Back on track: beauty industry to record growth in coming years

According to research firm Sanford C. Bernstein an average growth of 5.6 per cent is expected, slightly below the 2001-2005 average, but above the performance of 2006-2010.

The global Beauty & Personal Care (B&PC) market is the largest sub-segment of the Household and Personal Care (HPC) industry, representing 46 per cent (€264bn/ $382bn) of the total market.

How do the big players stack up?​

At a company level Bernsteina notes that Natura should continue to be the number one over the next few years assuming it sustains attractive double-digit growth.

Procter & Gamble, Estée Lauder and L’Oréal should all see improved growth as well with Estée Lauder improving as luxury stays strong, especially in the emerging markets, and as management continues its company metamorphosis.

Bernstein notes that L’Oréal is likely to continue its climb as improved investment and execution continues.

P&G should also improve if it delivers the Gillette/Pantene rehabilitations and its promise of increased emerging market penetration.

Bernstein believes that from the European-based players, Unilever and Henkel, the improved business management seen in recent years should sustain and slightly improve their robust/strong performance.

It’s not all good news…​

However it is not all rosy for Nivea brand owner Beiersdorf, once one of the fastest growing companies, as its focus on hair and make-up unwinds and its refocus on core skin categories will take time to build, slowing initial progress, although growth is expected to reach five per cent by 2014.

Colgate Palmolive is also forecasted to fall; in fact the biggest of the top 12, as growth slows from 7.3 per cent to 5.4 per cent. This is expected to come about as P&G's growth in Latin America slows on account of the fact that many of its major growth categories are reaching maturirty, while activity in Venezuela is also slows.

These predictions are all based on a market report carried out by Bernstein analysing the last ten years and looking ahead into the next four years.

The report analyses the long-term market growth by assessing the organic beauty and personal care sales of the top 12 global publically quoted beauty personal care companies, identified as P&G, L’Oréal, Unilever, Colgate, Avon, Beiersdorf, Estée Lauder, Johnson &Johnson, Shiseido, Kao, Henkel, Natura Cosméticos…and which represent 52 per cent of the global market.