Shampoo in a Looming Water Crisis: Less Lather Gathers Pace

Whilst dry shampoo is now considered a veteran in the fast and fickle beauty industry, the mind-set around its place in the hair care routine is evolving. product which began as an alternative is becoming staple, a shift which was recently cemented by Batiste Dry Shampoo’s launch of an Amazon Dash button. The surge of shampoo replacements is doing a double duty by aiding the increasingly philanthropic agendas of beauty brands and consumers alike, providing opportunities for hair care to grow, and all the while conserving natural resources.

The “no poo”, or “no shampoo”, trend originated in the US and was born from scaremongering which demonised the sulphates commonly found in shampoo. Instead of allowing consumers to drastically forego hair washing entirely, the industry’s comeback was cleansing conditioners, a low-lather product which strikes a balance between cleansing and conditioning without the sulphates. The ingredients in cleansing conditioners produce significantly less foam than those most commonly found in standard shampoo, requiring a lower volume of water to rinse off. Therefore, whilst initially the “no poo” movement was largely narcissistic, with the condition of the hair at the heart of its fruition, these low-foam substitutes form part of a virtuous circle which is preserving water supplies and therefore has geographical appeal far beyond the US.

A win-win for stakeholders

Water crisis topped the World Economic Forum’s list of long-term global risks in 2015. In the same year, the global shampoo market grew by over US$5.5 billion, a figure which is largely attributable to many high water-stress countries. Evidently there is significant opportunity for hair care brands to stop exacerbating and start thwarting the issue by taking low-lathering shampoo to the heart of the issue. Investing in research and development to help mitigate a potential water crisis can only strengthen a hair care brand. Not only will such a practice safeguard natural resources in the long term but it will also protect the supply chain itself from any unforeseen fluctuations in water supply. Perhaps most lucrative for brands themselves is the allure that sustainable product claims have amongst the modern day consumer who connect with a meaningful social purpose.

Source: Euromonitor International Beauty Survey

In Euromonitor’s 2016 Beauty Survey, “water efficient to use or produce” ranked highly among important “green” features for shampoo. For 12.5% of respondents globally, water efficiency is desired product feature, a higher percentage than consumers concerned with recyclable packaging or sustainably sourced ingredients. Respondents from developing countries were most likely to prioritise water efficiency when making a shampoo purchase, whilst the percentage of respondents concerned with water efficiency also showed a correlation to the level of water stress of their country. Tellingly, Indian consumers are the most preoccupied with water-efficient products, whilst India is also under a significant level of water stress. This observable consumer concern is also reflected in the demand for low-lather ingredients which are forecast to soar in India through to 2020, with non-ionic (low-foaming) surfactants predicted to grow at a CAGR of 10%, at the expense of high-foaming anionic surfactants which require rigorous rinsing. Likewise in the Middle East and Africa, the argument for brands to bring water-efficient products to market is irrefutable. This region, which in 2015 encompassed the five most water-stressed countries in the world, is also that where the shampoo market grew most dynamically over the review period, and is expected to continue leading global growth.

Source: Euromonitor International Natural Resources Dashboard

Waterless in form or in function?

A handful of brands have responded to the more planet-conscious and less self-conscious consumer by marketing low-foam shampoo replacements with buzzwords such as “waterless” to engage the ethically-minded. Tresemme’s Instant Refresh Waterless Foam Shampoo Spray did just this, whilst those such as Zerreau’s Towel-Off Shampoo Foam are missing a trick by making it too easy for shoppers to overlook its sustainable positioning. However there is a distinction to be made in “waterless” and “water-efficient” products. In beauty and personal care, the water footprint is largest at the end of the supply chain, with consumer-use heralding the largest imprint, and water as an ingredient the smallest. The reliance on water at different stages of the supply chain is reflected in the number of innovations hitting the market, with products targeting end-usage being the most common and those claiming waterless formulations remaining relatively negligible.

Price inelasticity makes a case for coconut water

Source: Euromonitor International Beauty and Personal Care Forecast Model

Manufacturers may begin opting for plant-based alternatives such as coconut water, a move which could prove rewarding considering that shampoo is largely price-inelastic and the added cost of exotic ingredients would not spell a palpable plunge in consumption when passed onto the consumer. This too is encouraging for the highly water-stressed Middle East and Africa, where the negative impact of a price increase in shampoo is only expected to act as a mild drag on consumption. The price inelasticity of shampoo in the region, however, also reveals much about lifestyle and cultural expectations. Those consumers who can afford and use shampoo at its current price are likely to be affluent and less responsive to price hikes, compared with in developed markets where shampoo is more ubiquitously used by all social groups. The fact that lifestyle trends, GDP per capita and habit persistence are more elastic growth engines of shampoo in the Middle East and Africa, is further indicative of this.

Moving forward it can be expected that shampoo which requires minimal rinsing will become an industry norm, potentially encouraged by more stringent regulations as an impending water crisis looms ever closer. Meanwhile there are other ways for manufacturers to provide relief for water supplies, including utilising recycled water in formulation, an initiative which has already been undertaken by brand Hair O’Right in its Moisturising Shampoo.