Clean Hair: Growth Opportunities for CPG Companies in the Shampoo Market

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While growth in the overall shampoo industry remains modest, the herbal sector outpaces its cosmetic, dry, and anti-dandruff counterparts. How can CPG companies use consumer desire for organic, all-natural ingredients to its advantage?
Image source: Flickr CC user Hannah Rosen

Since it was first made commercially available in 1914, shampoo has become a staple of our personal care product arsenal. Despite its basic function of washing hair, consumer packaged good (CPG) companies make a point to emphasize the other unique properties of the shampoos they sell. In an established market, showcasing these qualities can mean the difference between winning over new customers and losing them to someone else.

Estimates say the global shampoo market will value $25 billion dollars by 20191. Traditionally divided into the four sectors of cosmetic, dry, anti-dandruff, and herbal, it’s the last category that’s experienced the most growth in recent years. This isn’t to say there aren’t opportunities for the other three. The long-standing categories of cosmetic and anti-dandruff shampoos benefit from finding ways to innovate existing formulas. There’s research focusing on increasing efficacy of anti-dandruff treatments, for example. Even dry shampoos are finding a loyal consumer base consisting of time-strapped, eco-conscious individuals.

We’ve previously discussed how the perceived benefits of all-natural ingredients have driven innovation in the cosmetics market. The same concepts apply to shampoos. Growing concern over increased pollution and the potential harmful effects of chemicals found has changed consumer spending patterns2.

Capitalizing on Consumer Desire for All-Natural Ingredients

Let’s examine the Herbal Essences product line as a case study. Acquired by Proctor and Gamble in 2001, the brand was in the middle of a long-term decline by 2004. But in the decade since, it has turned itself around thanks to revitalization and rebranding3. As someone who’s used the Herbal Essences shampoo line herself, I hadn’t realized it was an existing brand before now. I do remember when the brightly colored bottles started taking up a good chunk of shelf space, though.

Other CPG companies can take inspiration from Proctor & Gamble’s example:

  • As demonstrated by the Herbal Essences line, it isn’t just food that benefits from innovative CPG packaging. Shampoo products do as well. Whether it’s bright colors that attract the eye or memorable logos, firms can brainstorm design ideas and work with collaborators to determine which ones suit their purposes the best.
  • Another acknowledged factor to the successful overhaul is the rebranding for a younger demographic. P&G isn’t the only company that’s adopted this strategy, but they were definitely forward thinking! While the youthful, bright colors of the Herbal Essences product line are certainly part of that, the truth comes out in the sly puns written on many of their shampoo and conditioner bottles. Those jokes appeal most to a specific generation. If other CPG companies take a similar approach, they’ll need to conduct appropriate research that gauges consumer response and choose the ones that fit their target demographic.
  • In many ways, Herbal Essences won the lottery by virtue of having a name with “herbal” in it. Herbal implies all-natural and this fulfills consumer desires for products that provide health benefits. While the drive for all things organic began with food, it’s expanded to other areas. Consumers are now concerned about what they put on their bodies as well as in them. CPG companies need to take this into account when designing products for the growing herbal shampoo sector. They must highlight the ingredients that are organic and all-natural and state what their benefits are. For example, I’ve used Herbal Essences products for dry hair and the packaging points out that it contains coconut, which is good for damaged strands.

The Benefits for CPG Companies of Using ELNs in the Herbal Shampoo Market

While there are many growth opportunities in the herbal shampoo sector, there are many things CPG companies have to take into consideration. The information and research data gathered can be overwhelming. That’s why using a digital tool like an electronic lab notebook can be to their benefit. It can manage large data sets such as those obtained by market research and testing. It has features that allow for tagging and indexing, which lets R&D scientists pick out details—such as which organic ingredients to highlight on their packaging. It even has sharing tools, which let users collaborate instantaneously.

Is your firm planning to explore growth opportunities in the consumer-packaged goods market? Then having the right digital tools is key. Contact us today to learn more about the benefits of implementing the BIOVIA Notebook within your CPG company.

  1. “Herbal formulas growing fastest in the shampoo market,” May 21, 2015, http://www.cosmeticsdesign.com/Market-Trends/Herbal-formulas-growing-fastest-in-the-shampoo-market
  2. “Why Natural Beauty is Blooming in Chicago,” June 10, 2015, https://www.nerdwallet.com/blog/small-business/natural-beauty-is-blooming-in-chicago
  3. “Recent Herbal Essences range caters to growing demand for herbal shampoos driving shampoo market,” November 17, 2014, http://www.companiesandmarkets.com/News/Consumer-Goods/Recent-Herbal-Essences-range-caters-to-growing-demand-for-herbal-shampoos-driving-shampoo-market/NI9723

One thought on “Clean Hair: Growth Opportunities for CPG Companies in the Shampoo Market

  1. Thanks for the article. CPG companies use consumer desire for organic, all-natural ingredients to its advantage. This will give us hope , which it is natural that really good for our hair. Thank you for sharing this wonderful article.

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