection and firmness” and promises to nourish, soothe, reinforce and restructure skin thanks to a Nutri-Restore complex, camelina and macademia oils, and sahku butter.
NICHE WORKING WELL
Fine fragrance in general may well have lost its lustre but French niche scents are working well both on home soil and abroad. Euromonitor believes that prestige fragrance brands owned by multinationals have become less desirable to French consumers due to frequent product launches and discounting. This is turn is prompting many consumers, particularly high-income consumers to favour niche brands.
“The world of perfume is suffering from confusion,” says Joel Palix, president, Clarins fragrance group. “The glut of products on the market is affecting the category and the bad habits so many manufacturers have got into are finally taking their toll. We need to look at how retailers and brands can be more sensitive and invest more in the quality of perfume.”
And brands are taking advantage of the upsurge in interest. Juliette Has A Gun has just launched its fourth fragrance, Calamity J, described by founder Romano Ricci as a “masculine fragrance dedicated to women”. The scent blends patchouli, iris, amber, musks and vanilla.
Meanwhile perfumer Francis Kurkdijan has opened his first boutique in Paris. Maison Francis Kurkdijan features scents, candles and fragranced home products in day and evening fragrances, as well as offering a bespoke fragrance service.
The sustained interest in the niche has also enabled brands to forge ahead with expansion plans outside France. Diptyque, Fredéric Malle and Creed have all opened standalone stores in New York in recent months and the brands say there are plans to roll out more concepts in the coming months.
Whether interest in the niche can be sustained is yet to be decided but the industry’s big players have certainly noted the potential in niche fragrances and next year sees the much anticipated return of Balenciaga to the fragrance fold, under the watchful eye of Coty Prestige. Coty is hoping its successful reinvention of the Chloé brand will act as a template for Balenciaga.
While the last 12 months have not been as bleak for the French C&T industry as previously feared, the outlook for the next 12 is not particularly positive either.
Euromonitor predicts final 2009 figures will reflect a particularly difficult year for C&T in France. Volume consumption is expected to decrease slightly as consumers look for simpler, more straightforward products. Manufacturers meanwhile will face the challenge of portraying their products as affordable luxuries rather than as superfluous.
The prediction from French research analyst Xerfi is similarly cautious, with predictions that consumption of beauty products in France will grow just 0.5% in 2009. Expenditure is predicted to fall 1.5% in 2010 as disposable income continues to shrink.
But with news from the Organisation for Economic Co-operation and Development (OECD) that between July and September the Eurozone economy grew for the first time since the first quarter of 2008, and is expected to further recover in 2010, the industry will be holding its breath for a more buoyant 12 months.
CRISIS TALKS ON SHOPPING HABITS
Will the beauty industry come out of the crisis unscathed? asked a recent French consumer survey by IFOP (Institut Français d’Opinion Publique). Of the consumers polled, 78% were worried about the crisis. A total of 54% said their buying ability was diminished and 67% of those who have restricted their spending choose to cut back on cosmetics.
Price was given as the governing factor when buying cosmetics by 66%, but for those aged 24-34 years this figure rises to 75%. Despite this 57% fully agree that they sacrifice quality when they buy on price, while 50% buy all their cosmetic products in the same shop or chain of shops. Nearly half, 45%, regularly or often research a cosmetic product before buying it, although innovation appears to be sacrificed in times of crisis with 82% agreeing (completely or somewhat) that innovations are too expensive. A total of 74% prefer to buy products they already know.
According to the study, 79% completely or somewhat agree that buying a big national brand has become a luxury, although 51% do not agree that a big national brand is necessarily a sign of quality.
One marketing effort that has gained its own reward is the loyalty card. Reward programmes have become hugely successful with 94% of consumers polled always using their cards when they shop.