Beauty Industry Insights for 2025
As we enter the holiday season which is arguably, for beauty brands, the busiest season of the year, we’re also looking at the state of the industry and making predictions for 2025. As investors and beauty and CPG experts chime in with their observations and prognosticate about the coming year - I have some observations and predictions of my own to share based upon 14 years of brand building in the beauty industry and my passion for anticipating trends and innovating for customer needs and desires.
Growth has slowed. In recent years, new beauty brands flooded the market and it felt a little like the Wild West. While the explosive growth in the beauty industry has slowed, there will always be opportunities for innovative, impactful brands that have a clearly defined niche and understanding of who they are serving, as well as the ability to clearly communicate their points of differentiation and value propositions. Barriers to entry remain low for startup beauty brands, but so does VC funding.
Wellness is here to stay, hurray! As the founder of a pioneering brand in the natural products industry, and an advocate for whole-body wellness, I am a superfan of beauty-wellness brands that authentically operate in this space; providing innovative solutions that tend to our bodies, minds, and spirits. Mental health remains a high priority for the wellness category with the creation of products focused on comfort and relaxation. Of course, products for women’s health and longevity should always be trending, and we can expect to see more innovation and options for them in 2025.
Savvy customers are fatigued. Over-consumption, celebrity brands and inauthentic influencer marketing have savvy customers fed up. There is a distinction between brands built on expertise and passion for their product and those built on fame and fortune. Customers are growing wise to the difference and are turned-off by greenwashing, being bombarded by options and the deeply concerning push for consumption. Indie beauty brands are able to excel in personalization, relationship building, customization and authentic marketing for products they have actually poured their blood, sweat and tears into - and make a difference while doing it! Customers increasingly know and value the difference.
Underconsumption is in. Less is more, as customers increasingly turn to multi-purpose products and simpler routines. Minimalism has been around for years, but the personal care industry produces a tremendous amount of waste - with an estimated 120 billion units of packaging being produced each year - that we know either can’t be, or won’t be, recycled. Enter multi-use products. This really isn’t new, but Gen Z consumers are highly influenced by sustainability. Makeup as skincare has been trending and becoming increasingly common, multi-purpose balms and sticks and combination products used both on the hair and skin are increasingly becoming the norm. Consumers will continue to look for ways to streamline and simplify their lives, and care for the environment with low waste and even package-free options.
Price-conscious spending for CPG. Price is a determining factor as cash-strapped customers opt for lower priced alternatives to lesser-valued items, but still prioritize highly-valued items that make them feel and look good. Consumer Packaged Goods (CPG) has taken a hit as prices have soared. Manufacturing costs have risen substantially leaving them no choice but to pass off some or all of these costs to the consumer. With lower disposable income, customers are forced to swap out some of their usual high-end consumables with lower-priced alternatives. However, this does not mean all items are being replaced. Beauty and wellness items that are considered small-ticket luxury items still have their place (lipstick effect). Feeling and looking good are priorities that aren’t going away any time soon.
