Natural Foods Merchandiser

Personal care still a superstar in '07

Natural and organic body care sales are strong, with projected growth in 2007 of $91.8 million (compared to $89.8 million in 2006) across naturals supermarkets and conventional food, drug and mass merchandisers.

Body care includes nine categories, with similar sales rankings across channels. Skin care is the clear leader in dollar sales in both naturals and FDM; hair products and oral care also place among the top four categories. In naturals supermarkets, soap and bath preparations places second, while in conventional FDM, personal care (which includes analgesics, antiseptics, family planning and therapeutic topical products) and first aid takes the No. 2 spot.

Although growth of personal care in naturals stores slowed in 2007, sales volume was still higher than in previous years.
The lion's share of sales
Conventional FDM leads in overall body care department dollar growth, as well as for year-over-year growth of almost all individual categories, but naturals take the lead in sales volume. While the conventional FDM channel accounts for 77 percent of body care dollar growth, naturals supermarkets account for 57 percent of current dollar volume. The fact that naturals supermarkets represent the majority of volume is staggering considering that the channel consists of approximately 1,000 stores versus the 64,000 stores that make up the conventional FDM universe. Growth drivers of natural body care sales clearly differ by channel; conventional FDM gains are a result of increased distribution of products or greater availability, whereas naturals supermarket gains come from increased velocity, or sales depth.

Continued awareness of health, wellness and environmental issues drives consumers to seek safer body care alternatives that are free of potentially harmful ingredients like parabens and petrochemicals. Committed consumers of natural and organic products are thinking beyond what they put into their bodies and realizing that what they put on their bodies is also an important element in overall health. While heavy buyers of natural and organic products account for only 20 percent of total natural product sales, this same group accounts for more than 70 percent of natural body care sales, indicating that this is a very undeveloped market with lots of room to expand its reach.

Deeper selection in naturals
The availability of high-quality, all-natural skin care products continues to increase as consumers drive demand. There are some 920 natural body care brands, of which 840 are sold in naturals supermarkets, with more than 600 exclusive to the channel. In contrast, approximately 300 brands are available in conventional FDM, 78 of which are exclusive to the channel. What's more, naturals supermarkets carry nearly 9,000 unique items versus the 650 items available only in conventional FDM.

As often is the case with natural and organic product trends, conventional FDM is a platform for top-selling brands and items, while naturals supermarkets offer wider selections. Sales share is dispersed across hundreds of brands in naturals supermarkets, with the top two brands representing only 12 percent of sales. Conversely, conventional FDM share is very top-heavy, with the top two brands representing 40 percent of total department sales. As natural body care product sales continue to take off, manufacturers will expand their reach in FDM, resulting in more brands and items that are unique to the channel and a greater selection of products, making FDM a more serious competitor for naturals retailers.


Naturals Supermarkets

Sales Rank

Retail Dollars ($M)

Retail Units (M)

Avg. Retail Price

Current

% Change

Absolute Chg.

Current

% Change

Absolute Chg.

Current

% Change

Body Care

$428.72

4.7%

19.22%

$62.87

3.0%

1.81%

$6.82

1.7%

Skin Care

1

$132.94

1.1%

1.41%

$15.18

-1.7%

-0.26%

$8.76

2.8%

Soap & Bath Preparations

2

$74.03

7.7%

5.27%

$14.50

3.3%

0.47%

$5.10

4.2%

Hair Products

3

$69.12

10.4%

6.50%

$8.70

6.5%

0.53%

$7.94

3.6%

Oral Care

4

$44.20

7.2%

2.97%

$10.95

8.2%

0.83%

$4.04

-0.9%

Personal Care & First Aid

5

$37.68

11.2%

3.78%

$4.74

9.4%

0.41%

$7.94

1.6%

Aromatherapy & Body Oils

6

$32.34

10.4%

0.13%

$3.73

-0.7%

-0.03%

$8.66

1.1%

Deodorants

7

$17.81

4.7%

0.79%

$3.43

3.4%

0.11%

$5.19

1.2%

Cosmetics & Beauty Aids

8

$15.50

-2.2%

-0.35%

$1.26

-9.4%

-0.13%

$12.33

8.0%

Body Care Kits & Sets & Travel Packs

9

$5.10

-20.1%

-1.28%

$0.36

-25.8%

-0.13%

$14.08

7.7%


Convention FDM

Sales Rank

Retail Dollars ($M)

Retail Units (M)

Avg. Retail Price

Current

% Change

Absolute Chg.

Current

% Change

Absolute Chg.

Current

% Change

Body Care

$323.09

25.1%

64.84%

$61.71

22.4%

11.31%

$5.24

2.2%

Skin Care

1

$111.68

60.3%

42.03%

$24.50

45.5%

7.66%

$4.56

10.2%

Personal Care & First Aid

2

$67.57

1.4%

0.91%

$8.59

1.3%

0.11%

$7.87

0.0%

Oral Care

3

$47.65

2.9%

1.36%

$9.91

3.6%

0.34%

$4.81

-0.6%

Soap & Bath Preparations

4

$33.73

30.1%

7.81%

$8.12

18.5%

1.27%

$4.15

9.8%

Hair Products

5

$21.03

57.9%

7.71%

$3.41

49.1%

1.12%

$6.17

5.9%

Deodorants

6

$20.24

18.7%

3.18%

$4.80

16.5%

0.68%

$4.21

1.9%

Body Care Kits & Sets & Travel Packs

7

$15.28

6.9%

0.98%

$1.33

0.3%

0.00%

$11.52

6.6%

Aromatherapy & Body Oils

8

$4.54

30.9%

1.07%

$0.89

21.1%

0.16%

$5.10

8.1%

Cosmetics & Beauty Aids

9

$1.36

-14.1%

-0.22%

$0.15

-20.0%

-0.04%

$9.27

7.4%


Growth

Naturals Supermarkets

Conventional FDM

Combined Channel

2004 to 2005

17.44%

22.22%

19.22%

2005 to 2006

11.86%

20.19%

15.03%

2006 to 2007

4.41%

26.95%

13.38%


Natural Foods Merchandiser volume XXIX/number 1/p. 46

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