Industry Focus: Personal Care & Cosmetics Products (Part II)Industry Focus: Personal Care (II)
Despite declining rates of global economic growth, the Personal Care and Cosmetics industry continues to expand, buoyed by a combination of a growing middle class in many emerging markets and the entry of new consumer groups including increases in men’s grooming and an increased focus on products for children and babies. These increases are further supported by a wave of innovation in the industry, with the increasing introduction of new and innovative ingredients drawing from bio and nanotechnology and a renewed focus on botanicals coupled with new textures and product delivery formats. This wave of innovation in formulation and new delivery formats ranging from face masks to cushion compacts to eye brow kits is driving consumers to increase the number of products in their make-up bags and skin care regimes. The sector is also driving a larger trend in consumer products and services of personalization and unique product engagement. From personalized digital tools that enable consumers to try new eye shadows virtually to self-mixing, make up kits, the industry is increasing the experiential aspect of products. Consumers no longer have to go to a spa or beauty salon to experience the latest treatments, with an increasing number of products and devices that allow for salon-quality results to be achieved at home. This diversification and interest is customization is also reflected in the emergence of a number of indie or smaller companies and is reflected in product market share. For example in the U.S. between 2009 through 2014, the market share of products shifted by 2.9% to smaller brands.
The diversity of products covered in the sector is reflected in Table V, which provides an overview of the primary categories for the sector. Globally, skin care continues to be the largest product category, with 24% of the market, followed by hair, color cosmetics, fragrances, oral care, and bath and shower products. In this section we provide a high level overview of the product trends in some of the fastest growing product categories, which offer high potential opportunities for U.S. manufacturers
Table VI: Global Market for Personal Care and Cosmetics
|Product Categories||2015 Estimated Growth||3 Year Average Growth||2015|
|Baby and Child Specific||$16,897.43||4.02%||3%||6.49%|
|Bath and Shower||$42,792.45||3.02%||9%||5.24%|
|Total Global Market||$489,922.31||3.22%||100%||5.37%|
Baby and Child Care Products (Top Export Opportunity)
Baby and child specific products are the fastest growing product category globally with 4.02% growth in 2015. While this category is still relatively small—at only 3% of the total global market—it is expected to continue, given both the growing interest in many emerging markets by parents to pamper their children via child-specific products. It also is a highly competitive category for imported products, given consumer sensitivities to the safety of these products, due to concerns over the safety and high levels of adulteration of personal care products. The baby and child care products category is also relatively new in many markets with fewer players; therefore offering a significant opportunity for U.S. companies. Moreover, U.S. branded products also benefit from their strong reputation and track record of safety.
Men’s Grooming (Top Export Opportunity)
With the metrosexual movement and increasing expectations and interest in men’s fashion and correspondingly grooming habits over the past decade, this product category is one of the fastest growing globally both in terms of global sales and U.S. exports per Tables II and V. These products are becoming increasingly specialized with all men’s lines. These products cater to male sensibilities in terms of packaging, fragrance, as well as offering an increasingly array of products. In addition to skin care and general grooming, there is an increasing array of color cosmetics for men, such as tinted moisturizers, correctors for under eye shadows or blemishes and nail polish.
Increasingly many women globally are picking up on the Asia trend of using multiple skin care treatments daily, as well as multi-function products which incorporate for example color, sun screen and moisturizer. This growing interest in skin focus on skin care is also reflected in U.S. exports, with skin care products exports growing by 7% over the past five years and 24% over the past three years in terms of total global demand. Cosmeceuticals, products which combine cosmetic and pharmaceutical features such as acne treatment or anti-aging, are also increasingly popular.
Hair Products (Top Export Opportunity)
Niche and premium hair products are among some of the fastest growing segment for U.S. exports globally, with U.S. hair products exports up 4.8% over the past five years. As illustrated in Table VI below this growth is driven primarily by innovations in colorants, shampoos and other specialized hair care products such as smoothing oils, conditioners, color protection treatments, dry shampoo and waxes. Multi-step hair regimes are also increasingly common. In this segment, similar to many others, it is important to look at regional trends, as the products in demand tend to correlate to local environmental conditions, hygiene habits, etc. For example in hot and dry environments such as the Middle East, there is a focus on products that nourish and repair hair. This category also exhibits some of the strongest interest in the environmental footprint of products, given the opportunities to save on water and energy use.
Table VII: US Exports of Hair Care Products 2011-2015
Green or Natural Products (Top Export Opportunity)
Across product segments, there is a growing interest among consumers in products formulated with “natural” or organic ingredients. The sophistication and functionality of this segment of the market continues to grow as companies are producing high quality ingredients with greater traceability and purity, as well as using biotechnology and other technologies to improve product quality. Increasingly these natural formulations are replacing ingredients in product categories that were once dominated by synthetic ingredients, such as emollients, surfactants and colorants. Global data on this trend, in terms of global growth in demand and U.S. export trends is not available. A study of the U.S. market completed by Kline and Company in 2015 found that natural products and ingredients are among the fastest growing segments in the market, with products consisting of primarily natural ingredients comprising 25% of the total market currently. This trend is also reflected in Table 2, in the growth in U.S. exports of essential oils, which also reflects this larger industry trend. There is also increasing localization of this trend with products incorporating botanicals grown in a given region, as well as the incorporation of medicinal or nutritional ingredients such as aloe, milk and honey. Another trend is the incorporation of ayurvedic and other traditional medicines.
Color Cosmetics are the third fastest growing product category for U.S. exports, with demand up by 7% from 2010 through 2015. Hot products continue the focus on evening out skin tone, with color correcting creams and light weight foundations and tinted moisturizers growing in popularity. Some of the fastest growing product categories are lipsticks and rouges. Given the popularity, particularly of color cosmetics, large international markets are often saturated with larger branded products that are of high quality as well as color adapted for local preferences and skin tones, making these more competitive markets for U.S. companies to enter.
Table VI: US Exports of Hair Care Products 2011-2015
Perfumes, Toilet Waters and Fragrances
Finished perfumes and toilet waters are a less competitive product category for U.S. companies with U.S. exports declining and the majority of fragrance houses based in Europe. However, the growth in this category globally of 10% over the past three years, means it should not be ignored. U.S. exports of fragrances inputs are also growing, like due to the use of fragrances in heavily scented personal care products such as personal toilet (bath washes, deodorants and shampoos).
- Given the popularity, particularly of color cosmetics, large international markets are often saturated with larger branded products as well as high quality locally made products, making these markets very difficult for small to medium sized U.S. companies to enter.
- Additionally, cosmetics labeling, regulatory, and registration requirements vary widely from country to country, even within the same region, making compliance and registration burdensome for small to medium sized U.S. personal care and cosmetics companies.
- Strong marketing support and resources (financial, staff time and focus) for establishing a brand is often needed in international markets, as most markets have a large number of well-established and branded products. U.S. companies entering a market for the first time often have to invest in branding either through their own direct efforts or in unison with a partner/distributor.
- Potential for gray market sales and diversion, particularly for well-known brands
- Managing and protecting intellectual property is a constant challenge
- Natural Products Expo West – http://www.expowest.com/ *
- Cosmoprof Worldwide Bologna – http://www.cosmoprof.com/*
- Cosmoprof North America – http://cosmoprofnorthamerica.com/*
- World of Beauty Show – http://www.worldofbeauty.eu/ *
- Cosmoprof Asia – http://www.cosmoprof-asia.com/ *
- Premiere Beauty shows: https://www.premiereshows.com/ (
- HBA Global (NY) - http://hbaglobal.packagingdigest.com/
- ISSE show: http://probeauty.org/isselb/
- International Beauty Show (Las Vegas): http://www.ibslasvegas.com/
- International Beauty Show (NY): http://www.ibsnewyork.com/
- International Esthetics, Cosmetics, and Spa Conferences (NY, Las Vegas, FL): http://www.iecsc.com/
For More Information
Senior International Trade Specialist
U.S. Commercial Service – Ontario, California
U.S. Department of Commerce
International Trade Administration
909-390-8469 (office) 909-717-1811 (mobile)
Market Access Issues and Market Research
International Trade Specialist, Personal Care and Cosmetics
Office of Materials Industries
U.S. Department of Commerce
International Trade Administration
1401 Constitution Avenue, NW Room 10010
Cosmetics and Toiletries Market Research