In a January 2020 report, Fior Markets predicted that the global beauty and personal care industry would be worth $756.63 billion by 2026, evolving with a compound annual growth rate of 5.81% from 2019a. It is possible that markets may near recovery by next year, but in the eyes of intelligence agency McKinsey the short-term prognosis is not good—they suggest that global beauty industry revenues will likely fall 20-30% this year from pre-COVID-19 estimates, and that further lockdowns in the United States come autumn could see the decline plummet as far as -35%b.
The Lipstick Effect
Not every segment has been suffering in the same way. We know that personal care saw a marked uptick at the start of the COVID-19 pandemic as consumers turned to bathroom comforts as fiscally responsible, accessible indulgences that added immediate and potent emotional value, complementing newly re-strategized regimes of hygiene, wellness and conscious consumption, evidenced by Q1 growth from Colgate-Palmolive and Johnson & Johnson.
High luxury, in contrast, saw big losses not only as a result of store closures (and the sector’s reliance on face-to-face persuasion and human touches) but also declining consumer appetite dented by fear, uncertainty and a lack of need for ostentation. In a May report, consultancy Bain & Company forecast that 2020 sales of luxury goods will be down almost 30% ($100 billion in losses) by the end of the year from a 2019 benchmarkc.
For the full article, please check out Perfumer & Flavorist's October 2020 issue.