Bath and Shower in Canada

Euromonitor International June 2011

Bath and Shower

Canada

List of Contents and Tables

Headlines ................................................................................................................................................................. 1 Trends ...................................................................................................................................................................... 1 Competitive Landscape .......................................................................................................................................... 2 Prospects .................................................................................................................................................................. 3 Category Data ......................................................................................................................................................... 4 Table 1 Sales of Bath and Shower by Category: Value 2005-2010 ................................................ 4 Table 2 Sales of Bath and Shower by Category: % Value Growth 2005-2010............................... 4 Table 3 Bath and Shower Premium Vs Mass % Analysis 2005-2010 ............................................ 4 Table 4 Bath and Shower Company Shares 2006-2010.................................................................. 5 Table 5 Bath and Shower Brand Shares by GBN 2007-2010 ......................................................... 5 Table 6 Bath and Shower Premium Brand Shares by GBN 2007-2010.......................................... 6 Table 7 Forecast Sales of Bath and Shower by Category: Value 2010-2015.................................. 7 Table 8 Forecast Sales of Bath and Shower by Category: % Value Growth 2010-2015 ................ 7 Table 9 Forecast Bath and Shower Premium Vs Mass % Analysis 2010-2015 .............................. 7

Euromonitor International

Page

Bath and Shower

Canada

BATH AND SHOWER IN CANADA

HEADLINES
Bath and shower products increase 3% in current value terms in 2010 to reach C$878 million Body wash/shower gel sees most dynamic value growth of 5% to reach C$279 million Marketing and product development focus on skin care benefits, bath collections and spa experience Prices increase across all categories, but consumers still seek value and bargains, mitigating price increases Unilever Canada leads with 15% value share; re-launch of popular Dove line helps share gain Maturity will cause growth to decelerate, with category forecast to grow only marginally over forecast period to reach C$888 million by 2015

TRENDS
The decelerating trend in growth that started in 2008 continued in 2010. The value growth of 3% demonstrated by this category is chiefly a result of higher pricing. The upsurge seen in 2009 was mainly a result of the H1N1 scare, and thus did not continue into 2010. A high rate of household penetration and the price sensitive nature of many products in this category, especially bar soaps, as well as saturation for products such as body washes and liquid soaps, were evident in slowing growth rates. Body wash/shower gel was the highest growing niche with a 5% increase in value sales, reaching C$279 million in 2010. Its popularity is confirmed by the fact that it also saw positive volume growth of nearly 4%, making it one of the few niches to achieve volume growth in 2010. Product development helped to drive value and volume, although growth decelerated compared with earlier years of the review period. In 2010 Dove re-launched its line of body washes with new more attractive packaging and a formulation boasting its Nutrium Moisture technology, which better penetrates the skin to help absorb moisture from the product. Another product that received much attention this year was Old Spice Mens Body Wash. Its innovative viral marketing campaign which starred NFL player Isaiah Musthafa in a series of 200 YouTube videos, garnered much attention both online and in stores. The fresh and funny campaign helped to re-launch Old Spices image and revive body wash usage among older men. Private label products such as Shoppers Drug Marts Life and Balea lines also saw investment of considerable effort in developing their body wash offerings, increasing the number of affordable choices available to consumers. Liquid soap also saw a healthy current value terms growth of 5%. However, the volume of sales saw a slower pace in 2010 compared with 2009, as a result of the H1N1 flu scare receding. This category has been marked by intense competition, and this year saw household cleaning product giant Lysol entering the competition. Lysol launched a touchless liquid soap-dispensing system which comes with its own refill. However, the system retails at higher prices than regular liquid soap, with the system retailing at C$11.00 and refills at C$6.00. The refills are available in two scents. The high price of the product led to slow movement on shelves, but some sales are occurring due to the novelty of the product. Private label products also reinforced their presence with Shoppers Drug Mart retailing liquid soap under both its Life and Balea brands. Balea brand products are usually more expensive than Life, and on par with other national brands. A sign of rising consumer confidence was seen in bath additives, which suffered during the recession as these products are usually bought from specialty retailers where prices are higher. They are also more of a discretionary spending item, and hence consumers were less induced to spend on them during the recession. In 2010 retail sales grew 3% versus 1% in 2009, reaching C$148 million. Volume, though still negative, also saw signs of improvement in 2010. Bath salts in particular are seeing positive volume growth to the tune of 0.1% and current value terms growth of 4%. This was due to its appeal as a natural chemical-free product, which in some cases is touted as having inflammation-reducing properties. Another appeal of bath salts lies in the fact that it is sometimes sourced from natural resources, such as the Dead Sea, increasing its exotic appeal. Bath foam/gel and bath oils/pearls have also demonstrated positive retail growth. For these categories bath foams and oils that claim natural ingredients, such as Lush, increased in popularity at the end of the review period.

Euromonitor International

Page

Bath and Shower

Canada

Bar soaps continued to see decline, after a brief moment of recovery due to the H1N1 flu scare and the recession, which led to many consumers seeking cheaper personal hygiene options. In 2010 retail value performance remained negative at -2%, while volume dropped 3%. Total sales stood at C$206 million. In order to maintain sales, manufacturers have focused on positioning their products not just as soap but as part of a beauty care regime that contributes to healthy-looking skin. For example, Doves Go Fresh Beauty Bar is positioned not just a soap but a moisturising skin care aid. Intimate hygiene products and talcum powder both suffered losses in 2010. Intimate washes are not deemed necessary by consumers, and usage is in fact discouraged by some doctors. There is also little information, including in-store information, available on such products. Hence, intimate washes saw a steep decline of 89% in both current value and volume terms. However, due to the 5% value growth of intimate wipes, intimate hygiene as a whole managed to stay afloat with retail growth of 1%. Talcum powder sales fell mainly due to their premium-pricing and not being a necessity item. There has also been quite a bit of controversy regarding potential health hazards of talcum powder if inhaled. Sales of talcum powder declined by 4% in current value terms in 2010. Added value has become ever more important in bath and shower products to drive sales, given the high degree of household penetration and the increasing commoditisation of products such as liquid soap and shower gels/body washes. While pampering, scents and spa treatments remain the focus of attention of speciality retailers, along with products with natural ingredients, more mainstream brands have paid more attention to products and marketing of bath and shower aids with skin care benefits, including anti-ageing claims, and body collections. Examples of products include Dove Visible Care Renewing Crme Body Wash by Unilever, which is claimed to nourish and replenish skin, and Olay Total Effects Anti-Ageing Body Wash by Procter & Gamble. While novelty helps to add value to sales, higher price tags also contribute to growth. Thus, Olay Total Effects body wash retails for an average of C$11.99 for 450ml bottle versus Olay Body Ribbons (launched a couple of years ago) which retails for on average of C$7.99 for 532ml. Body collections are also becoming a trend, where manufacturers attempt to foster and extend brand loyalty across various product categories by offering a full collection of body care products that include soaps, body washes and body lotions each collection differentiated by scent, packaging and skin care properties. Examples include Olay body collections by Procter & Gamble. The mass segment will continue to dominate as most items in this category such as soap, liquid soap and shower gel are necessity items of daily consumption that most consumers are unwilling to splurge on. As a result the mass segment was responsible for 93% of all bath and shower sales. On the other hand, recovery from the recession is once again tempting consumers to spend more on items of indulgence such as bath additives which are priced at a premium point. As a result these products saw a slight increase in share over 2009-10.

COMPETITIVE LANDSCAPE
Unilever Canada continued to lead with close to 15% share of category value sales in 2010 and saw some share gains over the previous year. Its two star brands, Dove and Lever 2000, together held a 46% value share in bar soap. The Dove brand also built a name in body washes, where it held 11% of value sales. In 2010 Dove expanded its presence with the launch of the Dove Men+Care line. With three types of body washes and two types of soap, this line also offers its own brand of shower tool, which is an alternative to a bath sponge or loofah. Further value is added for the cautious consumer by including two bars of soap in each package instead of one. It also capitalised on the popularity of its womens shower gel line by revitalising its packaging and emphasising its Nutrium Moisture Technology. Procter & Gamble followed closely in second place with a 14% share in 2010. The companys strength has recently been based on its Olay line of shower products, although the company also markets brands such as Ivory and Zest. The company, however, has paid close attention to the Olay brand, leveraging brand strength in skin care. In line with this brand strategy, Olay launched Total Effects Body Wash, which claims to fight the seven signs of ageing seen on the body, such as improving skin elasticity and evening skin tone. This is a follow-up to its popular Total Effects skin care line, which makes similar claims. Olay also features a range of other body washes such as Olay Ultra Moisture Body Wash and more recently Olay body collections. As a result of all the activity in product development and marketing, the companys Olay brand saw share increases in 2010.

Euromonitor International

Page

Bath and Shower

Canada

Lush Handmade Cosmetics experienced the highest sales growth in 2010, rising from 2.5% to 2.7% of bath and shower category value. Consumer enthusiasm for natural bath and shower products continued in 2010, and Lush saw a steady performance even during the recession, with sales falling only slightly in 2009. Renewed spending on bath additives also helped, as this is at the core of the Lush bath and shower range. Lush is only second to The Body Shop in bath additives, holding an 11% value share. The main reason for this is that Lush products are on average priced higher than The Body Shops products. Continuous product innovation and a much publicised policy of no animal testing has held this company in good stead. The Body Shop Canada Ltd held the third-highest value share in bath and shower products as a whole in 2010 on 8%. This is mainly due its strong presence in bath additives and body wash. The company, in fact, leads sales of bath additives, holding a 32% value share in 2010. In body wash/shower gel it held 5% of sales. The company faces strong competition from the lower priced and expanding Bath & Body Works retailer, as well as higher priced Lush Cosmetics line, and maintaining a strong USP of organic and sustainably-sourced products has kept its position stable. Some leading retailers have worked to expand presence of their store brands in the bath and shower category throughout the review period, and in 2010 value share of private label in sales of bath & shower products stood at 8%. Shoppers Drug Marts Life held a leading position among private label products, and the retailer also introduced a new Balea line. In shower gels the Life brand attempted to capitalise on the success of brands such as Dove and Olay by replicating the packaging and offering a similarly scented product alongside the originals on shelves. While Canadian consumers traditionally prefer branded products, the recession compelled some to try private label products, which many now find comparable to national brands. Even within the category, private label products are diversifying by offering products which can be perceived as masstige, such as the Balea line by Shoppers Drug Mart. Priced at almost C$1.20 higher than the Life brand, Balea products are moving well in drugstores despite being priced very close to national branded products.

PROSPECTS
Retail sales of bath and shower products are expected to grow marginally in value over the forecast period. Saturation of previously more dynamic categories such as liquid soap and shower gel, coupled with already declining categories such as bar soap and talcum powder, will seriously limit the pace of growth. Overall, sales of bath and shower products are expected to reach C$894 million in 2015. Body wash/shower gel will remain the most dynamic, with a CAGR of 2% in constant value terms over the forecast period to stand at C$314 million in 2015. Despite having reached a high rate of household penetration, body wash products can see further growth in value by focusing on added value, mostly through skin care benefits and natural ingredients. Marketing body wash products and soaps as a part of body care collections can also help increase brand loyalty and drive sales across several categories. Liquid soaps, which previously benefited from the H1N1 flu outbreak, will see growth slow over the forecast period. Despite the launch of innovative delivery systems, consumers are likely to choose lower prices over novelty. The category is becoming increasingly commoditised, and soap is seen just as soap, albeit in more convenient delivery format. Private label products have greater potential to capture share of sales here, and product developments along skin benefit lines, as in body wash, does not appear to have the same appeal to consumers. Over the forecast period retail sales of liquid soap products are projected to see a modest CAGR of 2% in constant value terms to achieve an estimated C$233 million by 2015. Bath additives are also unlikely to see a strong upsurge in growth, and are expected to grow at a modest pace to reach C$160 million by 2015. Bath salts will lead this growth with a CAGR of 2%, while bath foams and bath oils/pearls will see a marginally slower growth rates. Scents and promises of spa experiences are likely to remain on the agenda as far as products and marketing are concerned, but products with natural ingredients are likely to grow further in popularity in coming years. While some price increases are forecast, not least on the back of new product lines and extensions, many consumers see bath and shower products, especially products such as soap, as a staple of hygiene. Consequently, many consumers, especially in the wake of deep discounting and promotions in recessionary times, will continue to engage in smart shopping. They are unlikely to want to pay too much for bath and shower products unless they offer real benefits.

Euromonitor International

Page

Bath and Shower

Canada

Intense competition between major players Unilever and Procter & Gamble is expected to continue, with both rolling out more innovative products to entice consumers. Sustainably-sourced and natural ingredients are expected to be the trend for coming years.

CATEGORY DATA
Table 1 C$ million 2005 Bar Soap Bath Additives - Bath Foam/Gel - Bath Oil/Pearls - Bath Salts/Powder - Other Bath Additives Body Wash/Shower Gel Intimate Hygiene - Intimate Washes - Intimate Wipes Liquid Soap Talcum Powder Bath and Shower
Source:

Sales of Bath and Shower by Category: Value 2005-2010

2006 239.0 134.1 52.8 41.4 33.7 6.2 218.6 6.6 2.6 4.0 176.0 28.4 802.7

2007 227.0 138.6 54.5 42.6 35.2 6.2 237.1 6.5 2.4 4.1 186.6 28.4 824.2

2008 217.0 142.6 56.2 43.7 36.6 6.2 252.7 6.4 2.2 4.2 196.3 27.3 842.3

2009 210.4 144.1 56.8 43.9 37.3 6.0 265.9 6.5 2.0 4.5 204.1 25.8 856.8

2010 206.1 148.0 58.4 44.8 38.8 6.0 279.3 6.6 1.8 4.7 213.6 24.7 878.2

249.4 130.6 51.7 40.0 32.6 6.3 191.8 6.3 2.5 3.8 162.2 28.2 768.6

Euromonitor International from official statistics, trade associations, trade press, company research, store checks, trade interviews, trade sources

Table 2

Sales of Bath and Shower by Category: % Value Growth 2005-2010

% current value growth 2009/10 Bar Soap Bath Additives - Bath Foam/Gel - Bath Oil/Pearls - Bath Salts/Powder - Other Bath Additives Body Wash/Shower Gel Intimate Hygiene - Intimate Washes - Intimate Wipes Liquid Soap Talcum Powder Bath and Shower
Source:

2005-10 CAGR -3.7 2.5 2.5 2.3 3.5 -0.8 7.8 0.8 -6.4 4.7 5.7 -2.6 2.7

2005/10 TOTAL -17.4 13.4 13.1 12.0 18.9 -4.1 45.6 4.0 -28.0 25.7 31.6 -12.5 14.3

-2.1 2.8 2.8 2.2 3.9 -0.6 5.0 1.3 -7.7 5.3 4.6 -4.3 2.5

Euromonitor International from official statistics, trade associations, trade press, company research, store checks, trade interviews, trade sources

Table 3 % retail value rsp

Bath and Shower Premium Vs Mass % Analysis 2005-2010

2005 Premium Mass Total

Source:

2006 6.2 93.8 100.0

2007 6.4 93.6 100.0

2008 6.4 93.6 100.0

2009 6.3 93.7 100.0

2010 6.7 93.3 100.0

5.9 94.1 100.0

Euromonitor International from official statistics, trade associations, trade press, company research, store checks, trade interviews, trade sources

Euromonitor International

Page

Bath and Shower

Canada

Table 4 % retail value rsp Company

Bath and Shower Company Shares 2006-2010

2006 16.6 15.4 8.1 6.7 5.1 4.7 1.5 2.5 2.4 2.0 2.3 2.0 1.4 0.9 0.3 0.6 0.5 0.4 0.1 0.1 0.1 0.1 0.1 0.1 0.1 26.1 100.0

2007 15.6 14.8 8.3 6.6 5.6 4.6 1.8 2.6 2.6 2.0 1.4 2.1 1.3 1.0 0.5 0.7 0.4 0.5 0.1 0.2 0.1 0.1 0.1 0.1 27.1 100.0

2008 14.9 14.0 8.4 6.7 5.7 4.6 2.1 2.7 2.8 2.1 1.7 1.8 1.3 1.0 0.7 0.8 0.4 0.4 0.2 0.2 0.1 0.1 0.1 0.1 27.5 100.0

2009 14.4 13.8 8.3 6.7 5.9 4.7 2.7 2.5 2.6 2.1 2.0 1.8 1.3 1.0 0.9 0.9 0.3 0.4 0.2 0.2 0.1 0.1 0.1 0.0 26.8 100.0

2010 14.6 13.9 8.4 6.8 6.1 4.1 3.1 2.7 2.6 2.1 2.1 1.8 1.4 1.1 1.0 0.9 0.3 0.3 0.2 0.2 0.1 0.1 0.1 0.0 26.3 100.0

Unilever Canada Inc Procter & Gamble Inc Body Shop Canada Ltd, The Colgate-Palmolive Canada Inc Kao Brands Canada Inc Other Private Label Shoppers Drug Mart Inc Lush Handmade Cosmetics Ltd Avon Canada Inc Johnson & Johnson (Canada) Inc Dial Canada Inc Coty (Canada) Inc Yves Rocher Inc Fruits & Passion Boutique Inc Jean Coutu Group (PJC) Inc Beiersdorf Canada Inc Mary Kay Canada Inc Reha Enterprises Ltd Strom's Enterprises Ltd Playtex Canada Ltd Colba Laboratories Inc Belvedere International Inc CB Fleet Co Inc Sara Lee Household & Body Care Canada Ltd Novartis Consumer Health Canada Inc Jergens Canada Inc Pfizer Canada Inc Gojo Industries Inc Bristol-Myers Squibb Consumer Products Group The Dial Corp Schwarzkopf & Dep Canada Ltd Others Total
Source:

Euromonitor International from official statistics, trade associations, trade press, company research, store checks, trade interviews, trade sources

Table 5 % retail value rsp Brand Dove The Body Shop Olay Jergens Softsoap

Bath and Shower Brand Shares by GBN 2007-2010

Company Unilever Canada Inc Body Shop Canada Ltd, The Procter & Gamble Inc Kao Brands Canada Inc Colgate-Palmolive Canada Inc

2007 12.1 8.3 7.0 5.6 4.2

2008 11.8 8.4 7.2 5.7 4.4

2009 11.5 8.3 7.3 5.9 4.6

2010 11.7 8.4 7.5 6.1 4.7

Euromonitor International

Page

Bath and Shower

Canada

Other Private Label Ivory Life Lever 2000 Lush Irish Spring Zest Dial Yves Rocher The Healing Garden Purell Fruits & Passion Personnelle Nivea Calgon Johnson's Baby Avon Naturals Neutrogena Mary Kay Ombra Fa L'Occitane Playtex Avon Always Alpen Secrets Down Under Naturals Summer's Eve Vaseline Intensive Care Radox Clairol Herbal Essences Palmolive Fa Dial Caress Others Total
Source:

Procter & Gamble Inc Shoppers Drug Mart Inc Unilever Canada Inc Lush Handmade Cosmetics Ltd Colgate-Palmolive Canada Inc Procter & Gamble Inc Dial Canada Inc Yves Rocher Inc Coty (Canada) Inc Johnson & Johnson (Canada) Inc Fruits & Passion Boutique Inc Jean Coutu Group (PJC) Inc Beiersdorf Canada Inc Coty (Canada) Inc Johnson & Johnson (Canada) Inc Avon Canada Inc Johnson & Johnson (Canada) Inc Mary Kay Canada Inc Reha Enterprises Ltd Dial Canada Inc Strom's Enterprises Ltd Playtex Canada Ltd Avon Canada Inc Procter & Gamble Inc Colba Laboratories Inc Belvedere International Inc CB Fleet Co Inc Unilever Canada Inc Sara Lee Household & Body Care Canada Ltd Procter & Gamble Inc Colgate-Palmolive Canada Inc Schwarzkopf & Dep Canada Ltd The Dial Corp Unilever Canada Inc

4.6 4.4 1.8 3.3 2.6 2.4 2.3 1.1 1.3 1.5 1.0 1.0 0.5 0.7 0.5 0.6 0.8 0.4 0.4 0.5 0.3 0.1 0.2 0.2 0.1 0.1 0.1 0.1 0.2 0.1 0.1 0.0 29.5 100.0

4.6 4.0 2.1 3.1 2.7 2.3 2.2 1.4 1.3 1.3 1.1 1.0 0.7 0.8 0.5 0.6 0.5 0.4 0.4 0.4 0.3 0.2 0.2 0.2 0.1 0.1 0.1 0.1 0.0 0.1 30.0 100.0

4.7 3.9 2.7 2.9 2.5 2.2 2.1 1.7 1.3 1.3 1.1 1.0 0.9 0.9 0.5 0.5 0.5 0.4 0.3 0.4 0.3 0.2 0.2 0.2 0.1 0.1 0.1 0.1 0.0 0.0 29.2 100.0

4.1 3.8 3.1 2.8 2.7 2.1 2.0 1.8 1.4 1.3 1.2 1.1 1.0 0.9 0.5 0.5 0.5 0.5 0.3 0.3 0.3 0.2 0.2 0.1 0.1 0.1 0.1 0.1 0.0 28.7 100.0

Euromonitor International from official statistics, trade associations, trade press, company research, store checks, trade interviews, trade sources

Table 6 % retail value rsp Brand Lush Yves Rocher Fruits & Passion L'Occitane Others

Bath and Shower Premium Brand Shares by GBN 2007-2010

Company Lush Handmade Cosmetics Ltd Yves Rocher Inc Fruits & Passion Boutique Inc Strom's Enterprises Ltd

2007 41.4 21.0 15.9 2.3 19.4

2008 42.1 20.3 15.8 2.5 19.4

2009 40.4 21.4 16.4 2.4 19.4

2010 40.4 21.4 16.4 2.4 19.4

Euromonitor International

Page

Bath and Shower

Canada

Total
Source:

100.0

100.0

100.0

100.0

Euromonitor International from official statistics, trade associations, trade press, company research, store checks, trade interviews, trade sources

Table 7 C$ million

Forecast Sales of Bath and Shower by Category: Value 2010-2015

2010 Bar Soap Bath Additives - Bath Foam/Gel - Bath Oil/Pearls - Bath Salts/Powder - Other Bath Additives Body Wash/Shower Gel Intimate Hygiene - Intimate Washes - Intimate Wipes Liquid Soap Talcum Powder Bath and Shower
Source:

2011 199.9 149.9 59.2 45.2 39.7 5.9 287.0 6.5 1.7 4.9 218.5 23.1 885.0

2012 190.0 152.2 60.2 45.6 40.6 5.8 294.5 6.5 1.5 5.0 223.1 21.5 887.7

2013 181.0 154.7 61.3 46.1 41.5 5.8 301.5 6.5 1.3 5.1 226.8 20.0 890.4

2014 171.3 157.5 62.5 46.7 42.6 5.7 307.9 6.4 1.2 5.3 230.3 18.5 891.9

2015 162.7 160.5 63.8 47.3 43.7 5.7 314.0 6.4 1.1 5.4 233.1 17.1 893.8

206.1 148.0 58.4 44.8 38.8 6.0 279.3 6.6 1.8 4.7 213.6 24.7 878.2

Euromonitor International from trade associations, trade press, company research, trade interviews, trade sources

Table 8

Forecast Sales of Bath and Shower by Category: % Value Growth 2010-2015

% constant value growth 2010-15 CAGR Bar Soap Bath Additives - Bath Foam/Gel - Bath Oil/Pearls - Bath Salts/Powder - Other Bath Additives Body Wash/Shower Gel Intimate Hygiene - Intimate Washes - Intimate Wipes Liquid Soap Talcum Powder Bath and Shower
Source:

2010/15 TOTAL -21.1 8.4 9.2 5.4 12.6 -4.4 12.4 -2.2 -42.4 13.4 9.2 -30.9 1.8

-4.6 1.6 1.8 1.1 2.4 -0.9 2.4 -0.4 -10.5 2.5 1.8 -7.1 0.4

Euromonitor International from trade associations, trade press, company research, trade interviews, trade sources

Table 9 % retail value rsp

Forecast Bath and Shower Premium Vs Mass % Analysis 2010-2015

2010 Premium Mass Total

Source:

2011 6.8 93.3 100.0

2012 6.9 93.1 100.0

2013 7.0 93.0 100.0

2014 7.1 92.9 100.0

2015 7.2 92.8 100.0

6.7 93.3 100.0

Euromonitor International from trade associations, trade press, company research, trade interviews, trade sources

Euromonitor International

Page