Natural Bar Soap Sales Climbing Again
Here’s a stat that’ll surprise you: Soap sales were largely unaffected during the recession. And, in a report from Mintel, researchers said “the soap/bath category grew by $1 billion and surpassed $5 billion in total sales in 2012.” It’s expected to continue growing through 2017.
Mintel also discovered that big brands are losing sales and the trend toward bath gels has ended. Consumers are buying everything from $100 soaps to expensive anti-aging products and showing a stronger aversion to chemical ingredients. Bar soap is a commonly used product that may even open doors for sales of complementary products such as cleansers, exfoliators, moisturizers, and other niche skin health products, and even hair products.
Once a new niche brand is established, it has significant power to grow. Take Rocky Mountain Soap of Canmore Alberta. The company launched itself with a small number of bar soaps but has since progressed into new product types and is expanding its operations eastward. Ontario and the rest of the world are not far off, but RMS will have to quicken the pace to ensure they aren’t squeezed out by an aggressive and similarly positioned competitor who sees where it’s all going.
Key Factors in the Soap Market
As competition heats up in the niche soap market, entrepreneurs and businesses will need improvement in these aspects:
- Natural non-chemical ingredients
- Product benefits
- Internet sales
Who’s Going to Take it National?
Big retailers such as Costco, Walmart, and Loblaws don’t dabble too much in this market, but it’s a growing sector, so you can expect them to take a stab at it. Those who buy these luxury, health soaps typically have upscale incomes. The Body Shop and Bath and Body Works are the premier soap retailers in Canada and their product selection is not huge. So there is room for more retail competition and lots of time for the market to determine winners and losers.
Much of the small niche soap market is produced by mom and pop producers who won’t be able to scale up production. Acquiring the right ingredients, growing production volume, accessing new global markets, and managing distribution is a major problem for mom and pop producers. National, international marketing and distribution logistics is no small matter and few soap entrepreneurs and producers know who to turn to for advice and support.
In Canada, we can access the services of the BDC who offer help with financing and a little with Internation marketing and distribution issues.
Packaging Design Opportunities
In the realm of packaging, the range of creative packaging from banding to boxing is phenomenal. Most packaging you’ll see is poorly designed. It doesn’t convey a value proposition well or quickly. Then there’s the matter of choosing between cardboard, paper, specialty paper, and plastic.
Consumer income has not progressed well since the recession so using coupons and other POP promotional tactics is still relevant within a multi-channel marketing strategy. Integrating QR Codes remains a useful way to promote and collect consumer info.
If soap entrpreneurs are going to take their product and business to success, they need to look down the road to when they have ramp up sales volume and reach a bigger market, whether here in N.America or Europe and Asia.
If you don’t have the marketing and distribution wherewithal to take your soap business where it needs to go, you can take it far enough to get noticed by potential investors or those who might then buy you out.
They may have the marketing expertise and production capacity to finish your dream. Make sure you work in a royalty sharing agreement. Nothing wrong with keeping a small piece of the pie!