Beauty’s 8 Top Growth Areas

The headlines in the most recent reporting period pointed to slowing growth for beauty^a, though the category was far more robust than any of its consumer product peers.

Digging into the numbers, it's clear that every sector, even the softening makeup space, has robust growth opportunities. 

Here are the top opportunities based on the latest sales figures. 

1. Sets top scents: Fragrance gift sets grew by 22% in Q1 2024, per Circana, faster than juices, and gained market share in the category, while travel size sets, including discovery sets, grew at double the rate of traditional full-size sets.
2. Fragrance$: Luxury fragrance units sold paced at more than double the rate of the rest of the prestige market in Q1 2024.
3. Pucker up: Amid soft makeup sales in Q1, lip makeup led the pack, with dollar sales up 26%. Top performers included tinted lip balms and lip oils.
4. Body-centric: While skin care results were strong in Q1, body sprays were a standout, with sales nearly tripling since Q1 2023.
5. Clinical is going nowhere: Face serums were the second-strongest grower in the skin care category, per Circana, driven by clinical brand launches. This is in line with an ongoing trend toward expert-backed, dermatologist- driven skin care.
6. Hair wellness dominates: Prestige hair product sales in Q1 2024 was led by products offering solutions for hair thinning and loss, as well as wellness-oriented SKUs such as hair oils and serums, scalp care, and heat protectants. All of those categories grew sales between 13% and 25% in Q1, per Circana.
7. At-home trumps pro beauty: In a recent analysis, Circana’s Sally Lyons Wyatt noted^b that while consumers continue beauty spending, they are making sacrifices: “[I]nstead of paying higher salon prices, consumers are doing their nails and hair at home more frequently.” Perhaps for this reason, salon hair care brands were the top sales contributor to the prestige hair sector (that said, celebrity hair brands grew the fastest, up 64%).
8. Unstoppable Gen Alpha: We simply cannot forget about the “Sephora kids.” Per Circana, Gen Alpha continues to drive prestige sales among households earning more than $100,000, with kids' households growing at twice the rate of households with no children. Notably, the firm explained, “spending per buyer was directly influenced by the presence of children: among households with children, the average spending per buyer in Q1 increased at five-times the rate as those without children.”

FOOTNOTES

^awww.circana.com/intelligence/press-releases/2024/us-beauty-industry-sales-slow-but-continue-to-grow-in-q1-circana-reports/

^bwww.circana.com/intelligence/blog/2024/lessons-for-cpgs-and-retailers-how-inflation-is-changing-consumer-behavior/