The numbers don't lie: the U.S. prestige beauty market grew by 7% year-over-year to $22.8 billion for the period January-September 2024, per Circana, while mass market sales experienced a 2% increase in sales in the same period, signaling a strong bifurcation in the market. Digging into the data, several explanations and solutions for mass brands emerge. At the same time, new data points to a happy holiday forecast, top innovation opportunities for 2025 across every category, rising interest in longevity ingredients and the fastest-growing sustainability claims. Read on for the full details...
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The numbers don't lie: the U.S. prestige beauty market grew by 7% year-over-year to $22.8 billion for the period January-September 2024, per Circana, while mass market sales experienced a 2% increase in sales in the same period, signaling a strong bifurcation in the market. Digging into the data, several explanations and solutions for mass brands emerge. At the same time, new data points to a happy holiday forecast, top innovation opportunities for 2025 across every category, rising interest in longevity ingredients and the fastest-growing sustainability claims. Read on for the full details...
Mass-Prestige Beauty Dynamics: a Closer Look
Euromonitor's recent 2025 Consumer Trends report reflects data flagged in Circana's latest sales figures. Per Euromonitor, "mass beauty growth is expected to significantly lag behind premium beauty and personal care in every geographic region."
Mass growth was strongest in the Middle East and Africa, as well as Latin America, weakest in Australasia and even shrinking in Eastern Europe.
The weakness in mass beauty and personal care perhaps explains why the expansion of private label brands in the beauty and personal care sector has lagged behind most other categories.
It might be easy to conclude, given the data above, that mass beauty is a challenging sector and that all the action is in prestige/masstige.
But a recent post from Jacqueline Flam Stokes of NIQ highlights the opportunities in the even the lowest price tiers.
As we recently reported, Gen Z and even millennials increasingly seek out beauty dupes, pointing both to a desire for aspirational products and a demand for value.
Stokes notes in her LinkedIn post that there are about 19,000 stores in the dollar channel, which often offer beauty dupes to shoppers.
But that's not all. Stokes points out that E.L.F. Beauty has teamed up with Dollar General to bring its accessibly priced products to the retailer. E.L.F. has thrived in the mass beauty space, even as other brands have faltered, so this expansion into the most accessible tier is intriguing.
Stokes closes her post by pointing out that the dollar channel comprises about 4% of U.S. beauty and personal care stores, racking up about 6% year-over-year growth. That's actually faster growth than mass and drug channels.
Whatever the price tier, shoppers are focused on value. Euromonitor concludes, "Consumers are focused on all-around value and expect brands to deliver meaningful incentives with long-term impact."
Breaking Down 9-month 2024 Beauty Category Dynamics
Lips & Blush: Makeup Champs
Makeup is the largest prestige beauty category, growing at 5% year-over-year in dollars and units, faster than skin care but significantly slower than hair and fragrance. Mass actually contracted about 3% in the same period.
As in previous periods, the lip makeup segment was a juggernaut, expanding at 21% in dollar terms and 23% in unit terms. Key drivers include tinted lip balms and oils.
(For a detailed breakdown of the sector around claims and growth opportunities, check out our recent report: 2024’s Fastest-growing Makeup Categories: Lips & Unique Formats.)
Further driving lip sales are the sheer number of new launches coming into the space. Per Circana, there has been "a doubling of dollar sales tied to launches this year through September, compared to 2023.
We apparently also haven't hit peak blush, per Circana., with the category's sales up double-digits.
Skin Care: a Push to the Middle
Skin care is defying the prestige wave; according to Circana figures, prestige sales grew 3% in the first nine months of 2024, while mass grew 2%. The fastest-growing sector is actually masstige, or mid-range, products, which are growing six times faster than prestige.
These trends are reflected in skin care softness in the department and beauty specialty store channels, both of which grew just 3% in the nine-month period.
Circana attributes results to a decline in average pricing and, as a result, greater units sold.
The firm concludes: "[C]onsumers are increasingly favoring lower-priced skin are product in prestige outlets."
One notable highlight over the last year, per Euromonitor data, are launches with NAD+ claims, which are associated with skin and overall longevity. The firm's data shows that NAD+ beauty product claims rose from roughly 100 in 2022 to nearly 500 in 2024 (as of August 2024).
For details into what pushes shoppers to devote their dollars to prestige skin care, read our recent report, What’s Driving the Prestige Skin Care Boom and How Can Brands Get in on the Growth?
Hair Wellness Shines
Prestige hair care sales are up 8% for the first nine months of 2024, per Circana, with units also climbing.
Top growth sectors outpacing the market include heat protectants and scalp care, which are both part of the broader hair wellness and skinification trends.
That said, hair styling was the fastest-growing segment, and also the largest contributor to the category’s sales gains, per Circana. This, too, follows the skinification of the category's products.
Notably, more than half of hair product sales in the department store and specialty retail sectors are done online, more than any other product category.
Circana notes, "[W]ith the majority of hair set sales stemming from e-commerce, we can expect online to be a particularly lucrative destination for holiday gift shopping."
Fragrance Leads Beauty Growth
Prestige fragrance sales boomed 14% in 2024 through September, with units jumping 12%.
Key winners include:
- high fragrance concentrations
- luxury brands (which jumped 15% year-over-year for the first nine months)
- women's scents smaller than 1 oz, which grew 4x the rate of other sizes based on units sold
Circana points out, once again, that some 40% of fragrance sector sales take place during the holiday season. The firm explains, "Early indicators in the third quarter align with forecasts for positive performance."
Holiday 2024 Beauty Forecast
Per Circana, holiday shoppers plan to spend an average of 2% more than last year, with 29% intending to purchase beauty products as gifts this year. That's up a bit compared to 2023.
According to a recent YouGov poll, 23% of Americans typically buy cosmetics as holiday gifts. That includes 29% of American women and 16% of American men.
According to YouGov, 34% of consumers aged 18-34 purchase cosmetics/beauty products as gifts, compared to 19% of those aged 35 and up.
Non-parents are more likely to buy cosmetics/beauty products as gifts at 25% compared to parents at 21%. That said, Circana notes that 41% of households with children intend to buy beauty during the 2024 holiday season–which is 11 percentage points higher than overall intentions.
There is no doubt: Gen Alpha is driving high engagement in beauty among households with children.
“Prestige beauty epitomizes the indulgence in little luxuries and acts as an indicator of the consumer mindset for the beauty industry overall,” says Larissa Jensen, global beauty industry advisor at Circana. “This holiday season, its resiliency will be tested. There has been some pullback in spending throughout 2024, but big increases in prestige beauty spend from higher-income households with children under 18-years-old indicate parents are indulging Gen Alpha with these products. The social media virality of this new generation of beauty enthusiasts shows no sign of slowing and could be a pivotal holiday growth driver.”
Beauty's Fastest-growing Sustainability Claims
Beauty and personal care products with sustainability claims generated more than $120 billion in 2023, per Euromonitor, the highest industry across categories by sales.
Notably, 46% of beauty and personal care products sold online made sustainability claims in 2023.
The fastest growing sustainability claims in the beauty and personal care market are:
- Rainforest Alliance: 68%
- Made Safe: 63%
- Upcycled: 56%
