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Brand Acquisitions and International Expansion Boosting Market Growth for Pro Skin Care Products


Kline study to examine trends in evolving market

(press release from Kline @ Company)

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LITTLE FALLS, N.J., July 22 -- With the continued demand for products that can "turn back the hands of time," the professional skin care market is forecast to remain one of the fastest-growing sectors of the cosmetics and toiletries industry. Now, market consolidation and overseas expansion are bolstering the market segment further.

The professional market remains very fragmented with a lot of small, niche brands, but we're starting to see some convergence," says Carrie Bonner, industry manager of the Consumer Products practice for Kline & Company's research division. "The market is evolving, and major players are starting to emerge as some of the smaller ones drop off or are bought out."

Over the past five to six years, the market for professional skin care products, sold primarily through spas and salons or dermatologist and plastic surgery clinics, has been booming. According to preliminary research from Kline's PROFESSIONAL SKIN CARE 2005 market study, worldwide sales for products sold through these outlets exceeded $2 billion last year and have been growing at double-digit rates, in contrast to growth of only 4% for traditional cosmetic and toiletry products.

While the overall market remains crowded with many suppliers and small brands, there are signs of consolidation at both the manufacturer and distributor levels, with larger marketers swallowing up some of the smaller brands.

Bonner cites L'Oreal as one example: the international marketer recently added SkinCeuticals to its brand family, which already included BioMedic and LaRoche-Posay. And she says it is likely that there will be more mergers and acquisitions to come.

"Larger marketers have been capitalizing on the anti-aging/makeover craze, and acquiring an existing brand is a lot easier and generally less expensive than developing a new brand and trying to establish it in an already saturated market space," she says.

In addition to growth through acquisition, some marketers have expanded their distribution to new regional markets. N.V. Perricone M.D. Cosmeceuticals and Murad recently introduced their product lines to the European market, and Valeant Pharmaceuticals is now selling its Kinerase anti-aging line in Europe as well. And to add another brand to its professional skin care lineup in the U.S., L'Oreal is distributing its Vichy line in select CVS and Brooks Pharmacy stores. Sold primarily through European pharmacies, Vichy is one of the leading skin care brands in Europe.

For other marketers that want to follow this path, a clear understanding of the nuances in the European and U.S. professional markets is critical, particularly when it comes to sales channels and distribution.

For example, the medical channel is unique to the U.S.; in Europe, physicians are not permitted to sell products in their offices. And the beauty institute is a major sales channel in Europe but is scarcely found in the U.S. This channel offers a treatment-oriented approach to skin care with a more clinical feel than the typical U.S. spa experience.

"Companies that are involved in the skin care market and don't have an understanding of this segment are missing a key part of the overall picture," says Susan Babinsky, senior vice president and head of Kline's Consumer Products consulting practice. "Even traditional marketers that aren't directly involved in the professional segment should be aware of how it can affect the prospects for overall industry growth."

PROFESSIONAL SKIN CARE 2005 will be the third edition of Kline's comprehensive report on professional brands sold through spas, beauty institutes, physician offices, European pharmacies, and retail stores. The study will analyze the developing trends and opportunities in this hard-to-track industry, with expanded coverage to include Europe.

For more information on this study, go to: www.klinegroup.com/Y562.htm
or contact Carrie Bonner at +1-973-435-3412 or carrie_bonner@klinegroup.com. In Europe, contact Pilar Pardo at +32 2 776 0737 or pilar.pardo@kline-europe.com.

To learn more about Kline's customized consulting capabilities for the consumer products industry, contact Susan Babinsky at +1-973-435-3365 or susan_babinsky@klinegroup.com.

Established in 1959, Kline & Company is an international business consulting and market research firm serving clients worldwide in the consumer products, specialty chemicals, life sciences, and energy industries.

 

     For more information, contact:
     Carrie Bonner
     Industry Manager, Consumer Products
     +1-973-435-3412
     carrie_bonner@klinegroup.com


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