The lipstick index holds true. New market forecasts from Mintel predict cosmetic sales in the United States will rise as a result of the recession. Moreover, Mintel anticipates a higher growth rate for makeup now than it did just eight months ago (10% during the next five years instead of 7%).
Mintel’s reforecasting of previously published research reports has uncovered which beauty and personal care markets are recession-proof and which ones are being stimulated by the poor economy. Although the beauty and personal care sector is struggling overall, Mintel sees some very bright spots, including color cosmetics.
Joan Holleran, director of research at Mintel, notes that "Many women have a deep emotional tie to their appearance, so cosmetics are a non-negotiable. These women may trade down on other purchases or forgo expensive vacations, but they will still treat themselves to small, feel-good luxuries like makeup and beauty products."
Holleran points to another segment that is expected to weather the recession well: anti-aging beauty. Mintel expects sales of anti-aging skin care products to increase 20% during the next five years. One year ago, Mintel forecast 44% five-year growth, but the adjusted market forecast is significant given the current economic climate.
Mintel also predicts healthy growth for sun care products, with sales expected to increase 36% from 2008 to 2013. This is a slight decline from Mintel’s original market forecast of 41% growth, but it still shows people continuing to follow dermatologists’ advice to use sunscreen daily.
Although the cosmetic, anti-aging and sun care markets should hold strong throughout the recession, other beauty and personal care markets may not. "Shoppers are trading down to save money on purchases they don’t deem necessary. So everything beyond deodorant, shampoo and razors is at risk," states Holleran. "Personal care companies need to focus on value, feel-good benefits and new product innovation to keep shoppers interested."