Redefining the “Lipstick Effect”– Examples of Recession-Proof Categories When an economy enters troubled waters, this does not spell bad news for all categories. “Affordable luxury”, for example, tends to perform well in a recessionary environment. This trend became known as the “lipstick effect”, a term coined by Leonard Lauder, Chairman of Estée Lauder, at the beginning of 2001 when he observed that lipstick sales tend to be inversely correlated to economic health. While lipstick sales did not withstand the recent recession, there is some evidence that the “affordable luxury” effect is still present, but manifesting itself in different categories over time. Figure 1: Response to Recession in Developed World Source: Euromonitor International (Passport Industries) Note: Industry dynamics during the 2008/2009 downturn. Did the Lipstick Effect Fail the Test of Time? Whether by accidental correlation or strong underlying psychological/economic motives, lipstick sales have historically performed well during slowdowns and equally poorly when an economy was strong.
CTPA - Key facts Key Facts about the Cosmetics Industry Historical use of cosmetics Cosmetic products have been in existence for thousands of years – In 400 BC, Greek Olympic athletes covered their bodies with a ‘sunscreen’ mixture of sand and oil to protect their skin from the sun! The Chinese Cho Dynasty (600 BC) used gum, egg whites, gelatine and beeswax to create nail varnish.The use of henna as a hair colorant was first recorded around 1400-1500 BC.A soap formula was found written on a Babylonian tablet around 2200 BC.Ancient Romans used a mixture of soil and water in their hair, rolled with textiles and baked it in the sun to create temporary waves.In 5000 BC the Egyptians made a bath powder from myrhh, the powdered ashes of ox hooves, powdered and burnt eggshells and pumice.Use of perfume dates back to the beginning of mankind; the first perfume bottles were found in the Mediterranean in 7000 BC. (small, medium-sized enterprises)
Into the red: 'lipstick effect' reveals the true face of the recession | Business Some say hemlines and heels rise and fall with the state of the stockmarket. But for those who really want to know how bad things are there is only one item that counts: lipstick. When times are tough, consumers stop spending on big ticket items. Car sales are down by a third; the drop in demand for mortgages has taken its toll of spending on carpets and furniture. But, according to one City economist, rather than lose the spending habit consumers simply trade down to cheaper items to cheer themselves up. Dhaval Joshi, analyst with RAB Capital, said that the recent sales figures from the world's big cosmetic companies - L'Oréal, Beiersdorf and Shiseido - confirm that the so-called lipstick effect has returned as the global economy has headed into its first synchronised downturn since the early 1980s, with consumers increasing their spending on cosmetics even while economising on everything else. In the first half of the year, L'Oréal showed like-for-like sales growth of 5.3%."
Beauty and Personal Care in the United Kingdom Beauty and personal care continues to grow The UK beauty and personal care market continued to grow in 2014. This was thanks to a number of categories in which both economy and niche premium brands reinvigorated sales through new formats and multi-functional products, creating intense competition for a slice of the market. An increasing obsession with image has intensified the desire of UK consumers for a consistently well-groomed appearance. A new younger demographic of young teen and tween consumers, particularly influenced by social media, is also interested in beauty and personal care products as a result of growing social pressures with regard to appearance from a younger age. Premium segment outperforms the mass segment Premium beauty and personal care outperformed the mass segment in 2014. The sweet smell of success for fragrances In 2014, fragrances was the best performing category. Reasonable outlook for beauty and personal care Samples (FAQs about samples): Overview
Color Science - P&G Beauty&Grooming | History of Makeup and Color While the cosmetics industry regularly produces new products, makeup itself is anything but new. Since the dawn of time, women (and men) have applied a wide variety of products to enhance their faces and improve their natural beauty. Research shows that human beings have been using makeup for over 50,000 years. Neanderthals used yellow foundation-type pigments and red powders for ritual purposes. In the 4th century B.C., upper class Egyptian women applied scented oils, creams made from the fat of sheep and eye paint. Sarah Vickery, P&G Beauty & Grooming Principal Scientist, discusses how the Color Science program allows P&G Beauty & Grooming scientists to create natural-looking skin foundation shades and vibrant color cosmetics schemes that enable women to convey certain messages about themselves to others. Similar to the Egyptians, First Century Romans also used kohl as an early form of eyeliner and mascara. The makeup industry as we know it today came to life in the 1900s. References
British beauty means business The industry is stepping out of the shadows of London Fashion Week with a new initiative From left: Lime Basil & Mandarin Cologne, Jo Malone; Aoud Parfum, Roja Parfums; LP No9 For Women, Penhaligon; Royal Arms Eau de Parfum, Floris; Lip Glow in Pink Sweet Pea, Burberry For an industry that is based on building confidence, the British beauty business has always suffered from low self-esteem. The £17bn industry, which employs 1m people in the UK and is forecast to grow 16 per cent by 2016 (according to Ernst & Young), has, ironically, long been seen as the plainer younger sibling of fashion. As facialist Amanda Lacey says, “Fashion has been the bigger sister, and beauty has been pushed to the bottom of the pile.” This may be about to change. “People were not aware of the size of the contribution of beauty business,” says Carol Bagnald, commercial director at HSBC, which is co-hosting the event. Caroline Neville, chairman of CEW UK, supports this view. www.rojadove.com www.jomalone.co.uk
Consumers Need to Push Sustainability in Order for Beauty Brands to Follow Suit | GCIMagazine.com Posted: December 2, 2013 “Consumer behavior needs to change for sustainability” was one of the key messages from the recent European and Asia-Pacific editions of the Sustainable Cosmetics Summit. More than 150 senior executives convened at each edition in Paris and Hong Kong to discuss key sustainability issues affecting the beauty industry. A number of speakers suggested that consumer behavior was becoming a major barrier to sustainable development of the beauty industry. Although operators are implementing a raft of sustainability initiatives, consumer education and recognition of such remains low. Furthermore, lack of consumer demand for green products and ingredients was discouraging brands to make greater commitments. In a paper presented at the event, the Union for Ethical BioTrade showed awareness of biodiversity and green issues is rising in Asia. Consumer awareness is also a major issue in Europe.
Beauty Market Research in UK - npdgroup.co.uk Since 1996, the prestige beauty industry has relied on NPD’s comprehensive beauty market research and business solutions to deliver insights into what is selling, where, why, and at what price. Our research includes information for the U.S., Canada, France, Italy, Mexico, Spain, and U.K. beauty markets. It helps companies address the emerging trends, needs, and behaviours of the next generation of beauty consumers. We monitor global beauty industry trends – from the “big picture” down to the category, geographic region, and store levels. We can even help you look for opportunities or evaluate pricing strategies. How do we do it? BeautyTrends BeautyTrends® retail tracking measures the performance of the U.K. prestige beauty market. Monthly and weekly data is available. For more information, contact us. Beauty Multi-Country Topline Report Regular Price and Promotion Price Assessment (PPS) Mathilde Lion Director and Industry Analyst Beauty, Europe
Europe Industry Watch Europe Cargill's cocoa and chocolate business has made a significant investment to expand its cocoa liquors capabilities in its plants in France and Germany. The move comes as it looks to meet growing consumer demand for organic and sustainable confectionary products. According to Cargill Cocoa & Chocolate's Managing Director Philippe Huet, 'this major investment in our cocoa liquor capabilities will enable us to meet growing customer demand for premium and organic chocolate products. These liquors are used in our wide range of chocolate recipes and in our organic certified cocoa butter and powders.' The investment in Rouen, France, focuses on enhancing and expanding the Fine Flavour range of cocoa liquors. The plant in Berlin, Germany also plays an important role in the production of specialty liquors for the chocolate market and the investment significantly increases its capacity in response to additional demand for quality liquor. Source: News Release / OM Source: Portal Spozywczy