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