IN YOUR FACE

CHAPIN CLARK / Additional Reporting: Joel Elson

Green tea, licorice root, chamomile -- the list of unlikely additives finding their way into facial moisturizers and cleansers is getting longer and longer, as companies look to trade on the fast-growing popularity of herbs and other edible natural substances as curatives.

But despite all the attention these new products are attracting, and, overall, very healthy growth in the facial skin care category, supermarket health and beauty care buyers are skeptical. Finding the shelf space for exotic and unproven items is difficult enough, they say, and they wonder whether their customers are ready or able to pay the often steep prices involved.

For example, last fall Torrance, Calif.-based Skin Essentials, headed by a founder of vitamin manufacturer Leiner Health Products, began offering vitamin- and herb-infused products ranging from $8 to $11. Also last fall, Kiss My Face, Gardiner, N.Y., launched a 16-item line called Kiss Organics, with ingredients like green tea, lemon grass and echinacea and price points of up to $15.

"The higher-priced products aren't for the grocery store. When people with three kids have other products to buy, they don't go over 10 bucks," said Lori Miller, cosmetics manager at a store operated by Erickson's Diversified Corp., Hudson, Wis.

Erickson's carries only "the basics" in facial skin care, devoting 8 to 12 feet of space to the category, Miller said. That space allotment hasn't changed in some time, she said.

"Consumer resistance seems to build the closer you get to $10," said Terry Born, HBC buyer for Fairway Foods, Bloomington, Minn. "I think our shoppers are probably conditioned to spend less, and women that spend more will go to a department store for treatments. When you get into the higher end, it's like they are either not looking for it, or the higher-end user is satisfied with Mary Kay or Avon."

Fairway, too, devotes relatively little space to facial skin care, fitting it into 8- to 12-foot body care sets, Born said.

"The facial skin care category overall for me is not doing what the industry seems to say it's doing. Our lower-end products are doing well compared to higher-end facials."

According to Information Resources Inc., Chicago, supermarket sales of facial moisturizers during the year ended Jan. 24 increased 7.1%, to $97.2 million. Drug chains, by contrast, registered sales of $233.7 million, a 4.4% increase; mass merchandisers, $200.5 million, an 11.7% rise.

However, the facial-cleansing segment, fueled by pore strips from Biore, Pond's and a widening field of imitators, is where the real growth is occurring. Again for the year ended Jan. 24, supermarkets rang up $153.2 million in sales of facial cleansers, a 38.4% increase. Drug stores sold $224.9 million worth, a 36.9% increase from the prior year; mass outlets, $244 million, a whopping 53% more than in the comparable 1997-1998 period.

Biore, which in the summer of 1997 was the first to market with cleansing pore strips, is the No. 1 facial-cleansing brand thanks to that launch and subsequent line extensions. Biore had sales of $136.7 million -- 22% market share -- for the year ended Jan. 24, IRI reported. Its latest products, Pore Perfect Ultra Strips, Facial Cleansing Cloths and Fine Line Gel Patches, shipped to stores in January.

Biore is a division of Andrew Jergens Co., Cincinnati.

Pond's, which was close behind Biore with its own pore strip introduction in September 1997, is now the No. 2 facial-cleansing brand. Its sales totaled $102.8 million for the year ended Jan. 24, a 16.5% market share, according to IRI. Backed by a 1999 ad budget of $45 million, the company, a unit of Unilever Home & Personal Care USA, Greenwich, Conn., last fall introduced two new products -- Soothing Cucumber Eye Treatments, $7.99 retail for 24 cucumber-, aloe vera-, chamomile- and green tea-infused pads; and Cleansing and Make-Up Remover Towelettes, $4.99 for a 30-towelette box.

Another Unilever brand and a strong seller in supermarkets, Suave, recently came out with its own, lower-priced cleansing patch.

"The facial strips like Biore's and Pond's still seem to be doing very well," said Dave Lynam, nonfood buyer at Harding's Friendly Markets, Plainwell, Mich. Miller of Erickson's agreed.

But David Himel, HBC buyer for Associated Grocers, Baton Rouge, La., said he has seen a slowdown. "Overall, facial skin care is doing well, and the facial strips for cleaning pores were a boost to the category, although they have dropped somewhat after their introduction."

Himel said Associated retailers have been slow to add other cutting-edge products, mainly because their customers, who are spending about what they always have on facial skin care, haven't demanded them.

"We have not yet added any herbal-remedy skin products. Our facial skin care sections are small and so we carry the mainstream items," he said. "Carrying [new high-tech] items isn't likely unless we can free up some space, and we don't have any intention of doing that right now."

Born of Fairway Foods said he too has seen a drag on sales of pore strips, perhaps due to customer dissatisfaction with the quality of some of the newer products.

"Facial strips like Biore started out like gangbusters, but all of them have slowed down considerably," he said. "Biore really works the best, and I wonder if people have tried the knockoffs and, if they don't work, they may have gone away from the whole category."

As other skin care companies scramble to board the patch bandwagon, Nivea, Norwalk, Conn., is betting on coenzyme Q10 to become the next big thing. CoQ10, a compound that occurs naturally in human cells, is said to have antioxidant qualities and is sometimes prescribed for heart patients. The body's natural supply breaks down with age, however, and many say they believe research shows a link between physical signs of aging and a depletion of CoQ10.

Nivea's Q10 Wrinkle Control Face Creme and Q10 Wrinkle Control Eye Creme will be available in stores next month, each for about $11. Nivea will extend the line this summer with Q10 Wrinkle Control Night, shortly after beginning a series of TV and print ads on which the company is spending an estimated $15 million.

Nivea is also backing the Q10 products with a refund guarantee if consumers don't find a visible softening of their wrinkles within 30 days, according to Susan Savoie, vice president of marketing at parent company Beiersdorf, also based in Norwalk.

In May, Clairol Herbal Essences, a top-selling hair and body care line in supermarkets, will enter the facial skin care realm with a six-stockkeeping-unit line of foaming face washes, toner, lotion, astringent and moisturizer retailing from $5.49 to $6.49, a range grocery buyers will likely be more comfortable with. The products contain grape-seed extract, willow bark and ginseng, among other natural ingredients. Promotional support will include a big TV and print campaign and sampling.

Born, just back from a skin care trade show in Orange County, California, had his own ideas about the next wave in face care. "What impressed us the most was vitamin K, which draws blood to the affected area to take care of age spots, scars and wrinkles," he said.

"It will be the next buzzword."

Cleaning Up

Pore strips, introduced to the public in the summer of 1997, continue to drive sales in the facial-cleansing category, as evidenced by Biore's and Pond's strong results.

Those two strip pioneers have been steadily fleshing out their lines, Biore with its Self-Heating Mask, Mild Daily Cleansing Scrub, Pore Perfect Toner and, most recently, Pore Perfect Ultra Strips, Fine Line Gel Patches and Facial Cleansing Cloths. Last fall Pond's came out with its Soothing Cucumber Eye Treatments and Cleansing and Make-Up Remover Towelettes.

Together, Biore and Pond's account for nearly 40% of all facial-cleansing sales.

Top 10 Facial-Cleanser Brands

Brand $ Sales % Change % Share

(in Millions)

1. Biore $136.7 NA. * 22.0

2. Pond's $102.8 NA. * 16.5

3. Noxzema $57.6 - 5.2 9.3

4.Clean and

Clear $49.8 25.5 8.0

5. Neutrogena $46.2 24.0 7.4

6. Oil of Olay $34.5 6.0 5.5

7. Sea Breeze $23.3 1.9 3.7

8. St. Ives $21.7 - 0.3 3.5

9. Cetaphil $20.8 15.3 3.4

10. Freeman $15.3 20.1 2.5

For the 52 weeks ended Jan. 24, 1999, in food, drug and mass outlets. Source: Information Resources Inc., Chicago.* Dramatic growth in sales of these brands was due mainly to products so new as to render the % change figure meaningless.