Personal Care Products Manufacturing
Companies in this industry manufacture toiletries and grooming products, including perfumes, shampoos, skin lotions, and shaving cream, as well as lipstick, mascara, and other cosmetics. Major companies include Estée Lauder, Johnson & Johnson, and Procter & Gamble (all based in the US), as well as L'Oréal (France), Shiseido (Japan), and Unilever (UK).
The global personal care products industry is estimated to surpass $250 billion at the end of 2023, and reach an annual revenue of about $290 billion by 2027, according to Statista. According to Mordor Intelligence, the Asia-Pacific market is one of the fastest growing markets for beauty and personal care products. Europe is one of that biggest market for organic personal care products.
The US personal care products manufacturing industry includes about 1,000 establishments (single-location companies and units of multi-location companies) with combined annual revenue of about $45 billion.
Competitive Landscape
Makers of beauty products must build awareness of their brands. Competition is fierce in advertising and promotions, and companies often enlist celebrities to help elevate brands. Establishing an online presence in both marketing and e-commerce is also essential. Digital ads are quickly replacing television ads, making consumer viewing rates less predictable. An upstart brand's promotion may go viral, while an established player's ad falls flat. Impulse buys are less frequent as more consumers shop online.
Keeping up with consumer preferences can help companies gain a competitive edge. Trends such as demand for cruelty-free or sustainable ingredients can dictate entire product lines. The profitability of individual companies depends on product innovation, product quality and effectiveness, and efficient operations. Large companies have scale advantages in purchasing, manufacturing, distribution, and marketing. Small companies can compete effectively by offering specialized products. The US industry is highly concentrated: the 50 largest firms account for about 85% of industry revenue.
Nearly all large US manufacturers are expanding operations, sales, and distribution internationally. Exports and imports both account for about 20% of the US market. Top export markets include Canada and the UK, while key import sources include France, China, and Canada.
Competitive Advantages:
Strong Internet Presence - Online sales of personal care products are growing rapidly, and companies with a strong e-commerce presence are gaining market share. Amazon, Sephora, Ulta, and Wal-Mart lead in online beauty product sales, according to a 2016/2017 report from AT Kearney. Companies such as Estée Lauder are building direct-to-consumer sales portals and ramping up social media and digital marketing campaigns.
Expansion into Emerging Markets - Facing stagnant sales in saturated markets such as the US, companies are targeting emerging markets for growth. Strategies for expansion include launching established brands in new territories, creating market-specific products, or acquiring popular regional brands.
Research and Development - Companies employ teams of scientists and product developers to formulate and create innovative new products, product-line extensions, and packaging designs. Current trends include organic ingredients and eco-friendly packaging.
Companies to Watch:
L'Oréal is a leading global beauty products manufacturer, offering cosmetics, perfume, and skin and hair care items under brands such as Maybelline, L'Oréal Paris, Lancôme, and Redken. Major markets include the US, China, and France.
Unilever is a diversified consumer products company with a broad portfolio of personal care products including skin care, hair care, deodorants, and oral care offerings. Brands include Axe, Dove, and Suave. The company operates in over 100 countries and markets goods in nearly 200.
Estée Lauder markets cosmetics, skin care, fragrance, and hair care products under global brands including Estée Lauder, Clinique, Aveda, Bobbi Brown, and Tom Ford. Its offerings are sold in more than 150 countries and territories. The company is focused on selling high-margin products, enhancing its digital presence, and expanding in emerging markets.
Products, Operations & Technology
Major products cater to the personal care and hygiene necessities of consumers. These include cosmetics (about 60% of revenue); creams, lotions, and oils
... plus:
Sales & Marketing
,
Finance & Regulation
,
Regional & International Issues
,
Human Resources
Also includes the following chapters:
Quarterly Industry Update
,
Industry Indicators
,
Business Challenges
,
Trends and Opportunities
,
Call Preparation Questions
,
Financial Information
,
Industry Forecast
,
Industry Websites
,
Glossary of Acronyms