In this column, Tony D’Andrea, Director of Planning and Research at The San Jose Group, analyzes the “Hispanic Haircare Market” and introduces interesting examples to think the “Hispanic green trend” in the US and Latin America.
In times of economic hardship, whereas mainstream consumers turn to cheaper brands, Hispanics stick to their brands of choice, particularly in haircare and skincare products. As recurrently found in CPG market monitors, brand loyalty is higher among Spanish-speaking consumers, often 5 to 15 percentage points above English-speaking Hispanics and general market consumers (verified as recently as February 2011 Mintel Oxygen).
Latinos and other multicultural consumers spend 5 billion dollars on haircare products each year. This includes shampoos, conditioners, haircolor, styling products, relaxers and sprays. Nearly 70% is spent on regular products, and the remainder on ethnic-specific ones. Growing at an average 2.6% each year since the early 2000s, haircare spending is being in part driven by the dramatic growth of the Hispanic population in the US.
Yet, Hispanic women show great interest in natural and wellness options. Herbal, organic, natural ingredients in haircare products are particularly appealing. According to a Packaged Facts survey, Latinas want environmentally friendly products, as expressed in a whopping 173 index. They are interested in recycling (119), and oppose animal-tested products (115). Although indexing only slightly higher in the consumption of natural products (105), such differences between verbalized interests and manifested consumption actually represent great marketing opportunities.
In fact, the Hispanic green trend has been successfully explored by number one Latin American cosmetic giant Natura. Building its brand around natural, responsible and sustainable themes, Natura is gaining market share in all eight national markets it operates, from Argentina to Mexico. Upon a robust direct sales model, the motto “well being and being well” crowns Natura’s 3 billion dollar annual revenue. Moreover, in order to boost its global quality capabilities, Natura has opened an R&D lab in Paris, while being already mentioned in the sophisticated French market. In Brazil, where it is headquartered, Natura holds a 24% market share, notwithstanding direct competition by L’Oreal, Avon and Unilever.
The rise of innovative, mid-size marketers in tune with multicultural markets is a new challenge for CPG leaders like P&G and Unilever. Not surprisingly, Global CMOs are now in charge of taking best marketing practices culled in Latin America and Asia back to their core markets.
Tony D’Andrea is Director of Planning and Research atThe San Jose Group, headquartered in Chicago. As a strategic planner and anthropologist, Anthony has over 10 years of consulting experience integrating research insights into effective strategies. He holds a PhD in Anthropology from the University of Chicago, and a BBA in Business from the Federal University of Rio de Janeiro.