The U.S. Cosmetics market, measured in manufacturers' shipments, grew by more than one $1 billion dollars in 1998, at a rate of 6.6%. Growth was driven by Color Cosmetics with its focus on teens and tweens, and Skin Care with its dermal patches and pore strips, as well as the impact of niche lines with spa positioning. As for Body & Bath, there were few cellulite or slimming body products and the bath market seemed close to saturation. Fragrance exhibited modest growth, fueled by classic scents and by limited editions.

II. Product Type

A. Dollar Volume in Manufacturer's Sales (millions)

Clear divisions between product categories are becoming blurred. Some skin care products are shaded, while many makeup products have serious treatment claims. Spa theming touches all products, except fine fragrances -- for the moment. Aromatherapy and colortherapy have become mainstream and are present in all product categories.

Skin Care picked up in the last part of the year with products for acne-prone skin, transdermal patches and vitamin C treatments. Teens drove Color Cosmetics, grabbing anything that sparkled, shone or glittered. Home fragrance (especially candles) was key to Body & Bath's growth.

Christmas was disappointing. The industry hasn't found a way to market new scents without cannibalizing existing business. Body mists were an important product form for women's fragrances,, but pulled sales from more expensive forms. Alternative designer fragrances showed moderate growth, an indicator that price points are becoming an important way to lure consumers.

B. Growth Rate

All product categories experienced some growth, except Men's Products which continued a sales decline.

C. Market Share

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