Absorbing Increasing Personal Care Costs and Demands, and Maintaining Margins is not Mutually Exclusive, sees Kline

Absorbing Increasing Personal Care Costs and Demands, and Maintaining Margins is not Mutually Exclusive, sees Kline

PARSIPPANY, NJ, DECEMBER 6, 2011– As rising costs eat into margins, personal care marketers are reducing marketing expenditures and integrating their supply chain and consolidating distribution for improved efficiency. The success of these and other strategies is borne out by all marketers profiled in the recent Personal Care: U.S. Competitor Cost Structures 2011 report by worldwide consulting and research firm Kline & Company, registering double-digit operating margins from 2009 to June 2011.

Costs of goods sold, which includes raw materials, packaging, processing, and overhead, have increased on average to 11.1% of net sales in 2011, compared to 10.6% in 2009, finds Kline. Commonly used ingredients, such as UV agents, SPF ingredients, synthetic ingredients, chemical ingredients, fatty acids, and essential oils, have all increased by as much as 8% from 2009 to June 2011. Additionally, consumers are increasingly seeking out natural personal care products which tend to be more expensive to produce and source than synthetic alternatives. Packaging costs have seen similar increases as the consequence of volatile oil and commodity prices, as well as a consumer-driven interest in companies employing sustainable practices.

These demands are impinging upon profit margins and requiring the reallocation of fiscal priorities and a reassessment of cost structures. Marketing costs, being the most malleable, have been curtailed and claim an average of 48.3% of net sales so far this year, down from 50% in 2009. However, Kline finds that the reduction in marketing expenditure is not exclusively driven by cost-cutting, but rather the ever greater use of more focused, often cost-effective, new-media methods to connect directly with the consumer. Many companies are re-assessing their expenditures on traditional media advertising and increasing social media and web-based advertising in their marketing mix.

Greater consumer expectations of both environmental responsibility and sustainability are cited as new challenges and opportunities that are impacting personal care cost structures. The establishment and sourcing of sustainable, natural and/or organic ingredients are ostensibly challenges to costs of goods and ultimately profitability, but going green also helps create an opportunity for higher price points, increased sales, and future cost savings.

Kline’s related research on Natural Personal Care indicates that despite leaner times some consumers are willing to pay a premium for natural products and the popularity of these products have seen them experiencing double digit sales growth. Moreover, a brand’s appeal is also enhanced and the demand for “greener” and usually simpler packaging could ultimately reduce packaging costs. The high overheads resulting from continually high oil prices have already seen leading personal care marketers adopt lighter packaging to reduce freight costs and a minimization of plastic components, with added benefit of implied environmental awareness.

Ultimately, despite initial higher costs, sustainability can serve both the market and the industry by insisting upon more natural constituents – be they ingredients or packaging – and enhancing both the image of the consumer and the personal care company.

Personal Care: U.S. Competitor Cost Structures 2011 is a comprehensive examination of competitor cost structures of leading personal care marketers, focusing on key trends, developments, and business opportunities.

About Kline
Kline is a worldwide consulting and research firm dedicated to providing the kind of insight and knowledge that helps companies find a clear path to success. The firm has served the management consulting and market research needs of organizations in the chemicals, materials, energy, life sciences, and consumer products industries for over 50 years. For more information, visit www.KlineGroup.com.

Room for Both Natural and Traditional OTCs, but Healthier Growth Rates for Natural OTCs Predicted, Reports Kline

Room for Both Natural and Traditional OTCs, but Healthier Growth Rates for Natural OTCs Predicted, Reports Kline

PARSIPPANY, NJ, NOVEMBER 16, 2001 – While the U.S. traditional nonprescription drugs industry registered an average CAGR of 2.5% between 2005-2010, the market for natural over-the-counter (OTC) remedies has grown at a CAGR of 5.9% per year from 2009 to 2011, according to the research study Natural OTCs 2011: Impact of Non-drug Products on the U.S. OTC Market by worldwide consulting and research firm Kline & Company.

With close to 40% of consumers currently using more natural OTCs than in the previous year the natural trend, already well established in the personal care industry, has set roots in the OTC market as consumers gravitate towards natural products across the board. This correlates with the finding that 47% of U.S. consumers believe natural OTCs to be as effective as traditional OTCs. With the growing popularity of natural remedies and the large number of retailers that embrace the market segment, the market is set to maintain healthy growth rates over the next five years and is forecast to reach nearly $750 million by 2016. By contrast, the traditional OTC market is forecast to grow as little as 3% per year. However, there is room for both types of OTCs on the market as 53% of consumers surveyed note that they use both natural and traditional OTCs to treat themselves or family members when sick.

Within this fertile environment, large branded and savvy OTC marketers might consider augmenting their traditional OTC portfolios with natural OTC brands where appropriate; Procter & Gamble’s Align, GlaxoSmithKline’s Breathe Right, and Bayer Groups Phillips’ Colon Health are telling examples of how seriously the natural OTC trend is being taken and tapped. Opportunities appear ripe for large and small OTC companies alike to market natural OTC brands which could offer mutually beneficial business propositions.

For those interested in seizing the potential offered by this relatively young market segment, Laura Mahecha, Industry Manager at Kline’s Healthcare practice, cautions that business opportunities vary in attractiveness across various product categories. For instance, while cough and cold preparations are expected to grow at a rate of only 5% to reach $320.9 billion in 2016, it is anticipated that sleeping aids will grow by about 18% per year to reach $54.0 million in 2016 from $23.5 million reported in 2011. Other product categories covered by Kline include analgesics, digestive products, sinus medications, allergy relief products, and topical products.

“Growth in natural OTCs,” observes Mahecha, “will be dependent on whether consumers continue to find them effective and safe.” Kline’s survey on the usage and perception of natural OTC reveals that presently more than 45% of the respondents find natural OTCs effective and over 40% consider natural OTCs to be safer or have fewer side effects than traditional OTCs.

Kline’s Natural OTCs 2011: Impact of Non-drug Products on the U.S. OTC Market is a comprehensive market assessment of non-drug products that compete with traditional OTCs. It includes analysis of market size, consumer perceptions, and company profiles.

About Kline
Kline is a worldwide consulting and research firm dedicated to providing the kind of insight and knowledge that helps companies find a clear path to success. The firm has served the management consulting and market research needs of organizations in the chemicals, materials, energy, life sciences, and consumer products industries for over 50 years. For more information, visit www.KlineGroup.com.

Global Lubricant Market Initially Viscous as Cars Sales Stall, according Kline’s Fall 2011 Estimates

Global Lubricant Market Initially Viscous as Cars Sales Stall, according Kline’s Fall 2011 Estimates

PARSIPPANY, NJ, NOVEMBER 8, 2011 – Despite the global lubricants market’s 6% rebound in 2010 and a promising start to 2011, the industry’s growth has generally abated according to international consulting and research firm Kline & Company.

Asia, until now the major engine for growth, has seen its new car sales contract, with China’s growth estimate for 2011 at 3% compared to 30% last year, and India is estimated to see just 2% growth compared to the double-digit magnitude enjoyed last year. Geeta Agashe, Vice President of Kline's Petroleum & Energy practice, attributes this slowdown to regional inflation, interest rate hikes by central banks, the supply-chain disruption wrought by the tsunami/earthquake afflicting Japan, and exports contracted by lower demand. However, Agashe also observes that 2010’s benchmark growth was spurred by easier access to credit for car-buyers and government incentives, such as vehicle scrappage (“cash for clunkers”) schemes.

Conversely, 2011 Q1-Q3 car sales in the United States are up a defiant 10% over the same period last year and steel production remains resilient in the face of near universal declines: Asia is declining 0.7% per month (mainly due to China; India continues to grow), EU 27 is declining at 7.7% per month while Germany, France, and Italy are declining at 4%, 11%, and 19% per month, respectively.

Europe’s 2011 Q1-Q3 car sales show much disparity with Germany’s healthy 11% growth checked by a 5% drop in sales in the United Kingdom, an 11% drop in Italy, and a 21% drop in Spain. However, Germany’s exceptional performance is already waning as the eurozone makes more demands of it and the weakness of its neighboring markets curbs its exports. As an encouraging counterpoint, Europe’s commercial vehicle sales are up 12% over 2010.

Fueled by large domestic economies, Russia and Brazil are maintaining growth with car sales in Brazil alone up 7.5% over last year. Brazil’s strong currency is also helping by driving consumer spending. However, global financial uncertainly is affecting both countries’ exports and consequently growth is slowing.

With no solution yet found for the paralyzing eurozone financial crisis, exacerbating an already precarious and wary global economy, Kline’s research indicates modest—if any—growth in car sales in the near-future, which will challenge the lubricant industry’s recovery from the lows of 2008-2009.

Essentially, according to Agashe, despite an encouraging start Kline & Company extrapolates a flat global lubricants market in 2011, and with these particularly uncertain times, a volatile 2012. Agashe continues “Where there is change, there is opportunity and it’s thus imperative to be informed and prepared.” With a January 2012 release, Kline’s LubesNet Database, an interactive global database that captures finished lubricant consumption in vital lubricant markets, will provide Kline’s in-depth take and prognosis on 2012.

More on the lubricants market can also be found in Kline’s annual report Global Lubricants Market Analysis and Assessment which provides a detailed analysis of the global automotive and industrial lubricant industry segments.

About Kline
Kline is a worldwide consulting and research firm dedicated to providing the kind of insight and knowledge that helps companies find a clear path to success. The firm has served the management consulting and market research needs of organizations in the chemicals, materials, energy, life sciences, and consumer products industries for over 50 years. For more information, visit www.KlineGroup.com.

While Asian Markets Hum, North American and European Markets Grind; Shell Remains the Global Lubricant Market Leader, According to Kline

While Asian Markets Hum, North American and European Markets Grind; Shell Remains the Global Lubricant Market Leader, According to Kline

PARSIPPANY, NJ, NOVEMBER 2, 2011 – Economic uncertainty continues to mitigate the North American and European lubricant markets while the Asian market has remained resilient, claiming some 43% of global demand, according to latest study Global Lubricants 2010: Market Analysis and Assessment by international consulting and research firm Kline and Company. “However, within the overall Asian market, it’s also important to distinguish what parts of the market are ’accessible’ and what parts are ’quality’ because this is the opportunity for IOCs in the emerging world,” notes Geeta Agashe, Vice President of Petroleum & Energy Practice at Kline.

Kline's study finds that overall, global lubricant demand increased by an estimated 6% over 2009, but still trails pre-recession levels. The market is also getting more competitive with increasingly ambitious NOCs and Independents challenging the IOCs, not only on price, but improved performance of their products. Shell maintained its #1 market share position in 2010, accounting for a 13% market share, followed by ExxonMobil claiming 11%. Shell helped consolidate its dominance by improving its positions in the emerging markets, particularly China, Indonesia, and India, among others, and further developing OEM relations with Daimler, Hyundai, Honda, Suzuki, Renault Nissan, and Chinese OEMs, expecting a “halo” effect from that first-fill leading to after-market sales. ExxonMobil is continuing to focus on the “value” end of the market.

On a per country basis, the United States remains the world’s largest lubricant consumer by volume, although its dominance has declined to around 23% despite historically accounting for a quarter of global lubricants demand. The increasing penetration of synthetics in the North American automotive sector, while negatively affecting volumes, has compensated by boosting value. Similarly, the European market remains sluggish for reasons including high fuel prices deterring car ownership and use, continuing economic uncertainty and efficiency gains through downsizing and longer service-intervals. The one beacon of hope in Europe for volume growth might be Russia if its government's modernization programs are successfully implemented.

The demand for lubricants in the BRIC countries, in particular China and India, continues to grow quantitatively and qualitatively, driven by both industrial activity and growth in the commercial and passenger vehicle population. Kline reports that this latter phenomenon has spurred a manifold augmentation in quality through the implementation of global OEM specifications, improvements in packaging to deter adulteration, and greater brand awareness. This is well reflected in China where API Group III baseoil consumption has doubled every two years. Despite this, the caveat remains that price-points are often low and, given supply-links between state-owned enterprises and other factors, a significant part of this market remains inaccessible.

Kline's findings caution that Asian growth may be temporarily tempered by declining exports to Western markets, domestic inflation concerns, and a consequent slowdown in automotive sales. The report notes that in India interest rates have increased 10 times within the last two years thereby restraining car-ownership growth, and Japan's recovery from a devastating earthquake and tsunami has seen resultant domestic reconstruction crimped by power-shortages and disruptions to manufacturing supply chains.

Although market conditions remain volatile and the global economy in protracted flux, Agashe observes that the demand for lubricants remains fundamental and that lubricants are essential to keep the world moving.

Kline and Company's Global Lubricants 2010: Market Analysis and Assessment provides a detailed analysis of the global automotive and industrial lubricant industry segments and the players who participate in them.

Natural Products Outperform the Overall Personal Care Market: More Double-digit Growth on the Global Horizon

Natural Products Outperform the Overall Personal Care Market: More Double-digit Growth on the Global Horizon

By Nancy Mills, Industry Manager, Consumer Products

PARSIPPANY, NJ, October 14, 2010 - The surge in consumer interest and adoption of natural personal care products around the globe has driven outstanding growth in this segment of the market even as the overall industry has posted lukewarm results. While this story may already be well-documented, new research reveals that this little-red-sports-car of the consumer products industry will continue to pull ahead of the pack with stellar growth expected in key emerging markets.

Although not immune to the downturn in the global economy, the natural personal care market seems to have recovered more quickly than any other segment, outpacing overall industry growth in all four major market regions. As the naturals movement regains momentum, unprecedented growth in some unexpected locations may not only continue to outpace overall industry growth, but also provide significant opportunities for both regional and global players to capitalize on the double-digit surge expected over the next five years.

Burgeoning in Brazil
Despite its ranking behind Asia and Europe as only the third largest market for natural personal care products, the Brazilian market for naturals has ballooned at a 20% compound average growth rate (CAGR) since 2005. Despite an economic crisis that saw the nation’s GDP slide backwards by 0.2%, growth in naturals continued at a double-digit pace, making it one of the fastest growing markets in the world. Part of this growth can be attributed to the heavy influence of local giants Natura and O Boticário, which together command an overwhelming majority of the market share.

However, as the industry moves toward more natural formulations, there remains plenty of room for other players, especially those who can offer consumers a wider selection of truly natural products. The richness of Brazil’s biodiversity, particularly the flora of the Amazon region, is one of the key drivers in the growth of this segment, with many well-known ingredients already being explored for their cosmetic properties. The increasing supply of locally sourced raw materials also makes natural products more affordable and accessible for consumers.

Belief in natural remedies is already a well-ingrained aspect of Brazilian culture, where herbs and plants have long been widely used for medicinal and therapeutic purposes. This cultural acceptance makes it easier for manufacturers to make the natural “pitch” to consumers, who largely already appreciate the benefits. Meanwhile, the rising middle class has boosted overall cosmetics and toiletries growth, priming the market for naturals to blossom.

With large competitors like Unilever, Procter & Gamble, Avon, and L’Oréal already entering this segment on a global basis to diversify their existing product lines and meet the new demands of consumers, no doubt the local and regional players will see increasing competition in the coming years.

Asia Continues Climbing
Buoyed by a longstanding traditional of herbal remedies, Asia remains the largest market for natural personal care in the world, but now ranks second to Brazil in its pace, posting double-digit growth in 2010. Here, truly natural formulations hold a larger share at nearly one-fourth of the market, but growth in natural-inspired products is gaining strength as consumers demand mass products at lower prices.

Interestingly, the market for naturals in Indonesia is well-established, dominated by multinationals like Unilever, which has been on the ground here for more than two decades. Here, consumers seem to follow Western trends, despite the largely rural population, with the foreign origin of a brand commanding priority as a status symbol over its natural positioning. In contrast, truly natural products account for about one-third of the total market in India, which ranks second in the region behind China in terms of overall naturals growth. The competitive pricing of domestic brands and a strong belief among consumers in the medicinal properties of ayurvedic formulations are driving growth in the segment.

Also poised for double-digit growth, the market for naturals in Asia is expected to surge by a nearly 14% CAGR through 2015, buoyed by rapidly increasing urban population and greater awareness of natural products, especially in China, India, and Indonesia. Renewed interest for natural products—and a change in the perception of naturals from that of cheap alternatives to mass brands—is creating healthy competition and encouraging domestic brands to invest in research and development to improve product quality. The dominance and wide acceptance of herbal natural products in China and India will ensure ongoing demand in the natural segment.

Renaissance in Russia
Despite a deep economic downturn over the last two years, the natural personal care market in Russia enjoyed a growth rate significantly better than the country’s overall lackluster economy. Here, direct sales has emerged as a leading channel, offering low- and medium-priced natural cosmetics to meet the needs of cash-strapped Russians, both from an affordable pricing perspective and as a supplemental income opportunity. As the naturals trend continues its slow but steady uptick, the Russian market provides plenty of potential for growth as consumers are increasingly attracted to new trends and novelties and embrace the natural and/or organic lifestyle.

U.S. Upswing
In the supercharged natural personal care industry, the U.S. market has shown the most significant impact of the prolonged economic recession. However, the real story here seems to be the surge in truly natural products, which shot up more than 13% over the past year, while natural-inspired products inched up just over 11%. One of the leading factors behind the growth of truly natural products is product reformulations. Marketers are reformulating their natural-inspired products to fit more within the truly natural segment. Furthermore, some of the leading marketers of truly natural personal care products, including Burt’s Bees (Clorox) and Tom’s of Maine (Colgate-Palmolive), have succeeded in expanding their product lines in mass market retail outlets like Walmart, Target, and drug stores around the country, which has played an important role in the growth of the truly natural segment.

Around the globe, consumers have displayed ever-increasing interest in natural products, which will continue to push worldwide growth into double-digit territory—a welcome respite for diversified multinational manufacturers reeling from lackluster performance in the overall cosmetics and toiletries market. The key to leveraging this growth in specific regions is to remain mindful of the nuances and unique characteristics in each market. While stellar growth may be the universal condition, specific consumer demands and other drivers in each region will dictate the best course of action to capitalize on pockets of opportunity.

Russian Specialty Pesticides Market Open for Multinational Suppliers; Kline’s Advice: Invest with Caution

Russian Specialty Pesticides Market Open for Multinational Suppliers; Kline’s Advice: Invest with Caution

PARSIPPANY, NJ, OCTOBER 3, 2011 – In the first-ever look at the Russian specialty pesticides market, a new report by worldwide consulting and research firm Kline & Company has found the $218 million market to be dominated by local suppliers and generic products, yet still ripe for new product formulations—a situation that demands cautious optimism for multinational suppliers looking to establish a presence in the market.

Despite these challenges, Kline’s Specialty Pesticides 2011 Russia: Market Analysis and Opportunities reveals there is still room for branded suppliers to make inroads with more advanced formulations and technical expertise to help customers find the safest, most effective products to meet their pest and weed control needs. Backed by more advanced product formulations, technical assistance, and a consultative approach, multinational suppliers have a distinct competitive advantage—particularly with industrial and commercial customers who demand a higher level of efficacy, safety and efficiency for their higher-volume applications—over generic suppliers whose only real competitive differentiator is low price.

“The Russian economy is growing, but also still adjusting to a free market economy devoid of government control,” said Dennis Fugate, Specialty Pesticides Industry Manager with Kline. “In pest control, the lack of product registration in some segments has opened the doors to off-label usage, low-cost generic imports from India and China, and some imitation products that aren’t nearly as effective as the genuine product.”

Meanwhile, the Russian government is making progress on enforcing product patents to reduce the prevalence of counterfeit products. In some cases, value-priced generic imports fall outside product registration requirements; in others, registration is extremely difficult and costly. This lack of quality assurance in some areas raises questions about the efficacy and safety of the products themselves, leaving patent enforcement as their only form of regulation.

Fugate adds: “Multinational brands could have a strong advantage with products that can offer certified genuine ingredients and deliver guaranteed results.” Rather than rely on the government, some multinationals are taking their own action, incorporating unique identifying marks to their product packaging. For example, Bayer Cropscience offers information on its website that helps customers identify genuine products and even offers a hotline for consumers to call and report a counterfeit product or get information to verify the authenticity of a product they’ve purchased.

Finally, while the Russian government has conceded some control of the economy, the government “tender” process often awards supply contracts to the same companies year after year, mostly based on established relationships and extremely low pricing. This is most prevalent in the industrial vegetation management (IVM) segment. However, despite this challenge, Kline’s data shows the market for IVM is growing, which could lead to more room for competition based on efficiency, efficacy, and technical services.

Fugate says that in spite of these issues, the Russian market is enticing—as the economy modernizes, consumers are eager to try more contemporary Western products, giving technologically advanced suppliers the opportunity to introduce new active ingredients that have yet to make their way into the Russian market. While generic suppliers depend on tried-and-true formulas, this leaves room for product innovation by aggressive formulators who understand the market dynamics.

Kline’s Specialty Pesticides 2011 Russia: Market Analysis and Opportunities offers in-depth analysis of the professional pest control, stored grain, consumer, forestry, IVM and rural hygiene markets to help subscribers identify potential business opportunities and new markets, understand the competitive landscape, spot market trends and future growth and identify potential alliances, acquisition opportunities or customers.

About Kline
Kline is a worldwide consulting and research firm dedicated to providing the kind of insight and knowledge that helps companies find a clear path to success. The firm has served the management consulting and market research needs of organizations in the chemicals, materials, energy, life sciences, and consumer products industries for over 50 years. For more information, visit www.KlineGroup.com.

Beauty Sales through Alternate Channels Post a 21 % Gain as U.S. Consumers Flock to the Internet and Television to Buy Cosmetics and Skin Care, According to Newly-released Kline Report

Beauty Sales through Alternate Channels Post a 21 % Gain as U.S. Consumers Flock to the Internet and Television to Buy Cosmetics and Skin Care, According to Newly-released Kline Report

PARSIPPANY, NJ, SEPTEMBER 21, 2011 – Sales of cosmetics and toiletries through alternate channels have exploded, growing by nearly $1 billion since 2005, according to the latest Beauty Retailing USA 2010 report by worldwide consulting and research firm Kline & Company. More double-digit growth is expected as consumers are increasingly drawn to the convenience of at-home shopping to meet their beauty needs.

Posting a stellar 25.4% growth from 2005 to 2010, e-commerce sales are leading the way, followed by home shopping networks like QVC and HSN posting a CAGR of nearly 20%. Similarly infomercials for brands such as Hydroxatone, ProActive, and Sheer Cover, bolstered by industry veteran Guthy-Renker and its multi-media celebrity-endorsement approach to marketing, have seen sales grow over 17%.

“Consumers are spending more time at home, either by virtue of unemployment, telecommuting, or merely a desire to save money by not going out so much,” observed Karen Doskow, Consumer Products Industry Manager at Kline. “Instead of running out to the store to buy their beauty products, they’re watching home shopping channels and infomercials to get the latest on new products.” They’re scouring through websites like dermstore.com to get information on high-end facial treatment products with unique benefits.

Consequently, brand marketers are exploring new tactics to build online buzz. Daily deal sites, such as Groupon, LivingSocial, and so-called “flash sale” sites such as HauteLook, Rue La La and Gilt Group, are fueling e-commerce sales by creating awareness and enticing interest about new products or services by offering one-time discounts in order to create trial.

Doskow also notes that the bricks-and-mortar front is far from lagging: “Beauty has become the new revenue sweetheart in the traditionally slow-growing drug store channel as pharmacies reinvigorate their beauty offerings to lure customers with a more upscale, specialty-store look. For example, Walgreens’ acquisition of Duane Reed and its high-end Look boutiques is expected to promote growth for both the chain and the channel. Meanwhile, CVS, Rite Aid, and others have begun offering new and improved customer loyalty programs and expanding shelf space for their beauty merchandise.”

Furthermore, Kline’s study reveals that as brands increasingly look to leverage mobile and e-commerce to create seamless and ubiquitous purchase options for their customers, single-channel marketing is being rendered less and less viable.

“We expect a great deal of cross-channel promotion that will drive solid growth over the next five years,” predicts Doskow. “The Internet and mobile technologies are empowering consumers to be even more aggressive in their product and price comparisons and driving marketers to deliver value-based products to meet these demands.”

In its ninth edition, Kline’s Beauty Retailing USA 2010: Channel Analysis and Opportunities offers an in-depth look at the challenging cosmetics and toiletries retail environment, highlighting how market dynamics are influencing product sales and consumers’ shopping behavior. The report covers 27 product categories across six purchase channels and 20 sub-channels, features detailed profiles of the leading retailers in each channel and includes access to Kline’s exclusive interactive database.

About Kline
Kline is a worldwide consulting and research firm dedicated to providing the kind of insight and knowledge that helps companies find a clear path to success. The firm has served the management consulting and market research needs of organizations in the chemicals, materials, energy, life sciences, and consumer products industries for over 50 years. For more information, visit www.KlineGroup.com.

A Rising Consumer Understanding of Personal Care Active Ingredients Continues to Drive Product Development on the U.S. Market, Says Kline

A Rising Consumer Understanding of Personal Care Active Ingredients Continues to Drive Product Development on the U.S. Market, Says Kline

PARSIPPANY, NJ, SEPTEMBER 6, 2011 – The specialty actives market in the United States, reaching nearly USD 240 million in 2010, is expected to grow at an annual growth rate of 3.8% from 2010 to 2015, according to recently published study Specialty Actives in Personal Care 2011: U.S. Market Analysis and Opportunities by worldwide consulting and research firm Kline & Company. A rising consumer understanding of active ingredients in personal care products driven by extensive media coverage is pressurizing the active ingredients manufacturers to produce innovative products.

“The increasing average age of a U.S. citizen and desire to look younger has raised consumer expectations for efficacy of active ingredients resulting in functionality becoming increasingly important,” comments Anna Ibbotson, Industry Manager at Chemicals & Materials practice at Kline. “Consumers want to see results, and this is reflected in the trend towards more effective finished personal care products.”

She also adds that, for example, “In the natural products arena, the presence of plant-based ingredients in the formulation used to be enough to encourage personal care consumers to purchase the products. However, consumer awareness concerning product activity has increased, and the product’s function and efficacy are regarded at least as important as the active ingredient source.”

As the demand for natural concepts continues, this will sustain growth in the botanicals segment, which is currently the largest specialty actives category with 38% market share. The fastest growing category is biotechnology products with an estimated compound annual growth rate of 4.5% from 2010 to 2015. From the functionality perspective, the largest and the fastest growing group is anti-aging, which includes sub-functionalities such as anti-wrinkle, firming, moisturizing, skin radiance, or age spots, accounting for 56% of the market in 2010.

The specialty actives market is fragmented although recent mergers and acquisitions have created a more structured industry. Each category of specialty actives is dominated by a different group of companies. BASF, with its own active ingredients division BASF Beauty Care Solutions and its most recent acquisition of Cognis and Laboratoires Sérobiologiques, has established itself as the market leader.

Competition in the market is centered around two key factors: combining efficacy with the natural trend, and distinction of the product due to a unique characteristic, such as patented molecules like ascorbic acid 2-glucoside (AA2G) or a unique extraction process. Kline's report suggests opportunities exist in these markets, given steady growth projections and the current diversity in supplier specialty.

Kline’s fourth edition of Specialty Actives in Personal Care 2011: Multi-Regional Market Analysis and Opportunities provides a detailed analysis of the current and future business and competitive landscape for specialty actives in personal care in Europe and the United States. It covers estimated consumption and sales by major supplier for botanical actives, proteins and peptides, enzymes and coenzymes, and other types of active ingredients including marine- and biotechnology-based ingredients.

At-home Skin Care Devices: The Next Billion Dollar Market, According to Recently Published Kline Report

At-home Skin Care Devices: The Next Billion Dollar Market, According to Recently Published Kline Report

PARSIPPANY, NJ, AUGUST 17, 2011 – A new report from worldwide consulting and research firm Kline & Company reveals key findings on the booming market for power-operated devices designed for acne elimination, anti-aging treatment, and daily cleansing. In At-home Skin Care Devices 2011: U.S. Market Analysis and Opportunities, Kline pegs the market at close to $1 billion at the retail level for 2011, with exceptional growth expected for the next five years. Kline's report is the first of its kind to take an in-depth look at the market for this emerging class of products.

“We knew this market was really taking off, but even we were shocked by its sheer size,” said Karen Doskow, Industry Manager for Consumer Products at Kline. “Clearly, these devices are finding a very receptive and growing audience of savvy consumers looking to save time and money by avoiding regular trips to the doctor for those in-office procedures that were once commonplace in more robust economic times.” With more consumers staying at home, either due to job losses or by virtue of the work-at-home/telecommuting trend, Doskow says the direct sales channel, which includes home shopping networks, infomercials, and e-commerce, is the primary means of distribution, with about 60% of the total market share.

While sonic cleansing products, led by market leader Clarisonic, top the list as the highest growth segment, acne treatment devices are the fastest growing. Meanwhile, anti-aging devices are expected to grow by a very healthy 50% this year alone, benefiting from consumers’ demand for products to reduce the appearance of fine lines, wrinkles, and age spots. Kline’s recent Professional Skin Care research revealed that anti-aging is the number one skin care concern for consumers, with topical product sales in this category, comprising more than 40% of the market. “This dynamic provides a perfect opportunity for device and topical product manufacturers to pair their products together to meet consumers’ anti-aging needs,” Doskow said.

At-home Skin Care Devices 2011: U.S. Market Analysis and Opportunities also points to strong opportunities for manufacturers to develop mass market product options for price-sensitive consumers and to diversify their product lines to appeal to a wide range of age groups, from teens to mature consumers. “It’s incredible how marketers are targeting teens with colorful and easy-to-use products such as Neutrogena’s Wave amongst other market entrants,” adds Doskow.

Kline’s At-home Skin Care Devices 2011: U.S. Market Analysis and Opportunities covers the market for facial-related, power-operated devices with 19 profiles of key brands and sales channel data derived from the direct, luxury, and mass distribution trade classes. For more information, visit www.klinegroup.com

About Kline
Kline is a worldwide consulting and research firm dedicated to providing the kind of insight and knowledge that helps companies find a clear path to success. The firm has served the management consulting and market research needs of organizations in the chemicals, materials, energy, life sciences, and consumer products industries for over 50 years. For more information, visit www.KlineGroup.com.

Kline Research Shows Industrial Fluids Rebound in North America

Kline Research Shows Industrial Fluids Rebound in North America

PARSIPPANY, NJ, August 1, 2011 – The North American market for industrial oils and fluids is showing promising signs of post-recession recovery with overall consumption volume up 11% in 2010 over the previous year, according to the latest report Opportunities in Lubricants: North American Market Analysis by worldwide consulting and research firm Kline & Company. Likewise, the global market for metalworking fluids is expected to increase by a CAGR of 2% through 2015, according to the Kline’s Metalworking Fluids 2010 Global Series: Market Analysis and Opportunities.

With U.S. car and light truck manufacturing up some 2.1 million units in 2010 from a recessionary low of just 5.7 million in 2009, all indications point toward an 8.5 million unit production for 2011. This upward trend is expected to drive increased consumption in metalworking, hydraulic, and other industrial oils and fluids over the next few years.

In addition to gains in the transportation equipment industry in the United States, the growing adoption of alternative energy technology is driving demand for synthetic lubricants like gear oil and greases on a global scale, and global trade is fostering increased demand for marine engine oils, and related compressor fluid and hydraulic fluids for the marine transportation market. The study also finds growing opportunities for synthetic food grade lubricants, such as gear oil, white oils, grease, and compressor and refrigeration oils.

“The resurgence in manufacturing is a welcome change for lubricant marketers, particularly specialty suppliers who cater specifically to those industries that were hit the hardest by the downturn, such as automotive and construction equipment manufacturers,” said Milind Phadke, Industry Manager with Kline’s Energy Practice. “Many companies focus on niche applications, leveraging their technical expertise and flexibility to offer specific formulations to meet their customers’ needs. Now that things are beginning to turn around, they will likely see a renewed demand for these specialized services as manufacturers look to optimize production.”

While the North American markets have only recently rebounded from a deficit, demand for metalworking fluids in Asia continues to grow at a healthy rate, sustaining an average 3.3% annual growth rate over the last three years. The continued vitality of the Chinese and other regional manufacturing industries has spurred consumption of metalworking and other industrial fluids across all categories.

Meanwhile, in Europe, metalworking fluid demand has dropped off 1.8% over the past three years, but the loss has been tempered to some degree by the strong manufacturing recovery in Germany and Russia, where exports to Asia and internal demand respectively have buoyed consumption.

With global growth of metalworking fluids forecast at 3% through 2015, Kline’s research indicates regional growth is expected to hit 5% in Asia, 2% in North America, and 1% in Europe, bringing this market back into the black for the first time since the recession began two years ago.

Kline’s Metalworking Fluids 2010 Global Series: Analysis and Opportunities provides an accurate, independent overview of the industry addressing key trends, opportunities and threats on a worldwide basis and by geographic region for the Americas, Europe, and Asia. Volume III: Industrial Oils and Fluids 2010 in Kline’s Opportunities in Lubricants: North American Market Analysis series provides continuing analysis of the products, markets and distribution in the United States, Canada and Mexico to offer subscribers up-to-date information on consumption, products, and suppliers.

Given the recent shifts in the global industrial oils and fluids market, Kline is launching Global Industrial Oils and Fluids 2012: Market Analysis and Opportunities, a complete overview and analysis of the diverse end-use industries and products that make up the industrial oils and fluids market.

About Kline
Kline is a worldwide consulting and research firm dedicated to providing the kind of insight and knowledge that helps companies find a clear path to success. The firm has served the management consulting and market research needs of organizations in the chemicals, materials, energy, life sciences, and consumer products industries for over 50 years. For more information, visit www.KlineGroup.com.