The lines between salon brands and mass-market hair-care labels continue to blur as 2005 retail sales for the total U.S. hair-care market hit $7.2 billion.
Packaged Facts estimates the total market for hair-care products grew 3.9 percent over total sales for 2004, topping $7.2 billion in 2005. The compound annual growth rate (CAGR) for the 2001 to 2005 period was 1.1 percent.
In 2005, sales of all hair-care products tracked by Information Resources Inc. (IRI) grew 2.15 percent to $4.75 billion. Growth in 2005 primarily came from conditioners (up 4.1 percent) and hair accessories (up 6.9 percent); each category posted sales of $825 million. Sales of shampoo also were up with a 1.4 percent increase to $1.26 billion, while gels/mousses increased 2.4 percent. Sales and share for hair growth products fell the most, down 9.3 percent or nearly $6 million. Other categories in decline were hair coloring and permanent/relaxers, although recent data show hair coloring may be improving.
Shampoo usage remained high, at nearly 94 percent of the population in 2005, but, in general, the U.S. consumer has become less interested in other types of hair-care products. Consumers appear to be shifting away from higher-maintenance hairstyles that require the use of other hair-care products, and they are opting for more all-in-one solutions intended for specific hair color and issues.
Procter & Gamble (P&G) remains the leader in the hair-care market with the help of its premier brands, Pantene and Clairol, accounting for 28.1 percent of the market at $1.33 billion in sales, according to IRI. However, P&G's market share fell from 28.5 percent in 2004. P&G is restaging and extending its Pantene and Aussie brands this year, while jettisoning a number of other labels. A Clairol hair color restage also may be in the offing. With $960 million in tracked sales in 2005, No. 2 L'Oreal's market share increased from 19.5 percent to 20.2 percent in 2005.
The lines between salon brands and mass-market hair-care labels continue to blur. Salon and professional brands—such as John Paul Mitchell, Nexxus, John Frieda, and Ken Paves—that once fought this shift are, in part, embracing it, with many signing exclusive deals with mass retail outlets. CVS, for example, exclusively offers the Cristophe Beverly Hills professional hair-care line, named for stylist Cristophe Schatteman's California salon. For retailers, salon brands are viewed as a way to rekindle sales growth in a slow and cluttered hair-care category. However, for manufacturers, prestige brands are causing difficulties for value and private-label brands. P&G discontinued its Daily Defense and Daily Renewal lines early last year and put Pert up for sale, while Unilever's Salon Selectives is off the shelves of major chains.