- Large brands trial new products in the US while smaller outlets use their local markets as a testing ground
- ‘Ingredient-led’ moisturisers and treatments saw the most brand and sub-brand launches
- Holistic wellness trend pushes Beauty and Personal Care brands to innovate to meet consumer health needs
- BPC acts as incubator for other companies in the fast-moving consumer goods space as companies watch for consumer trends
LONDON, UK – More than 25% of all brands launched are in the beauty and personal care (BPC) industry, according to Euromonitor International’s Innovation tool which tracks new product development across the 50 most disruptive FMCG categories.
Innovation in beauty over the last year has been concentrated around key skin and hair care categories. New product launches focused on effectiveness and wellness benefits, and often premiered in the US for large brands, while smaller outlets used their local markets as a testing ground, revealed Egle Tekutyte, Innovation Consultant at Euromonitor International.
Tekutyte said: “Following the evolution of innovation in Beauty and Personal Care (BPC) can help businesses understand and respond to consumer purchasing preferences and help them make informed strategic decisions. Additionally, other fast-moving consumer goods (FMCG) industries seek inspiration from beauty and personal care and hope to learn from how BPC speaks directly to consumers.”
‘Ingredient-led’ beauty concept leads innovation in moisturisers
Moisturisers and treatments were the most launched new brand and sub-brands in the industry, accounting for almost a quarter of new product development in BPC last year, according to Euromonitor’s Innovation tracker.
Tekutyte said: “Consumers look for natural facial care, but in the absence of a standard claim for natural, ingredient-level information helps better inform their purchasing decisions.
“Incorporating highly effective ingredients is a focus for industry players globally. The concept of ingredient-led beauty is key in new product development and drives the launch of new brands and product lines.
“Our Innovation dataset shows Mary & May is a clean K-beauty skin care brand which first appeared on the digital shelf in the UK in 2021. Ingredient transparency is among the brand’s key unique selling points, increasingly important for consumers. Openly disclosing ingredients of its products contributes to Mary & May’s success in expanding globally and launching nine sub-brands in the tracked markets over 2021-2024.”
Holistic wellness trend pushes BPC brands to innovate to meet consumer needs
With beauty increasingly thought of as part of holistic wellness, brands are shaping their traditional product lines to address consumers’ emerging health needs.
Tekutyte said: “With holistic wellness gaining emphasis in hair care, new products increasingly focus on and promote hair and scalp health. As a result, conditioners and treatments have become an important playground of innovation and welcomed almost 150 new product launches - the second highest number in the industry last year.
“The trend is expected to contribute to the positive outlook of the category’s development, projected to register a 3% CAGR in global retail value terms between 2023-2028.
“For example, Aveda is globally recognised for its natural, plant-based products, and follows a holistic beauty approach, connecting hair, skin and body care with wellness in an environmentally friendly way.
“Over the last two years our Innovation tool shows Aveda launched close to 20 new sub-brands, including an entire new line, Scalp Solutions, dedicated to scalp health.
“More than 90% of new product development is driven by sub-brand launches, and innovation in BPC mostly comes from brands expanding their product portfolios with new lines.”
Innovation occurs in largest BPC markets with big brands testing products in the US
Euromonitor Innovation data reveals that the biggest BPC markets in value terms are the most active in producing new products and that launches occur in large markets, where consumers are open to trying new alternatives, have high levels of disposable income to experiment, and have a varied retail base where brands can showcase their latest products.
Tekutyte said: “The US market has the highest number of new brands appearing from online retailers, which is not surprising considering its size and vast consumer base.
“Last year, the US accounted for 22% of the global value sales of BPC. After the US, most product launches in beauty take place in Brazil, India, Germany, France and the UK.
“Small brands innovate more dynamically and launch new products in their local or regional markets. However, bigger players tend to test their products first before expanding to multiple markets.”
Spotlight is on BPC to inform consumer trends for other industries
Beauty and personal care serves as an incubator for new product development. Companies across the FMCG space keep an eye on new brand launches in this industry to understand which features or attributes align with consumer needs.
“Such insights enable them to identify areas for future innovation within their own business. Companies should think about the concept of wellness holistically and consider how it manifests itself in the industry where they operate. Additionally, they should openly disclose the ingredients of their products as consumers increasingly demand transparency on this front,” said Tekutyte.
For further insights into tracking new brand and sub-brand launches across the global digital shelf, read Euromonitor’s article Strategies for Success in Innovation and New Product Development and visit the Innovation product page.
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