Shampoos & Conditioners

INDUSTRIAL CODES

NAICS: 32-5620 Toilet Preparation Manufacturing

SIC: 2844 Perfumes, Cosmetics, and Other Toilet Preparations Manufacturing

NAICS-Based Product Codes: 32-562071 through 32-56207151, and 32-562072 through 32-562072D1

PRODUCT OVERVIEW

Shampooing, conditioning, and otherwise caring for the hair are activities normally carried out in the bathroom, sometimes called the toilet. The U.S. Census Bureau categorizes hair care products in an industry it calls Toilet Preparations Manufacturing. The hair care products are one of five product groupings in this industry.

Hair preparations are most often thought of as shampoos and conditioners. However, the hair care products industry also makes products designed to color hair, to straighten and curl hair, and to alter its appearance in a number of subtle ways. All of these hair care products are standard nondurable consumer goods. Nondurable goods are purchased for immediate or almost immediate consumption and have a life span ranging from minutes to three years. Nondurable goods are destroyed by their use so consumers need to repeatedly replenish their supply throughout the year. Generally this equates to repeated purchases at lower price points.

The history of shampoo is linked to the history of hair styles. The 18th century was characterized by elaborate wigs, the bigger the better. During the Victorian era, both women's and men's hair was neatly smoothed down with oils and for women, curled into long, orderly ringlets. By the Roaring Twenties, women bobbed and waved their hair to signify their new independence. During the 1930s and 1940s, women had access to the cinema and trends were set by Hollywood superstars of the time. Shampoo advertisements began to feature movie stars. Lustre-Creme shampoo claimed throughout the 1950s that four out of five Hollywood stars used it. Ava Gardner, Donna Reed, Esther Williams, Rita Hayworth, and Barbara Stanwyck appeared in advertisements that claimed Lustre-Creme shined as it cleaned, and made hair a delight to handle. Breck developed one of the early U.S. liquid shampoos and in 1936 launched a long-running advertising campaign that went national in 1946 and featured the trade-marked Breck girl. Eventual Breck girls included starlets Cybill Shepherd (1968), Cheryl Tiegs (1968), Jaclyn Smith (1971, 1973), Kim Basinger (1972, 1974), and Brooke Shields (1974).

MARKET

The market for all toilet preparation products in the United States was valued in 2002 at almost $28 billion according to the Census Bureau. Hair preparation products together accounted for approximately 24 percent or $6.8 billion of the total toiletries industry. Products used for caring for hair on the head are divided by the Census into two main subdivisions: hair preparations including shampoos, and hair tonics including conditioners.

Shampoos

Within the $6.8 billion hair preparations industry, shipments of shampoos of all types represent $3.8 billion or 56 percent. Shampoo products are classed based upon whether they are designed for professional hair care in a salon or consumer hair care at home. Each class, whether professional or consumer, includes products with additives for coloring and dandruff removal. The shampoo product classes, listed from most popular to least popular, are:

• Consumer liquid hair shampoos containing synthetic organic chemicals
• Consumer hair shampoos containing soap
• Professional hair shampoos containing soap
• Professional liquid hair shampoos containing synthetic organic chemicals
• Cream and gel hair shampoos containing synthetic organic chemicals

Consumer liquid hair shampoos containing synthetic organic chemicals are by far the most popular of the shampoo product classes, and represented 53 percent of all shampoo shipments, or almost $2 billion of the total $3.8 billion shampoo shipment value in 2002. The top shampoo brands in 2006 were Garnier Fructis (L'Oréal), Dove (Unilever), Clairol Herbal Essences (Procter & Gamble), Suave Naturals (Unilever), and Pantene (Procter & Gamble). Procter & Gamble dominated shampoo sales with 27 percent of the market share based on mass market sales at supermarkets, drug stores and discount stores (excluding Wal-Mart) in 2005.

This largest class of shampoo preparations changed tremendously in the five-year period between 1997 and 2002, more than quadrupling in value of product shipments. In just five years, newly reformulated liquid synthetic organic chemical shampoos exploded into the market, growing from less than $500,000 to almost $2 billion, an increase of 324 percent in terms of the value of shipments. This explosion in one class affected another shampoo product class. The class that lost market position was consumer hair shampoos containing soap. That class had historically been master of the shampoo universe, representing 71 percent of all shampoo products shipped in the United States during 1997. By 2002 the emergence of the new synthetic organic chemical shampoos left consumer hair shampoos containing soap with only 38 percent, instead of its usual 70 percent, of shipment value.

On the other hand, shampoos containing soap saw growth with some customers, namely professional stylists who used five times more shampoos containing soap in 2002 than they had in 1997. Growth in professional hair shampoos containing soap grew from $51 million in 1997 to $257 million by 2002. This represented a growth rate of 401 percent over the five-year period and 80 percent growth annually. This class of shampoo was expected to continue to grow because under the auspices of professionals in a salon environment, consumers are influenced to spend more on professional products. Moreover, by growing 401 percent, this class overtook professional liquid hair shampoos containing synthetic organic chemicals, which lost 54 percent in shipment value.

Conditioners and Hair Tonics

Within the $6.8 billion per year hair preparations industry, hair tonics and conditioners represent $2.8 billion of shipments, or 41 percent. Conditioners are classified based in part upon whether they are designed for use by professionals in a salon or designed for use at home by the consumer. Other classes are primarily products designed for use after shampooing, such as hair colorings, sprays, conditioners, mousses, and perms. The top seven Census Bureau product classes include:

• Hair rinses (excluding color rinses)
• Consumer use hair coloring preparations (bleaches, dyes, rinses, tints, etc)
• Aerosol hair spray
• Hair dressings, including brilliantines, creams and pomades
• Consumer use conditioners

• Other hair preparations, including heat setting wave preparations
• Consumer use hair perms, complete and refill

Hair rinses are by far the most heavily used of the hair conditioners and rinses. Hair rinses represented 20 percent of all shipments of conditioners and hair tonics in 2002, or $547 million of the $2.8 billion shipment value. According to data published in Market Share Reporter 2007, the top hair conditioner brands in 2006 were Garnier Fructis (L'Oréal), Dove (Unilever), Clairol Herbal Essences (Procter & Gamble), L'Oréal Vive (L'Oréal), and several Pantene formulations (Procter & Gamble). Although these were the market leaders in terms of 2006 U.S. sales of hair conditioners, together they represented only 23 percent of the market by brand. The hair care products industry offers an enormous number of brands, the top together represented 34 percent of U.S. sales in 2006.

The hair rinses category changed tremendously during the five-year period between 1997 and 2002. In just five years, newly reformulated hair rinses exploded into the market, growing from $24 million in value of product shipments to $547 million, an increase of 2,120 percent. It is difficult to convey the scale of this explosive growth; each year for five years, hair rinses increased in shipment value by 425 percent. One reason for this extraordinary growth rate has to do with changing expectations of hair rinses and conditioners on the part of consumers and changes in the way that these products are categorized. As, for example, hair rinses and conditioners were formulated to include color-enhancing chemicals, they drew products that had traditionally been categorized as hair coloring products into the conditioners and rinses category. Consequently, the increased shipment volume in conditioners and rinses corresponded with a decline in hair coloring products.

Nonprofessional hair coloring preparations experienced declining sales in the late 1990s and early 2000s. Shipments of hair coloring products dropped from $820 million to $532 million, a decline of 35 percent between 1997 and 2002. As reported by the Census Bureau these products represented just 8 percent of all hair care product shipment in the United States in 2002. Over the period 1997 to 2002, one-third of the women who used to color their hair at home stopped doing so. According to Market Share Reporter 2007, the top hair coloring brands in 2006 were L'Oréal Preference, L'Oréal Excellence, Clairol Nice 'n Easy, Just for Men, and Clairol Natural Instincts. L'Oréal products together dominated the U.S. consumer use hair color market, with 41 percent of the market in 2005 based on sales in supermarkets, drug stores and discount stores (excluding Wal-Mart). L'Oréal's 2007 advertising blitz suggested that the company was committed to maintaining its dominant role in the market and committed to expanding its appeal into the growing ethnic marketplace. Penelope Cruz was serving as L'Oréal's spokesmodel for its Preference line of products.

U.S. shipments of aerosol hair spray grew during the 1997 to 2002 period. Although a relatively small part of the overall $6.8 billion hair care products industry, shipments of aerosol hair sprays grew from $176 million in 1997 to $399 million in 2002. This growth came at the expense of nonaerosol hair sprays, which declined in shipment value over the period, from $230 million to $129 million. Aerosol hair spray is preferable to nonaerosol hair spray for many people because it tends to clog the spray nozzle less frequently and provides a more even coverage. With the replacement of chloroflourocarbon as the accelerant in aerosol sprays in the late 1980s, the popularity of aerosol hair spray began to grow. This growth continued as more people discovered that the environmentally damaging chloroflourocarbons used in earlier aerosols were no longer a part of aerosol hair spray formulations.

Products classified as hair conditioners saw a 60 percent decline in shipments between 1997 and 2002, dropping from $528 million to $199 million. This decline was directly related to the reclassification of many products that had previously been considered conditioners and were switched to the larger hair rinses category.

Other smaller categories of hair care preparations include heat setting wave preparations and hair permanent treatments. Products in both of these categories saw growth during the period between the 1997 and 2002 economic censuses, 16 percent and 90 percent, respectively, over the period.

As a whole, the hair care products industry saw 5.3 percent growth annually over the period 1997 to 2002, more than four times as fast as the population grew over the same period. Although an assessment of growth by product class provides insights into where the hair care products industry is strongest, it is also somewhat deceptive. As reformulated products move easily from one product class to another, over time it is the growth of the industry as a whole that provides the clearest picture of the hair care products market.

KEY PRODUCERS/MANUFACTURERS

Manufacturers of shampoos, conditioners and other hair care products have an entire oeuvre of products within a line of brand name products, and may have multiple brand name lines. For some manufacturers, one brand may compete with another brand it makes and these brands may sit side by side on the shelf at the store. An example is Unilever, which makes Dove shampoo and Suave shampoo, both sold at mass retailers. Other manufacturers like L'Oréal have clearly defined professional products and consumer products that never sit side by side on the shelf because they are sold through different retail channels. The three most successful manufacturers of U.S. shampoos and conditioners are L'Oréal, Procter & Gamble, and Unilever.

L'Oréal USA

Headquartered on Fifth Avenue in Manhattan, New York, L'Oréal is the most successful hair color maker in the United States. It consistently captures 42 percent of the consumer use hair coloring market with its L'Oréal Preference and L'Oréal Excellence hair coloring brands. After introducing its European best selling Garnier Fructis brand shampoos and conditioners into the U.S. market, L'Oréal quickly captured the number one spot for both shampoos and conditioners. Garnier has been a European hair care expert for 60 years, making products enriched with natural ingredients like avocado. L'Oréal also makes Kérastase professional hair care products, sold only in salons. Professional use products allow salon owners to keep the client at the center of attention, immersed in an environment where beauty and well-being come together. Ultimately, the salon customer spends more money on professional products to use at home. Typically, a Kérastase-trained consultant/hairdresser selects the professional products best suited to the hair-type of the client and recommends a personalized home-care program from Kérastase's six product lines.

L'Oréal USA makes hair preparations in both the consumer and professional categories. Consumer hair preparations include brands like Garnier and L'Oréal Paris. Each heads up a cavalcade of products under its brand name. Professional hair preparations sold directly to salon owners include L'Oréal Professionnele, L'Oréal Technique, Kérastase, and Redkin.

Procter & Gamble (P&G)

Cincinnati-based Procter & Gamble was established in 1837 and is now the most successful shampoo manufacturer in the United States, and second only to L'Oréal in terms of its worldwide ranking. P&G consistently captures 27 percent of the nonprofessional shampoo market and 21 percent of the conditioner market. Incongruously, while P&G is the top maker of both shampoos and conditioners, it does not manufacture the number one and two best sellers. Those slots—in both shampoos and conditioners—are held by Garnier Fructis (a L'Oréal brand) and Dove (a Unilever brand). P&G holds its position as the top shampoo and conditioner maker because it snatches up the rest of the market with its panoply of Pantene products. Pantene is formulated with panthenol, the alcohol analog of Vitamin B3 known for its revitalizing and conditioning effects in hair. It has humectant-like properties that promote moisture absorption. Because panthenol is used by the pharmaceutical industry in ointments for treatment of minor skin disorders, it is included in the 1984 listing of approved over the counter drugs published by the Food and Drug Administration.

P&G's best-selling panthenol-based Pantene brand includes Pantene Smooth & Sleek, Pantene ProV, Pantene Daily Moisture Renewal, Pantene Classically Clean, and Pantene Sheer Volume. In 2005 it added Pantene Full & Thick to its successful Pantene franchise. In early 2007 it continued its expansion of the Pantene line by introducing the Pantene Ice Shine line of four products that give "2X the shine in just one use," and Pantene Winter Rescue shampoo and conditioner that give "10X damage protection." Pantene Pro-V Midnight Expressions is formulated especially for black hair, and Pantene Pro-V Texturize! is a line of four pro-vitamin products.

Unilever

Unilever is a behemoth. It is an international manufacturer of products in the food, home care, and personal care industries. In 2003 Unilever executed its largest new brand launch ever in North America. It spent $110 million to launch Dove hair care and succeeded in establishing a new segment in the highly-competitive hair preparations industry. It banked on consumer loyalty to its Dove cream bar, launched 50 years ago and still number one in North America—consistently capturing close to 50 percent of the bar soap market. Dove hair care burst into stores with 13 stock keeping units of shampoo and conditioner formulations; nine shampoos and conditioners, including Intense Moisture, Extra Volume, Moisture Rich Color, Volumizing Color, and Beautifully Clean; three 2-in-1s that clean and condition in one step, including Intense Moisture, Extra Volume and Beautifully Clean; plus an Intense Daily Conditioning Treatment. Because its Dove brand is so successful, Unilever divested two shampoo brands in 2006 (Finesse and Aqua Net) to continue to focus on its well-known and well-respected Dove brand. In February 2007 it launched the Dove Pro Age line of hair care products that deliver fullness and thickness to thinning hair, as well as protection against brittleness and breakage.

Unilever's hair care products are sold under the brands Olay, Dove, Suave, ThermaSilk, and Sunsilk. Suave sells products in four lines: Professionals, Naturals, Suave for Men, and Basics.

Other prominent companies include Aveda and Bumble & Bumble, both owned by Estée Lauder and both professional products sold only in salons. In addition to the three firms profiled above, the largest hair care manufacturers worldwide include The Henkel Group, headquartered in Düsseldorf, Germany; Kao Corporation, headquartered in Tokyo, Japan; Shiseido Co., Ltd., also headquartered in Tokyo, Japan; and Alberto-Culver, headquartered in Melrose Park, Illinois.

MATERIALS & SUPPLY CHAIN LOGISTICS

The materials used by manufacturers in the production of hair preparations consist of the ingredients necessary to produce the product as well as the materials needed to package the product. Hair preparations packaging plays an important part in marketing. Hair care preparations are generally packaged in a plastic container such as a jar, tube, tub, or bottle that also serves as the dispenser during use. The $28 billion per year toiletries industry as a whole spent $8.0 billion in 2002 on the total cost of materials needed to make all toiletries, including shampoos and conditioners. Of this, $5.6 billion was spent on packaging and other materials, and $2.4 billion was spent on ingredients. This industry spends approximately 70 percent on packaging, and only 30 percent on the ingredients that go into the product. Expenditures for plastic containers including jars, tubes, tubs, and bottles were $1.2 billion in 2002, more than on any other single material consumed in the production process.

Setting the issue of plastics aside, this section examines the $2.4 billion industry-wide expenditures for ingredients—the part of the product applied to the head for hair care. The primary categories of ingredients needed to make toiletries of all kinds, according to data reported by the U.S. Census Bureau are, from largest to smallest in terms of industry-wide spending:

• Synthetic organic chemicals—representing 30 percent of ingredient spending
• Perfume oil mixtures and blends, essential oils (natural)—representing 30 percent of ingredient spending
• Perfume materials (synthetic organic)—representing 11 percent of ingredient spending
• Bulk surface active agents (surfactants)—representing 10 percent of ingredient spending

Synthetic organic chemicals represent 30 percent of the cost of ingredients needed to make hair preparations. They are the largest single class of ingredients consumed by the toiletries industry. Synthetic organic chemicals are generally derived from petroleum products during its separation into fractions according to boiling ranges. In toiletries, organic chemicals are most important as preservatives integral to making hair preparations with a long shelf life. Consumers expect toiletries to have a longer shelf life than, say, food. Examples of synthetic organic chemicals are the parabens. Parabens include methyl, propyl, ethyl, and butyl. They all provide broad spectrum anti-microbial protection to toiletries products. Synthetic organic chemicals also include the silicones. The U.S. toiletries industry almost tripled its use of synthetic organic chemicals between 1997 and 2002, escalating from purchases valued at $243 million to $721 million, an increase of 197 percent. This growth helps explain the triple-digit growth of 324 percent in consumer liquid hair shampoos containing synthetic organic chemicals, and also helps explain the quadruple digit growth of 2,120 percent growth in hair rinses. Both product classes consist of newly reformulated products that use synthetic organic chemicals, particularly to take advantage of silicones, which provide shine and gloss but not heaviness.

Perfumes are used to impart a pleasant aroma to hair care preparations. Together, perfume oil mixtures and essential oils purchased for their pleasant aroma accounted for almost 30 percent, or $683 million, of the annual $2.4 billion ingredient cost of 2002. The cost to purchase essential oils decreased 7 percent between 1997 and 2002, dipping from $174 million down to $161 million. The increased use of synthetic organic perfume materials allowed the industry to purchase fewer natural essential oils, which are generally very expensive.

Perfume materials (synthetic organic) have traditionally been a relatively small input to the toiletries industry. Their importance to formulators has escalated during the early 2000s. The cost for purchasing synthetic organic perfume materials almost quadrupled in the five year period that ended in 2002, ballooning from $67 million to $252 million, an increase of 278 percent. Synthetic organic perfume materials are created primarily from chemical compounds obtained during petroleum distillation, a process which separates petroleum into fractions according to the temperature at which they reach their boiling point. Synthetics can both mimic fragrances found in nature and provide fragrances not found in nature.

The advantages of synthetics are notable. The ever-increasing annual expenditures for synthetic organic perfume materials show how rapidly their use is becoming pervasive in hair preparations. This is not surprising, considering the industry-wide strategy of offering shampoos and conditioners in a range of scents to expand existing product lines. For instance, Suave recently reformulated Naturals Juicy Green Apple Shampoo using the new synthetic perfumes to create the crisp scent of orchard-grown apples. For manufacturers, perfume materials (synthetic organic) make economic sense because they do not depend on plant material and plant harvest from year to year. The result is stable prices, consistent supply, and more than 2,000 odor profiles to choose from (instead of only 200 plant-derived profiles).

Surfactants are used to adjust the surface tension of a liquid or cream liquid to assist cleansing, foaming, and emulsifying. Synthetic surfactants derived from petroleum include olefin sulfonate (a foaming agent), cocamidopropyl betaine (a top ingredient in Dove shampoo), and sodium laureth sulfate (a cheap and effective foaming agent that is also the first ingredient in Dove shampoo after water). Wetting agents that help products spread, surfactants are integral to making effective shampoos and conditioners. The U.S. toiletries industry decreased spending on surfactants by 26 percent in the five-year period between 1997 and 2002, from $330 million to $243 billion.

DISTRIBUTION CHANNEL

Hair care products exist as both professional and consumer product classes. Professional denotes that the product was developed for and is distributed via the salon distribution channel. Consumer denotes that the product was developed for and distributed via the mass market distribution channel.

The professional distribution channel is a choice distribution channel precisely because of the intimate environment within the salon. Hands-on demonstrations and personalized advice result in higher sales and larger profit margins. The professional product distributed at salons allows purchase decisions to be influenced by a trained professional. Industry statistics show that sales increase when professionals are present to influence the choice. The salon distribution channel is known for its wide geographic diversity. Some makers prefer the salon environment because it can be carefully controlled. For instance, when Estée Lauder acquired Aveda, it immediately repositioned the brand upward, removing its product from salons that were not Aveda Concept Salons or dedicated solely to Aveda products, and removing the brand from beauty supply stores and Web sites. Reestablishing the feel of exclusivity appears to have been the objective.

The mass market distribution channel for consumer hair preparations is changing and broadening. It now includes such mass market outlets as drug stores, including CVS, Rite Aid, and Walgreens; food stores; mass merchandisers, including Kmart, Target, and Wal-Mart; warehouse clubs such as BJ's Wholesale Club, Costco, and Sam's Club; online commerce sites; and other nontraditional retailers. Sometimes hair preparations exist side by side with so many other stock keeping units that they are viewed as undifferentiated commodities, where one brand is thought to work as well as any other. To differentiate products in the mass market distribution channel, celebrities are often hired as spokesmodels for hair care products. For instance, Revlon named singer Sheryl Crow spokesperson for its Revlon Colorist hair color in January 2007.

KEY USERS

Key users of hair preparations are both male and female, young and old. Children generally use shampoos and conditioners specially designed for their delicate hair and skin. The best known of these is Johnson's Baby Shampoo, which regularly captures in excess of 60 percent of the market for baby shampoos sold at supermarkets and drug stores.

ADJACENT MARKETS

The fashion market is the market with the most direct impact on the sale of hair care products. As styles change, the products used to achieve the trendiest styles also change. The sale of mousses increases when voluminous hair styles are fashionable. Similarly, the sale of curling treatment products rise and fall with the popularity of curly hair styles, as do sales of coloring agents as the hair color fashion trends vary.

For the most part, changes in fashions impact the prominence of some hair care products relative to others and do not significantly alter the overall market for products in the category as a whole. Since most hair care manufacturers produce a full line of products, they are able to benefit from the fluctuating demand for products that accompanies the fluctuations in fashion trends. Dirty hair is seldom fashionable and if it were, chances are good that manufacturers of hair care products would even develop products designed to enhance the look of dirty hair.

RESEARCH & DEVELOPMENT

R&D in the hair care products industry is an ongoing activity since products have a limited lifetime of approximately four years before they see diminishing sales and tend to be re-formulated and re-marketed as new in order to keep up with ever-changing trends. During the early twenty-first century R&D has focused on reformulating products to take advantage of potential cost savings related to synthetic organic chemicals and synthetic organic perfume materials. For instance, Unilever recently reformulated Dove Moisture Rich Color Shampoo using synthetic organic perfume materials and claims its new breakthrough thoroughly cleans without stripping hair of its natural protection or weighing it down. This product is designed to leave essential proteins and moisturizers in hair, while providing color protection for dry, color-treated hair and enhancing color's brilliance.

New silicones are responsible for much of the robust growth in hair preparations. Silicones add conditioning properties to hair care products, and more than likely contributed to the explosive quadruple-digit growth in hair rinses between 1997 and 2002 and the triple-digit growth in consumer liquid shampoos containing synthetic organic chemicals during the same time period. Silicones are synthetic organic materials that increase spreading properties, improve texture, enhance wet combing, and impart a velvety feel. Silicones can be modified to add gloss, improve organic compatibility, provide improved emulsion, increase conditioning properties, and boost foaming. L'Oréal Paris Vice Pro for color treated hair uses silicone to lock in color and keep out damage.

In shampoos, conditioners, and hair rinses, silicone hybrids such as silicone-polyethers are used for thermal protection of hair. Because silicones coat the hair strand, silicone hybrids provide protection from the sun and have resulted in newly reformulated shampoos, conditioners, and hair rinses that boast sun protection factor (SPF) ratings. Silicone hybrids such as thermoplastic silicone elastomers form protective films on hair that provide gloss and glean and shine. Innovative silicone developments have produced new products that are especially helpful for problem hair that is dry and brittle, because silicones contribute to a light gloss without being heavy. For example, John Frieda has a Luminous Color Glaze product line that takes advantage of silicone hybrids to create a trademarked color illuminating technology that boosts shine, adds a hint of color, and gives a luxurious feel. John Frieda products also successfully introduced one more step in hair care—after shampooing and conditioning, it is now common to apply a protective glaze or rinse.

CURRENT TRENDS

The popularity of shampoos and conditioners that tout natural and organic ingredients has produced an increase in the number of products with this characteristic. This may appear to be a trend that is in direct opposition to the increased use of silicone hybrids in hair care products. Just as more reformulations are offered to take advantage of synthetic organic chemicals and synthetic organic perfumes, more consumers are requesting natural products. Unilever, for instance, makes Suave Naturals. Naturals are formulated with an advanced combination of botanicals and light fresh fragrance. The line includes 11 shampoos. L'Oréal Paris now sells Natural Match hair coloring that is ammonia-free and comes in a calibrated cream formula that conditions with aloe vera and green tea.

In early 2007 L'Oréal introduced Garnier Nutrisse hair color with Sarah Jessica Parker as a spokesmodel. Nutrisse has fruit oil concentrates and nourishes hair with grape seed and avocado oil. According to Garnier lore, it created a shampoo with plant extracts in 1904, at a time when people were still washing their hair with soap. In the 1980s it created Fructis, the first strengthening shampoo with active fruit concentrates. These were available exclusively in Europe. Building on the success of Fructis, Garnier created Nutrisse, the first haircolor masque (or rinse) that cares for hair as it colors. In 2000 Garnier reinvented Fructis Style to create professional products sold via the salon distribution channel.

The trend with the farthest reaching implications is exemplified by the consumer demand for more transparency about chemical ingredients used to manufacture hair preparations in the United States. The Campaign for Safe Cosmetics was formed in 2002. It wants the toiletries industry to phase out the use of certain chemicals linked to cancer and birth defects. In February 2007 Environmental Working Group published a report called SkinDeep, calling attention to potential cancer causing ingredients in cosmetics and toiletries. Jumping on the concept but linking it more closely to shampoo, in February 2007 Newsweek highlighted anecdotal evidence about certain baby shampoo product formulations that contain paradioxane, a cancer-causing chemical that could potentially contribute to young boys growing breasts and girls getting breasts too early. The New York Times published an article in early 2007 called "Looking at the bottle and what's in it," that reported that momentum is building for greater oversight of chemicals in everyday products such as shampoos and conditioners.

TARGET MARKETS & SEGMENTATION

The market for hair care products is a mature market with growth rates that tend to be flat in many product classes. Manufacturers target robust product classes and growing demographic groups.

Robust product classes and their rate of growth between 1997 and 2002 include: professional mousse (632%), hair spray (126%), home perms (90%). More importantly, nonprofessional liquid shampoos containing synthetic organic chemicals saw a growth rate of 324 percent during the same timeframe that hair rinses shipments exploded by 2,120 percent. Manufacturers frequently introduce ancillary products into robust product classes. They tend to focus on basic hair care products such as shampoos and rinses, because for most of their female customers these induce high rates of customer loyalty. America's Research Group reported that women have a penchant for buying brand name cosmetics, which translates to all beauty products. In fact, 35.1 percent reported that they were very loyal to their hair care brand.

Growing demographic groups for hair care products in the United States include African Americans and Hispanic Americans. In 2000 L'Oréal established its Institute for Ethnic Hair & Skin Research in Chicago, Illinois—the first and supposedly only research facility operated by a beauty company to conduct basic science research on the unique properties of the hair and skin of people of African descent. Makers are formulating products to meet the unique needs of the ethnic and racial groups, including African Americans and people of Hispanic origin. African Americans comprised 13.4 percent of the U.S. population in 2005 and Hispanics represented 14.4 percent.

One company that has seen success focusing on one racial group is Dr. Miracle. This company used uncon-ventional advertising to market its line of 20 hair care products to the African American community, and grew from $1 million to $10 million in two years by focusing primarily on this large population block. Hispanics, too, are being focused upon as a target market, particularly as they have been the fastest growing ethnic group within the United States during recent decades.

RELATED ASSOCIATIONS & ORGANIZATIONS

The Campaign for Safe Cosmetics, http://www.safecosmetics.org

Centre Européen des Silicones, http://www.silicones-europe.com

Cosmetic, Toiletry and Fragrance Association, http://www.ctfa.org

Environmental Working Group, http://www.ewg.com

The European Cosmetic Toiletry and Perfumery Association, http://www.colipa.com

Research Institute for Fragrance Materials, http://www.rifm.org

Synthetic Organic Chemicals Manufacturers Association, http://www.socma.com

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"Table 16. Resident Population by Race, Hispanic Origin Status, and Age—Projection: 2010 and 2015." Statistical Abstract of the United States: 2007. December 2006, 18.

"Toilet Preparation Manufacturing: 2002." 2002 Economic Census. U.S. Department of Commerce, Bureau of the Census. Available from 〈http://www.census.gov/econ/census02/〉.

"Unilever Our Brands" Unilever. Available from 〈http://www.unilever.com/ourbrands〉.

"Unilever to Expand Two Billion Dollar Global Dove Brand with Launch of Dove Hair Care in North America." Business Wire. 28 January 2003.

see also Soaps & Detergents