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PREMIUM OPPORTUNITIES: US MARKET TRENDS AND THE CHANGING CONSUMER LANDSCAPE
AMANDA HARTZMARK SEPTEMBER 2016
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OVERVIEW OF GLOBAL AND US MARKETS
PREMIUM AND THE NEW CONSUMER CONTEXT
KEY GROWTH DRIVERS IN COSMETICS, SKIN CARE AND FRAGRANCES
CONCLUSIONS
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OVERVIEW OF GLOBAL AND US MARKETS
PREMIUM AND THE NEW CONSUMER CONTEXT
KEY GROWTH DRIVERS IN COSMETICS, SKIN CARE AND FRAGRANCES
CONCLUSIONS
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Colour cosmetics, hair care and skin care lead global sales OVERVIEW OF GLOBAL AND US MARKETS
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North America sees highest regional growth OVERVIEW OF GLOBAL AND US MARKETS
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Premium beauty defies expectations in a cool industry climate OVERVIEW OF GLOBAL AND US MARKETS
4% CAGR for global premium beauty and personal care growth to 2020
50% of total premium beauty revenues by 2020 will be generated by US and China
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Premium helps U.S. outpace global beauty growth across categories OVERVIEW OF GLOBAL AND US MARKETS
2015 U.S. Beauty & Personal Care Value Sales and Growth by Category
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OVERVIEW OF GLOBAL AND US MARKETS
PREMIUM AND THE NEW CONSUMER CONTEXT
KEY GROWTH DRIVERS IN COSMETICS, SKIN CARE AND FRAGRANCES
CONCLUSIONS
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Consumers flex their power PREMIUM AND THE NEW CONSUMER CONTEXT
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Consumer changes transforming beauty PREMIUM AND THE NEW CONSUMER CONTEXT
Lifestyle
Diversity
Niche products
Digital
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Fitness Paramount Sustainability & Ethical Products
Trends from Foods
Focus on active, balanced lifestyle promotes holistic approach to beauty PREMIUM AND THE NEW CONSUMER CONTEXT
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13 PREMIUM AND THE NEW CONSUMER CONTEXT
Diversity has spurred growth of niche products that offer better results based on age, culture, ethnic group
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Lifestyle shifts and diversity inspire new product concepts PREMIUM AND THE NEW CONSUMER CONTEXT
Sensorial: cooling, energising, calming,
mood-enhancing
Multipurpose
Active-wear
Urban-wear
Active lifestyle
Small pack sizes
On-the-go formats
Natural ingredients
Activated/ bamboo charcoal
‘Clean’ label
Food ingredients: oats, nuts, yoghurt,
rice, honey
Lighter textures
Easy application formats
Solution-based: anti-redness, anti-strain, anti-stress,
detoxifying
Healthy
Ethical
Holistic
Ingredient inspiration
Product positioning
Product benefits
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50% of survey participants in the US said the bought products that were suited especially for their hair type
PREMIUM AND THE NEW CONSUMER CONTEXT
Niche brands buoyed by consumer demand for unique, customized products
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Digitally influenced consumers tend to have more extensive routines
PREMIUM AND THE NEW CONSUMER CONTEXT
Note: Minimalists (0-3 skin care products used weekly) , Moderates (4-7 skin care products used weekly), Extensives (8-14 Skin care products used weekly)
Note: Minimalists (0-1 hair care products used weekly), Moderates (2-3 hair care products used weekly), Extensives (4-7 hair care products used weekly)
Note: Minimalists (0-1 colour cosmetics products used weekly), Moderates (2-6 colour cosmetics products used weekly), Extensives (7-16 colour cosmetics products used weekly)
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Consumers’ priorities have been redefined PREMIUM AND THE NEW CONSUMER CONTEXT
Digital & Diversity =
Innovation
Lifestyle =
Multi-benefit
Experience & Niche
Products =
Premium
The New Consumerism and Premium
Products
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KEY TRENDS IN US AND GLOBAL MARKETS
PREMIUM AND THE NEW CONSUMER CONTEXT
KEY GROWTH DRIVERS IN COSMETICS, SKIN CARE AND FRAGRANCES
CONCLUSIONS
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19 KEY GROWTH DRIVERS IN COSMETICS, SKIN CARE AND FRAGRANCES
Eye, face and lip products see highest growth in colour cosmetics
Premium Mass
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20 KEY GROWTH DRIVERS IN COSMETICS, SKIN CARE AND FRAGRANCES
Premium products and BB&CC creams lead in facial cosmetics
Premium Mass
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Sephora introduces South Korean BB Cream brand
Dr. Jart+ to the U.S.
Over 15 BB/CC creams launch in the U.S
BB/CC Creams grow 61% (constant value)
Packaging innovations launch
Innovation spurs growth in premium facial cosmetics KEY GROWTH DRIVERS IN COSMETICS, SKIN CARE AND FRAGRANCES
2011
2012
2013
2015
93% 17% US Premium BB/CC Creams CAGR 2011-2015
US Premium BB/CC Creams CAGR 2015-2020
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22 KEY GROWTH DRIVERS IN COSMETICS, SKIN CARE AND FRAGRANCES
Premium mascara, eye shadow and liner push eye category forward
Premium Mass
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Eye cosmetics: Safety and longevity drive growth KEY GROWTH DRIVERS IN COSMETICS, SKIN CARE AND FRAGRANCES
2015 Growth
• Premium Mascara – 11% • Premium Eye Shadow – 7% • Premium Eye Liner/Pencil – 11%
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24 KEY GROWTH DRIVERS IN COSMETICS, SKIN CARE AND FRAGRANCES
Trends spur growth in premium and mass other eye makeup
Premium Mass
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Brow cosmetics: Boldness drives growth KEY GROWTH DRIVERS IN COSMETICS, SKIN CARE AND FRAGRANCES
Boldly Bushy Boldly Defined
Ma
yb
ell
ine
Ne
w Y
ork
Ey
e S
tud
io B
row
De
fin
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Fil
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6/2
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Cli
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Ju
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sin
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-On
Sty
lin
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—8
/20
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A
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/20
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Bu
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9/2
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26 KEY GROWTH DRIVERS IN COSMETICS, SKIN CARE AND FRAGRANCES
Premium lipsticks and liner lead lip category
Premium Mass
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Variety drives growth in lip cosmetics KEY GROWTH DRIVERS IN COSMETICS, SKIN CARE AND FRAGRANCES
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Skin care: Premium growth with a twist KEY GROWTH DRIVERS IN COSMETICS, SKIN CARE AND FRAGRANCES
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Korean Beauty innovations still drive growth Successful skin care products feature natural, innovative ingredients Niche brands continue to gain market share
Innovation still key, ingredients king in skin care KEY GROWTH DRIVERS IN COSMETICS, SKIN CARE AND FRAGRANCES
Formulations Textures Formats &
Technology
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Premium skin care buyers more results-oriented, experimental KEY GROWTH DRIVERS IN COSMETICS, SKIN CARE AND FRAGRANCES
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Fragrance: Premium niche brands drive growth KEY GROWTH DRIVERS IN COSMETICS, SKIN CARE AND FRAGRANCES
Personalization through layering
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Jo Malone and Tom Ford exemplify layering & niche trends KEY GROWTH DRIVERS IN COSMETICS, SKIN CARE AND FRAGRANCES
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KEY TRENDS IN US AND GLOBAL MARKETS
PREMIUM AND THE NEW CONSUMER CONTEXT
KEY GROWTH DRIVERS IN COSMETICS, SKIN CARE AND FRAGRANCES
CONCLUSIONS
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Power to premium CONCLUSIONS
2011 2015 2020
Premium Value Sales ($US billion, constant)
$20 $23 $28
Premium Penetration (% Value)
32% 34% 37%
US$5 Billion U.S. premium beauty growth through 2020
Premiumisation of U.S. Beauty and Personal Care Market Forecasted to Continue
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Future of U.S. premium beauty: Growth-driving categories CONCLUSIONS
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Fragrances: Growth categories CONCLUSIONS
2015-2020 Premium Fragrance Growth (constant value) = US$1 Billion
Premium Unisex 2015-2020 CAGR:
15%
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Strong digital influence on premium purchases
CONCLUSIONS
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Macroeconomic Factors Evolving Retail Channels Success of Niche Brands
Evolving trends and opportunities CONCLUSIONS
Source: Mike Mozart
• Newly-flush consumers seek affordable luxury
• Premium beauty: Gateway purchase
• Rise of masstige
• Well-informed consumers
• Physical customer engagement
• Internet retailing, the great equalizer
• Millennials usher in era of individualism
• Foreign brands garner attention
• Acquisitions: Large companies take note of niche
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Quality of products remains important
Focus on wellbeing, health
Uniqueness prized
Consumer experience in store and online is the key to future growth
CONCLUSIONS
Key takeaways
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THANK YOU FOR LISTENING
Amanda Hartzmark, Ph.D.
www.euromonitor.com
¡MUCHAS GRACIAS!
Thank You!
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