Sun Care Peeks Out From Early '09 Storms

February 15, 2010

To the adage 'you can never be too rich or too thin,' let's add 'or too tan.'

To the adage 'you can never be too rich or too thin,' let's add 'or too tan.' That thought is on the minds of sun worshippers who bake their bodies to various shades of brown—and who rely on over-the-counter suntan preparations (sunscreens and sun blocks) to help keep them safe. Still others use lotions or oils on their skin to attain a desired tone, or go to tanning parlors or body sprayers in search of the 'perfect tan' appearance.

Millions of people pursue color on their skin, despite hearing the risks announced repeatedly by the American Cancer Society. Still, just one American household in five (20.0%) uses sunscreens or sun blocks to help guard against cancer, according to Nielsen Homescan Consumer Facts data for the 52 weeks ended June 27, 2009. Another 3.2% use lotions or oils; merely 0.5% use sunburn aids. These are all valuable customers: the average dollar amount spent per trip in this category approaches $10 ($9.24 for sunscreens/sun blocks; $8.49 for lotions/oils; $6.26 for sunburn aids).

Yet the recession has scorched the sun care business. Dollar sales of all category segments—sunscreens and sun blocks, lotions and oils, and sunburn aids—slowed tremendously in calendar 2009. In F3's opinion, three factors disrupted sales: the widespread abandonment of leisure travel in a bad economy; a perception that when money is tight, sun care purchases could be skipped in favor of necessities such as food and medicine; and perhaps less free time spent on outdoor activities, as people decide to spend less and do more at home.

Total sun care sales edged up a bare 0.3% to $798.0 million in U.S. food, drug and mass merchandiser stores (including Walmart) during the 52 weeks ended December 26, 2009, reported Nielsen. These are sales of OTC, prepackaged, UPC-coded products only, and do not include any cosmetics products that contain sun protection factors (SPF). Worse yet, on an equivalized unit volume basis, product movement slipped by 2.5% to 620,151,610 units (ounce basis) in the same period.

This followed a successful 2008, in which sun care grew by 7.1% to $795.3 million on a 1.0% EUV increase, the data showed.

The good news buried in the 2009 figures: Monthly data reveal that declines in the first half of 2009 weighted down the full-year figures. The business has swung back into positive territory since July, including two months with 20%+ gains over the same year-ago period, indicated Nielsen.

Sunscreens and sun blocks are the largest segment at $692.0 million, up 2.1% in dollar sales for the latest 52 weeks, albeit on a 1.2% EUV decline. The year before was sunnier: a 12.8% dollar rise on a 6.3% EUV climb. By comparison, the lotions and oils segment fell 9.7% to $106.0 million in the most recent year, on a 9.0% EUV drop. Sunburn aids plummeted by 26.8% to $11.0 million in 2009, on a 30.7% fall in EUV.