Beauty had an undeniably strong 2022 across mass and prestige, but now finds itself in an environment of uncertainty. At the same time, consumer data points to a wide range of innovation opportunities at the mass and prestige levels.
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Beauty had an undeniably strong 2022 across mass and prestige, but now finds itself in an environment of uncertainty. At the same time, consumer data points to a wide range of innovation opportunities at the mass and prestige levels.
The good news is that, among beauty buyers who are reducing overall spend due to inflation, 70% are not cutting back their spend in beauty. This per Larissa Jensen, vice president, beauty industry adviser, The NPD Group. Jensen’s comments came during CEW’s annual state-of-the-industry event, featuring insights from NPD/IRI, Spate, Google, NielsenIQ and Mintel.
Here, we review what 2022 tells us about the next three years in beauty, as well as the many nuances across categories, channels and pricing tiers.
According to NielsenIQ, 82% of beauty shoppers have noticed beauty price increases in the last year.
2022 Beauty Sales: Mass & Prestige Diverge
U.S. prestige beauty sales revenue for 2022 grew by 15% year-over-year, totaling $27.1 billion, according to new NPD data, while IRI/NPD data shows that 2022 mass beauty sales totaled $66 billion.
The fastest growing brands in the market included Necessaire, Megababe, Saie and Il Makiage. And, while celebrity brands have endured some negative publicity in the last year, they actually grew sales by 32% (prestige omnichannel) in 2022.
The U.S. XAOC health and beauty sector—comprising food/grocery, drug, mass merchandisers, club stores, dollar stores and military DECA (commissaries)—generated 2022 full-year sales of $111,254,478,883, according to NielsenIQ, a rise of 5.3% from the $105,678,193,385 generated in full-year 2021.
Combined mass and prestige beauty product market revenue growth for 2022 was 11%, per NPD. Yet only prestige unit demand remained strong.
According to NielsenIQ, XAOC unit sales dropped 3.5% in 2022. Average unit prices in the mass sector climbed 9.1%.
NPD concurs; mass price increases were overwhelmingly responsible for sales gains. Per NPD, mass brands increased prices 4-7 points higher than average prestige price increases.
According to NielsenIQ, 82% of beauty shoppers have noticed beauty price increases in the last year. That hasn’t entirely undermined purchase intent, however. In fact, 47% of surveyed consumers plan to spend the same on beauty in 2023, per NielsenIQ, while 29% expect to spend more.
Just 24% said they would spend less. Those that plan to spend less may purchase less expensive products, shop less often and use up all existing products before making new purchases.
Consumers who plan to spend less may purchase less expensive products, shop less often and use up all existing products before making new purchases.
Holiday 2022 Breakdown
During the U.S. holiday season, prestige growth was much faster than mass in last eight weeks of the period.
Christmas week prestige beauty sales totaled $1.3 billion, a record, per NPD. Half of that total came from the fragrance sector.
Regional Growth
Prestige beauty grew 15% in the United States in 2022, according to NPD, compared to 9% for mass.
Europe's prestige beauty market grew 17%, compared to 5% growth for mass.
Prestige beauty grew 25% in Canada, 28% in Mexico and 42% in South America, while the prestige sector decreased 9% in China.
2025 Growth Forecast
Looking ahead, NPD is forecasting that prestige beauty dollar sales through 2025 will remain elevated versus pre-pandemic levels, though results will vary widely by category.
Makeup/Color 2022: Strong Comeback
The fastest growing makeup sector was lip products, with sales surpassing pre-pandemic 2019 levels by double-digits.
The complete (mass + prestige) makeup category grew 12% year-over-year to $25.6 billion, according to NPD. The firm also notes that U.S. prestige makeup sales increased 18% in 2022, comprising the most sales revenue gains of all the prestige beauty categories.
In addition, aside from skin care, makeup was the only category to grow mass unit sales.
The fastest growing sector was lip products, with sales surpassing pre-pandemic 2019 levels by double-digits. Lip gloss outperformed lipstick, compared to both 2021 and 2019.
The top prestige 2022 makeup launch by dollar volume sales was Nars' Light Reflecting Foundation, per NPD.
On the mass/XAOC side of the equation, U.S. sales of cosmetics and nail grooming products increased 5.6% in 2022, totaling $8,912,002,760. The category's big gainer was cosmetic appliances, per NielsenIQ, which jumped 64.5% year-over-year to $9,406,521, while nail kits/sets increased 17.8%
Cosmetics and nail grooming combination pack sales increased 16.9%.
The top mass market makeup launch was L'Oreal Paris' Infallible Eyeliner Pen, Black, per NPD.
Meanwhile, the top five combined makeup category (mass + prestige) brands in 2022 were Maybelline, L'Oreal Paris, Kiss, Covergirl and e.l.f.
Looking ahead, there remain opportunities for color cosmetics to capture shoppers seeking clean, sustainable makeup.
According to NPD data, 34% of consumers believe it is important for makeup brands to be socially responsible.
Furthermore, about 80% of consumers reference vegan, cruelty-free and natural ingredients in online reviews. Vegan and cruelty-free are the top two aspects listed in these reviews.
Elsewhere, online searches for makeup are growing quickly, according to Yarden Horwitz, co-founder of Spate, and Flynn Matthews, head of insights and measurement, global CPG, Google.
Makeup brands with biggest search volume include Fenty, Charlotte Tilbury, Rare Beauty, e.l.f. Beauty and Nars, while top up-and-coming percentage gainers included Half Magic, Lash Therapy Australia, Pley Beauty and Jones Road.
Looking ahead, Spate and Google data unearthed a desire for low-maintenance/easy products such as tubing mascara, cheek and lip stains, and eyeliner stamps.
At the same time, a desire for self-expression is creating demand for bold looks that require body glitter, hair tinsel, rhinestones for the face, grunge makeup and crying makeup looks, and even tooth gems. This impulse is driven less by traditional beauty than a desire for individuality and iconic looks.
Skin Care 2022: Mass & Natural Rising
39% of U.S. skin care consumers feel it’s important for skin care products to be recommended by a doctor or dermatologist.
The complete (mass + prestige) skin care market grew 10% year-over-year, totaling $30.5 billion, per NPD/IRI data.
U.S. prestige skin care sales grew 12% in 2022. Body products grew at more than three-times the rate of facial products.
Skin care was one of two mass categories to grow units in 2022. Meanwhile, sun care mass sales dropped in favor of prestige products, signaling that consumers may be trading up.
On the mass/XAOC side of the equation, hand and body lotion sales increased 8.2% in 2022, while eczema and psoriasis treatments jumped 21.6%.
According to NPD, natural brands are making comeback in prestige skin care after pandemic-era gains for clinical brands. That said, mass natural brands declined, creating opportunities for nimble brands.
Despite the resurgence of natural brands, 39% of U.S. skin care consumers feel it’s important for skin care products to be recommended by a doctor or dermatologist, according to Sarah Jindal, senior director, beauty and personal care, Americas, Mintel.
That doesn’t necessarily require a dichotomy between naturalness and efficacy. Jindal notes that 20% of U.S. consumers recognize lab-grown nature-identical ingredients as effective, while 22% recognize these materials as safe.
On the mass/XAOC side, NielsenIQ reported that facial skin care sales rose 5.8% in 2022 to $4,555,884,624. Top gainers included facial treatments, up 34.7%.
Losers included facial skin appliances, which fell 30.6% and facial toners, which dropped 18.8%
The standalone mass/XAOC sun care sector totaled $1,663,022,313, representing a 6.7% gain versus 2021.
Fragrance 2022: the Boom Continues
According to NPD data, 80% of consumers choose scents based on what they like, while 70% are influenced by mood-lifting fragrances.
The complete fragrance market (mass + prestige) grew 11% year-over-year, totaling $12.7 billion, per NPD. Super premium fragrance brand sales jumped 18% in 2022.
Meanwhile, U.S. prestige fragrance sales increased 11% in 2022, driven by higher fragrance concentrations such as eau de parfums and parfums, and higher-end artisanal fragrance juices.
The top five prestige fragrance divisions in the prestige market were, in descending order, Chanel, Christian Dior, Yves Saint Laurent, Versace and Giorgio Armani.
The category is among the most “elastic” in beauty; even as prices increase, sales remain consistent. Perhaps for this reason, prestige fragrance comprises about 60% of the full-category volume.
Mass/XAOC fragrance sales increased 1.2% to $992,761,833 in 2022, per NielsenIQ. Fragrance gift set sales increased 21.2% in the period. However, body powder fragrance sales dropped nearly 27%, while fragrance combination packs fell 35.4%.
The top mass fragrance launch of 2022 in terms of dollar volume sales was Old Spice's Deep Sea Body Fragrance Spray. The top five mass market fragrance divisions (dollar ranking) were, in descending order, Axe, Old Spice, Body Fantasies, Coty and Calvin Klein.
The combined total market (mass + prestige) dollar ranking leaders in 2022 were, in descending order, Chanel, Christian Dior, Yves Saint Laurent, Versace and Giorgio Armani, showing the relative power of prestige brands in the sector.
According to NPD data, 80% of consumers choose scents based on what they like, while 70% are influenced by mood-lifting fragrances.
In addition, 50% are seeking scents that offer a wellness or physical benefit such as stress reduction, focus boosting or energizing effects.
Online fragrance searches are growing robustly, per Google/Spate data, reflecting high engagement in the category.
The most searched fragrance brands included Carolina Herrera, Valentino Beauty, Burberry, Scentbird and Versace, while the brands with the highest search percentage growth included Vilhelm Parfumerie, World of Chris Collins, Dedcool, Tiziana Terenzi and Henry Rose.
Hair Care 2022: Wellness on the Rise
According to NPD data, 44% of consumers believe that it is important for hair brands to be sustainable/good for the environment.
The complete (mass + prestige) hair care market grew 11% year-over-year, totaling $24.1 billion, per NPD/IRI. Sales of luxury hair styling tools jumped 23% in 2022, per NPD.
U.S. prestige hair product sales grew 22% in 2022, driven by masks and targeted treatments.
The top prestige market launch was Olaplex's No. 9 Bond Protector Nourishing Hair Serum.
NielsenIQ data for mass/XAOC shows that hair care sales rose 3.3% in 2022 to $11,862,651,221. According to NPD, mass represents 80% of sales across combined categories.
Top mass/XAOC gainers included styling product combos, up 15.7%, and shampoo and conditioner combos, up 13.4%. The top mass market hair care launch was Head & Shoulders' 2-in-1 Dry Scalp Care Shampoo, per NPD.
Top mass decliners included hair costume color, down 64%, and 3-in-1 products, down 13.7%.
The standalone hair removal sector totaled $3,258,036,381, representing a 3.3% gain.
The top five hair care brands (mass + prestige combined) in 2022 in terms of dollar volume were L'Oreal, Garnier, Tresemme, Pantene and Head & Shoulders.
According to a Google/Spate analysis, rosemary was the top growing hair ingredient search term.
The most-searched hair brands in 2022 included Dyson, Drybar, Mielle Organics, K18 and Nutrafol, while top up-and-coming percentage gainers included Divi, JVN, Owa (despite being renamed Susteau), Shark and Arey Grey.
Looking ahead, Google and Spate data pointed to an embrace of low-maintenance hair, favoring root perms and wolf cuts.
Another major opportunity is the underserved textured hair sector. NPD shows that, while 55% of consumers have wavy, coily or curly hair, just 5% of products in the prestige space cater to these hair types.
There is a similar opportunity for sustainable innovation. According to NPD data, 44% of consumers believe that it is important for hair brands to be sustainable/good for the environment.
Body & Bath Care
Bath and shower mass/XAOC sales grew 3% year-over-year to $7,520,327,591, per NielsenIQ. Bath and shower gift sets/kits grew more than 86% year-over-year, totaling $20,362,780, while exfoliators/scrubs grew 36.5% to $266,320,534.
Top decliners included bath and shower wipes, which dropped 34.6% to 48,750,736, and pandemic favorites hand sanitizers, which dropped more than 38% to $412,190,196.
The standalone oral hygiene and vitamin/supplement sectors grew 3.3% and declined 1.3%, respectively.
The State of Beauty Retail
In prestige beauty, 2022 year-over-year brick-and-mortar retail share grew, while online sales share increased in the mass market.
In prestige beauty, 2022 year-over-year brick-and-mortar retail share grew, while online sales share increased in the mass market.
Per NielsenIQ, online sales account for 38% of the total U.S. beauty market, up 2% from 2021.
Brick-and-mortar units were down in 2022, driven by mass market declines, while prestige in-store sales actually grew.
Meanwhile, multi-brand ecommerce grew shopper frequency more than any channel in prestige beauty, while dollar stores experienced the largest drop in the mass sector.
NPD data shows that the number of products sold on promotion in prestige beauty has fallen below pre-pandemic levels—with no harm to industry sales.
NielsenIQ, meanwhile, has surfaced retailer-specific trends. For instance, refillable packaging searches jumped 131% on Amazon in 2022, while the platform witnessed a 117% jump in searches for solid beauty formats.
Sephora.com top search trends included mini sizes (up 107%) and roll on/rollerball formats (up 167%).
On Ulta.com, meanwhile, vanilla ingredient searches jumped more than 1,500%, while searches for travel sizes spiked 546%.
The State of the Beauty Shopper: Mass, Prestige & Luxury
The U.S. mass beauty shopper is shopping less often, driving unit sales declines.
The U.S. mass beauty shopper is shopping less often, driving unit sales declines, according to NPD’s Jensen. These shoppers represent a diverse mix, with growth demographics including upper income shoppers and Asian Americans.
Meanwhile, prestige sector growth is being driven by higher income consumers, making at least $100K/year. In 2022, these consumers spent more than double on beauty than they did pre pandemic. In fact, the key prestige beauty shopper spends 12x more than average prestige beauty shopper.
Luxury buyers spent $2.4 billion on prestige beauty in 2022, up 1% year-over-year, per NPD. These shoppers are typically female, white, older than 45 years old and have a household income in excess of $100,000.
While the divide between the mass and prestige sectors is notable, Tara James Taylor, SVP global beauty vertical leader, NielsenIQ, stressed that beauty consumers are shopping across pricepoints and offline and online channels. This trend is highlighted by Ulta Beauty’s new store layouts, which freely mix prestige and mass products.
