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Health and Beauty We examine the trends underlying the growth of the global marketplace in health, beauty and hygiene. Our analysts will point the way forward by highlighting critical innovations and behaviours that are driving industry evolution.

Demographic Changes: The Impact on Beauty and Personal Care Packaging

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Across the world significant demographic shifts are occurring. Households are shrinking, population is aging and demographic consumer groups are becoming more defined as brand owners use product extensions to diversify and target new consumers. As the core brand communicator on the shelf manufacturers are looking to how packaging can make itself relevant to these specific groups.

We're all getting older

In 2010 the world population over 50 reached 22%, by 2020 this will have increased to over 25%. Of all demographic changes the ageing population has probably had the most visible impact on beauty and personal care in terms of both product and packaging. For example while the growth in global skin care sales slowed down in 2009, anti-agers was the standout category, maintaining relatively strong growth as consumers prioritised a youthful appearance above all else. Sales of premium anti-agers have also remained very dynamic, as consumers have attached greater importance to fighting the ageing process than other areas of beauty and personal care, and there is still a strong perception of a link between price and efficacy for many consumers.

This premium character of anti-agers is reflected in the widespread use of glass jars where clarity and weight has long been synonymous with quality. However glass jars are increasingly losing out to rigid plastic packaging such as tubes which provide easy and clean access to the product and rigid containers with pumps. As anti-agers include ever more expensive and sensitive ingredients the pump becomes essential to protect the contents from oxygen exposure, to carefully dose an appropriate amount to avoid waste and for the simple functionality that can be used by older consumers who may have reduced mobility or strength in their hands.

Disposable incomes take a dive

While the recession may officially be over, manufacturers are still dealing with changed consumer habits and purchasing decisions. With disposable incomes being squeezed consumers have looked to cut spending and discretionary purchases in beauty and personal care have taken a hit. Value has joined efficacy and brand trust as measure that consumers are looking to satisfy. As such many brands have looked to moving away from, or supplementing, a premium positioning with masstige products. For example Shiseido has introduced Senka skin care, a masstige-priced skin care range in Asia, looking to increase volume share of the market. This range utilizes simple rigid plastic bottles and includes a refill pouch option, not a pack format that you will find in the premium end of the market. The company is also repositioning its premium skin care brand Clé de Peau Beauté to make it more expensive and exclusive to ensure that it can still service ultra-affluent customers. For this high-end market the company has chosen opalescent bottles with gold highlighting and pump closures, showing that even in times of economic uncertainty there are value margins to be found.

Alongside the refill pack, another economic option is the value pack. Once confined to commodity products in food and beverages, the refocus on value has made consumers more accepting of bulk offers in beauty and personal care. Offering a larger pack size, for example as Listerine mouth wash have done in the UK with the 1 litre 'Value' pack, is no longer seen as damaging to a brand's standing. This also goes along with numerous discounting initiatives employed by retailers to help rejuvenate consumer confidence and spending habits. HDPE bottles are the winning pack type in this case providing an affordable, rigid pack type that can easily be adapted to convey relevant branding.

Generation Z: Green and online

Brand owners have recognised the opportunities that targeting different demographic groups can offer. One such group is Generation Z, tweens and teens aged between 8 and 19. These Gen Zers were born into the digital world, and at the same time have a strongly developed environmental consciousness.

A recent example of packaging targeted at Generation Z, is the introductory of bio-degradable packaging for eco-friendly cosmetics for 8- to 12-year-olds by Walmart in the US in spring 2011. Gen Zers have growth up with climate change and waste as important factors and as such have a developed environmental consciousness. This launch further develops the story via a promotional campaign centred on the environmental benefits of the products contents and packaging.

Generation Z are also heavy users of social networking. Beauty and personal care brand owners are increasingly using packaging to bridge the gap between the product and consumers' online worlds. For example 2D barcodes such as QR codes are gaining in popularity. These can transfer consumers directly to social networks, where the consumer can express opinion about product, establishing communication between the consumer and brand manufacturer. These codes can easily be read by smart phones, a product that increasingly even the youngest Gen Zers will not be seen without. By taking a photo of the code, their phone will automatically lead them to the product specific weblink.

In this case packaging is one of the most important mediators, as these codes become most immediate when placed on the product packaging. For example the International Natural and Organic Cosmetics Association has initiated introducing these codes on certified cosmetic products. The system allows consumers to access to detailed product information in the shops.

Outlook for beauty and personal care packaging

During the worst of the economic recession beauty and personal care packaging innovations witnessed a decline. Manufacturers avoided experimentation with packaging to avoid the cost of a pack type switch, as it could in many cases increase the unit price of the product. And indeed a consumer focus on cost is expected to be with us for some time yet. Euromonitor International predicts that the trend for consumers cutting back on spending on beauty, opting for cheaper alternatives in essential categories and cutting out products altogether is likely to continue despite improvements in the global economy. This might still restrict packaging manufacturers from introduction of revolutionary innovations. However, in order to attract the attention of busy consumers, differentiation through the packaging format, pack shape and size are expected to develop.

The shift towards an ageing population will also continue, with the percentage of population over-65 expected to grow by 14% over 2010-2015. As such specific targeting for different age groups will become more common in the future. For example innovations targeting the older consumer are expected to encompass easy-to-use packaging, closures and bigger printing on the labels.

Gen Z consumers will be more demanding than ever as young adults. Being the most technologically-orientated generation in history, and having been born into a digital world, Generation Z does not have a sense of fear of technology. As such Euromonitor International expects the digital world to become an important future battleground for beauty and personal care products, and one in which packaging will increasingly be expected to appear.

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