A new survey from SkinStore.com reports that the average woman wears about $8 worth of makeup and skincare products every day. This is approximately $250 a month and over $300,000 in a lifetime. Yup, just about the cost of a house! Women in New York, Connecticut and West Virginia spend on average $3 more per day. The average American woman will use a minimum of 16 products every day. It is not surprising skincare is big business.
How big? By 2021, the global skin care market is estimated to be 121 billion U.S. dollars.
Specifically, Facial Wash (10% of respondents), Toner (60% of women are including toner in their skincare ritual), Serum, Eye Cream (89% of women are using eye cream every morning and night), Moisturizer, Primer, Concealer, Foundation, Bronzer, Blusher, Eye Shadow, Eye Liner, Mascara, Eyebrow Product, Highlighter and Lipstick are among the popular beauty and skincare products used by women every day.
According to the Skinstore.com survey, “70% are now using serums, SPF’s, toners, primers, and highlighters to enhance their skin – a growing beauty step which has become essential within the last couple of years.”
The organic skincare products segment is expected to increase at a CAGR of 10% from 2016 to 2025, according to a report by Grand View Research. “We have seen a dramatic of customers asking for an environmentally friendly, sustainable natural soap, using organic and high quality natural essential oils, herbs and botanicals,” says Sujoy Bhattacharya, Founder and CEO of Falls River Soap Company, a small business based in Chagrin Falls, Ohio, “people are increasingly aware of Triclosan, Dioxane, Sodium laurel sulfate (SLS), Diethanolamine (or DEA), Formaldehyde, Parabens, Fragrance and PEG-6 are part of the soap making process for many well-known over the counter skincare products and are looking for a safer and smarter alternative.”
A recent study entitled “Facial Skincare and Anti-Aging US 2016”, by Mintel, a leading market-research firm, shows the intersection between natural health and beauty in the skincare segment, consumers are most likely to be using or interested in using natural products with vitamin C (85 percent), fruit based ingredients (78 percent), oatmeal (78 percent) and honey (76 percent).
Despite the myriad of skincare products, the average woman spending just 10 minutes on morning cleansing and applying makeup and 6 minutes nightly for makeup removal.
I you are bullish about the sector, investors looking to capitalize on the beauty/skincare trend and the generational shifts between Baby Boomers and Millennials, it may be helpful to understand the size (based on 2016 sales figures) for some of the largest international beauty and skin care companies. L’Oréal is the largest company with yearly sales of approximately $27.6 billion, Unilever (UN) is second at $22.3 billion, followed by Procter & Gamble (PG) at $18 billion. After P&G, Estée Lauder (EL) and Colgate Palmolive (CL) round out the top five companies with sales of $11.3 billion and $10.7 billion, respectively. For investors seeking greater diversification, there are several consumer discretionary ETFs worthy of consideration.
For more aggressive investors, disruptive social media marketing, guerilla and viral media campaigns are positioning smaller companies for significant growth. For investors seeking to capitalize on Baby Boomers’ search for the fountain of youth in a bottle or the coming buying power of Generation Y and Millennials seeking to preserve their youth and beauty, there are many investment opportunities to generate market-beating returns while betting on younger, more beautiful skin.
Author Bio: V. David Ben Melech is a former attorney with over 15 years of experience providing a wide range of legal and strategic advisory services to Fortune 500 companies and financial institutions on a broad variety of regulatory, enforcement, compliance, risk management and transactional matters.
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