MWSCC Discusses Private Label Growth and Awards Excellence

By: Katie Anderson

Posted: December 18, 2012

The agenda was chock-full at the November meeting of the Midwest chapter of the Society of Cosmetic Chemists (MWSCC). Not only did the event award excellence with the Stanley Allured Lifetime Service Award and the chapter's 2012 Cosmetic Science Scholarships, but it also hosted the installation of new officers and a presentation on the private label industry by Sudhakar Puvvada, VP of R&D for Vijon.

Private Label Industry

The evening began with a presentation on the private label industry by Sudhakar Puvvada, who first noted that private label is up 14% since 2009, whereas branded personal care grew only 9%. He reasoned this growth with a boost from the recession, which he noted grew private label because, "People were looking for more value." However, Puvvada added it is interesting that private label has continued to grow after the recession ended.

North America has the greatest number of private label products, and growth has mainly occured over the last few years. Puvvada added that some sellers such as CVS and Costco invest more to offer unique private label products. The growth in private label products is also driven by the growth in personal care and a better consumer perception about the quality offered by private label products. When polled, 30% of consumers believed that private label products deliver better quality than branded products, 60% believed private label products are as good as branded products and 20% believed private label products are not as good as branded products.

Strong product categories for private label products are baby care, hair care, hand sanitizers, hand washes and mouthwash, with skin care (face and body), hair care (styling) and body wash being emerging categories. There are three tiers of private label products: value, which are basic in function; everyday, which compare themselves to similar branded products; and premium, which claim to be better than similar branded products. Puvvada has seen a recent growth in the private label industry for anti-acne and facial cleansing products and he noted the growing improvement in everyday private label products.

Private label brands are expanding into new technologies and fragrances, according to Puvvada. In addition, they are offering enhanced efficacy and safety claims. Like the branded personal care industry, the private label industry is seeing a continued growth of naturals and requests for sustainable and "free from" products.