Returning to Excel London for the first time since 2002, in-cosmetics Global has grown to three times the size, featuring nearly 800 exhibitors, with many using the show as a launch platform for their ingredients. The popular Marketing Trends presentations provided an all-encompassing perspective on key trends in global beauty, including what impact Brexit is likely to have on the UK and European cosmetics industry, the very latest cosmetics innovations from Korea, how digital and AI is changing the world of beauty and a focus on Halal beauty.
Changes in the global beauty industry
For the second year running, growth in global beauty has been driven by premium brands and Euromonitor predict that this sector will add $5bn in value over the next five years. Nicolas Micallef, senior analyst, beauty and personal care, Euromonitor International, pointed out that the US and China are expected to contribute 54% of this increase in premium revenue.
After a period of decline, Brazil and Russia have rebounded, the latter boosted by local beauty brands. South Korea, a hotspot for cosmetics innovation, has risen to become the world’s eighth largest market. Niche brands are having an impact globally, with brands such as Seeyoung, NYX, Smashbox, Bulldog, Rituals, Tom Ford and Kiko among the fastest-growing businesses.
Micallef identified some universal trends impacting global beauty. Less is more represents a redefining of consumer priorities to own less and declutter, while spending on indulgences, often sensorial ones. Holistic, Pure and Authentic, is further proof of this, as consumers believe that ingredients matter, whether they are natural, organic, gluten free, vegan or fermented. Brand examples include Kat van D, e.l.f, Bite Beauty and Inika. Shifting consumer priorities is opening up the world of consumer electronics (wearables, apps), a focus on consumer health and sporty apparel which is morphing into beauty. “Athleisure is expected to grow as it’s about having an active and social lifestyle, looking and feeling good,” stated Micallef.
Mintel’s Charlotte Libby and Andrew McDougall presented the company’s four key themes that are shaping global beauty trends. Active Beauty focuses on beauty brands formulated in the quest for fitness that ties in with the growth in gym membership and numbers of consumers who exercise regularly. Sweat Cosmetics’ mineral make-up with SPF and Yuni Beauty body and haircare products are designed to enhance the body’s performance and relieve stress head the athleisure trend in Sephora. Tarte is due to launch cosmetics and skincare as “athleisure for the face and yoga pants for the skin”. Damsels in Distress describes how consumers are seeking to de-stress and recharge using easy and quick means, such as grabbing “me-time” and re-energising on the go. The Danish term “hygge” encapsulates this and beauty brands are moving into this space, including Bjork & Berries bath and body products. Mintel envisages much innovation in this area, including calming packaging and drinks. Back to Basics continues this theme with a focus on declutter, detoxing and turning to multi-functional and customisable products to save money and space. Beauty Round the Clock is about fitting products into a beauty routine that are designed for specific times, such as speed-savers when commuting, products to cope with the stress of the workplace (eg blue light from computers, mobile phones and LED lighting), transitioning from office to social life and that work while sleeping.
Spotlight on Asia
Jan Jang, global beauty and personal care analyst, Mintel, discussed trends in South Korea, where facial skincare and complexion make-up represent 90% of new launches. However, growth is expected to slow as the market reaches saturation and the economy slows. Jang described words that denote beauty, including pure, fair, glowing, dewy, balanced and “chok chok” the glowing look after a bath or shower. K drama and K pop use product placements to promote products, such as actress Hye-kyo Song who wore Laneige two-tone lipsticks in a TV drama. Digital beauty content also impacts NPD, with beauty vlogger link-ups, including A’Pieu X Yoon Charmi and Etude House x Pony.
Fei Xu, market intelligence director, Information & Inspiration, discussed current colour cosmetics trends in Asia, where women are addicted to taking selfies, using technology and beauty products to achieve the perfect face. However, the latest trend is to create perfection without photoshopping and numerous products and sub-categories have been launched to this effect. Xu referred to the “apple zone boom”, highlighting the cheek-bones, which is the most important zone of the face in Asia. “Apple zone products are used to highlight, restore youth and create the desired heart shape of the face,” he stated. Tone-up cream is another Korean invention, a multi-tasking product that is invisible on the skin and combines skincare, suncare and base. Xu foresees many more hybrid products and greater “product hacking”, a term used by Asian bloggers to create their own products by mixing up existing ones.
Artificial Ingelligence (AI) is a hot topic invading all industries, including beauty and healthcare. Anastasia Georgievskaya, project manager, Beauty.AI & RYNKL, discussed how brands can achieve deep learning by means of databases of millions of images. “The database can predict molecules that exist and could be used to reverse the age of some tissues,” she maintained. Other uses for AI in beauty include tracking skin imperfections and the effects of pollution on the skin in order to determine a customised treatment for individuals.
Sean Singleton, managing director, Your Favourite Story, focused on ways in which to launch a beauty brand in today’s fast-moving digital world. Drawing on quotes from industry professionals, he cited Krista Madden, founder of the Beauty and the Dirt website, who said, “As soon as your product is in someone’s hands it’s online. You have little control over who where or what is said. Everyone’s opinion counts.” Mobile is key, having grown from 0.7% usage in 2009 to 50.3% in 2016. “But only 54% of companies are completely mapping out the customer journey,” commented Singleton. With video forecast to dominate consumer internet traffic by 2020, brands need to be mindful that consumers gravitate towards interactive experience. He stressed the importance of brand continuity as consumers are not naturally loyal.
According to Herbie Dayal, ceo & founder, KMI Brands Ltd, over the past 20 years, there have been major technological revolutions, such as the dot.com boom in 2000, but no one has made any money from them. From AI to VR, people worry if they should be involved in new digital technologies. “But it doesn’t make us better marketers,” maintained Dayal, who sees brand focusing too much on what is trending, rather than what drives the business and permanence. His checklist of areas for brands to focus on include the brand DNA (product, packaging, prices and experience), Augmenting values, emotive attributes and tone of voice, Tribe (who is your customer and how do they connect with you) and the business (sales, margin, overheads and profits).
Product category highlights
Skincare has been a trend setter for years with global retail sales of $400-$450bn and CAGR expected in the region of 3.5-4.5% by 2020, according to Kline. Nikola Matic, Director, Kline, described how anti-ageing will continue to be a growth driver, with new applications such as neuro cosmetics emerging. The mask category is developing into new areas, including bubble textures, the use of clay, charcoal and mud and food-based masks based on fruit extracts for their vitamin benefits. The second trend is anti-pollution claims as a result of environmental concerns, such as bluelight exposure from electronic items, leading to new products and applications. Specialty actives target a wide variety of performance benefits such as DNA protection anti-stress and skin firming/lifting. On the supply side, the top ten suppliers (including BASF, Dow Corning, Croda and Asland), represent 40% of the total value of the global personal care ingredients market.
Demand for sunscreen ingredients is changing due to different regulations and the trend towards broad spectrum formulations. Maria Coronado Robles, ingredients associate analyst, beauty & personal care & home care, Euromonitor International, described regional differences, with sunscreens providing less UVA protection in the US, compared to the UVA/UVB broad spectrum trend in Europe and Asia. While sunscreens are used predominantly in suncare products, in Asia they are also used widely in skincare and other product categories, such as colour cosmetics and haircare. Coronado Robles sees big opportunities in Western Europe for emollient esters and alcohol, followed by vitamins, copolymers and other ingredients such as plant extracts and peptides.
According to Kline, global manufacturer sales growth in at-home beauty devices has continued from 2011-2015, though at a slower pace compared to earlier years. The largest region is the US, where growth dipped in 2016, while Europe and Asia stayed strong. Ewa Grigar, project lead, Kline, described how cleansing, hair removal and anti-ageing devices account for most items bought globally, although skincare concerns vary by region. For example, in South Korea Lee Ji Ham Cosmetics’ LED Face Mask Deesse is the leading anti-ageing device (tying in with the face mask trend in skincare), while Michael Todd’s Soniclear Elite is popular with US consumers who are more likely to buy a device for cleansing. In Europe, hair removal is the largest concern, with products such as Remington i-Light Prestige Hair Removal Series. Some of the key 2016 trends include a growth in MINIatures, small but intense devices that have a role in introducing consumers to the device concept; apps such as Nu Skin’s genLOC Me web check app that provide a skin diagnosis; and local brands, such as Eyesel Creative, which is the fastest growing Asian company and represent sustainable competition to multinationals. Vloggers and the use of videos on branded websites are playing an increasingly important role in educating consumers.
Halal beauty is a growth category but is still considered to be niche by the global beauty industry. Stephane Moullec, managing director, Butterfly London, stated, “Halal is rooted in conservative attitudes, but beauty is about drawing attention to yourself,” he stated and gave recent examples of fashion brands, including Nike and Vogue Arabia, which are breaking down some of the taboos. Megan Powell, consultant, Butterfly London, discussed the trends in halal beauty and pointed out the tensions that exist between consumers and beauty. “The reason we are not seeing more halal brands is that halal certification is a barrier and there is a risk of alienating non-Muslims,” she argued, pointing out that halal brands lack the advantages of multinationals with big marketing budgets and also lack the heritage, prestige and link to fashion. “However, they could be a voice to bring social change and to educate consumers on ingredients and processes,” she said and identified a number of ways to talk about beautification. These include stressing a brand’s pure and ethical qualities, which can enable them to reach out to all consumers; and taking pride in the Islamic culture which has a tradition of beauty, such as the use of perfume and eyeliner. An example is Habibi, a modern cosmetics range based on traditional terracotta Berber make-up.
Round table discussions
Shortly before the in-cosmetics Global show began, the United Kingdom triggered Article 50, which means that it will leave the EU within two years. The implications of Brexit for the UK and the EU cosmetics industry were discussed by a panel of leading specialists from the CTPA, the UK’s cosmetics industry body and a representative from the CBI. The discussion was moderated by Dr Emma Meredith, director of science, CTPA. According Olivia Santini, head of regulatory & international services CTPA, the exit process will be complex due to the number of EU institutions involved and the relatively short time frame in which to agree on a wide range of issues. “Article 50 does not say anything about the future relationship between the EU and departing member state and this could take considerably longer than two years,” she predicted, highlighting the broad categories that need to be decided on, such as cosmetic products regulation, REACH, workforce mobility, international Free Trade Agreements, the Customs Union etc.
Anthony Robinson, principal adviser for EU negotations, CBI, stated that, after initial negotiations, he envisaged that the work will begin in earnest in September 2017. He believed the “divorce” to be relatively simple and hoped that a transition deal can be struck at the end of two years. Santini showed the cosmetic categories that the UK trades in globally and that it exports £2030.2m to the EU and imports £2,157.6m from the EU. Dr Meredith summed up that the CTPA is involved with MPs and the CBI and engaging with all relevant players to ensure that the UK cosmetics industry remains ahead of the curve.
Angelika Meiss, editor, COSSMA, moderated this year’s niche round table discussion, which included three skincare brands and their differing challenges. Dr Nitasha Buldeo, founder of Organic Apoteke, came up with the idea of a luxurious organic cosmeutical range, after watching her grandmother concoct her own recipes for skincare conditions in her kitchen. Years later Buldeo analysed these formulations and found she was onto something. She had no desire to create a brand, but wanted to make an emulsion that had the ability to penetrate into the deeper layers, that was safe, pure and effective. She married cosmeceuticals and organic and came up with the Organic Apoteke brand which sold in the US, Asia and the UK. However, it was tough going and in 2012, she took it out of retail and relaunched it as a professional-only line for use in spas. The focus is now on wellbeing as well as skincare.
Maleka Dattu launched her evidence-based skincare line, Merumaya, using actives that are proven to work in certain concentrations. She took an integrative holistic approach to skincare, viewing each skincare challenge on its merits and not in isolation. For example, the signs of ageing could include sensitivity and being prone to acne, but ingredients to treat these can fight each other, so she loaded the formulations with anti-inflammatories, as well as making them free from the sort of claims of miracles, overclaims and fear-mongering often seen in skincare products. “We talk about youthful ageing, not anti-ageing, which makes you feel bad about yourself,” stated Dattu, who wants to prove that it is not necessary to pay through the nose for truly effective formulations.
Corinne Morley, in-house beauty expert, Trilogy, works across innovation and education for the brand. She described the origins of Trilogy, starting in 2002 with rose hip oil, when the skincare category was awash with high tech brands. “Trilogy is about natural skincare formulations that can be even better than synthetic and to bring it into mainstream beauty,” she stated. The formulations all have a natural seal of approval and certification through Natrue, using the strapline, “maximum effect on the skin, minimum effect on the environment.”
The discussion turned to the challenges which each brand faced in carving out a niche. Dattu found the hardest thing was to distil her point of difference into one sentence. “Overestimate how much it’ll all cost and underestimate sales,” she advised to budding beauty brands. Nitasha stressed the importance of having a clear vision and believing in what you do. “You’ve got to expect you’ll be losing money for some of the time,” she said, adding that it is pretty normal not to make any money in the first four years. Trilogy trims costs by not having a high marketing spend and treating everyone as a potential customer. “Sampling is really important in getting them to try it,” she said. Angelika summed up by saying that passion is so important and can compensate for any money lost.
This year’s sustainability round table was moderated by Amarjit Sahota, founder & president, Ecovia Intelligence, with panelists Jayn Sterland, managing director, Weleda, Dr Michel Philippe, sustainable innovation manager, L’Oreal, and Chris Sayner, vice president, global accounts, Croda. From an ingredients perspective, Sayner described the increasing demands put on them to understand sustainability credentials, such as social accountability within the supply chain. “Sustainability is our DNA and the challenge as an industry is how to produce natural and organic ingredients that are sustainable.” Croda’s role as an ingredient supplier is to be proactive in creating a sustainable supply chain. “Reducing carbon is something our industry has to manage and face that’s a challenge in the next five years.”
Dr Philippe confirmed the importance of developing renewable ingredients, but first defining what a “green” ingredient means – it has a broader definition than “natural”. Jayn Sterland stated that over 80% of Weleda’s products are organic or bio-dynamic, which defines the brand’s unique positioning within the industry. Weleda sets up at least two new partnerships every year to grow ingredients. “Our key aim is to get social benefits at source to start building communities and developing a fair price,” she affirmed.
“Marketing blur” is a term used by Antoinette van den Berg, trend forecaster & art director, Future-Touch in her presentation that covered how our beauty ideals are always changing. What is acceptable now may not be in the future, such as our current desire to get rid of wrinkles which will become more acceptable as more women reject cosmetic procedures and products in favour of looking their age. Similarly, gender fluidity is become more acceptable and with that, the realisation that we all have the same desires to use the same products. Van den Berg forsees a move towards greater authenticity when consumers are accepted, whatever their age, gender or differences.
Marie Alice Dibon, owner Alice Communications, further explored this conversation, stating that brands should recognise that diversity is not about treating people differently, but “all it takes is inclusion.” For example, the pro-ageing trend accepts that age can still be beautiful. “It’s about defining feminine values beyond pure plastic beauty and using words like allure, elegance, charisma, glamour,” she maintained.
Jamie Mills, consumer insight analyst, GlobalData, took the conversation into product categories to show how younger consumers are the most proactive group when it comes to personal health, with food and drink playing a central role in terms of wellbeing. GlobalData has identified four key opportunities for cosmetic brands to harness this trend, which include using health food ingredients in formulations, developing ingestible beauty/grooming products based on fruit, vegetables and bee-derived ingredients, harnessing the “clean beauty” trend with products containing superfoods, probiotics, fresh, raw and fermented ingredients, and helping to promote active lifestyles with products for use before, during and after exercising. Mills predicted greater use of fresh, raw and cold pressed ingredients in beauty, while lifestyle bloggers could enhance the holistic appeal of such offerings.
Entering the Chinese market
Inna Fu, cosmetic safety assessor, Reach24h Consulting Group, provided a run-down on Chinese cosmetics regulation for brands looking to enter the Chinese market. The regulations are complex, covering safety & technical issues, cosmetic labeling, animal testing and the life cycle of products. Imported products need pre-market approval and brands must be aware of the large number of exclusions that exist. Whether marketing existing products or developing new ones for the Chinese market, companies much give themselves enough time to conduct all the necessary tests, procedures and paperwork.
Retailing and brand design
Nick Vaus, leading partner & creative partner, Dew Gibbons & Partners, began by sharing a cosmetics recipe taken from 2,000 years ago, which included many ingredients which are popular today, such as rose, almond oil, beeswax honey and snail secretions. It was a sobering lesson in what gets brands excited in terms of the latest ingredients. He talked about the incredible rise of natural and organic beauty and massive shift from abstract science towards ingredients and provenance, yet brands should be aware of the pitfalls. For example, using an ingredient as the name of your product can limit your audience and restrict NPD, but can give a brand credibility and position them as an expert in the field. Vaus talked about the importance of creating convincing narrative that is not clichéd, but is believable and has a strong connection with ingredients with provenance.
Helen Miller, managing director, Helen Miller Consulting, provided advice and recommendations on how to overcome retailers’ resistance to stocking a new brand. “The more you understand the other party, the better,” she advised. By meticulously going through the do’s and don’ts, a brand has a better chance of success. For example, she warned not to go in with a 50-slide presentation which does not have prices in the right currency or is full of irrelevant information. Key to success is learning the retail language such as the difference between profit or return or mark-up and net versus gross margins. “Propose a joint business plan,” advised Miller. “Show the buyer how to support your brand both in and out of the retail store.”
Lia Neophytou, associate analyst, GlobalData, revealed how 87% of millennials find their looks and appearance to be important and are influenced more by blogger and user reviews than brand promises.With 89% of millennials placing importance on wellness and health, this opens up an opportunity for health conscious products, such as make-up with SPF 50 for staying protected. Male grooming is another new trend with men seeking freedoms from gender norms. Another trend is the heightening of the in-store experience by using interactive experiences to appeal to millennials.
A future view from Peclers
Dominique Assenat, head of colour, beauty and accessory, Peclers, Paris, forecast three trends over the next two years. Chamane Nordique addresses a young Generation Z consumer who are not just eco-concerned but eco-activist. Global warming will inspire alternative approaches and there will be an interest in cold preservation ingredients and those with a spiritual dimension. The Minimal trend is about more simplicity. Less is more but has increased hidden augmented benefits. In beauty, a holistic approach to beauty via food, athleisure and exercise will combine efficiency and comfort; made to measure solutions will lead to bespoke DNA skincare and perfect fit make-up.
COSSMA, June 2017