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THE BACKGROUND

The market for bath and shower products has benefited in recent years from British shoppers' growing desire to pamper themselves, even if only for a few minutes in the shower each morning. This trend toward treating bathing as therapeutic or a stress-reduction tactic has seen even mass-market bathing brands emphasise their luxuriant qualities and add functional, spa-treatment and aromatherapy ingredients to their products. Bathtime, in particular, is now being widely promoted as an indulgent treat for women, rather than an everyday event for anyone.

The bathing products sector is under tremendous price pressure.

The multiples have been cutting prices as they attempt to build market share in the category at the expense of the pharmacies, and in response, the bigger pharmacy chains such as Boots and Superdrug have been trying to maintain share with heavy discounts; buy one get one free promotions have been particularly prevalent.

So while the sector's growth was healthy up to 2004, it is expected to slow to about 1% in value terms to £670m this year, according to Euromonitor.

Bodywashes, shower gels and liquid soaps have performed best. Euromonitor says that while the value of these will continue to rise, this growth will be balanced by the decline in more traditional products such as bath additives and bar soap.

In 2004 volume sales of bodywash and shower gel grew by 27%, while liquid soap rose 18% on 2003. While this volume growth has been impressive, the pressures on price mean bodywash and shower gels value sales are expected to grow by only 7%.

Shower gels are being bought more often for two main reasons: lower prices and a rise in the number of households with showers - penetration is now 85%.

Functional products

Manufacturers have further boosted this sector with new product development that has seen added benefits such as exfoliating, firming or moisturising become the norm. Another trend has been the use of natural or food-based ingredients such as milk, rice and fruits considered beneficial to the skin.

The discounting of liquid soaps has meant consumers who previously considered them too expensive have been converted. Liquid soap dispensers, at an average price of £4.50 a litre, now cost the equivalent of a twin-pack of bar soap. Their convenience and added benefits such as anti-bacterial qualities also appeal to shoppers.

But this has meant bar soap volume sales in 2004 were down 4% on the previous year, as consumers switched format of soap rather than use more.

PZ Cussons is the leading manufacturer in the liquid soap category, with a 17% value share. Its leading brands are Imperial Leather and Carex.

In 2002 it bought the Original Source brand, which had £11m sales in 2003.

Imperial Leather has expanded from its original bar soap format to include shower gels and creams, bubble baths (under the Bath Moments brand) and more recently Foamburst - a shower gel that turns into lather. Its ads play heavily on its heritage and uses the strapline 'Everyone deserves a little bit of luxury'.

Beyond the kitchen

Last year Cussons extended kitchen handwash brand Carex into bathroom products with new fragrances and packaging. The activity was supported by an ad campaign using the animated Squirts characters used in previous Carex work.

Sara Lee Household & Body Care is close behind Cussons with an estimated 16% value share, an increase of 2% on 2003. Its growth is driven mainly by the market-leading Radox brand. The company's portfolio also includes Sanex, Badedas and children's brand Matey.

The Radox bath range relaunched in autumn 2004 with a reshaped bottle and amended formulations. The range consists of six herbal baths and four Aromatic Bath Essences. The relaunch was supported by a £4m ad campaign featuring a woman bathing after a busy day, the events of which were performed in front of her as a musical. In May, Radox put £5m into the relaunch of its Shower range with a translucent pack.

Beauty focus

Unilever manages several brands in this market, of which Dove is the best performer. The brand was introduced to the UK 12 years ago as a beauty soap, but has extended into other areas, including bodywashes. In 2004 it launched a firming range, which was supported by the message that 'Real beauty comes in all shapes and sizes'.

The launch garnered huge media attention because the Ogilvy & Mather advertising featured 'real women'. Dove sales increased 700% in the first half of 2004.

Dove has also shifted its focus to the indulgent aspects of bathing, launching its Calming Night Bath and Relaxing Tranquillity Bath, which contain essential oils and active moisturisers.

Liquid growth

The future performance of this market is predicted to be one of steady growth, with some subsectors faring better than others. By 2009 the category will be worth £693m, of which bodywash and shower gels will be the main component at £366m, according to Euromonitor.

Bodywash and liquid soap sales will continue to grow, but the rate of growth will slow as sales reach saturation levels. Volume growth will be driven by increased use and discounting.

As products continue to be developed around the concept of bathing as a treat, the decline in bath additives will slow. The categories performing least well will be bar soap (sales are predicted to fall 23% from 2004 to 2009) and talcum powder, which is seen as old-fashioned.

Euromonitor predicts a major rationalisation of mass-market bar soap brands, which may see only half those on-shelf now still around in 2009.

BATH AND SHOWER BRANDS BY MARKET SHARE (%) Brand Company 2004 2003 2002 2001 1 Radox Sara Lee 13.7 12.3 12.1 11.1 2 Imperial Leather PZ Cussons 10.1 10.0 9.4 n/a 3 Dove Lever Faberge 8.0 7.8 7.4 6.8 4 Johnson's pH 5.5 Johnson & Johnson 5.5 5.7 6.0 6.1 5 Oil of Olay Procter & Gamble 5.5 4.8 4.9 4.6 6 Carex PZ Cussons 5.1 4.8 4.3 n/a 7 Boots Boots 4.0 4.5 4.6 5.0 8 Avon Avon Cosmetics 3.5 3.5 4.4 4.2 9 Palmolive Colgate-Palmolive 3.5 2.9 2.8 2.7 10 Lynx Lever Faberge 3.2 3.1 2.9 2.6 11 The Body Shop Body Shop 2.9 2.9 3.5 3.7 12 Garnier Nutralia Laboratoires Garnier 1.7 1.7 1.7 1.7 13 Sanex Sara Lee 1.7 1.4 1.2 1.0 14 Simple Accantia Health 1.3 1.4 1.6 1.6 & Beauty 15 Johnson's Baby Johnson & Johnson 1.3 1.4 1.4 1.3 16 Palmolive Aromatherapy Colgate-Palmolive 1.3 1.3 1.2 1.1 17 Palmolive Nourishing Colgate-Palmolive 1.2 1.0 0.8 0.7 18 Badedas Sara Lee 0.8 0.9 1.1 1.3 19 Lux Lever Faberge 0.7 0.7 0.7 0.9 20 Adidas Coty UK 0.6 0.7 0.6 0.6 21 Own-label n/a 10.1 10.5 10.8 12.0 22 Others n/a 14.0 16.8 16.6 30.8 Total 100 100 100 100 Source: Euromonitor ADVERTISING SPEND ON BATH AND SHOWER BRANDS BY COMPANY Company £1 Unilever 10,589,295 2 Sara Lee Household & Personal Care 4,656,102 3 Procter & Gamble 3,169,376 4 Colgate-Palmolive 1,985,800 5 PZ Cussons 1,634,261 6 Beiersdorf UK 1,318,740 7 Others 2,038,972 Source: Nielsen Media Research Note: figures are for year to 30 Sept 2005

ANALYST COMMENT - HANNA FISHER, SENIOR CONSUMER ANALYST, MINTEL INTERNATIONAL GROUP

Bubble baths and shower gels are no longer the functional commodity products they once were. Today they offer sophisticated features and value-added benefits. The sector has distinctly moved toward a holistic approach to washing, with recent launches taking their cue from broader trends and catering for the wellbeing of body, mind and soul.

New users are few and far between, so the only realistic growth option is increasing value through segmentation, targeting specific consumer groups and needs. In the UK market, which is characterised by constant price promotions, new product development is key to maintaining and gaining share.

Segmentation addresses not only function, but also skin type, as well as formulations, with gels being complemented by oils, creams and mousses.

Skincare is a key feature in bath and shower products, as simple cleansing is now taken for granted.

Straightforward shower products now sit alongside those that indulge a desire for pampering. This reflects changing habits, as consumers take showers as part of their grooming routine and baths to relax. Many products have an aromatherapy proposition or offer thermal spa-style restorative properties.

Drawing on trends in skincare, the range of fragrances on offer has been greatly expanded and 'natural' ingredients now vary from botanicals to shea butter, ylang-ylang, vitamins and milk proteins.

In addition to male-specific products, novelty lines aimed at children and young teens have been another recent growth area.

There is further scope to develop products with more sophisticated skincare properties, while spa-inspired brands will need to link more closely to real spa treatments.