Euromonitor Pinpoints Trends at America's Expo 2009

Euromonitor International analyst Virginia Lee attended America’s Beauty Show (ABS) and America’s Expo for Skin Care & Spa held in Chicago from March 28-30, 2009. The co-located shows featured exhibitors from the salon hair care, skin care, spa and nail care markets. The shows hosted industry founders such as Paula Kent Meehan (founder of Redken, the Global Salon Business Awards and the BEST Foundation), Horst Rechelbacher (founder of Aveda and Intelligent Nutrients), Lydia Sarfati (founder of Repêchage) and Jan Arnold (co-founder of CND), as well as leading hair stylists Kim Vo (Bravo’s “Shear Genius”), Nick Arrojo (TLC’s “What Not to Wear” and Orlando Pita (on QVC for T3). Key issues discussed at the show included ways to retain clients in a weak economy, sustainability, and natural and organic products.

Recession impacts the U.S. salon industry

Like many other industries across the United States, the salon industry has been impacted by the weakening of the economy. In an interview, ABS CEO Paul Dykstra said that salon clients are going longer between appointments. Clients who used to come into salons every four to five weeks are now coming in every six weeks. Cosmetologists Chicago, owner of ABS, surveyed salon professionals in December 2008 and found that 60% of respondents said their 2008 business was either the same or better than in 2007. However, color services have remained consistent and are sustaining hair salons, according to Dykstra.

A casualty of the recession has been retail sales at spas and salons. Value sales of salon hair care declined by almost 6% to reach US$2.7 billion in 2008, according to Euromonitor International. Fewer salon visits and increased product diversion to mass retail contributed to the sales decline.

Many speakers offered business-building tips during this time of economic turmoil. Sarfati of Repêchage suggested adding a facial bar to expand awareness of spa services and increase retail sales. The facial bar offers mini facial services in the middle of the spa providing a view of spa services often hidden away in a room to consumers. Georgia Sturges, director of education and training with DDF Skincare (acquired by Procter & Gamble in January 2007), suggested offering value propositions that add to existing treatments instead of offering discounts. To maintain loyalty among existing clients, she suggested offering reward programs and series-selling, as well as escapist, evening events.

Salon Spa Sustainability Summit

The show also hosted its second annual Salon Spa Sustainability Summit. Salon sustainability is based on three principles: people (social progress to support and protect ourselves and our communities); planet (active and involved concern for the environment); and profit (continued economic development to sustain our business). Speakers included Rechelbacher, Ted Ning, executive director of LOHAS, Lifestyles of Health and Sustainability, Clodagh, internationally known design leader, Max Simon, an authority on stress reduction, self-esteem and life purpose, Mary Bemis, editor-in-chief of Organic Spa magazine, and owners of three eco-conscious spas.

Rechelbacher is the son of an herbalist, environmentalist and organic farmer who started hairdressing at the age of 14. He founded Aveda in 1978, sold it to Estée Lauder in 1997, and stayed on as a consultant until 2003. His latest venture is Intelligent Nutrients, a company that sells certified organic hair care, skin care, body care, essential oils and functional foods and supplements. All of his products are certified organic, either by the United States Department of Agriculture (USDA) or by the UK Soil Association. The certified organic ingredients are grown on his farm in Osceola, Wisconsin. He shared his belief that “The body is an eco-system” and that “Plants are master chemists.” Rechelbacher stated that “We need to switch from a petrochemical economy to a carbohydrate economy.” Organic foods contain 30% more antioxidants than conventionally grown foods, according to Rechelbacher. He showed a chart comparing the ORAC (antioxidant) value of black cumin seed oil with a 1.37 score for the conventionally grown and a 4.33 value for the organic variety. The activist in Rechelbacher spoke about the global organic certification confusion as the number of certificates (organic, natural, green) proliferate and lead to greenwashing. To fight greenwashing, he joined Dr Bronner's Magic Soaps April 2008 lawsuit in the California Superior Court against several personal care brands making organic claims on their labels.

Ted Ning discussed the evolution of the LOHAS market stating that the world has made significant progress. He cited data from the Natural Marketing Institute that segments U.S. consumers into five groups: LOHAS (17%, with a strong interest in planetary health), Naturalites (17%, interested in personal health or children’s health), Conventionals (26%, practical people who recycle and buy Energy Star appliances), Drifters (24%, affected by trends) and the Unconcerned (16%). With consumers worried about the economy, there has been a shift from green initiatives focused primarily on improving the environment to practical green initiatives that save money. Ning stated that there has been double-digit growth in taking bags to grocery stores, the successful launches of Clorox Green Works and Arm & Hammer (green products in conventional stores), use of CFLs (compact fluorescent light bulbs), and less driving.

Salons embrace natural and organic products

Many of the new products launched at the show featured natural and organic ingredients. TIGI (acquired by Unilever in February 2009) introduced an organic hair care line named Love Peace & the Planet. Products in the line feature organic ingredients such as aloe leaf juice, lavender, pomegranate extract, shea butter and white tea extract. The organic line’s bottles and tubes are made from 50% post-consumer recycled material. After years of offering organic skin care products, Eminence Organics went one step further and developed an organic Biodynamic skin care line. The line uses ingredients that have been farmed using biodynamic practices and recyclable glass packaging manufactured with wind power energy. In nail care, Essie introduced the Essie Naturally Clean nail care line made with botanical ingredients, such as aloe vera and eucalyptus oil, which has antiseptic properties.

Even products not making natural or organic claims sought to position their products as being “free” from ingredients such as sulfates and parabens. Many manufacturers offered sulfate-free shampoos. Alterna Professional Haircare’s Alterna Caviar Anti-Aging Texture product boasts that it contains Rhodiola extract to protect against heat while being free from parabens, gluten, synthetic colour, DEA, TEA, phthalates, mineral oil, and paraffin.

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