How would you estimate the market size for vegan shampoos in the UK?

Market sizing
New answer on Feb 28, 2021
7 Answers
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Anonymous A asked on Feb 01, 2021

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Antonello
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replied on Feb 02, 2021
McKinsey | MBA professor for consulting interviews

Hi, in addition to the solutions proposed by the other coaches in the discussion, I would like to suggest similar cases in the platform to practice with:

  • https://www.preplounge.com/en/consulting-forum/how-much-would-you-charge-to-clean-all-the-windows-in-seattle-4965
  • https://www.preplounge.com/en/consulting-forum/market-sizing-milk-consumption-5087
  • https://www.preplounge.com/en/consulting-forum/how-would-you-calculate-the-value-of-a-cow-4982
  • https://www.preplounge.com/en/consulting-forum/estimate-number-of-traffic-lights-in-a-london-5692

Hope it helps,
Antonello

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Udayan
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replied on Feb 01, 2021
Top rated McKinsey Case & PEI coach/Multiple real offers/McKinsey EM in New York /6 years McKinsey recruiting experience

This would be a subset of

  • Vegans (~3-5%) - can include 80% of folks here as being vegan is an identity
  • People that care about clean beauty products - you can estimate it based on something rational...any number around 10-20% would be reasonable in my opinion
  • Subset of people that care enough about animal rights to switch shampoos - (first calculate those that care about animal rights and then a small percentage of them that would shift)

With those numbers you can easily estimate it using standard population metrics.

Best,

Udayan

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Ian
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replied on Feb 02, 2021
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  1. Population of country
  2. Split by income/wealth level (poor, middle, upper class)
  3. Estimate frequency of shampoo purchase by group per year (of course, moderately directly correlated with socioeconomic status...benchmark off of your annualy usage)
  4. Estimate % of each group that would use vegan shampoos (also strongly correlated with socioeconomic status)
  5. Price per bottle - based off what you see (if you only know "normal" shampoo, obviously this product is a premium product, so increase the price by x %)
  6. Multiply 2x3x4x5

And voila!

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Raj
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replied on Feb 03, 2021
Strategy&| ex-interviewer | 170+ coached over career |95% success @ MBB, S&, RB, LEK, OW, Big4 [SUCCESS STORIES BELOW]

Hi!

Many great answers already around how to think about this. I would structure it around the use cases:

  1. Ethical - vegans who will switch to the shampoo for moral reasons
  2. Cosmetic - people who will switch to the shampoo as they are highly conscious of cosmetic products they use and ingredients
  3. Medical - people who HAVE to switch as vegan shampoos are the only ones suitable e.g. skin conditions like eczema

If I was the interviewer asking this question, I would like to see if you could identity unconventional markets like number 3 above with a bit of lateral thinking.

The general approach around estimating population, % of population for each, willingness to pay etc. would work as per all other market sizing questions.

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Alexander replied on Feb 28, 2021

I would probably go for a simple approach:

  • Number of vegan hairwashes
    • Total Population (UK, ~60m)
    • Vegans (~2%)
    • Non-Vegans using vegan products for their reasons (~5%)
    • Frequency of hairwashes (say 4x/week across the board)
  • Number of portions per bottle (say 20)
  • Price per bottle (5GBP, around double the normal price)

That would get you to 60m x 7% x 4 x 50 = 840,000,000 vegan hairwashes with 42m bottles at 5GBP, i.e a market size of ~200mGBP/anno.

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Gaurav
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replied on Feb 03, 2021
Ex-Mckinsey|Certified Career Coach |Placed 500+ candidates at MBB & other consultancies

I agree with what Udayan has proposed. IMO, you need to take into consideration all three options.

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Clara
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replied on Feb 03, 2021
McKinsey | Awarded professor at Master in Management @ IE | MBA at MIT |+180 students coached | Integrated FIT Guide aut

Hello!

I think the easiest is to calculate the % of vegans -since I don´t think that many more people other than them would buy the shampoos-.

However, this market sizing does not seem as the classical one you would find in a case - it´s too straight-forward.

Hope it helps!

Cheers,

Clara

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Antonello gave the best answer

Antonello

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