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Picture-Perfect: Predictions for the Cosmetics Industry in 2021

Kristin Marshall, Analyst & Drishti Masand, Analyst
April 23, 2021

The world of beauty and personal care is commonly associated with fast-moving fads that keep R&D teams on their toes. While it is necessary to keep up with consumers' rapidly evolving attitudes, it is also helpful to take a step back to identify the broader themes behind them in order to help focus innovation efforts, be more proactive than reactive, and possibly even shape future trends to come. There are three big-picture themes we see impacting beauty and personal care in 2021 and beyond.

Theme #1_ Sustainability  (1)-1

As all brands know, millennial and Gen Z consumers want products that are better for the planet. Sustainability in cosmetics goes beyond ingredients and includes how products are packaged, transported, used, and disposed of. Key trends here include:

  • "Free-from" and minimalist ingredient lists. Often, the absence of undesirable ingredients is more important to consumers than the inclusion of beneficial ones. Some of the top ingredients that consumers look to avoid include sulfates, parabens, synthetic fragrance, oxybenzone, polyethylene glycol (PEG) compounds, and retinyl palmitate. While the real risks may be debatable, the perception is what matters, so brands are seeking alternatives, creating needs and opportunities for more "natural" or "organic" ingredients. The next step now is to simplify ingredient lists: For example, Five Dot Botanics is a U.K.-based minimalist skincare line that uses just five natural ingredients in its formulations.

  • Water-smart and water-free products. Water-smart products are growing in popularity, as cutting out water reduces packaging and shipping energy, and these products address growing concerns about water stress. Indie brands like Lush were the first to lead this trend, but now mainstream brands follow suit: L'Oréal, for example, recently unveiled a solid shampoo for its Garnier brand. While the science behind water-free formulations is known, formulating an easy-to-use product can still be tricky –  look for new materials offerings to improve these products' sensory aspects and performance.

  • Plastic is not fantastic. "Clean" beauty today is not just about what is in the product but also how it's packaged, and brands are responding to consumer and regulator pressure to shift away from single-use plastics. Unilever recently announced it would be reducing its virgin plastic packaging by 50% by 2025, including 100,000 MT of absolute plastic reduction, and it's joining other brands investing in reusable and/or refillable packaging as well as "no plastic" solutions, including "naked products." Before adopting new packaging, however, brands should perform life cycle assessments (LCAs) to confirm that their new solutions do not create larger environmental challenges than they solve.

Theme #2_ Personalization

Products that allow for customization and personalization have been steadily growing over the past several years, thanks in part to improvements in digital hardware and analysis tools. Personalization is poised to have a lasting impact on consumer expectations through trends including: 

  • A digital renaissance. The rise of digital tools in the beauty and personal care industry will pave the way for brands to offer more custom products and experiences to consumers. There are many ways to employ digital tools for personalization, ranging from simply curating existing products for consumers to going as far as developing bespoke products. Not all customers are willing to give away personal data, either, so it is good to consider multiple product offerings along the spectrum. 

  • Deep customer insight. New technologies can also help uncover individual consumers' needs, as with genomics playing a bigger role in personalizing beauty recommendations. Pathway Genomics' SKiN IQ, Allél, Skinshift, and other beauty-focused DNA testing kits can offer recommendations or even formulate personalized products for users' specific genomic skincare traits. Leaders like L'Oréal, Beiersdorf, AmorePacific, and L'Occitane are trying to understand how they can employ the skin microbiome to provide more personalized products. Givaudan uses the i-MAPS instant microbiome profiling system for product formulation development – expect to hear more partnership announcements as brands look to unlock this layer of personalization.

  • On-demand products and experiences. Consumers' tastes and needs differ not only from individual to individual but from moment to moment, so brands are working to offer on-demand solutions. Perso, L'Oréal's custom lipstick gadget, allows consumers to have any custom color, eliminating the need to buy a new lipstick to try out a shade, and Shiseido offers personalized skin care for on-demand formulations at home with its Optune device. Upstream ingredient suppliers are also beginning to act on these trends: BASF recently released formulations to allow its customers to create customizable face and hair care products. On-demand products won't be widely adopted in the near term, given their high costs, but companies all along the value chain should consider where they can play an enabling role as this category grows.

Theme #3_ COVID-19

The pandemic hasn't been around forever (although it often feels that way), but it will have a lasting impact on consumer behavior, though trends like:

  • Spotlight on protection. Now more than ever, consumers want to guard themselves against infectious threats from their surroundings, creating opportunities for new types of sanitizing formulations or products.  Blue light's damaging effect on the skin has also received greater awareness as remote work has more people sitting in front of a computer all day. Threats can vary from region to region, and exposure can differ based on demographics, profession, or hobby, but companies should be able to provide answers to these very real worries.

  • Fighting "mascne." Even as the coronavirus threat lifts, more people will be wearing masks daily to leave their homes. Acne caused by masks ("mascne") has become a serious issue, and brands are racing to find solutions and create products that are less harsh while still being effective. Hydrocolloid patches from companies like Mighty Patch, Starface, and ZitSticka have boomed in sales, along with hyaluronic acid, glycerin, and dimethicone moisturizers and glycolic acid toners. Preventative solutions could be lucrative as well: Virgil Abloh's Off-White and Amorepacific partnered to create a "Protection Box" to address skin concerns related to face masks. Focus on the root of the problem for ideas and consider opportunities beyond the ingredients and formulations themselves. 

  • Redefining "camera-ready." Everyone now needs to look good in digital form as video calls become the most common form of communication professionally and personally. Products focused on digital appearances include dramatic makeup and quick fixes to reduce shine, and ingredient manufacturers are also developing new products to enhance or blur features specifically for the camera. The rising use of Zoom has even coincided with a rise in cosmetic procedures like Botox, neck liposuction, and under-eye fillers – brands should consider offering complementary products for such services or alternative at-home devices/treatments. 

 

#luxtake

Sustainability, personalization, and the COVID-19 aftermath are creating both challenges and new opportunities for beauty and personal care companies, as well as their ingredient (or other) suppliers. For personal care and beauty brands, this could mean marketing existing products in a new way or developing entirely new products altogether. The latter will require new materials innovations to be successful.

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