In research conducted by Mintel, Consumer Spending Habits – Brazil, in 2013, 42% of middle class consumers and class AB purchased more toiletries, cosmetics and beauty products than the previous year, reflecting the significant growth of the sector in 2013 (12%). This growth was driven primarily by increased sales of products with higher added value. Younger consumers (16-25 years) were those who bought more (52%) compared with only 27% of those over 55 years old.
In terms of socioeconomic groups, there was no significant difference between them, for example, 46% consumers of the AB class bought more compared with 45% of the class C, which suggests that the “new middle class” are not just buying more products from this category but may also be seeking personal care and beauty products with higher added value, what should continue to drive category growth in the second half of 2014. However, the aging of the population over the next five years could affect some categories.
In the last five years (2008-2012), the sector is been growing at an accelerated pace, especially in 2012 when it reached 16%. According to a report by Mintel Consumer Spending Habits – Brazil, in July 2013, in 2012, 43% of Brazilians spent more on beauty products and personal hygiene than the previous year. In 2013 the industry achieved a turnover of R$ 38 billion.
According to the agency, and also with market data Abihpec – Brazilian Association of Toiletries, Perfumes and Cosmetics Industry – since 2008, all categories of the industry are showing positive growth. But the two categories that stood out were deodorants and shampoos & conditioners. The significant growth of these categories is mainly due to the fact that they are increasingly seen as essential and accessible to a larger portion of the population.
The category of deodorants, according to the agency, has a high penetration, with 95% of the population claiming the use of the product. According to the survey, in recent years consumers have interest in products with higher added value, for example the migration of the consumption of products in spray format (squeeze / pump) for roll-on and aerosol formats, a behavior that demonstrates the interest of consumers for products with higher added value when they reach a higher socioeconomic status. Companies focused on the middle class who traditionally were strong in spray segment (squeeze / pump), have expanded themselves and renovated with products in formats roll-on and aerosol the research points out.
In turn the market for shampoos & conditioners has showed consistent growth between 2008-12 with a growth of 19.3% in 2012, one of the largest in the industry and in constant growth. Conditioners (with or without rinsing and treatment masks), and even more sophisticated products that offer specialized treatments (eg hydration, repairers, anti-frizz), targeted to a female audience, are one of the most responsible for this result, since the women who currently have higher income, are more likely to use these products. In the Mintel report Hair Care-Brazil, this segment is the one with fastest growing via consumer sophistication, ie products with higher added value and generally higher price.
In the report Mintel Makeup-Brazil, only 72% of women over 55 years old wear makeup, compared with 92% of women between 16 and 24 years. For this reason, the challenge for makeup brands, according to the agency, will be developing products that besides color also provide other benefits such as anti-aging properties to attract the more mature consumers.
Sector’s growth, according to Mintel, was another factor, which was the expansion of cosmetic brands by the franchise system, a simple and safe way to open a business with a relatively low financial investment, it points out. According to ABF (Brazilian Franchising Association) in 2012 the country had about 104,500 franchise units, ranking sixth in the world.
The forecast of the market growth personal care, beauty and cosmetics, according to a report by Mintel, continues positive, with an increase of 46% between 2013 and 2018 when it will reach R$ 83 billion.
According to IBGE – Brazilian Institute of Geography and Statistics, the Brazilian female population is expected to grow 4.2% between 2013-18, but in terms of age groups the number of women between 15 and 34 should decline nearly 1% and the ones over 55 will increase 21% by 2018.