Premium Beauty and Personal Care in Portugal

PRE-COVID-19 PERFORMANCE

Economic recovery heralds rejuvenation in premium beauty and personal care

2019 saw the premium segment show strong signs of recovery after several years of weakened sales. The economic crisis of the 2010s led to a shift in spending from premium to mass as consumers traded down to basic products.

Premium brands step up promotions, innovations and accessibility

At the same time that disposable income rose, premium prices also became more affordable and more innovative, with some premium brands working to drive volume sales through more affordable pricing and others focusing on communicating their added value.

L’Oréal holds onto its strong lead

L’Oréal was also the clear leader in premium beauty and personal care with a share of 26% in 2019, stable on 2018. The company’s leadership at this end of the market was underpinned by a portfolio of brands including Lancôme, Vichy, Biotherm and Helena Rubinstein, with Biotherm showing an increase in share in 2019.

2020 AND BEYOND

COVID-19 impact

Sales of premium beauty and personal care are expected to be stagnant in 2020 in 2019 constant value terms in light of the impact of COVID-19, growing by just over 0%. The COVID-19 pandemic put the brakes on the previously fast growth in premium products that had been led by economy recovery, due in part to encroaching economic uncertainty and some streamlining of purchasing habits as consumers focused on stocking up on essentials instead of luxuries.

Affected products within premium beauty and personal care

Most products in premium beauty and personal care showed slowing growth during the COVID-19 lockdown in line with the closure of workplaces and social events. The hardest hit areas mirrored those in mass beauty and personal care, with constant 2019 price falls in evidence in colour cosmetics, fragrances and sun care, all areas badly impacted by the switch to spending more time at home.

Recovery and opportunities

While 2020 is expected to pause the trend towards premium products, this pause ie expected to be short-lived, with annual growth rates accelerating year on year thereafter throughout the forecast period. While Portugal will suffer an economic impact from COVID-19, this is not expected to be severe, and the broad trend towards trading up is forecast to bounce back from around 2021 as the market continues to polarise between value products and premium brands.

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