Contents:

Scope and Themes - What you need to know - Definition - Data sources and methodology - Sales data - Consumer survey data - Advertising clips Abbreviations and terms - Abbreviations - Terms Executive Summary - Market at a glance - Shampoo/conditioner is the largest category segment - Mainstream marketers dominate black haircare category - Demographics’ role in buying behavior - Professional haircare struggles during tough times - Mainstream marketers making headway in Hispanic markets - Market Size and Forecast Black haircare shows slight decline - Key points - Black haircare languishes in 2008 - Tough economy damaging to haircare market - Black haircare market size and forecast - Figure 1: FDMx sales and forecast of black haircare products, at current prices, 2004-14 - Figure 2: FDMx sales and forecast of black haircare products, at inflation-adjusted prices, 2004-14 - Competitive Context - Economic concerns may spell opportunity for traditional retailers - Online shopping still resonates with shoppers - Brand loyalty higher than store loyalty - Hair styling appliances plug into consumers’ hair concerns Segment Performance - Key points - Shampoo/conditioner remains key component of haircare - Hair coloring sales not quite as gray - Sales of black haircare products by segment - Figure 3: FDMx sales of black haircare products, by segment, 2007 and 2009 - Figure 4: FDMx sales and forecast of black haircare, at current prices, by segment, 2004-14 Segment Performance—Shampoo/Conditioner - Key points - Shampoo/conditioner sales suffer slight declines - Latest styles may keep shampoo out of fashion - Sales and forecast - Figure 5: FDMx sales and forecast of shampoo/conditioners, at current prices, 2004-14 Segment Performance—Styling Products - Key points - Styling products not a model of success - New products in vogue - Gels lead the styling products category - Figure 6: FDMx sales and forecast of styling products, at current prices, 2004-14 Segment Performance—Relaxer Kits - Key points - Relaxer sales in sleep mode - Sales and forecast - Figure 7: FDMx sales and forecast of relaxer kits, at current prices, 2004-14 Segment Performance—Hair Color - Key points - Hair coloring sales fade - Women enjoy hair color - Sales and forecast - Figure 8: FDMx sales and forecast of hair color, at current prices, 2004-14 Retail Channels—Drug stores/Other - Key points - Drug stores’ share growing since 2004 - Drug stores’ dollar sales peaked in 2007 - Sales through drug stores and “other” - Figure 9: U.S. FDMx sales of black haircare products at drug stores and “other,” 2004-09 Market Drivers - Key points - Haircare more than just a fashion statement - Salons/barbershops address more than hair needs - Recession impacting wallets and hair styles - Buying power increasing for blacks - Some Hispanics migrating from black haircare market Leading Companies - Key points - Mainstream marketers leading but experiencing sales declines - Namasté Laboratories may have found formula for success - Procter & Gamble sells black haircare company - Leading black haircare companies - Figure 10: FDMx sales of leading black haircare companies, 2008 and 2009 Shampoo/conditioner - Key points - Namasté Laboratories posts biggest sales jump - Procter & Gamble sees sales decrease - Figure 11: FDMx manufacturer brand sales of black-targeted shampoo/conditioner in the U.S., 2008 and 2009 - Styling Products - Key points - Fantasia’s share gain puts it out front - Few manufacturers post gains - Figure 12: FDM manufacturer brand sales of styling products in the U.S., 2008 and 2009 Relaxer Kits - Key points - SoftSheen-Carson seeing sales declines - Namasté Laboratories moves into third - Figure 13: FDM manufacturer brand sales of relaxer kits in the U.S., 2008 and 2009 Hair Color - Key points - Numbers down for majority of manufacturers and their brands - SoftSheen-Carson continues to control the segment - Figure 14: FDM manufacturer brand sales of hair coloring in the U.S., 2008 and 2009 - Brand Qualities - Organic Root Stimulator - Dark and Lovely - Pantene - Innovation and Innovators - Unique challenges to black haircare product introductions - Hair treatments - Shampoo/conditioner - Styling products - Hair coloring - Advertising and Promotion - Overview - Dr. Miracle’s Hair Relaxer - Figure 15: Dr. Miracle’s hair relaxer, March 26, 2009 - Dr. Miracle’s Haircare Line - Figure 16: Dr. Miracle’s haircare line, April 4, 2009 - Luster’s Pink Moisturizing Hair Lotion - Figure 17: Luster’s pink moisturizing hair lotion, August 9, 2008 - Organic Root Stimulator Olive Oil - Figure 18: Organic root stimulator olive oil, January 18, 2009 - Bronner Bros. International Hair Show - P&G’s My Black is Beautiful Tour - Ebony Fashion Fair - M&M Products’ ABCs of Hair Styling Usage of Black Haircare Products - Key points - Overall use of haircare products - Figure 19: Usage of hair products, by gender, October 2007-December 2008 - Frequency of product usage in last seven days - Figure 20: Mean number of products used in last seven days, by product, by gender, October 2007-December 2008 - Frequency of product usage by women in last 12 months - Figure 21: Mean number of products used in last 12 months, by product, October 2007-December 2008 - Permanent/relaxer brands used - Figure 22: Relaxer brands used, October 2007-December 2008 - Types of permanent/relaxer brands used - Figure 23: Types of relaxer used, October 2007-December 2008 - Hair color brands used - Figure 24: Hair color brands used, October 2007-December 2008 Purchasing Habits and Product Attitudes - Key points - Purchase behavior - Figure 25: Purchasing habits of black haircare products, by age, June 2009 - Figure 26: Purchasing habits of black haircare products, by household income, June 2009 - Retail destinations for black haircare - Figure 27: Where black haircare products are purchased, by age, June 2009 - Figure 28: Where black haircare products are purchased, by household income, June 2009 - Purchasing factors for black haircare products - Figure 29: Factors considered before purchase, by age, June 2009 - Figure 30: Factors considered before purchase, by household income, June 2009 Patronage of Professional Haircare Services - Key points - Frequency of professional haircare services - Figure 31: Frequency of professional haircare services, by age, June 2009 - Figure 32: Frequency of professional haircare services, by household income, June 2009 - Frequency of at-home treatment or styling - Figure 33: Frequency of at-home treatment or styling services, by age, June 2009 - Figure 34: Frequency of at-home treatment or styling, by household income, June 2009 - Frequency of relaxer treatments - Figure 35: Frequency of relaxer treatments, by age, June 2009 - Figure 36: Frequency of relaxer treatments, by household income, June 2009 Maintaining Hair after Treatment - Key points - Aftercare treatments - Figure 37: Choice of aftercare treatments, by age, June 2009 - Figure 38: Choice of aftercare treatments, by household income, June 2009 Impact of Race/Hispanic Origin - Key points - Hispanics not afraid to try something new - Importance of specific haircare needs spans across ethnic groups - For Hispanics, home is where the haircare is - Figure 39: Attitudes toward haircare products, by Hispanic origin, June 2009 - Figure 40: Outlet preference for haircare products, by Hispanic origin, June 2009 - Figure 41: Buying influences for haircare products, by Hispanic origin, June 2009 - Figure 42: Frequency of professional haircare, by Hispanic origin, June 2009 - Figure 43: Frequency of in-home hair treatment/styling, by Hispanic origin, June 2009 - Figure 44: Frequency of hair relaxer usage, by Hispanic origin, June 2009 - Figure 45: Relaxer aftercare products used, by Hispanic origin, June 2009 Appendix: Other Useful Consumer Tables - Different types of shampoo used by black respondents - Figure 58: Types of shampoo used, by gender, October 2007-December 2008 - Different types of styling products used by black respondents - Figure 59: Type of styling products used, by gender, October 2007-December 2008 - Different types of hair permanent/relaxers used by black women - Figure 60: Type of hair permanent/relaxer products used, October 2007-December 2008 - Impact of education level on purchases - Figure 61: Buying influences, by education level, June 2009 Appendix: Trade Associations

Companies Mentioned

- Alberto-Culver USA Inc - American Health and Beauty Aids Institute (AHBAI) - Avon USA - Black Owner Beauty Supply Association - Brinker International Inc. - Bronner Brothers Inc - Colomer USA - CVS Caremark Corporation - Dillard's, Inc - Ford Motor Company (USA) - Greenfield Online - Imetec - Independent Cosmetic Manufacturers and Distributors Inc. (ICMAD) - J Strickland & Co Inc - Kmart Corporation - Kohl's Corporation - L'Oréal Canada - L'Oréal USA - Luster Products Co. - M&M Cosmetics Ltd - Macy's, Inc. - Namasté Laboratories Llc - National Beauty Culturists' League, Inc. (NBCL) - P&G-Clairol, Inc. - Procter & Gamble Company (The) - Procter & Gamble USA - Revlon USA - Sally Beauty Company, Inc. - Society of Cosmetic Chemists (SCC) - SoftSheen Carson - Target Corporation - The Conference Board - Turner Broadcasting System, Inc. - U.S. Bureau of Labor Statistics - U.S. Bureau of the Census - Ulta Salon, Cosmetics & Fragrance, Inc. - Unilever USA - Walgreen Co - Walmart Stores (USA) - White Castle System, Inc.