Men's Grooming Grows in China Despite Recession

 

Kevin Zhu, Research Analyst at Euromonitor, explains how the men's grooming category in China was the most dynamic sector in all of beauty and personal care last year. Industry trends attribute the growth in this sector to the following categories:

• Skin care
• Hair care

The reasons for this dynamic growth are as follows:

• Chinese Male consumers have become more comfortable in buying their own grooming products
• Emotional advertising campaigns were launched by several large manufactures of men's grooming products
• New product developments in men's grooming

As for future market development, Zhu states that he expects the men's grooming sector will still grow over the next several years. Compared to the women's personal care market in China, the men's is still relatively undeveloped, meaning there is room for new products and innovation. As the male population in China continue to buy their own personal care products, affordable and widely distributed products are expected to grow the most.

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Consumers Questioning Health Products

 

Samantha Chmelik, Head of Global Consumer Health Research, explains how more consumers are becoming wary of products in the health care market. With recent recalls and negative press, purchasing health care products can be a confusing ordeal. Chmelik discusses how consumers are seeing more health care opportunities in vitamins, dietary supplements, and herbal remedies. Consumers are even looking to certain food and beverage products as alternatives to pills and supplements. Chmelik talks about traditional over the counter products, their counterparts in vitamins and dietary supplements, and their equivalents in food and beverages.

The first example is vitamin C, which:

• Can be taken in a pill form
• Is found in orange juice
• Can be found in a power dietary supplement which can be mixed with water
• Can be found in a drink such as Vitamin Water

Pain relievers, or analgesics, is the next category. Consumers are turning to different pain relievers, such as:

• Pills such as ibuprofen
• Hot and cold patches
• Hot and cold gel packs

An upset stomach is a common problem for many people. Many health and wellness options exist to relieve upset stomachs, and consumers are relying on:

• Antacids in a chew or gum format
• Liquid products that coat the esophagus and stomach lining
• Ground ginger or ginger root

The last category Chmelik explores is children's medication. Parents are especially concerned about what kind of drugs they give to their children. Chmelik discusses the following types of products:

• Cough and cold medication
• Mucus relief
• Dietary supplements designed to boost the immune system

Chmelik ends with a reminder to parents to always read the labels when buying health care products for their children.

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Destocking and Restocking: Manufacturers Scramble to Improve Sales in the Appliance Market

Simon Maddrell, Head of Global Consumer Appliance Research at Euromonitor International, explains how the major appliance manufacturers are reporting positive growth in sales in the first half of 2010. Maddrell states that since 2009 was such a poor year for appliance sales, small but positive growth for 2010 should be expected. However, the possibility of a double dip in sales inside the appliance market is looming, considering the following factors:

• Retailers destocked their appliances in 2009 because of lower sales
• Retailers are restocking in 2010 due to increasing sales
• Consumer demand for appliances is still relatively weak

Maddrell uses the example of US retailer Lowe's, which destocked throughout 2009, and now is increasing stock. The appliance manufacturer Whirlpool is selling directly to Lowe's, and is reporting an increase in sales to the retailer. That means Lowe's has a positive outlook in the North American market and is looking to expand its selection.

Arçelik also has a positive outlook for its market in Turkey and launched a four-door refrigerator. Madrell notes that his product is limited in two ways:

• The credit card facilities in Turkey cannot deal with the price tag, which is above the 2,000 Turkish Lira transaction limit
• The appliance retailers in Turkey are small in size and cannot stock such a large product

Maddrell concludes by stating that larger retailers will get better prices for their products and therefore have broader stock, whereas smaller and independent retailers will have to take a different approach to compete.

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買収でアジアに攻勢をかけたキリン (Kirin Embarks on Business Expansion in Asia by Merger)

ユーロモニターのリサーチ・アナリスト 谷口憲太郎が、先日発表されたキリンによるフレーザー・アンド・ニーブ社（F&N）の株式13％取得について解説します。キリンは、どのようにしてF&Nが持つ生産、市場そして流通のネットワークを活用できるのでしょうか。

今年初めにサントリーとの合併を発表したキリンですが、決裂におわりました。両社とも世界展開が弱かったこの合併計画と違い、今回のF&N株式取得では海外事業の発展が期待できます。特に、F&Nが筆頭株主であるアジア・パシフィック・ブルワリーズ（APB）は、13カ国に36製造工場を持っており、キリンはAPBを通じてコアビジネスであるビール事業の強化が可能となります。また、APBの株主であるハイネケンは、キリンとも提携をしています。同社と良好な関係を構築することによって、ビール市場の拡大が予想されるインドなどの国でビジネス展開が望めるでしょう。

キリンは合併をビール事業の増強と捕らえているようですが、F&NのaLiveブランドを通じたヘルス＆ウェルネス製品の開発や、シンガポールとマレーシアで既存のF&N流通網を利用したキリン製品の販売など、他事業でもメリットが考えられます。

English Translation:

Kentaro Taniguchi, Research Analyst at Euromonitor, discusses Kirin's recent acquisition of a 13% market share of F&N. Taniguchi explains how Kirin will be able to use F&N's existing network to manufacture, market, and distribute their brands locally. Kirin originally planned to merge with Suntory earlier in 2010, but was scrapped. Neither company had a global reach.

The acquisition will help Kirin's core beer business because of F&N’s majority stake in APB, which has 36 breweries in 13 countries. Kirin can ride on APB to expand overseas, beyond it's core Japanese market. Also, APB’s other large shareholder is Heineken, which Kirin has recently strengthened its ties with. Good partnership with Heineken would give Kirin access to India, another part of the world with strong growth potential. Although Kirin seems mainly concerned with its beer market, it can expect to benefit from the acquisition in other ways:

• Working with F&N's aLive brand to produce new health and wellness products
• Distributing products through F&N into Singapore and Malaysia

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Heart Healthy Products on the Rise

Euromonitor's Head of Global Health and Wellness Research, Ewa Hudson continues her discussion on the market analysis of heart healthy products, focusing on yoghurt with heart healthy ingredients and a breakdown of the companies with the largest sales, including:

• Becel / Flora
• Benecol
• Danacol

The up and coming brand Evolus is also steadily gaining a share in the heart healthy yoghurt market.
Hudson explains the sales of products containing the two main heart healthy ingredients:

• Plant sterols
• Omega 3

Plant sterol products account for almost double the sales of Omega 3 products, however, most of those sales are in Europe and North America. Asia and Latin America are relatively unpenetrated in terms of heart healthy products. Hudson encourages manufacturers of heart healthy products to focus on Latin America and Asia, mainly due to the high heart disease rate in both areas.

Hudson discusses the history of heart healthy products, which are introduced in chronological order:

• Spreadable oils and fats
• Yoghurt
• Milk

Milk has been the latest heart healthy trend, with Omega 3 fortified milk being introduced in:

• Ireland
• France
• United Kingdom
• Spain

Juice is the next big trend in heart-healthy markets, which would reach a wider consumer base because it can be consumed by people who are lactose intolerant or who don't consume dairy products. Among the other products for these consumers are non-dairy dairy products; the leading products here are oat beverages. The Swedish company Oatly is emerging as a leading company in this market. Two other emerging products in the non-dairy category are:

• Non-dairy cheese
• Flavoured milk drinks

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Stimulus Packages and the Consumer Appliance Market

Simon Maddrell, Head of Global Consumer Appliances research at Euromonitor International, examines the appliance market in 2010 and how the industry has reacted to the economic stimulus packages in various regions. Maddrell begins the discussion with a forecast for 2011, including a look at markets in the following regions:

• North America
• Latin America
• Europe

Maddrell then addresses the affects of stimulus packages on consumer appliance in North America, Brazil, and China. Analysis of consumer reaction to stimulus packages shows there is a risk that once packages are completed, there will be a dip in appliance sales. Packages targeted at Western Europe are having no effect on the stagnant consumer appliance market there.

In terms of major growth within appliances, refrigeration is the projected highest growing segment. This is due to several factors:

• Refrigeration was sold into retailers in Quarter 1 and 2 in 2010
• It is one of the most essential appliance purchases for consumers

Maddrell then shifts to discuss appliance manufacturers that are at high risk in 2010. Indesit is shown as a prime example, which has seen sharp declines in global revenues since 2008. These declines can be traced to the following reasons:

• The recent closure of three manufacturing plants in Italy
• No production outside of Eastern Europe
• The recent investment in a super-premium brand in Europe

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Understanding Heart Healthy Ingredients

Euromonitor's Head of Global Health and Wellness Research, Ewa Hudson, discusses the current health and wellness trends in food and beverages, with a focus on heart healthy products. Hudson states that 4.3 million people die every year in Europe alone due to cardiovascular diseases. However, the main issue of heart healthy products is that they offer no instant gratification to consumers. Consumers, therefore, need to trust heart-healthy products to offer them long-term benefits.

Plant Sterols and Omega-3 are the two main ingredients of heart healthy products. Recently, the European Food Safety Authority approved the health claims of these two ingredients. However, these ingredients are new to consumers. The average person doesn't understand the benefits of these ingredients and manufactures are being faced with the challenge of educating consumers.

EFSA recently stated that consuming plant sterols can help decrease cholesterol in the body, and the American Heart Association recommends Omega-3 for heart health. Manufacturers would be keen to include these recommendations when promoting new heart-healthy products.

Spreadable oils and fats make up the majority of heart-healthy foods, with yoghurt trailing in second place. However, sales of heart-healthy yoghurt are growing steadily. Heart-healthy yoghurt grew by 230% between 2005-2009, and is the largest growing category of health and wellness yoghurt.

Watch Part 2 of this video.

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Leaving Las Vegas: Fewer Inbound Flights to the City of Sin

Michelle Grant, Euromonitor's Travel and Tourism Research Manager, continues her discussion about the tourism and travel industries in Las Vegas, with a specific look at the airline industry. Passenger traffic to Las Vegas dropped by 8% in 2009, however, unlike the hotel industry, the airlines were able to cut capacity to recoup some of their losses. US Airways, one of the major airlines to fly into Las Vegas, has majorly cut its capacity to Vegas, choosing instead to focus on its hubs in the east coast of the United States.

One of the most profitable airlines in the world, Allegiant Air, is based in Las Vegas and has been able to stay profitable by flying from smaller cities around the US to larger tourist destinations like Orlando and Las Vegas. It also uses older planes which it was able to buy at a cheaper price due to the large amounts of fuel the planes use. The flight times for Allegiant are infrequent and the routes don't experience interference with larger airlines.

Part of the airline strategy is to get ancillary revenue, and most airlines charge for checking a bag, checking in online, and other fees as a way to remain profitable. Another way to get ancillary revenue is to sell packages. Allegiant Air benefited from the low hotel rates in Vegas by offering packages to tourists - booking their flight and hotel at one time. Allegiant was able to negotiate low prices with hotels because they were desperate for guests during the recession. These packages drew in tourists and were a bright spot for the city.

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No Rest for the Wicked: Las Vegas Faces Falling Traffic

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Michelle Grant, Euromonitor's Travel and Tourism research manager, explains how the tourism industry in Las Vegas was harshly impacted by the economic recession. Visitation to the city dropped as travelers cut back on discretionary spending. The so called "AIG Effect" also had an impact on the tourism industry there. This effect is a result of a 2008 event when AIG Insurance executives spent about a half a million US dollars at a lavish retreat in California - one week after receiving a federal bailout. There was significant public outcry, and, as a result, lavish resort settings for company retreats were seen as taboo. As companies sought to avoid negative public perception, they cancelled many conventions and retreats in Vegas.

More hotel rooms were becoming available during this time - causing hotel chains to lower prices because inbound visitors were so low. As a result, bargain prices were seen at many hotels, but even when tourists took advantage of these prices, they didn't spend as much money as they would during non-recession years.

2010, however, seems to be a turning point for the city. Visitation is steadily growing, although slightly. Economic recovery in the US also plays a big part into recovery for the city. If the economy recovers, the tourism industry in Vegas will most likely grow faster. The AIG effect seems to have worn off, and more business travelers are on the road. However, the scrutiny on expenses is expected to remain, and as a result, people may still spend less.

One bright spot for Las Vegas is that McCarran International Airport is expanding, adding 6 international gates. Vegas has always attracted international visitors, and the city has been proactive in luring direct flights from around the world. These international travelers may very well make up for the slower growth in domestic visitors.

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The Effects of Political Instability on Thailand's Economy

An Hodgson, Senior Strategic Analyst, explains how Thailand has been gripped by political turmoil since the coup in 2006. Since the latest political unrest in May 2010, the economy has been adversely affected. A reduced amount of tourists have been traveling to Thailand, lowering the flight and hotel numbers. This negative impact on the Thai tourism industry is taking a toll on the overall GDP in Thailand.

Business confidence was also affected, with the BSI index experiencing the largest month-on-month fall since 1999. The consumer confidence index also fell - but experienced less of a decline in its most recent quarter than in 2009, mainly due to the Thai economy being hard hit by the global recession.

Due to political instability in Thailand, there will be more tourism arrivals in countries surrounding Thailand because tourists will direct their interests to outlying countries. Tourism agencies have reported booking cancellations in Thailand. Foreign investment will also be impacted, as investors will be looking at the political turmoil in Thailand and relocating investments to neighboring countries.

Read more about the political unrest in Thailand, and how it is effecting ASEAN countries.

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