After less than stellar results in 2004-2005, manufacturers will be breathing a sigh of relief across Europe as the facial skin care market boomed throughout the Big 5 in 2005-2006 and fears that the previous period marked the beginning of a slow down for the facial skin care industry proved to be unfounded. 

In the UK, TNS World-panel reported a considerable improvement on 2005 as value sales climbed 7.7% to reach nearly $1 billion during the 52 weeks ended Dec. 3, 2006.

France pulled up its socks and ECM calculations based on figures from the Fédération des Industries de la Parfumerie suggest that the market rose 2.6% to $2.5 billion in 2005.

In Germany, overall skin care sales weighed in at $3.2 billion in 2006, a rise of 3.5%, according to the IKW. And a closer look at facial skin care sales shows even more cause for celebration—the face creams category put on 5.6% to $541 million for the January-October 2006 period, according to IRI, which in the customarily staid German market is a considerable achievement.

P&G's Olay (Olaz in Europe) continues to  gain momentum.

It was thanks to Italy’s facial skin care market that the country’s domestic cosmetics and toiletries sales managed to avoid a negative result in 2005 and the 2% growth of the sector to $1.3 billion was encouraging, particularly in view of wider market conditions—even if it was less impressive than 2004’s 4.8% rise. Early indications show that the facial skin care sector is set to record another positive year in 2006, with Mintel estimating a growth of 2.7% for the sector to nearly $1.4 billion.

In Spain there was no need to put the facial skin care market in context: a 25.3% growth speaks for itself and the mass market recorded value sales of $257 million in 2006 according to Fragancias y Cosmética.

In terms of brand rankings, Beiersdorf’s Nivea is a firm favorite across the Big 5, with TNS Worldpanel placing it in first. Yves Rocher commands second place chased by L’Oréal in third, Avon in fourth and, last, P&G’s Oil of Olay.

La Prairie markets some of the most expensive skin care products in the world.

When you take a look at the penetration figures across Europe it is clear that the facial skin care markets still have some way to go before they become saturated. The elegant French naturally recorded the highest penetration (86%) of facial skin products and also command the highest usage: an average of 18 usage occasions per week, according to TNS Worldpanel, but the belle nation’s less groomed neighbors are failing to get the message. Overall, the Big 5 garnered a penetration of just 75%, with Italy’s penetration at the bottom of the list at 63%.

Age of Concern

It is only when you take a closer look at the product categories that it becomes clear just how much room for growth remains in the market. For example, although the three-step routine—cleanse, tone, moisturize—has been trotted out at every conceivable opportunity for the past three years, it appears that the message still hasn’t gotten through to consumers. Overall, the cleansing category achieved a penetration of just 37% across the Big 5. With a usage level of 53%, moisturizers are the most widely-used skin products in Europe. Despite the proliferation of new product development in the anti-aging category and the reams of editorial surrounding the aging issue, just 7% of Europeans regularly apply an anti-aging product.

New product development definitely has the shelves groaning with the scores of new products that are launched each year.

This year marketers finally cottoned on to ways to increase penetration. The facial skin care market is no stranger to segmentation, and after exploring skin types (oily, combination, dry), many manufacturers moved on to usage occasions (night, day, travel), then came facial zones (eyes and lips). But aside from persuading several skin care enthusiasts to part with a bit more cash—they weren’t really attracting new buyers to the industry. Now, however, the industry has latched on to the sure fire way to bring in new buyers and hook them for life—segmenting skin care users by age. In 2005 a number of super-charged anti-aging creams for mature skin emerged in a new category and in 2006 marketers looked to the other end of the scale: the 20-somethings. Of course, like the over-50s, this group has the advantage of a high disposable income, given that they are less likely to have children or mortgages than the 30-40-year-old demographic.

In trying to persuade the hedonistic youth of today that they should worry about aging before the first wrinkle has registered on their brow, marketers have taken a more realistic approach. The new crop of creams concentrates on reversing the adverse effects of a hectic lifestyle of working and playing too hard and burning the candle at both ends. Many promise to delay the aging process and to protect the skin from environmental aggression and pollution. The prestige market was out in force in this category, and battling it out were Arden with Intervene, Beiersdorf’s La Prairie with Anti-Aging Emulsion and Lauder’s Darphin with the brand new Arovita C range.

Marketers did not stop their relentless assault on more mature skin either. As is usually the case in the cosmetics and toiletries market, where the prestige brands lead, the mass market brands follow. This year the big multinationals provided handsomely for consumers on a budget. Nivea brought out DNAge and L’Oréal Paris brought out the big guns as it signed Jane Fonda, at age 68, to front the campaign for its Age Re-Perfect Pro-Calcium campaign.

These age ranges have also had an effect on the traditional special treatment creams available. Clearly, different age groups have different concerns and the over 50s must pay special attention to their necks, while younger women are more concerned about keeping their eyes and lips line-free. Hence the introduction of Lancôme’s (L’Oréal) Renérgie Morpholift Cou to the company’s mature skin lineup.

The Super Luxe category is also moving in on the different age groups. Helena Rubinstein (L’Oréal) created Gold Future for the French youth market, with micro-active gold, designed to impart radiance and boost cells’ activity levels. La Prairie also went for gold with colloidal gold (24 karat suspension) in its latest launch, Cellular Radiance Concentrate, a serum commanding a price tag of 500 euros.

Facial skin care is also becoming more seasonal. With the advent of Johnson & Johnson’s Holiday Skin, a body moisturizer with a small proportion of self-tanning ingredients, the market became flooded with copycat versions. And inevitably the product crossed over to the facial skin care market last year. Olay has jumped in to claim the market for the first overnight tanning and treatment cream, however and launched the contradiction in terms Complete Everynight Sunshine in Germany at the close of 2006. The industry reports a rush on these tinted or self-tanning creams during the spring and several brands are busy stocking the shelves with their very own version. RoC (J&J) and L’Oréal Paris have both introduced tinted anti-aging creams, while Crème de le Mer  has catered to those who are saving on their annual winter sun and spending on their facial skin care routine instead. The winter is now punctuated by editorial highlighting the dehydrating effects of central heating and cold winds and several creams have diversified to provide for cold weather conditions. Clinique’s Polar Shield is a rather extreme example, and is not available on the open market. Polar Shield is a cream developed for the Ice Warrior 4 Poles Expedition. However, the brand did take the opportunity to attribute winter benefits to its more commercially viable cream: Super-defense Triple Action Moisturizer.

All in all it was a good year for the facial skin care markets in Europe. The category is expanding in every country, and manufacturers and marketers are working hard to boost penetration and attract new buyers to the category. And with the French government announcing that the nation has finally hit the birth rate needed to replenish its population, perhaps a new focus on youth is just what the facial skin care market needs to maintain its own momentum.