Overview

Overall, hair care follows the general trend in the Bulgarian FMCG market and grows, both in short term and long term aspect. In the last 2 years (MAT 2018 vs. MAT 2016) the category has increased its value sales by 13.6%, managing to exceed for the first time the 20 million BGN milestone, shows Nielsen Bulgaria data. The picture is not much different in the latest MAT period (ending July-August 2018), when value sales posted a 7.1% growth and item sales 5.0% growth compared to MAT 2017.

The average price of the category over the last 2 years has increased by 5.4%, reaching 5.58 lv in MAT 2018, in line with the overall price inflation we observe in fast moving goods.

Channel performance:

Talking about the channels, there is a continuation of the trend that sees the majority of the sales happening outside supermarkets. This year exactly 2/3 of the value was spent in specialized stores (cosmetic/chemical/drug or pharmacies) and only the remaining 1/3 in different supermarket formats. The largest channel by far is cosmetic / chemical / drug stores which displays an impressive double digit growth rate and is gradually approaching the 50% share threshold. Undoubtedly, one of the main drivers over the last years has been the expansion of major chains like DM and Lilly.

Segment performance:

With regards to the pack types, bottle accounts for almost 40% of the value sales, followed by spray and box. All three combined represent 84% of the total market, however it is tube (10% share) that displays the highest growth rate in the last MAT.

Conditioner remains the leader of “type of care” segment with a stable share of 46.8%, followed by mask with 25.5% and tonic with 20.9%. Considering that all segments are displaying positive performance it shouldn’t come as a surprise that the shares have not changed significantly in the last 3 years.

Looking forward:

Enhancing the assortment with new and innovative products is going to be one of the key drivers going forward. Reading through the results of the latest Shopper Trends survey, 49% of respondents claim that innovation in shampoo and hair care is extremely or very important, while at the same time the category is not amongst the ones with the highest price awareness. This means that shoppers are still willing to trade up for products that justify their price tag with added benefits. This is also reflected in the channels that Bulgarians are shopping from; meaning that assortment in the near future will be more important factor than pricing and promotions.

Sources:

1. Nielsen Retail Index – MAT data to July / August 2018
2. Nielsen Shopper Trends Survey – 2017/18 wave