Private label is no longer seen as the poor relation to its branded cousins and instead is providing some innovative C&T offers. Emma Reinhold looks at how it has transformed itself into a credible competitor
When you think about the private label market for cosmetics and toiletries just a decade ago, the image conjured up in many people’s minds involves a product with little or no shelf appeal and not a great deal of cosmetic innovation; the main draw was the price. Fast forward to 2008, and the picture could not be more different. Today’s private label sector has adapted to today’s savvier consumer demands throwing off its old image and instead offering sophistication, innovation and even luxury without compromising on affordability.
“Ten years ago private label was seen as a substitute to branded products but today is much more sophisticated, with good quality products and good packaging. Retailers’ own brands are upping their competitive profile by tapping into current market trends,” explains Alexander Kirillov, global cosmetics and toiletries research manager, Euromonitor International. “For many consumers it’s a safe bet - you don’t have to spend much on a product and there is a confidence in the name of the retailer, who is more often than not a major supermarket like Sainsbury’s or Tesco, a ‘brand’ in itself.”
“For many years, the great appeal of private label over branded products was the price differential – private label was less expensive. Today the appeal has changed,” adds Brian Sharoff, president of Private Label Manufacturer’s Association (PLMA). “It is based on the consumer’s trust that the retailer is offering a better product at a better price. The customer often feels that the retailer is more responsive and in many cases, more innovative.”
Despite growing consumer confidence, the private label market only represented a 1.9% share of the overall cosmetics and toiletries market in 2007, according to Euromonitor International. Market share has failed to make any large gains in recent years, hovering around the 2% mark, however its profile has been steadily rising among consumers, encouraging retailers to expand their offering beyond basic commodity products and introduce more dynamic products, greater segmentation and choice to the consumer.
This is good news for suppliers who are upping their game in the creativity stakes. “Primarily customers are asking for more innovation in the way that ranges and products are designed and developed, ensuring not only that they can be great value but are also more unique and bespoke in presentation,” Jane Fletcher, group sales & marketing manager, Swallowfield tells SPC. “We are also seeing much greater interest in ingredients innovation. I’m pleased to see private label moving away from just offering ‘me-too’ versions of brands. There is space and a market for innovative and unique ranges and it is good to see retailers having the confidence to develop these.”
“Private label in all categories is marketed more aggressively than ten years ago,” adds Sharoff. “Many retailers are now using celebrities to endorse and promote their products. Others have expanded their assortment to include exclusive brands.”
Strategies such as these are helping the retailer reap its rewards. According to the PLMA, private label now accounts for more than one in every three products sold in the UK, Germany, France, Spain, Belgium and Switzerland. And Euromonitor confirms that 60% of private label sales come from Western Europe. In Central and Eastern Europe, modern retailing is rapidly taking root and as a result, retailer brands are making their biggest market share increases. PLMA reports that in the countries tracked for its PLMA 2007 International Private Label Yearbook, the Czech Republic, Hungary, Poland and Slovakia all recorded large share gains.
The ‘O’ word
Private label has not normally been associated with cutting edge trends. Mainstream C&T trends have always eventually found their way down to private label but the current interest in natural and organic beauty has seen private label leading the way. Retailers, and in particular supermarkets, have recognised the potential in this area, offering consumers comprehensive ranges of organic C&T products, and in some cases even their own certification standards.
“Supermarkets are very big in organic,” says Kirillov. “They realised that there is a huge demand for this and were quick to react, releasing natural and organic ranges earlier than some brands.”
Sainsbury’s has followed the lead set by Tesco and Waitrose by launching Organic You, a range of affordable organic skin and body care products, certified by The Soil Association. All the products in the 15-sku range are said to contain a minimum of 70% organic ingredients and are free of soap, synthetic fragrances, petrochemical derivatives, sodium laureth sulphate and synthetic preservatives such as parabens. Products in the skin care line-up include Gentle Cleansing Milk, Soothing Rosewater Toner, Rich Hydrating Moisturiser, Purifying Clay Mask, Soothing Eye Cream and Softening Lip Balm. The body care line features: Revitalising Body Wash, containing spearmint and rosemary; Uplifting Shower Gel, with lemon and bergamot essential oils; Relaxing Bath Essence; Smoothing Sugar Scrub; Moisturising Hand Cream; and Moisturising Hand & Body Lotion.
The Organic Pharmacy also extended its organic offer to include a complete colour cosmetics range. Organic Glam is formulated using organic extracts and mineral colours, with no synthetic preservatives or fragrances. The line includes foundation, concealer, eye shadows, lip colours and new hydrogenated fat-free lip pencils. The retailer has also developed its body care range with a new line of shower gels, a hand cream and foot cream. An anti-ageing skin care line is also slated for September.
Boots and Whole Foods have taken natural and organic beauty one step further by developing their own certification standards. Whole Foods’ Premium Body Care logo is said to distinguish its Whole Body product range from other inferior botanically derived products. The Whole Body range is also free from parabens, polypropylene, polyethene glycols, and sodium lauryl and laureth sulphates.
Boots has developed an organic standard for its new Botanics Organic range. The six skus each contain at least 90% certified organic ingredients, with the Nourishing Body Oil product containing an impressive 100% certified organic ingredients. Other products include Rosewater Toner (90%), Lip Balm (95%), Relaxing Bath Oil (97%), Hand Wash (94%), and Super Balm (95%), a rich, hydrating balm suitable for use on very dry areas.
“There are many independently approved organic certification bodies for food and all have to be approved by the EU. However, as toiletries with organic claims are a relatively new market development there are currently no widely used independent criteria to validate the claims. This is why Boots has developed its own policy to provide customers with a clear justification on how Boots ensures its organic cosmetic and toiletry products and ingredients are indeed organic. All of the organic ingredients used in the Botanics Organic range have been certified by a recognised organic body,” said a Boots spokesperson.
The issue of certification is certainly provoking more debate than a year ago, and which of the numerous standards to adopt is creating confusion. Organic Monitor has identified at least seven new standards that have launched or will launch this year, making this very unsteady ground.
“Many of our customers are looking for new opportunities in naturals and organics,” says Belinda Crawford, creative marketing manager, Budelpack. “As this trend is still evolving we find a lot of confusion in the market about what it really means. The question of accreditation is something many customers, and consumers, are grappling with – whether its Soil Association or Ecocert or something else altogether.”
But are all these standards really necessary? A recent survey by Organic Monitor uncovered that just 35% of consumers look for organic symbols and logos when buying natural personal care products. The big question is are retailers wasting their time?
Raising the bar
Innovation is one thing that private label has not been in short supply of over the last 12 months. Advances in skin and hair care in particular have come to the fore, with functionality, anti-ageing and greater product segmentation featuring heavily in the retailer offering.
Following the phenomenal surge in sales of its No7 Perfect & Protect beauty serum, after it was clinically proved to reduce the appearance of lines and wrinkles, Boots extended the skin care range to include day and night creams and an eye cream as well as introducing a comprehensive ten-sku men’s line featuring cleansing, shaving, tanning and anti-ageing products, plus the all important Protect & Perfect serum.
The ‘Protect & Perfect effect’ has shown the level of consumer demand for effective performance in their beauty products. The retailer also introduced Hair Loss Treatment Spray for Women in its Expert range. The spray is the result of six years’ research and marks a move by Boots into more medical-related problems.
Across the Atlantic CVS has launched 24.7, an own label skin care line that is claimed to reduce the appearance of fine lines and wrinkles. Each product features specific treatment benefits, such as firming and smoothing, and the line-up includes Targeted Wrinkle Treatment, Smoothing Anti-Aging Moisturizer and Instant Plump Volumizing Lip Shine.
“Consumers these days are incredibly savvy and are becoming increasingly conscious of what they are purchasing, so strong performance really speaks for itself,” says Alex Holt, category manager, beauty, Tesco.
Tesco’s Skin Wisdom Age Delay Vitamin C Youth Boost Serum aims to provide just that, with product claims including smooth, hydrated skin and a reduction in wrinkles after four weeks’ of use.
Similarly Champneys’ new Collagen Plus range is said to deliver plumping, wrinkle smoothing and firming action thanks to the hexapeptide Collaxyl. The range includes Super Charged Repair Concentrate, Restructuring Neck and Décolletage Cream, Firm & Protect Day Cream and Repair & Perfect Night Cream.
And Sainsbury’s Skin Therapy range combines provitamin B5, coenzyme Q10 and vitamin E to help protect against environmental aggressions such as pollution and UV damage. The range is divided into two lines, one for all skin types and the other developed for sensitive skin, underlining the need for private label to diversify the product offer to target a greater consumer target base.
“There is an increasing trend towards the use of premium ingredients that would typically only have appeared in more luxury products a few years ago,” continues Holt. “The mass-luxury category is booming and products at lower price points now sit confidently alongside far more expensive products.”
It is clear that private label has upped its game in recent years, offering in many cases a product range that could rival that of branded products, and with the current economic climate and a fall in consumer confidence, private label is well placed to increase its market share. But consumers will no longer accept just a low price – innovation, sophistication and a firm understanding of today’s C&T trends are vital to the success of this market.