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Beauty Disruptor Series: Innovation in Americas

December 2019

Beauty innovators generally have the power to disrupt markets, predominantly through route to market and their brand value proposition. The case studies of beauty innovators selected by our in-country analysts cover newly established local businesses launched between 2012 and 2018, and typically formed by entrepreneurs who identified a gap in their market and decided to supply the demand through a product or service.

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Key Findings

Leading global players are increasingly under threat from fast-growing insurgent and local brands

Recent changes in consumer behaviour have opened up new opportunities for smaller brands, which tend to be more agile and responsive to trends than multinationals. Local businesses typically offer greater consumer-centricity, with a deeper understanding of what local consumers really want. Disruptors will often put an individual group of consumers at their core, and shape their offering accordingly, through customisation, naturalness, sustainability, etc.

Different evolution stages separate North and Latin America when it comes to disruption

The competitive landscape differs significantly when comparing North America and Latin America. While in the US and Canada, the surge of smaller brands continues to increase their presence in the market and force multinational companies to increase investment to keep up with the competition, in Latin America, the scenario is different. Bigger brands continue to reign, and most of the dynamism comes from medium sized players, which are typically quick to respond to local consumer needs.

Natural formulations and sustainability issues reinforce the presence of smaller brands in North America

Most of the disruptive brands emerging in North America have managed to understand the changes in consumer behaviour and launch items targeted appropriately. Several players have leveraged the preference for natural formulations to launch products that engage with sustainability issues. Although smaller brands continue to increase their presence, continuous investment by multinational companies keeps the share of smaller brands at bay.

Newcomers face a challenging scenario in Latin America

Smaller brands face extra challenges to grow in Latin America. Distribution issues can prevent companies from expanding. Internet penetration is increasing in the region, but the prevalence of store-based retailing and, especially, direct selling prevents some brands from increasing their presence more rapidly.

Scope
Key findings
From improving what consumers do today to reinventing behaviour
Renovation and innovation are often wrongly identified as disruption
For a company to disrupt they must focus on four areas
Who has the power to disrupt?
Homegrown brands trade on local knowledge
Local brands can be a direct contrast to global brands
“Other brands” increase alongside top players
Disruptive companies most prominent in skin care
Beauty specialist retailers keeping up with e-commerce competition
Value for money and high quality features remain important
Canada: Harlow
US: Art of Sport
US: Keracolor
Medium sized players increasing their presence in Latin America
Fragrances and men’s grooming present opportunities for small brands
Direct selling leads, but online sales grow faster
Value for money remains the top priority in Latin America
Argentina: Karma Pink
Brazil: Pink Cheeks
Brazil: Souvie
Chile: Be Feelosophy
Colombia: P!nch
Mexico: AHAL
Mexico: Rayito de Luna

Beauty and Personal Care

This is the aggregation of baby and child-specific products, bath & shower, deodorants, hair care, colour cosmetics, men's grooming, oral hygiene, fragrances, skin care, depilatories and sun care. Black market sales and travel retail are excluded.

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