A New Dawn for Sun Care: Key Prospects and Challenges

Strategy Briefing

About This Report

Aug 2015

Sun care continued to slow down in 2014 as Western Europe declined while North America remained stagnant. The addition of sun protection benefits to skin care and colour cosmetics products has been key to this. However, further penetration into new markets will help sun care sales to reach US$11.3 billion in 2019. In terms of top markets Brazil and China still lead growth but the Middle East and Africa and Southern Europe remain key for sun protection players.

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A New Dawn for Sun Care: Key Prospects and Challenges

Sun care remains 2% of global beauty

Sun care, which reached sales of US$9.8 billion in 2014, remains one of BPC’s smallest categories accounting for just 2% of total BPC value. While value growth will continue to slow down by 2019, consumption growth will keep rising due to consumers trading down to cheaper options (such as private label) and retailers’ strong promotional offers.

50% of sun care remains in the hands of just four markets

Over half of sun care’s value sales is in the hands of four markets -Brazil, the US, China and South Korea. This creates a challenge for sun care brands as Brazil and China are expected to slow down, the US is expected to decline and South Korea will remain static over 2014-2019.

Category crossover hinders sun protection growth prospects

The rise of BB/CC creams as well as sun protection added as a key feature in facial moisturisers, anti-agers and make-up has pushed sun protection offerings to an occasion-specific product rather than a daily necessity. The blurring of the lines between skin care, colour cosmetics and sun care creates greater value products for consumers.

Southern Europe, MEA and Asia remain key opportunity zones

Despite going through economic and political turmoil, Southern Europe with the exception of Italy managed to return to growth in 2014, where it is expected to remain to 2019. In addition, MEA and Asia Pacific remain relatively less penetrated by sun care. Consumers’ desire for fairer skin in both regions creates opportunities for sun care especially for international brands with strong recognition.

Segmentation -a key innovation strategy

Segmenting new product offering by gender, age and/or ethnicity creates an opportunity for sun care players to diversify their portfolios and to add value by customising innovation to certain consumer groups. Segmentation by occasion is also rising, egbeach vs sport vs skiing. Taking inspiration from skin care and adding further breakdown by skin types, sensitivity, etccan also lead to higher perceived value products.

Introduction

Scope
Key findings

The state of the sun care industry

Sun care remains dynamic despite global slowdown
Emerging markets surge ahead to dominate sun care
Premium sun care remains niche
Parapharmacies /drugstores benefit the most in sun care
Sun protection continues to dominate over other categories

Sun care’s key challenges

Sun care’s key challenges hold back growth
Regulation: Sun care brands face tougher rules
Regulation: Desire for higher SPF impacts innovation
Regulation: Can banning the use of sun beds boost self-tanning?
Cross-category convergence hinders sun care growth
Skin care benefits remain a high priority for consumers
Facial skin care prevails in consumption over sun care
Cross-category movements to continue to impact sun protection
Affordability of sun care remains a challenge in developing markets
Private label continues to push prices down
How will consumption fare versus price?
Value-driven purchases across the board with some exceptions

Identifying Growth opportunities

Four markets hold half of sun care’s future sales
Brazil’s slow down to impact global market
US’s continuous decline hinders sun care’s global growth prospects
China is the future in sun care but South Korea remains the present
Thailand, India and Taiwan emerge as key next prospects
South Africa, UAE and Saudi Arabia have strong potential
Mature markets to continue to contract in value…
…but consumption remains healthy
Innovation key to sustaining growth
Convenience can help reduce need for promotions
Sun protection usage remains low to non-existent among males
Segmentation by consumer creates new opportunities
Southern Europe remains key despite economic woes
Consumer travel in Southern Europe creates further opportunity

Summary and recommendations

Key present and future geographic opportunities
Sun care’s key opportunity space in 2014 and beyond

Report Definitions

Definitions