Has Sights on US
AT NEXT year’s Paris In-Cosmetics show, the Market Focus feature will concentrate on the US beauty and personal care markets and industry experts will discuss the latest go-to trends, challenges and opportunities. The topic is
particularly on trend, now that Reed Exhibitions is launching In-Cosmetics USA, which will be held Sept. 7-8, 2016 in New York
For many beauty brands, the lure of success within the US
market is hard to resist as it can bring opportunities for growth
and substantial rewards. However, the reality is often quite different and many executives and entrepreneurs have had their fingers
burned as they come to realize that launching in the US beauty
and personal care market requires careful research and planning.
Much of the appeal of the US beauty and personal market is
due to its size. According to Euromonitor International, the total market was worth $76.3 billion in 2014, up by 14.5% since
2009. The largest product sectors were skin care ($13.7 billion)
and color cosmetics ($12.3 billion) which have grown by 18.1%
and 21.8%, respectively. Hair care, valued at $11.6 billion, posted
slower growth ( 8.4%) during the period.
In a market dominated by giants, such as Procter & Gamble,
L’Oréal, Estée Lauder, Unilever and Johnson & Johnson, indie
brands must work hard to get noticed. In Kline’s Cosmetics &
Toiletries USA report, 84 independent companies were found to
comprise just 3.6% of the market in 2014, yet grew by nearly 15%
between 2009 and 2014. Kline maintains that these brands of-
fer value-oriented products, are highly innovative and engaging
with consumers, which makes them attractive acquisition targets
by major cosmetic companies and private equity firms. Many of
them have significantly increased visibility through social media
marketing, which have given them the edge over the multina-
tionals with their large advertising budgets.
Such is the growing interest in indie brands that an event was
staged in New York in August to bring 80 independent beauty
brands together with buyers, media and consumers under one
roof. Some notable brands spotted by Kline were Colourpop,
which launched in 2014 and has become a social media sensation, as well as Phia, Nugg, Grande Naturals, Modern Minerals
and Malaya Organics. All of the participating brands are formulated without potentially toxic ingredients, positioning them in
the burgeoning natural category.
First Steps into the US
The US market is like no other due to its scale, diversity and complexity. Brands looking for a relatively trouble-free entry must
consider whether they want to target regionally, by state or by
city. Trade shows are often seen as the place for small businesses
to find a partner, but brand owners may end up disappointed to
find that so-called partners are effectively“one man and a dog,”
and do not have the infrastructure or expertise to guide new
brands within an unfamiliar market.
Kevin Price, director of an interim management professional
consultancy called Frattempo, said that brands must have a more
researched and considered approach when searching for a partner.
“The first question you need to ask is what type of distributor
would fit the brand and this depends on their positioning,” he
said. “So whether you want to target drug stores, perfumeries or
department stores, it’s important to search for a distributor that
already services those categories.”
Price warned that the wrong partner can be as damaging as
choosing the wrong market.
No First Move
Stirling Murray, CEO, The Red Tree, has worked extensively with
brands in developing international expansion and always aims to put
brands together with US distributors who can offer a full service, but
only after they are properly established in their home market.
Imogen Matthews • In-Cosmetics
Yes, the US is a huge
market—but it is
chockfull of pitfalls.