The beauty and personal care industry is among the most dynamic, with over a quarter of new brands emerging in this space. According to Euromonitor International’s Innovation tracker, which monitors groundbreaking product launches across 50 major FMCG categories, this sector is constantly evolving. Observing these innovations helps companies anticipate consumer buying patterns and make well-informed strategic choices. Additionally, other fast-moving consumer goods (FMCG) industries look toward beauty and personal care as a model for engaging consumers with compelling product benefits.
Key Developments in Skincare and Haircare
In 2023, product development in beauty primarily centered around skincare and haircare. Brands introduced formulations designed to enhance both efficacy and overall well-being. Large corporations often debuted their innovations in the US, while smaller enterprises used their domestic markets for initial testing.
Ingredient-Focused Formulations Drive New Releases
Moisturizers and treatments accounted for the highest number of new product entries in the beauty and personal care segment, representing nearly 25% of developments in 2023, according to Euromonitor International’s Innovation tracker. Consumers increasingly seek natural skincare options, yet without standardized regulations on what qualifies as “natural,” ingredient transparency plays a crucial role in purchase decisions.
As a result, companies focus on incorporating highly effective ingredients in their formulations. The concept of ingredient-centric beauty significantly shapes product development and influences the introduction of new brands and product extensions.
For instance, Mary & May, a clean Korean beauty label, emerged in the UK’s online market in 2021. Data from Euromonitor International’s tracking tool, which analyzes brands across 32 global markets, highlights the brand’s commitment to transparency as a major factor in its success. Openly listing product components has allowed Mary & May to expand internationally, with nine sub-brands launched between 2021 and 2024.
The Rise of Holistic Wellness in Beauty
Beauty is now recognized as an essential aspect of overall wellness, prompting brands to reshape their portfolios to cater to consumers’ evolving health-conscious needs. This holistic wellness approach is particularly evident in haircare, where new products emphasize scalp and hair health. Conditioners and treatments saw the second-highest number of new launches in 2023, with nearly 150 new product entries. This trend is expected to contribute to a 3% compound annual growth rate (CAGR) in global retail value from 2023 to 2028.
Aveda, a brand known for its plant-based formulations, exemplifies this trend by integrating hair, skin, and body care with a wellness philosophy rooted in environmental sustainability. Between 2021 and 2023, Aveda introduced approximately 20 new sub-brands, including the Scalp Solutions line, which focuses exclusively on scalp health. Industry data suggests that most beauty innovation stems from brands expanding their product offerings, with over 90% of new launches being sub-brands.
Market Leaders Test Innovations in Major Beauty Hubs
According to Euromonitor International, the most valuable markets in beauty and personal care are also the most active in launching new products. Major brands introduce products in large consumer markets where there is a strong inclination toward trying new offerings, significant disposable income, and a diverse retail landscape that accommodates fresh launches.
In 2023, the US emerged as the most significant online retail hub for new beauty brands, reflecting its expansive consumer base. The US accounted for 22% of the global beauty and personal care industry’s sales. Alongside the US, other top markets for beauty product launches include Brazil, India, Germany, France, and the UK. While smaller brands typically experiment with releases in regional markets, larger corporations prefer to test new offerings before global rollouts.
For example, well-established brands like Drunk Elephant and Olay introduced multiple new product lines between 2021 and 2023. Their strategy involved launching several sub-brands first in North America before expanding into additional markets. US consumers are particularly receptive to new innovations, with nearly 60% expressing interest in experimenting with different products, according to Euromonitor International’s Voice of the Consumer survey conducted in early 2023.
Leveraging Innovation Insights for Future Growth
The beauty and personal care sector serve as a vital source of inspiration for product innovation across various industries. Companies closely monitor emerging beauty trends to identify consumer preferences and align their offerings accordingly. Insights from this industry can help businesses refine their own product development strategies by focusing on key attributes that resonate with buyers.
A comprehensive approach to wellness should be a central consideration for businesses, regardless of industry. Additionally, transparency regarding product ingredients has become a crucial factor in consumer decision-making. As customers increasingly demand openness, companies must prioritize clear labelling and disclosure to maintain trust and loyalty.
By staying attuned to beauty and personal care industry innovations, businesses can anticipate shifts in consumer expectations and adapt their strategies to remain competitive in an ever-changing market.
