±±¾©Èü³µpk10

THE BACKGROUND

Foreign holidays are the driving force behind sales of suncare products, but the UK weather also has its part to play: last year's poor summer led to heavy discounting in the sector. However, the market has been boosted by health concerns about spending too much time in the sun, with the self-tanning category predicted to be a major beneficiary. Manufacturers are investing heavily in research to improve product ranges as they seek to capitalise on expected continued expansion.

The UK's weather may be unpredictable but our appetite for overseas holidays has ensured the suncare market continues to grow, with retail sales reaching £228m in 2003, according to Mintel.

Although foreign holidays drive sales, this sector is still affected by UK weather: the unusually hot summer of 2003 boosted sales, but the poor weather last year led to heavy discounting, so a fall in market value is expected in 2004.

Sun protection products account for almost 80% of the market, with sales worth £181m in 2003. Aftersun products make up 13% and self-tanning products 8% of the remainder of sales. While self-tanning products represent a small proportion of the market, sales have doubled since 1999, with many consumers wanting a year-round 'healthy' tanned look.

Not surprisingly, this market is highly seasonal, with the majority of sales and promotional activity focused on the summer months. However, winter holidays and the rise in long-haul travel means many retailers stock the products throughout the year.

Public information campaigns about the risk of skin cancer from exposure to the sun have been prevalent in recent years and most of the main manufacturers have established sun awareness campaigns or linked with charity ones.

However, many people - in particular young men - remain reluctant to change their habits when it comes to sun protection, and a tanned skin is still seen as fashionable and sexy by many women.

Consumer concerns

British shoppers are less likely than many other nationalities to use suncare products, which may explain why the UK has Europe's second-highest incidence of malignant melanomas. They also invariably use an insufficiently high sun protection factor (SPF) and do not reapply frequently enough.

The SPF rating, although now universal, is often confusing to consumers, with many believing high SPFs will prevent tanning.

Despite all this, sunscreens of SPF 30 and above have grown sales at more than double the sector average, and more than 40% of sales are from products with an SPF of 21 or more.

This is an interesting market where both brands and own-label battle it out for market share. L'Oreal's Garnier is the world's biggest manufacturer of suncare products. In the UK, its main brand is Ambre Solaire, but it lost its UK market leader position to Boots' Soltan in 2003. Among the other leading players are Beiersdorf's Nivea Sun, Avon and Johnson & Johnson's Piz Buin. Among own-label, Tesco and Sainsbury's both have significant suncare ranges.

While there are premium brands in this market, mostly from the established premium skincare brands such as Clarins and Estee Lauder, most sales are mass market, where price dominates.

Boots is the biggest retailer of suncare in the UK, accounting for 46% of all value sales in 2003, with Soltan and other own-label brands representing just over half its sales in the sector.

However, Boots' own-label range is extensive and the company has invested heavily in research and development (R&D) to keep the brand ahead in suncare technology.

The retailer's suncare product manager and buyer, Kevin Heath, says: 'In 2004 Boots relaunched Soltan with an improved design and we feel it is the best formulation on the market. It also saw its first TV campaign in eight years to drive Soltan as a standalone brand. Boots is stealing share from the proprietary brands because we are offering a premium product at better value than the others.' Soltan tackled the issue of men's reluctance to use suncream by launching a dedicated male range last year. As well as having a more masculine fragrance and packaging, it was easy to apply, addressing the key problem of sun cream being seen as too 'messy' by many men.

Ambre Solaire also has a good foundation in men's suncare and this year it has added Transparent High Protection Spray to its range. Ambre Solaire's range is broad and also includes self-tanning bronzers. It extended this in 2003 with the launch of Self Tan Wipes.

Beiersdorf, the German-owned multinational, has stretched its huge Nivea skincare range into the suncare category to become the third-biggest brand in the UK. It claimed to be the first multi-benefit sun protector when it launched Firming Sun Lotion in 2002, and tan prolonger is included in its aftersun products. In 2003 a significant launch was the Sensitive Sun range, which was aimed at consumers with sensitive skin and sun allergies.

Johnson & Johnson-owned Piz Buin has shifted its positioning in recent years, dropping its deep tanning image to include all levels of protection.

Product development

For all companies, using the latest technology to improve formulation is a key battleground. Improving application, reducing streaks in self-tanning products and extending protection are all areas that have benefited from R&D in recent years.

Particular growth areas in new product development are sunblocks with added benefits such as skin firming, anti-ageing ingredients or insect repellent. In the children's market this has included fun, coloured products so parents can see how thorough the application is and children can enjoy using them.

Demand for products looks set to grow, as holidaymakers' desire for foreign travel remains strong.

However, the market value has been badly dented and last year's heavy discounting has created a demand for permanently low prices in the sector.

Mintel predicts that self-tanning products will continue to be a boom area (sales up 72% in the next five years), especially as the formulations become more sophisticated, and better colour and less streaking are achieved.

SUNCARE PRODUCT MANUFACTURERS BY VALUE AND MARKET SHARE

Brand 2003 2001 1999 99-03

pounds m % pounds m % pounds m % % chng

1 Boots (all) 54 23 38 21 35 21 54.3

Boots Soltan 49 21 33 18 31 19 58.1

Boots (other) 5 2 5 3 4 2 25.0

2 Garnier Ambre

Solaire 43 19 37 21 35 22 22.8

3 Beiersdorf

Nivea Sun 36 16 30 17 20 12 80.0

4 Avon Bronze 18 8 14 8 14 9 28.6

5 Johnson &

Johnson (all) 18 8 14 8 13 8 38.5

Piz Buin 16 7 9 5 8 5 100.0

Johnson's 2 1 5 3 5 3 -60.0

6 Others and

own-label 59 26 46 25 45 28 31.1

Total 228 100 179 100 162 100 40.7

Source: Mintel

ADSPEND ON SUNSCREENS AND TANNING PRODUCTS BY BRAND

Brand 2003 2001 1999

£000 % £000 % £000 %

1 Ambre Solaire 8634.0 55.4 2467.0 31.6 2319.0 42.4

2 Johnson &

Johnson 2460.0 15.8 n/a n/a 92.0 1.7

3 Nivea Sun 1985.0 12.7 2364.0 30.3 1554.0 28.4

4 Boots 721.0 4.6 800.0 10.3 194.0 3.5

5 Keyline 253.0 1.6 151.0 1.9 75.0 1.4

6 Clarins 202.0 1.3 209.0 2.7 216.0 3.9

7 Superdrug 125.0 0.8 28.0 0.4 n/a n/a

8 Hawaiian Tropic 0.7 108.0 0.7 57.0 83.0 1.5

9 Estee Lauder 69.0 0.4 168.0 2.2 161.0 2.9

10 Lancaster 32.0 0.2 250.0 3.2 239.0 4.4

11 Elizabeth Arden 9.0 0.1 52.0 0.7 116.0 2.1

12 Malibu 2.0 n/a 255.0 3.3 37.0 0.7

13 Lancome n/a n/a 214.0 2.7 178.0 3.3

14 Avon n/a n/a 155.0 2.0 2.0 n/a

15 American Crew n/a n/a 153.0 2.0 38.0 0.7

16 Others 991.0 6.3 479.0 6.1 169.0 3.1

Total 15,591.0 100.0 7802.0 100.0 5473.0 100.0

Source: Nielsen Media Research/Mintel

ANALYST COMMENT - IAN BELL, Senior UK research analyst, Euromonitor International

Price-cutting by UK supermarkets has had a dramatic impact on the suncare market, stripping value sales by as much as a third as discounting spreads across the retail sector.

This has affected the market so severely largely because Boots, the UK's biggest suncare retailer, has faced increasing competition from the bulk-retailing channel.

Supermarkets such as Tesco and Asda are keen to lure summertime shoppers through the door for a pre-holiday shop, as this ranks among the highest in value of the whole year.

In 2004, manufacturers responded by investing in educational efforts alerting UK consumers to the dangers posed by exposure to the sun. The approach to this education has become more formalised, with manufacturers seeking to develop tie-ups with external bodies.

Boots, for example, supported Cancer Research UK's SunSmart campaign, while Garnier's Ambre Solaire received accreditation from the British Skin Foundation.

Product development has also been central in the attempt to maintain unit prices and competitive advantage. The most interesting have seen suncare products attain greater functionality, with brands now crossing the gap between suncare and skincare by offering extra features.

Suncare still lags far behind the rest of skincare in terms of penetration by premium products.

However, it seems interaction in consumer education, especially in encouraging men into the segment, allied to greater product functionality and the further development of premium brands such as Coty's Lancaster and LVMH, may well lead to a suncare segment more resilient to discounting and, ultimately, to better protected consumers.