From Sustainability to Purpose in Beauty

February 2021

As consumer awareness of social and environmental issues increases, steps to improve the beauty industry’s environmental footprint are progressing at a faster pace, driven by a holistic approach of “purpose over profit”. The coming years offer opportunities for technological advances in sustainable beauty innovations. Responsibility rests on companies to make major differences and set higher standards, and on retailers to apply leverage throughout the supply chain.

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Key findings

Sustainability strategies are no longer just the preserve of niche companies

As consumer awareness of social and environmental issues increases, steps to improve the beauty industry’s environmental footprint are progressing at a faster pace. COVID-19 has also bought a new consciousness that has spotlighted “purpose over profit” – a more holistic approach to sustainability that aims to encompass social, environmental and economic value.

Younger consumers and beauty enthusiasts are key drivers

Millennial and Generation Z consumers are driving the industry push for sustainable beauty, as they are extensive product users, premium buyers, digitally-influenced, and are increasingly influencing the skin care category, in particular.

Innovations are gaining pace across food and ocean waste, recycled materials and refillables

While the development of sustainable initiatives may have been postponed due to COVID-19, the forecast period offers significant opportunities for technological advances in sustainable innovations. The use of bio-based and biodegradable materials is expected to increase, in addition to more recyclable packaging materials, more recycled content usage and new returnable systems.

Multinationals are beginning to ramp up sustainable actions and innovations

With the top 15 global beauty players accounting for over 50% of value sales in the industry, responsibility rests on these companies to make major differences and set higher standards. 2020 saw many leading players, like L'Oréal, Shiseido and Unilever, unveil new sustainability goals and product developments.

Sustainability challenges are more pronounced among retailers

Economic incentives and knowledge are key to address retailers’ lag in adopting more sustainable practices. Beauty specialist retailers are particularly well placed to push forward sustainability, given their customer base, brand assortment, and leverage with brands and suppliers.

 

Introduction

Scope
Key findings

The Evolution of Sustainability

Ethical consumption is being integrated into consumers’ lifestyles
The evolution of beauty from “green” to “clean” to “conscious”
Demand for sustainable features rises, while demand for natural slows
Consumer values evolve as they emerge from lockdown
Definition of sustainability expands to encompass social purpose

Consumer Demand

Who is driving the demand for sustainability?
Millennials and Generation Z drive consumer push for sustainability
Extensive product users care more about sustainable product features
Sustainable features are a greater draw for premium buyers of beauty
Digital beauty consumers lead in desiring ethical features
Penetration of ethical claims highest in skin care, hair care and cosmetics
In skin care, Western Europe has highest share of ethical claims
Canada, France and Germany lead in environmental sustainability
Three largest markets rank in the lower tiers of sustainable behaviour
Colour cosmetics trending upward in sustainability
Wide range of sustainability concepts in the 10 largest beauty markets
Companies will respond to change if consumers demand change

Sustainable Innovations

Embracing a circular economy is key to tackling waste
Innovation in refillable formats extends across all beauty categories
Brands explore alternative packaging materials for the future
Upcycling food waste embraces the circular model beyond packaging
“Blue beauty” encourages brands to pay back environmental debt
Water scarcity encourages development of water-free formulae
Brands ensure supply chain traceability through farm-to-face
Conscious consumerism increases demand for cruelty-free beauty
Quest for sustainable innovations to accelerate post-crisis

Spotlight on Leading Beauty Players

Multinationals begin to rapidly ramp up sustainable actions
L'Oréal recognises its responsibility to drive sustainability
L'Oréal experiments with eco-friendly alternatives to plastic
Est é e Lauder looks towards a more sustainable supply chain
Shiseido unveils new beauty initiatives as part of sustainable goals
Significant efforts by Unilever to reduce the use of virgin plastic
Natura&Co continues to live up to reputation as a sustainable leader
Procter & Gamble experiments in refill innovations
Beiersdorf to publish industry standards for recycled plastic
Henkel tackles plastic waste and poverty in one with recycling scheme

Shopping Sustainably

Sustainability challenges more pronounced among retailers
Economic incentives and knowledge are key to address retailers’ lag
Beauty specialist retailers uniquely poised to push forward sustainability
Initiatives span inclusivity, vegan certification and eco-friendly packaging
Sustainability is part of department stores’ effort to redefine the channel
Other channels install refill stations, revamp packaging, form partnerships
Sustainability momentum still nascent in beauty e-commerce space
Leading e-commerce players test initiatives broader than beauty
Exploring COVID-19 impact on sustainability in beauty and personal care
Sampling to evolve while circular economy grows, driven by grocery

Key Challenges and Future Outlook

Environment-centred sustainability among the priorities in beauty
Sustainability to purpose challenges in beauty (1)
Sustainability to purpose challenges in beauty (2)
What should businesses focus on?
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