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Prestige suffers, face segment strong

BY Antoinette Alexander

PORT WASHINGTON, N.Y. —It has been a rough road for the U.S. prestige beauty industry as beauty mavens tightened the grip on their wallets, causing sales of those products sold mainly in department stores to sag 3% in 2008, according to market research company The NPD Group.

“The economic realities of 2008 have created fundamental shifts in the behavior of our consumers and the way they approach beauty. In 2009, we recognize that while consumption will not stop for prestige beauty, it has changed. It has become and will become more careful, more selective and more meaningful,” stated Karen Grant, senior global industry analyst and VP beauty for NPD.

The decline in the U.S. prestige beauty industry was driven largely by fragrance, which experienced a 6% decline—women’s fragrance was down 5% and men’s fragrance down 8%, according to NPD.

Total U.S. prestige beauty* industry

* Prestige beauty: fragrance, makeup and skin care sold mainly in U.S. department stores.Source: The NPD Group/Beauty Trends
  SALES IN BILLIONS DOLLAR SHARE % CHG ’08 VS. ’07
Total beauty $8.38 100% -3.0%
Makeup 3.20 38 -3.0
Fragrance 2.68 32 -6.0
Skin care 2.40 29 0.0

However, sales of higher priced gift sets—those priced between $60 and $100—were a bright spot for the fragrance category. This category represented 65% of gift set sales in 2008, compared with 40% in 2005, and experienced a growth in both dollars (12%) and units (11%).

Thanks to such new brands as Viva La Juicy, Estée Lauder Sensuous, Ed Hardy and the Harajuku Lovers collection, women’s new fragrances posted a 9% boost in 2008, according to NPD.

Fragrance sales have struggled for the past few years, but a bit of a surprise, according to NPD, is the decline in the makeup category. Year 2008 marked the first time makeup products posted a decline, dropping 3% in dollars and 6% in units. All segments in the makeup category—eyes, lips and face—experienced a decline in 2008.

Natural makeup experienced a surge in prestige offerings in the past year, however. Premium-priced products in the face segment also showed strength in 2008, even as other makeup segments struggled with their premium-price offerings, the research stated.

Prestige skin care managed to stay afloat, capturing 29% dollar share of total prestige beauty sales, an additional share point over 2007. Total prestige products, which include face, body, sun and hair, generated $2.4 billion in 2008.

NPD also found that anti-aging face products grew, and products that offered specialization (e.g., allergy relief, redness and whitening/brightening) were up double digits. Premium-priced facial products ($70 and up) increased 4% from 2007.

Natural/spa/wellness skin care brands showed the strongest dollar growth of the distinctive brand types, up 6% versus the year-ago period, to $304 million.

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Kroger to serve as exclusive supermarket sponsor of Fiesta Atlanta ’09

BY Allison Cerra

ATLANTA Kroger will serve as the exclusive supermarket sponsor of Fiesta Atlanta ’09, an outdoor Cinco de Mayo festival celebrating Latino culture, music and food.

Fiesta Atlanta ’09 takes place on Sunday, May 3 at Centennial Olympic Park in downtown Atlanta. For Kroger, the partnership represents the company’s commitment to the Hispanic community.

“We are very excited and looking forward to Fiesta Atlanta,” said Glynn Jenkins, director of communications and public relations for Kroger’s Atlanta Division. “Kroger has always made exceptional efforts to serve the Hispanic community and joining this celebration is another commitment to our Hispanic customers.”

Atlanta’s largest Hispanic outdoor family festival, Fiesta Atlanta attracted over 40,000 attendees last year. This year’s event will once again feature authentic food from many Latin-American countries, arts and crafts, sponsor displays with many free product samples and continuous live musical performances by national and local recording artists.

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AARP cites big jump in Rx prices

BY DSN STAFF

NEW YORK A report by AARP indicated that prices for branded drugs have increased at a rate outpacing the rate of inflation by more than six percentage points.

 

The report found that manufacturers’ prices for branded drugs increased by 9% last year, compared with the general inflation rate of 3.8%. Meanwhile, prices of generic drugs decreased, on average, by 10.6%.

 

 

Generic drugs have already grown significantly over the years, accounting for 69% of all prescriptions dispensed in the United States, but 16% of money spent on prescriptions, according to IMS Health. In 2007, according to the National Association of Chain Drug Stores, the average price of a generic prescription drug was $34.34, compared to $119.51 for a branded drug.

 

 

Price increases for branded drugs significantly higher than the overall rate of inflation, mixed with the recession, are likely to drive more consumers to generics. According to AARP, nearly a quarter of all older Americans skip medication doses because of the cost, while other studies have shown that many Americans facing economic hardship don’t have prescriptions filled at all.

 

 

At the same time, many branded pharmaceutical drugs – not to mention biologics – don’t yet have a generic version. This could create difficulties for elderly and other patients who may be able switch to medications that are cheaper, but different from what they take, or who take biologic drugs or newer drugs that have no equivalent on the market.

 

 

The Generic Pharmaceutical Association said the report indicated that generic medicines are “the right choice for better health.”

 

 

“During these difficult economic times, it is truly disturbing to hear reports that our nation’s seniors cannot afford their prescription drug costs,” GPhA president and CEO Kathleen Jaeger said in a statement responding to the report. “No one should be forced to choose between putting food on their table and paying for needed medicines.”

 

 

Jaeger also said the report illustrated the need for a regulatory pathway for biosimilars.

 

 

“It’s time to do right by our seniors and all Americans struggling with healthcare costs by approving legislation that brings safe, effective and affordable biogeneric medicines to patients sooner rather than later,” Jaeger said. “GPhA also strongly believes that increasing funding for FDA would ensure the more timely approval of generic medicines, increasing the opportunity for consumers to save immediately.”

 

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