Sales of suncare products in the UK have soared over recent years. Stimulated by the heatwave of 2003, the market shot up 41% from its 1999 value, making it worth £228 million.
Thanks to campaigns such as Cancer Research UK’s SunSmart, awareness of the dangers of exposure to ultraviolet rays is growing. And cheap flights to hotter climes during the winter are making the category less seasonal and less dependent on a store’s location.
Suncare margins are anything up to 70%, and having a credible offer that meets consumers’ distress purchasing needs will drive footfall and stimulate other warm weather related purchases.
Last year the suncare segment showed a 4% year-on-year increase and it now represents 67% of the market (IRI, supplied by Malibu). Consumers’ choice of sun protection factor (SPF) reflects the success of skin cancer awareness campaigns. SPF15 remains the single best-selling sunscreen, says Mintel, but with a greater range of SPFs, the higher factors - those over SPF30 - have grown at more than twice the sector average since 2001. The sunscreens with SPFs of 21 or more now take more than 40% of sales.
The major manufacturers are keen to play their part in informing consumers of the importance of sun protection, and they’re using their scientific credentials to persuade shoppers that their brands can play a part in reducing the dangers. Delph, for example, appears on the The Drug Tariff, which means it can be prescribed by GPs and is also supplied to the NHS. Graham Hill, Delph’s managing director, says: “All the products in our sun protection range offer superior four-star UVA protection, have been independently researched and tested (not on animals), and are 100% safe, to medical standards. This is a comforting thought for parents concerned about the UK’s dramatic rise in sun-related skin cancer.”
Children are particularly vulnerable to sun exposure, and according to Cancer Research UK, could be three times more likely than their grandparents to develop a malignant melanoma. Mintel has found the biggest volume purchasers of sun protection are parents, and manufacturers are responding. Nivea, for example, has produced extra-water-resistant lotions and sprays especially for children, which are green-coloured for greater application control. New formulations and pack formats are also making application and re-application easier. Earlier this year, market leader L’Oreal launched Solar Expertise, a range of non-sticky, non-greasy sun protectors, after-sun care lotions and ultra-fine mist sprays, which are water-resistant and have anti-ageing properties. It has also cottoned on to the importance of convenience and portability, by introducing SPF20 Sun Pocket Advance Protection Fluid supplied in a 30ml size.
Improved formulations are also helping to grow the self-tanning segment. IRI data supplied by Malibu shows sales were up by 17% year on year in 2004. Among the launches for 2005, which include High Protection Facial Fluid, Sun Protection Mousse in SPF12 (medium protection) and SPF20 (high protection), and After-Sun with Tan Extender, Malibu now offers a Self-Tanning Mousse. Similarly, Nivea has a Sun Touch Self-Tanning range available in four different application formats.
According to Fiona Lomas, brand manager for Nivea Sun, research suggests price is not an important issue when choosing a suncare product, although the sales unit increases during last year’s period of heavy discounting may suggest otherwise. “It’s worth remembering that penetration did not grow over this time, so the same people were buying more suncare, but paying less for it. However, in an impulse environment where the purchase is most likely to be made for an immediate need, consumers are willing to pay the rrp,” she says.
While some consumers will continue to pay the full rrp, others are becoming more value-conscious. Delph’s Graham Hill says: “As with most industries, sunscreen customers are price-sensitive. However, we ensure independents can make a decent margin without any difficulty.”
His assertion is confirmed by Philippa Varney, marketing manager for Malibu, which sells more than half its range for £2.99. Before Malibu launched its new pricing policy last year, which is carried over to 2005, it undertook a survey which showed that 64% of all respondents believed that sun lotions were rather expensive. Remploy is also tapping into the budget end of the market with Soleil, a new brand said to contain the same high-quality properties as mass-market products but at an affordable price. Says brand manager Lyndsay Jones: “Sunscreen consumers are price-sensitive. Price point is very important but not at the cost of quality.” In terms of merchandising, Nivea’s Lomas recommends a counter-top unit which can also prompt other warm weather purchases, as well as an appropriate range. “A core range of SPFs for adults and children should ensure no one needs to go to a larger store to get the products they need.”
Malibu, meanwhile, is offering a pre-pack merchandiser unit for the independent sector featuring three each of Malibu’s top-selling products in a range of formats and SPFs for £31.35. It includes SPF30 lotion which is suitable for children, SPF8 and 15 lotions, SPF15 lotion spray, SPF8 Dry Oil spray and Moisturising After-Sun.
Gareth Pugh, Spar, Polzeath, Cornwall.
Situated in the coastal village of Polzeath in Cornwall, suncare is a major category for Gareth Pugh’s 3,000sq ft Spar store. The category generates impressive margins of as much as 70%. Suncare consumers are very brand aware and associate quality with a high price tag. Parental concern for their children’s health is also driving sales of higher SPF products, according to Gareth.
He says: “If you have a product at £3.99 and one at £13.99, many mothers will pick the £13.99 product.” Products such as repellents are dual merchandised in both the health and beauty and suncare fixtures, as are moisturisers and self-tanning products - another growth area according to Gareth. Although there is a heavy summer season bias, with surfers flocking to the Cornish coast in the summer months, suncare is a year-round category and includes sunglasses, which attract margins of 50%. “We’re buying our sunglasses at £6.50 and they retail at £18.99, although we’ve got them on at £17.99. People, particularly young people, will spend £100 on sunglasses these days.”
Once a retailer has a credible suncare offering, it’s worth exploiting the potential of complementary products. Colin Hills, managing director of horticulture and gifting distribution company Flowerfete, says sunglasses can offer real profit potential with margins of around 50%. The company supplies a variety of designs, all with a £10 price point and complete with display units which can hold 20-48 pairs. “They’re an all year round product,” says Hills. Insect repellents are also a must. According to Church & Dwight marketing director David Thompson, “The repellent market is concentrated in the May to August period but sales are now more year-round because of foreign holidays to exotic locations,” says marketing director David Thompson.
Mosiguard is available in roll on, cream, aerosol, adult and kids’ pump formats with an RRP of £5.99. Malibu also has a 150ml insect repellent spray at £3.99, which is more suitable for children and sensitive skin.