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09/16/2022

Could beauty's pandemic rebound be stalled by inflation?

Beauty and personal care aisles are pulling in higher sales as consumers embrace self-care, but amid record inflation and shifting shopping habits, brands look to innovate
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Beauty may be in the eye of the beholder but, from self-care rituals to the demand for brand transparency, the biggest trends impacting the beauty and personal care industry are more universal.

Evelyn Bell, a consultant at market research firm Euromonitor International, says the beauty and personal care category has rebounded well from the overall decline it experienced during the pandemic.

“With the relaxing of COVID restrictions, people are starting to go out a little more — they’re going to the office, they’re going back to school, so that’s helping in the recovery,” she explains. Data from Euromonitor shows the beauty and personal care category in Canada grew by 10% between 2016 and 2021 reaching US$9.1 million.

Bell cautions, however, that new factors affecting the category in 2022, such as inflation, may cause a slight softening of its growth this year. “This year, we do expect growth but not as much as last year, which was kind of the recovery or the bounce back of the industry [year],” she says.

More products, more time

While subcategories like cosmetics and deodorant saw a decline in sales during the pandemic as consumers socialized less often, skincare was an exception, according to Lisa Reid, country leader for P&G Beauty Canada. “As professional services were closed or limited, consumers really embraced a DIY approach and focused on home regimens to deliver on their needs for both beauty but also well-being,” she says.

More time at home during the pandemic allowed customers to take their time with skincare, often developing multi-step routines. “The number of [skincare] products people are using is larger than it was in 2019,” says Bell.

As consumers return to busier schedules, the treating skincare as self-care trend continues, along with interest in using an array of products to pamper the skin. 

While multi-step skincare routines have traditionally been associated with female consumers, Vivien Siklodi, health, beauty and cosmetics expert at Nature’s Emporium, a natural and organic grocery chain in the Toronto area, says she’s seeing men take a greater interest in developing skincare regimens. Euromonitor’s Bell agrees, explaining that the growth in skincare purchases by male consumers is another example of a personal care trend that gained momentum during the pandemic, but continues into 2022. 

The “skinification” of hair care

Bell says consumers are also beginning to dedicate as much time and consideration to their hair-care routines as they have traditionally devoted to skincare, describing this trend as the “skinification” of hair care. “It used to be just shampoo and conditioner, but now you have a bunch of treatments for everything,” she says.

It’s a trend P&G’s Reid has also observed. “Consumers became much more educated on ingredients and the benefits that they were looking for – and while we had seen that for many years in skincare, we saw that really being elevated in hair care,” she says.

Reid says although sales of hair treatments have increased, many consumers are washing their hair less often because they believe it’s a healthier way to care for their locks. This is driving consumers to become more selective about the shampoo and conditioners they use when doing these less-frequent washes, with many applying the same critical eye to the ingredients and benefits of their shampoo and conditioner that they previously reserved for skincare products.

“When you wash your hair two or three times a week, it means that your shampoo and conditioner and your treatment have to work harder to remove build-up from styling and restyling your hair throughout the week,” says Reid. With this in mind, P&G recently launched a “scalp rebalance and refresh” collection featuring rosemary under its Pantene brand. 

Bell believes the trend toward multi-step hair care routines is in its early days and poised to take off. “We’re just at the beginning of the trend,” she says.

Call me responsible

“I think as we all reflected during the pandemic, what accelerated is what I would call ‘conscious consumption,’” says P&G’s Reid. Consumers are seeking brands that are transparent and ethical – from cruelty-free ingredient decks to a commitment to sustainability and social responsibility.

Reid says while consumers prioritize responsible brands, they also expect those brands to perform. She points to the Native brand, which P&G recently launched in Canada. “It delivers that great ingredient transparency that consumers are craving, combined with still a wonderful usage and performance experience,” she says.

“It’s beautiful how far natural brands have come in terms of skincare as well as makeup because they really do measure up,” says Siklodi at Nature’s Emporium. She points to Canadian brand Green Beaver’s aluminum-free antiperspirant as an example of a product that’s effective while also offering a natural ingredient deck. 

Alain Menard, co-founder of Green Beaver, says this antiperspirant has been a “gamechanger” for consumers who prefer the sweat-stopping capabilities of antiperspirant over deodorant (which only prevents odour), but dislike the aluminum content of conventional antiperspirants. 

Consumers are conscious not just about the ingredients found in their products, but their packaging as well. P&G, for example, recently released Secret Aluminum-Free deodorant in a plastic-free, cardboard package in response to this demand for eco-friendly packaging

“Packaging has been a huge determinator in more customers’ purchases,” says Siklodi. “They are looking for items to be in glass, or to have sustainable packaging that’s either [made of] recycled materials or compostable packaging.”

Thalis Mann, body care purchaser at Toronto grocer The Big Carrot, says refillable beauty and personal care products are attracting interest. “Our toothpaste tablets, shampoo and conditioner bars, family sizes, and refillable items have become increasingly popular,” she says.

Euromonitor’s Bell notes consumers are often willing to pay more to support responsible beauty and personal care brands. “With the economic situation, you need to really think about how you’re going to invest your money and they [consumers] see these brands as an investment for their health,” she says. 

Rethinking the beauty and personal care aisle

As a lasting impact of the pandemic, consumers are continuing to make fewer retail trips – a shift that P&G’s Reid thinks grocers can leverage to boost sales of beauty and personal care products. “We’re continuing to see consolidated retail trips and this – combined with the recessionary pressures that consumers are feeling in Canada – is really a fantastic opportunity for growth in beauty and personal care,” she says.

“Historically, people thought they could only get cheap and cheerful products at a grocery store,” adds Reid. Consumers can now find products that offer great value, as well as effectiveness, in grocery stores, saving them the additional trip and bigger expense of buying these products at a specialty store. 

Reid recommends retailers showcase beauty and personal care products through their online channels, store flyers and end-of-aisle displays, highlighting their benefits and reasonable price points.

Green Beaver’s Menard wants to see retailers move away from displaying natural beauty and personal care products separately from their conventional counterparts. “I think it was fine when the demand was smaller than what it is today…but the way it’s going, I think within the next five to 10 years, most conventional products are going to be more naturally-based and with greener packaging,” he says. “It’s going to happen."

This article was first featured in Canadian Grocer’s August issue.

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