Supermarkets, enticed by attractive margins and conscious that their customers expect more from a shampoo than a sweet smell, are embracing premium-priced hair care products with open arms.
And the suppliers of professional or "salon-quality" lines, through industry consolidation, a desire for the profitability that can only come from mainstream distribution, and a gray market that's getting lighter all the time, are making their wares widely accessible to meet the demand.
"We're getting a better margin on these products than on the lower-priced products primarily because the price is higher," said Michael Rourke, senior vice president of communications and corporate affairs for A&P, Montvale, N.J. "We've expanded a lot of our drug-store-type merchandise, especially in our new stores and our remodeled stores, and I think there's still growth potential there."
"Some people don't care what they wash their hair with," said a broker in the New York area. "But let's face it, if I'm going to sell to the same head of hair, I'd rather make a dollar profit than a penny profit on a value brand."
Consumers scanning supermarket hair care shelves are likely to be faced with a large, possibly overwhelming, number of choices.
Products in the Hairomatherapy line from "British Hairdresser of the Year" Nicky Clarke can now be purchased at Vons Cos., Raley's Supermarkets & Drug Centers, Big Y Foods and CVS drug stores. Comprising eight stockkeeping units, each with a suggested retail price of $5.99, Hairomatherapy will soon be available at Smith's Food & Drug Centers, American Stores Co., Bi-Lo and Fred Meyer Inc., according to Lesley Clarke, Clarke's wife and partner in the London-based business.
Nicky Clarke's competition on the supermarket hair care shelves includes fellow British hairstylist and salon owner John Frieda. His Wilton, Conn.-based company launched Frizz-Ease in 1991 and, more recently, Ready to Wear.
And Michaeljohn Aromatherapy, a hair care line named after salons in London and Los Angeles, has been available in Wal-Mart and Target supercenters and in Genovese and Ricky's drug stores for about a year.
Then there are premium-priced mass lines like Pantene, Alberto-Culver's Tresemme, Clairol's Herbal Essences, L'Oreal's Vive, Redman, Infusium 23, and Willow Lake, which advertises that it is made from natural ingredients.
Despite loud protests from salons and the manufacturers of salon-based lines, as well as lawsuits against diverters, consumers can also stock up on gray-market products from companies like Nexxus, Sebastian and Paul Mitchell, whose bottles clearly proclaim they are for professional use only.
These brands introduced the idea of a "hair care system," incorporating shampoo, conditioner and styling products. Many other mass-market lines have since jumped on the bandwagon.
"The more you put a concept in front of the public, it will spill over into the masses," said Marielle Hemschot, vice president of nonfood purchasing and merchandising at Millbrook Distribution Services, Leicester, Mass. She cites Pantene, Herbal Essences and Vive as market leaders.
Supermarkets can make sure their customers see, and reach for, these profit-laden hair care bottles through effective planogramming, said the New York-area broker. "If you want to entice consumers to buy premium products, put them at eye level."
Advertising also adds to the demand. Consumers want the shiny, healthy-looking hair they see in women's magazines and on TV, the broker noted.
He listed Wegmans Food Markets, ShopRite Supermarkets and Pathmark Stores as examples of companies that have realized consumers are spending more on hair care and that "want to present as many premium products as make sense." But if a product line isn't backed by advertising, he added, "the chances are they're not going to stock it."
In addition to display techniques and advertising, industry observers say, social and economic forces are pulling consumers toward higher-priced brands.
Mike Puican, director of marketing in the professional division of Alberto-Culver, Chatsworth, Calif., observed that consumers are looking for higher performance in hair care products because "they're not going to salons as much as they used to. As a result, they're looking for [salon products] on retail shelves. Because Tresemme started in salons, it gives that option to retail customers."
Hemschot said that while consumers seem to have more disposable income, they are more likely to use credit cards to pay for supermarket shopping.
"It's not just a budgeted trip anymore, so people are willing to make the splurge to buy something more upscale."
The high costs of advertising and promotion have led to more and more consolidation in the hair care industry. In the past couple of years alone, Helene Curtis, which makes the Finesse and Salon Selectives lines, was purchased by Unilever; Alberto-Culver bought St. Ives; Johnson & Johnson acquired Neutrogena; and Redmond, manufacturer of the specialty Aussie line, was purchased by Bristol-Myers-Squibb.
Last month, Lamaur Corp., Minneapolis, owner of the Willow Lake brand, announced it had retained an investment banking firm to examine the possibility of selling the company, entering into a "strategic alliance" or merging with a third party.
Don Hoff, Lamaur's chairman and chief executive officer, said, "With the consolidation in the industry as well as in the trade, and the advantages of critical mass in the hair care category, it is important that we evaluate opportunities to acquire scale or be acquired by a larger entity which will be able to leverage the brand equity we have developed."
What this means for retailers is that while product lines are proliferating, they are coming from fewer and fewer manufacturers.
"We're the last of the major league independent companies," said Larry Freeman, founder and chief executive officer of Freeman Cosmetics, Los Angeles, which manufactures the Salon Textures and Problem Solvers brands."
"We return to the supermarkets a significantly greater profit than the higher-volume lines. We're more supportive of the retailer's activity. The multinational, multibillion-dollar firms have more rigid marketing plans. In our case, we say, 'What do we have to do to help you sell our product?' "
