Interview, Fireside Chat
The Beauty Industry’s Next Steps
- Green, clean, and natural product subcategories in skin care, hair care, and color cosmetics are projected to maintain momentum, while consumer gravitation toward health and wellness self-care groups is expected to drive sustained performance in these areas.
- DIY nail grooming, devices, bath, and body wash categories are anticipated to benefit from enduring behavioral shifts toward at-home routines and reduced access to professional services, contrasting with continued challenges for heavy makeup lines due to remote work and mask-wearing habits.
- The industry is forecast to experience a sustained structural shift away from brick-and-mortar channels, with online sales trajectories expected to persist at elevated levels without reverting to historical norms as consumers remain trained for digital purchasing.
- Strategic players and private equity firms are expected to aggressively pursue M&A activity to modernize operations, capitalize on leadership positions, and access new demographics, resulting in heightened competition for acquisitions across the sector.
- Investment targets are differentiated by acquirer type, with private equity firms focusing on businesses with revenues below $100 million, while strategic players may target higher revenue ranges, utilizing significant available capital to deploy funds.
- China is identified as a primary growth driver necessitating international expansion, with the broader Asian region serving as a key focus area for brands seeking global market penetration.
- Travel retail channels are expected to evolve in response to pandemic disruptions to determine future positioning, while brands must define case-by-case omni-channel strategies combining subscription boxes, direct selling, and social selling.
- Strong momentum is projected across the entire beauty and personal care value chain, including contract manufacturers, turnkey service providers, ingredients players, and formulators, supported by continued purchasing activity from investors and strategics across the full industry spectrum.