Good morning! Well, Britain "went there" with Brexit. The pound is at a 31-year low, stocks worldwide are plunging and the United Kingdom is reportedly no longer the world's fifth largest economy. But what does it mean for the beauty and personal care industries?
"After the vote for the United Kingdom to leave the EU we now await further decisions and will adapt to the possible new conditions."
Muted but Real Impact
According to a forecast released by Euromonitor, "Brexit would have a muted impact on sales of beauty and personal care products." The analysis found that by 2020 the industry would be $205 million smaller due to Brexit, compared to non-Brexit forecasts.
The biggest category losers in personal care and beauty will be sun care (adult), men's grooming and, to a lesser extent, fragrance, according to Euromonitor's forecast. The least affected would be bath and shower brands.
Euromonitor's report added, "One slight outlier is deodorants, where income is not a major driver but the category is mid-range in terms of the impact of Brexit."
Industry Warnings Ignored
Ahead of the vote, the Confederation of British Industry published a paper highlighting the potential loss of 1 million jobs by 2020 and a significantly weaker pound.
During Unilever's annual general meeting in April, CEO Paul Polman commented, "[M]ost of the trade associations or the companies or the Bank of England and many others are actually making it very clear what the downside would be of leaving, and the price to pay seems too high for us."
He added, however, "For a company like ours, we will always survive because we operate in 190 countries in the world and many of them are not in the EU..."
Following the pro-Brexit vote, a Beirsdorf spokesperson's response was tepid: “We have followed the United Kingdom’s referendum to stay in the European Union and, of course, we have prepared for the various scenarios beforehand. After the vote for the United Kingdom to leave the EU we now await further decisions and will adapt to the possible new conditions. The United Kingdom is and remains a very important market for Beiersdorf.”