KLINE STUDY SHOWS NEW FORMULATIONS DRIVING U.K. COSMETICS MARKET

LITTLE FALLS, NJ, November 3, 2005 – The anti-aging trend that has driven many regional markets for cosmetics and toiletries over the past few years is also fueling growth in the $7 billion British market, according to a newly released study by Kline & Company.

New product lines that promise to reduce wrinkles, plump the lips, and extend the lashes are proliferating throughout the U.K., driving market growth by nearly 3.5% over the last year, Kline’s study finds. GLOBAL COSMETICS & TOILETRIES 2004: UNITED KINGDOM takes a detailed look at the overall market for personal care products for both men and women and indicates that technological advances are the driving force in many product classes.

“The market for skin care products in the U.K. is poised to grow by more than 5% over the next few years, driven by at-home anti-aging products, just like in the other mature Western markets,” says Lenka Contreras, vice president and head of the Consumer Products practice for Kline’s research division. “Facial products account for the bulk of anti-aging sales, but hand and body lotions are also featuring skin brighteners, firming agents, and cellulite reducers with anti-aging effects, and these products will have some of the highest growth rates in the next five years.”

In the makeup category, sales in the U.K. are being driven by advances in exact matching technology for foundation, which delivers a closer color match to the natural skin tone. L’Oreal Paris has been a champion of this movement with its True Match line, as has Maybelline with its Dream Matte Mousse products.

The anti-aging trend has carried over into the lipstick and lip gloss market as well, with collagen-like formulations designed to give the appearance of fuller, younger-looking lips. These formulas are becoming more readily available at a variety of price points, from department store brands like Chanel’s Aqualumiere Sheer Color Lip Shine to lower-end brands like Rimmel’s Volume Boost Lipstick.

While the overall market has experienced only a modest boost, the market for men’s products has seen a significant spike, albeit from a smaller base, with 15% growth from 2003 to 2004. While the buzz surrounding the metrosexual trend seems to have quieted, growth in this category can be attributed to still-growing interest among men––particularly young professionals––in their overall appearance, says Contreras.

“While overall sales growth hasn’t been fantastic, market value growth has outpaced volume growth, which means that manufacturers have created a greater perceived value for their products,” says David Vladyka, head of Kline’s Consumer Products consulting practice.

For example, Boots has recently reformulated and repackaged its makeup line and raised retail prices. The strategy seems to have worked, as the line has sold well in 2005, supported by a new in-store display campaign.

“Unit sales appear to have held steady, which indicates that customers are willing to pay more for the perceived value of reformulated products and line extensions,” Vladyka says. “While some of the products may cost a bit more to make, the anti-aging trend is definitely resulting in a higher return for marketers.”

GLOBAL COSMETICS & TOILETRIES 2004: UNITED KINGDOM is part of a global series that presents sales data in 17 separate volumes and more than 300 product category profiles, including sales value by product type and brand, retail outlet distribution, and five-year forecasts. The study is based on data collected from approximately 1,000 interviews with cosmetic and toiletry marketers, distributors, and retailers, as well as government agencies and trade organizations.

For more information on the study series, go to www.klinegroup.com/y559.htm or contact at +1-973-435-3407. In Europe, contact at +32 2 776 0737. In South America, contact at +55 11 3079 7843. In Asia, contact at +86 21 5382 6677.

To learn more about Kline’s customized consulting capabilities for the consumer products industry, contact at +1-973-435-3402.

Established in 1959, Kline & Company (www.klinegroup.com) is an international business consulting and market research firm serving the consumer products, life sciences, specialty chemicals, and energy industries.