Premium Beauty and Personal Care in the US

PROSPECTS

Growth is driven by DTC entrants and premium line extensions

Premium colour cosmetics experienced a cycle of hyper-consumption over 2013-2017, with 2018 marking the waning of that cycle. Within this five year period, there was a surge in the number of premium colour cosmetics brands entering the market.

Clean beauty’s intersection with wellness drives premiumisation

Naturally-derived ingredients remain a priority, particularly amongst consumers who increasingly equate wellness with the consumption of “clean” products. However, the beauty industry’s definition of “clean” varies widely, ranging to “free-from” claims, to minimalistic formulations with as few ingredients as possible, sustainability (e.

Products for skin care routines and for specific parts of the face are popular

Premium skin care is forecast to register the highest current value CAGR in premium beauty and personal care in the forecast period, followed by premium colour cosmetics. Within premium skin care, two notable fast-growth categories include premium skin care sets/kits and premium facial care.

COMPETITIVE LANDSCAPE

Estée Lauder leads premium beauty and personal care

Estée Lauder led premium beauty and personal care in value terms in 2018, followed by L'Oréal USA and LVMH Perfums & Cosmetics USA. Estée Lauder’s strong position is due to its high-performing brands (Bumble & bumble, Jo Malone London and Tom Ford), the performance of its largest brands (Clinique, Estée Lauder and Mac) and its push for digitalisation.

Store-based channels revamp their premium beauty offerings

Over the years, many premium DTC brands launched in the bricks-and-mortar space, with a better than expected reception amongst consumers, such as the entry of Kylie Cosmetics in Ulta Beauty in November 2018. However, the expansion of premium beauty is strengthening across all channels, rather than only beauty specialist retailers.

Department stores focus on curation and personalisation

To reverse losses in the distribution share of premium beauty products, in the last few years department stores experimented with creating more meaningful beauty experiences. In 2019, Bloomingdales launched its main floor beauty department, which it recently relocated as part of a strategy to expand its premium brands such as Chanel, Tom Ford and Acqua di Parma.

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