Sector insight: Soap, bath and shower products

Sector insight: Soap, bath and shower products
Sector insight: Soap, bath and shower products

This mature, saturated market remains almost static, despite growth in sub-sectors such as antibacterial liquid soaps.

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When Unilever announced last September that it was buying Sara Lee's personal care division, it was seen as evidence of the FMCG company's desire to lead the European market. The £1.17bn deal will mean its portfolio of brands includes Dove, Radox and Sanex and boost its presence in emerging markets.

For companies operating in the soap, bath and shower (SBS) sector, such acquisitions are one way to try to grow. This saturated market reached a value of £680m in 2009, according to Mintel, and growth has been steady. Although these products are seen as essential purchases, supermarket discounting has hit brand value. Between 2007 and 2009 value grew by 6%. The rise in households with more than one bathroom has also encouraged multi-buy purchases, according to TGI.

Consumers' preference for showers over baths is reflected in the performance of products in this sector. Shower products accounted for 45% of value in 2009; their value grew by 23% between 2004 and 2009 to reach £308m. Meanwhile, bath additives' value has declined by 10% over the same period, to £145m last year.

Liquid soap's popularity has eroded bar-soap sales. So while sales of the former have increased by £39m since 2004, the latter fell £8m. Liquid soap, especially antibacterial variants, received an unexpected boost last year when fear of a swine flu epidemic encouraged people to wash their hands more frequently. This trend was not lost on brands such as PZ Cussons' Carex, which took out targeted advertising to build growth.

One problem manufacturers face is the lack of engagement consumers feel for the products, which are widely viewed as purely functional. Supermarket discounting has been a particular problem for brands as consumers have little brand loyalty, so are swayed by cheaper options. The desire of many to cut their spending in the recession has only exacerbated this trend.

Almost nine in 10 people buy these products in supermarkets as part of their weekly shop, according to GMI. Value sales of SBS products through multiple grocers grew by 8% between 2007 and 2009.

The proportion of adults who said they use only good-quality toiletries fell 5% between 2004 and 2009, according to TGI, although there was a slight rise in those who said they spend a lot of money on toiletries and cosmetics.

In this highly mature sector, product innovation has been poor, especially compared with related categories such as cosmetics and skincare.

Prior to Unilever's announced acquisition of Sara Lee, the two were leading manufacturers in this sector (their combined might will create a share of about 38%), followed by PZ Cussons and Johnson & Johnson.

Sara Lee's decision to sell its personal care arm will enable it to concentrate on its core food and beverage business. In 2009 its focus was on the Radox brand; it introduced a few variants and launched a branding campaign aimed at busy 25- to 44-year-old women, particularly those with children, urging them to 'be selfish' and find time for a relaxing shower or bath.

Unilever's portfolio includes Dove, Lynx and Vaseline, all of which have a presence in this market and expanded their ranges last year.

As well as Carex, PZ Cussons owns the Imperial Leather and Original Source brands. It revamped the former range last year and extended Original Source further into products for men.

The increase in the proportion of over-65s in the UK means that this sector might feel the pinch - this demographic tends to buy at lower volumes and opt for lower-value SBS products. Levels of employment also have an impact as those in full-time work are more likely to spend time and money on their appearance and hygiene.

The value of the SBS market is expected to reach £757m by 2014, according to Mintel. This equates to a steady rise of about 2% a year, or 11% over the five-year period. However, when inflation is taken into account, it means this market will remain static.

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