Beauty and Personal Care Industry Trends and Future Prospects for The US
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Euromonitor International presented this press briefing on future trends for the beauty industry in the US at in-Cosmetics Paris on April 12, 2016.
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Beauty and Personal Care Industry Trends and Future Prospects for The US
- 1. INDUSTRY TRENDS AND FUTURE PROSPECTS FOR THE US IN-COSMETICS PARIS - APRIL 12, 2016 PRESS BRIEFING
- 2. US BEAUTY IN THE GLOBAL CONTEXT PREMIUMISATION OF US BEAUTY CATEGORY HIGHLIGHTS CONCLUSIONS
- 3. US BEAUTY IN THE GLOBAL CONTEXT PREMIUMISATION OF US BEAUTY CATEGORY HIGHLIGHTS CONCLUSIONS
- 4. © Euromonitor International 4 Outstanding Growth in North American Beauty Market BEAUTY BREAKDOWN: INDUSTRY TRENDS AND FUTURE PROSPECTS FOR THE US 2015 Beauty & Personal Care Value Sales and Growth by Region 0.00% 2.00% 4.00% 6.00% 8.00% 10.00% 12.00% $0 $20,000 $40,000 $60,000 $80,000 $100,000 $120,000 $140,000 $160,000 Western Europe Eastern Europe North America Latin America Asia Pacific Australasia Middle East and Africa 2014-2015ValueGrowth(Current,Fixed2015Exchange) US$Billions Colour Cosmetics Other Beauty & Personal Care Colour Cosmetics Growth Total Beauty & Personal Care Growth
- 5. © Euromonitor International 5 U.S. Outpaces 2015 Global Beauty Growth Across Categories 2015 U.S. Beauty & Personal Care Value Sales and Growth by Category 0.00% 1.00% 2.00% 3.00% 4.00% 5.00% 6.00% 7.00% 8.00% $0 $20 $40 $60 $80 $100 $120 Skin Care Colour Cosmetics Men's Grooming Fragrances Deodorants Sun Care 2014-2015ValueGrowth(Current,Fixed2015Exchange) 2015Sales(US$Billions) US World US Growth World Growth
- 6. US BEAUTY IN THE GLOBAL CONTEXT PREMIUMISATION OF US BEAUTY CATEGORY HIGHLIGHTS CONCLUSIONS
- 7. © Euromonitor International 7 2015 U.S. Premium Beauty Sales Grow Across All Categories PREMIUMISATION OF US BEAUTY 2015 U.S. Premium Beauty & Personal Care Select Category Value Sales and Growth 0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% 14.0% $0 $1 $2 $3 $4 $5 $6 $7 $8 Premium Colour Cosmetics Premium Fragrances Premium Skin Care Premium Sun Care Premium Deodorants 2014-2015Growth US$Billions Market Size Growth
- 8. © Euromonitor International 8 Power to Premium PREMIUMISATION OF US BEAUTY 2011 2015 2020 Premium Value Sales ($US billion, constant) $20 $23 $28 Premium Penetration (% Value) 32% 34% 37% US$5 Billion U.S. premium beauty growth through 2020 Premiumisation of U.S. Beauty and Personal Care Market Forecasted to Continue
- 9. © Euromonitor International 9 $2.16 $1.38 $1.15 $0.23 $0.39 Premium Colour Cosmetics Premium Skin Care Premium Fragrances Premium Hair Care Other Premium Beauty and Personal Care The Future Of U.S. Premium Beauty: Growth-Driving Categories PREMIUMISATION OF US BEAUTY Premium Category CAGR Total Beauty and Personal Care 4.10% Colour Cosmetics 5.70% Sun Care 5.60% Sets/Kits 4.90% Skin Care 4.70% Deodorants 4.60% Bath and Shower 3.80% Fragrances 3.30% *Constant Value terms US$5 Billion U.S. Premium Beauty Value Growth 2015-2020 (US$ Billions, Constant) U.S. Premium Beauty CAGR* 2015-2020
- 10. US BEAUTY IN THE GLOBAL CONTEXT PREMIUMISATION OF US BEAUTY CATEGORY HIGHLIGHTS CONCLUSIONS
- 11. © Euromonitor International 11CATEGORY HIGHLIGHTS Top 15 Growth Subcategories for 2015 U.S. Colour Cosmetics Colour Cosmetics: Growth Subcategories Eye Shadow Mascara Other Eye Make-Up Eye Liner BB & CC Creams Foundation & Concealer Other Eye Make-Up Other Lip Products Blusher, Highlighter & Bronzer Nail Polish Lipstick BB & CC Creams Powder Lip Liner Lipstick 0.00% 5.00% 10.00% 15.00% 20.00% 25.00% 30.00% 35.00% 40.00% 45.00% 50.00% 2014-2015ValueGrowth(Current) 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15Premium Mass
- 12. © Euromonitor International 12CATEGORY HIGHLIGHTS Top 15 Growth Subcategories for 2015 U.S. Colour Cosmetics Colour Cosmetics: Growth Subcategories Eye Shadow Mascara Other Eye Make-Up Eye Liner BB & CC Creams Foundation & Concealer Other Eye Make-Up Other Lip Products Blusher, Highlighter & Bronzer Nail Polish Lipstick BB & CC Creams Powder Lip Liner Lipstick 0.00% 5.00% 10.00% 15.00% 20.00% 25.00% 30.00% 35.00% 40.00% 45.00% 50.00% 2014-2015ValueGrowth(Current) 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15Premium Mass
- 13. © Euromonitor International 13 Sephora introduces South Korean BB Cream brand Dr. Jart+ to the U.S. Over 15 BB/CC creams launch in the U.S., from Clinique to Maybelline to Dior BB/CC Creams grow 61% (constant value) Packaging innovation: Miracle Cushion by Lancôme and Double Wear Makeup To Go Liquid Compact by Estée Lauder Facial Cosmetics: Innovation Drives Growth U.S. Facial Make-Up Sales 2011–2020 2011 2012 2013 2015 US BB/CC Cream constant value CAGR 2011-2015: 133% (Projected) US BB/CC Cream constant value CAGR 2015-2020: 12% $0 $1 $2 $3 $4 $5 $6 $7 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 US$Billions(Constant) Foundation/Concealer Powder Blusher/Bronzer/Highlighter BB/CC Creams Other Facial Make-Up
- 14. © Euromonitor International 14CATEGORY HIGHLIGHTS Top 15 Growth Subcategories for 2015 U.S. Colour Cosmetics Colour Cosmetics: Growth Subcategories Eye Shadow Mascara Other Eye Make-Up Eye Liner BB & CC Creams Foundation & Concealer Other Eye Make-Up Other Lip Products Blusher, Highlighter & Bronzer Nail Polish Lipstick BB & CC Creams Powder Lip Liner Lipstick 0.00% 5.00% 10.00% 15.00% 20.00% 25.00% 30.00% 35.00% 40.00% 45.00% 50.00% 2014-2015ValueGrowth(Current) 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15Premium Mass
- 15. © Euromonitor International 15 Brow Cosmetics: Boldness Drives Growth CATEGORY HIGHLIGHTS US Other Eye Make-Up constant value CAGR 2010-2015: 20% (Projected) US Other Eye Make-Up constant value CAGR 2015-2020: 13% Boldly Bushy Boldly Defined MaybellineNewYorkEyeStudioBrowDefine+FillDuo—6/2015 CliniqueJustBrowsingBrush-OnStylingMousselaun—8/2015 AnastasiaBrowDefiner—1/2016 BurberryEyebrowDefinerlaunched—9/2015
- 16. © Euromonitor International 16CATEGORY HIGHLIGHTS Top 15 Growth Subcategories for 2015 U.S. Colour Cosmetics Colour Cosmetics: Growth Subcategories Eye Shadow Mascara Other Eye Make-Up Eye Liner BB & CC Creams Foundation & Concealer Other Eye Make-Up Other Lip Products Blusher, Highlighter & Bronzer Nail Polish Lipstick BB & CC Creams Powder Lip Liner Lipstick 0.00% 5.00% 10.00% 15.00% 20.00% 25.00% 30.00% 35.00% 40.00% 45.00% 50.00% 2014-2015ValueGrowth(Current) 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15Premium Mass
- 17. © Euromonitor International 17 Lip Cosmetics: Variety Drives Growth CATEGORY HIGHLIGHTS US Lip Make-Up constant value CAGR 2010-2015: 7% (Projected) US Lip Make-Up constant value CAGR 2015-2020: 5% Glossy, Plump and Natural Vivid Colors in luxurious Finishes PixiLipLiftMax—3/2015 Maybelline Color Sensational Vivid Matte Liquid Lipstick— 1/2016 Burt’s Bees Lipsticks—2/2016Yves Saint Laurent Volupté Tint-in-Oil—1/2015
- 18. © Euromonitor International 18CATEGORY HIGHLIGHTS Top 15 Growth Subcategories for 2015 U.S. Colour Cosmetics Colour Cosmetics: Growth Subcategories Eye Shadow Mascara Other Eye Make-Up Eye Liner BB & CC Creams Foundation & Concealer Other Eye Make-Up Other Lip Products Blusher, Highlighter & Bronzer Nail Polish Lipstick BB & CC Creams Powder Lip Liner Lipstick 0.00% 5.00% 10.00% 15.00% 20.00% 25.00% 30.00% 35.00% 40.00% 45.00% 50.00% 2014-2015ValueGrowth(Current) 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15Premium Mass
- 19. © Euromonitor International 19 Eye Cosmetics: Lashes Drive Growth CATEGORY HIGHLIGHTS US Eye Make-Up constant value CAGR 2011-2015: 4% (Projected) US Eye Make-Up constant value CAGR 2015-2020: 3% NYX Big & Loud Lash Primer—1/2015 Benefit Roller Lash—2/2015 DiorDiorshowMascara—6/2015
- 20. © Euromonitor International 20 Skin Care: Growth Subcategories CATEGORY HIGHLIGHTS Top 10 Growth Subcategories for 2015 U.S. Skin Care $22 $1,166 $119 $43 $18 $48 $363 $1,939 $498 $144 0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% 14.0% 16.0% 18.0% $0 $200 $400 $600 $800 $1,000 $1,200 $1,400 $1,600 $1,800 $2,000 2014-2015ValueGrowth(Constant) US$Millions 2015 Sales 2015 % growth
- 21. © Euromonitor International 21 Skin Care: Growth Drivers CATEGORY HIGHLIGHTS Korean Beauty Trends Drive Growth Successful Skin Care Products Put Focus on Ingredients Niche Brands Gain Market Share Source: Sephora Polska
- 22. © Euromonitor International 22 -10% -5% 0% 5% 10% 15% 20% 25% 2015 2016 2017 2018 2019 2020 YearonYearValueGrowth(Constant) Premium Men's Fragrances Premium Women's Fragrances Premium Unisex Fragrances Mass Men's Fragrances Mass Women's Fragrances Mass Unisex Fragrances Fragrances: Growth Subcategories CATEGORY HIGHLIGHTS U.S. Fragrance Subcategory Value Growth 2015-2020 2015-2020 Premium Fragrance Growth (constant value) = US$1 Billion Premium Unisex 2015-2020 CAGR: 15%
- 23. © Euromonitor International 23 -10% -5% 0% 5% 10% 15% 20% 25% 30% 2014 2015 2014-2015ValueGrowth(Current) Estée Lauder Clinique Donna Karen New York Tommy Hilfiger Jo Malone Tom Ford Niche Brands Drive Premium Growth Fragrances: Growth Drivers Estee Lauder Company Fragrance Brands Personalization Through Layering
- 24. US BEAUTY IN THE GLOBAL CONTEXT PREMIUMISATION OF US BEAUTY CATEGORY HIGHLIGHTS CONCLUSIONS
- 25. © Euromonitor International 25 Macroeconomic Factors Evolving Retail Channels Success of Niche Brands U.S. Beauty: Overall Trends and Opportunities CONCLUSIONS Source: Mike Mozart • Newly-Flush Consumers Seek Affordable Luxury • Premium Beauty: Gateway Purchase • Rise of Masstige • Well-Informed Consumers • “Physital” Customer Engagement • Internet Retailing, the Great Equalizer • Millenials Usher in Era of Individualism • Foreign Brands Garner Attention • Acquisitions: Large Companies Take Note of Niche
- 26. THANK YOU FOR LISTENING Irina Barbalova Head of Global Beauty and Personal Care For press inquiries, reach out to press-london@euromonitor.com
Editor's Notes
- North American growth is outstanding given its high value sales. Middle East and African markets are some of the smallest, yet fastest growing. Premium outpaced mass in most regions (not Eastern Europe or Asia Pacific)
- US Growth higher than global growth across all categories (US growth positive for all categories, while global sales declined in 2015) Colour Cosmetics has highest growth in the U.S. of any category Stand-out U.S. growth in deodorants due to increasingly popular body sprays
- Premium Colour Cosmetics is primary growth category Premium Deodorant growth is mostly due to body sprays Inexpensive entry product for prestige brands Affordability means that consumers can buy many scents. Variety and layering yield a complete fragrance wardrobe reflects trend toward individualism and customization Skin Care grew less than anticipated, outpaced by CC Due to rise of BB creams and other multi-functional cosmetic products
- Premium Colour Cosmetics growth projected to outpace the rest of BPC Premium Sun Care projected to be a growth area, although it is small Premium brands focus on anti-aging benefits of sun protection Premium formulas offer multiple anti-aging ingredients, eg antioxidants to protect from environmental factors like pollution as well as UV rays Sets/Kits largely driven by Rodan+Fields Sets that target specific concerns doing well – people want products that are specifically formulated for their needs Body Sprays projected to drive deodorant growth
- Size of bubble indicates Value size of subcategory Premium subcategories make up most of the fastest-growing Colour Cosmetics subcategories
- In looks: Boldly natural brows, bright lips and Dewy Skin (Cara Delvigne) vs defined brows, contouring & strobing, plump neutral-toned lips (Kylie Jenner) Face BB Creams Both Premium and Mass BB Cream subcategories made the top 15 CC growth subcategories Dewy, natural look with skin care benefits Relatively new to US market (2011) Premium Foundation & Concealer The largest by value sales of the top 15 CC growth subcategories, yet still growing Consumers turning to premium to protect skin health and obtain exact skin tone match Premium Blusher, Highlighter & Bronzer Kontouring trend still present, though influence is waning Highlighter popular for both sculpting trend and fresh, dewy look Premium Powder also growing
- In looks: Boldly natural brows, bright lips and Dewy Skin (Cara Delvigne) vs defined brows, contouring & strobing, plump neutral-toned lips (Kylie Jenner) Face BB Creams Both Premium and Mass BB Cream subcategories made the top 15 CC growth subcategories Dewy, natural look with skin care benefits Relatively new to US market (2011) Premium Foundation & Concealer The largest by value sales of the top 15 CC growth subcategories, yet still growing Consumers turning to premium to protect skin health and obtain exact skin tone match Premium Blusher, Highlighter & Bronzer Kontouring trend still present, though influence is waning Highlighter popular for both sculpting trend and fresh, dewy look Premium Powder also growing
- Other Eye Make-Up is mostly made up of brow products While premium growth is higher than mass, this is a growing category across all price segments
- In looks: Boldly Bushy brows (Cara Delvigne) vs Boldly Defined brows (Kylie Jenner) Other Eye Make-Up growth driven by eyebrow products: both premium and mass other eye make-up subcategories made the top 15 Traditional eyebrow pencils & gels used to create clean, precise brows Powders and brow mascara used to emulate more natural, fuller, Brooke Shields-style brows with individually visible hairs Maybelline Brow Define+Fill Duo .2 mm defining wax pencil to shape and mess-free filling powder to finish
- Size of bubble indicates Value size of subcategory Premium subcategories make up most of the fastest-growing Colour Cosmetics subcategories Lipstick is large in value sales, yet still growing strong
- In lip looks: Bold matte and metallic colours vs plump neutral-toned lips (Kylie Jenner) Both Premium and Mass Lipstick made the top 15 growth CC subcategories, as did premium Lip Liner and premium Other Lip Products Neutral-brown toned lipsticks (which emphasize lip fullness) were most popular this year, but a wide variety of bold shades including bright oranges and Purples are on the rise Other Lip Product growth driven by lip plumping formulas (Kylie Jenner look) Incorporate beneficial ingredients to nourish lips Skin care is influencing colour cosmetics YSL Tint-in-Oil uses a blended base of botanical oils to suspend pigment Burt’s Bees “Finally a Lipstick that loves you back” has oils, beeswax “Intense color meets conditioning 8-hour moisture” “Smooth Satin Finish”
- Premium eye make-up is also growing Sensitive eye area requires non-irritating products without harsh chemicals Expectations for longevity, ease of application are extremely high Premium Mascara is the largest growing eye make-up category (after brows)- repurchased frequently for hygienic reasons
- Premium eye make-up is growing Premium Mascara is the largest growing eye make-up category (after brows)- repurchased frequently for hygienic reasons Expectations for longevity, ease of application are extremely high Diorshow is 2015 reformulation of classic mascara formula Advertises “lash extension effect” using fibers Visual impact key “mascara does not smudge” longevity “mascara does not dry out” Special airtight tube technology promotes sterile product safety+longevity NYX Big & Loud Lash Primer Base designed to extend wear; many lash primers are coming to market Opportunity in sensitivity: sensitive eye area requires non-irritating products without harsh chemicals
- Premium Skin care is outpacing mass 8/10 of the fastest growing subcategories are premium The 2 mass subcategories still have lower growth than their premium counterparts
- Korean Beauty Trends Drive Growth Top Left image: Tony Moly X Urban Outfitters collaboration Unique K-beauty product packaging and quirky product names appeal to consumers who want to stand out from the crowd Millenials drive beauty trends, want to express their individuality through their purchases Seeks to turn skin care into a luxurious, pleasant process Transforming textures (foaming cleansers, effervescent mud masks, etc) and pleasant scents Many-step customizable process Promotes increased overall skin care purchases Personalization appeals to Millenials as well as increasingly informed consumers overall who know their skin types and needs Multi-step cleansing drives cleanser growth Top Right Image-turning back the clock: Focus on Preventative Care Promotes increased overall skin care purchases Drives growth in: face masks anti-agers (“prejuvination” trend: 20-30 year olds buying more anti-agers than they used to) Focus On Ingredients Premium Skin Care is Particularly embracing this (Premium outpacing mass) Product names and packaging emphasize beneficial ingredients (especially botanical ingredients) Growing consumer concern about hazardous ingredients: Many products advertise “No Parabens, no sulfates, no phthalates” Popular ingredients include food and plant-based ingredients (Yes To, natural brands like Origins) Oils (argan, coconut, etc) Hyaluronic acid (repopularized by Korean brands, translated to Mass US market by many brands, including Neutrogena (middle right image) ) Hydro Boost advertizes hyaluronic acid on package, but also Niche Brands Gain Market Share Popular niches: Natural, Organic, dermaceuticals Skin Care Sets/Kits growth led by Rodan + Fields Results-oriented skin care routines targeted by skin concern 2015 sales = 48% of Premium Skin Care Sets/Kits Value Sales Glamglow Premium Face Mask company Based in Hollywood, originally targeted at Movie Stars, convey sense of glamour 2015 sales = 41% of Premium Face Mask Value Sales My 7th Heaven (Formerly Montagne Jeunesse) Mask face mask company, single-use masks 2015 sales = 31% of Mass Face Masks Value Sales
- All Premium subcategories are growing, all Mass subcategories are declining Premium Unisex outpaces all other fragrance subcategories Unisex is popular with consumers who care about expressing their individual personality through their fragrance. Don’t want to be labeled, want to find a scent with a personal appeal Mass brands do not allow for this individualization through personal scent because they are so common/ubiquitous. Premium Men’s fragrance is poised for slight, consistent growth through the next 5 years
- Niche Brands Drive Premium Growth Many American consumers do not want to smell “like X”. They want to smell like themselves and only themselves Coincides with decline in celebrity fragrances Estee Lauder: One example of successful niche brands being acquired by a beauty heavy-hitter Niche unisex brands Jo Malone & Tom Ford outpacing ELC’s more traditional premium fragrance brands Jo Malone and Tom Ford have wide arrays of fragrances, usually based around (and named after) 1-2 key ingredients Focus on ingredients implies quality, while wide selection of relatively simple scents allows for clear self-expression TF Fleur de Portofino (right fragrance in image) based on white acacia trees in Portofino in the Mediterranean TF Mandarino De Amalfi (left fragrance in image) based on mandarin scent Jo Malone fragrances have transparent, ingredient-focused names. In bottom image, Blackberry & Bay, French Lime Blossom, Wild Bluebell, White Jasmine & Musk, Red Roses Jo Malone displays are organized by scent descriptions “Floral” and “Woody”, etc. rather than gender designations personal preference Premium’s recent growth is driven by consumers who want to stand out, not fit in or “measure up.” Recognizing this, ELC also recently acquired 3 more niche unisex brands Le Labo acquired October 2014 Editions de Parfums Frederic Malle acquired 1/15 By Kilian acquired February 2016 Jo Malone and Tom Ford brands encourage scent layering for further personalization Personalization Through Fragrance Layering – entering Mass Space Appeals to desire for Individualism & Self-Expression Fragrance wardrobe, customize scent to mood, season, weather, occasion Body Mists tracked in deodorants, not fragrances, but they follow this trend Affordable enough to create a fragrance wardrobe
- Macroeconomic Factors U.S. gas prices declined in 2015, allowing customers to spend more on beauty Economic Recovery making strides, although not completely finished Consumers are tired of being frugal and want luxury- choose fewer more expensive products over many inexpensive products Rise of Masstige Premium beauty offers entry-level products from expensive fashion brands Eg Tom Ford: Pair of shoes> $1000, handbag $2000-$6000, perfume: $220-$600, lipstick: $35 Evolving Retail Channels Beauty Specialist Retailers gain market share Carry almost exclusively premium brands (Excluding Private Labels) Take some market share from declining department stores, but also some from drugstores Completely beauty-focused stores offer a more pleasant atmosphere than malls, grocery stores or drug stores customers shop more often and for longer Knowledgeable attendants identify products that serve customers’ exact needs more satisfied customers Aggressive rewards programs incentivize more frequent purchases Online gains market share Internet as great equalizer: Mass products are no longer easier to purchase than premium: all can be delivered to your door Both these channels (online & BSR) make niche brands more accessible Even Apparel Retailers are getting in on Beauty Urban Outfitters carries Korean Skin Care brandsTony Moly and Caolion, as well as niche American skin care brands Mario Badescu and S.W. Basic, among others Niche brands have risen in prominence Millenial consumers want to express themselves through purchases that reflect their personal style and identity Natural/Organic/Cruelty Free Pretty, cute or clever packaging Minority ethnicity-focused lines Influence of South Korean beauty- foreign beauty brands increasing market share Large companies taking note Between 2014 and 2015, Estee Lauder acquired 4 premium niche beauty brands (or according to ELC “insider beauty brands”) GlamGlow, Le Labo, Editions de Parfums Frederic Malle, RODIN olio lusso ULTA image: https://www.flickr.com/photos/jeepersmedia/14771473273 Attribution required