Cosmetics Business reveals the 5 biggest skin care trends in new report

Skin care continues to glow with opportunity. This report identifies how brands can differentiate and stay relevant for the future

Market overview: At a glance

What's in this report?

Introduction

Top 5 trends:

1. Pimple power

2. Skin tech 4.0

3. A microbial future

4. Filtered by lifestyle

5. Shaking up sunscreen

Country highlights

Outlook


Top 5 skin care countries, value and growth, 2019

Estimated figures. Source: Euromonitor International


Key market challenges addressed

Skin care continues to dazzle as one of beauty’s fastest growing categories, but the demands on brands are intensifying just as rapidly. The challenges are numerous, ranging from the need to adapt to the changing perceptions of ingredients to expectations on sustainability as well as addressing diversity and inclusivity, connecting with consumers more closely and demonstrating authenticity and transparency, all while being a brand that makes the consumer’s pulse quicken.

With demands moving so fast, it is little wonder that indie skin care brands, with their ability to be nimble and react swiftly to current consumer demands, are doing so well.

But for established, legacy skin care companies this presents a whole other set of challenges. Steph Filletti, Health and Beauty Expert at Kantar, tells Cosmetics Business: “With the increasing popularity of niche brands, more traditional names need to ensure that they remain relevant with shoppers who are looking for innovation and excitement.”

‘Clean’ skin care has been winning over the past year with players including Biossance and REN Clean Skincare reporting a surge in sales. Biossance, which bans the use of over 2000 ingredients from its formulations in line with its ‘No Compromise’ approach, underpinning the core of the brand, expanded into the UK in January after seeing huge success since launching in the US in 2017. Today, the brand has become one of Sephora’s top selling brands.

Dozens of brands have jumped on the bandwagon to claim a ‘non-toxic’ or ‘chemical-free’ positioning. But equally, the market has been challenged by the lack of clarity as to what constitutes ‘clean’ beauty. Janet Milner-Walker, founder and Director of beauty brand consultancy Bespoke Advantage, believes that this must now change.

“In 2020 we will continue to see a greater demand for transparency of ingredients from brands, leading to a clearer definition of ‘clean beauty’ as to avoid misleading claims and statements.”

Indeed, recent months have already signalled a shift toward a post-‘clean’ phase as backlash grows over claims of fear-mongering marketing. In a recent Cosmetics Business interview with Drunk Elephant, founder Tiffany Masterson explained that there was a need to “stop talking about being ‘clean’” and "develop a healthier relationship with ingredients”.

The industry is also on the cusp of a backlash against what has become “an unstoppable juggernaut of beauty products, influencers and content”, believes Nick Vaus, partner at brand design agency Free The Birds. “2020, to be honest, feels like we’ve reached ‘peak beauty’.”

But as ‘skip-care’ replaced laborious 10-step Korean skin care routines in 2019, and streamlined skin care routines have taken preference, this too has opened up fresh opportunities, as identified by Cosmetics Business in ‘The Conscious Beauty Diet’ trend forecast report.

“There will be a refocus on multifunctional, higher quality products that really perform. Less is definitely more in 2020,” says Vaus. Abi Cleeve, founder of skin care brand SkinSense, agrees: “Products offering multi-tiered solutions that save time and money and mitigate environmental impact will find a sustainable audience. Listening to the customer allows for sustained product development and the avoidance of gimmicks that flood the market with unnecessary ‘new’. We’ll ask what it does, how it does it and why we need it.”

Skin care: Overview

Skin care is a hotbed for shifting and opposing trends. Slow beauty and skip-care has come to the fore, yet it remains a fast-paced category that continually churns out new products.

Natural skin care has been booming, while science-led skin care that mimics dermatological results has simultaneously thrived. But the one consistent theme is that skin care, as a category, continues to boom throughout the world.


Global skin care sectors, value and growth, 2019


In what became its fourth consecutive year of growth, global sales surged by 6.8% in 2019 to reach $143.7bn, according to Euromonitor International. “The skin care market has been on the incline for some time now, and it isn’t showing any signs of slowing down,” says Janet Milner-Walker, founder and Director of Bespoke Advantage.

She adds that British women spend on average £570 on skin care annually, while data from Statistica shows that in 2019, 1.66 million Americans spent $500 or more on skin care in a three-month period alone.


Global value and growth, 2019

Total skin care. Source: Euromonitor International


“Skin care is one of the fastest growing segments in beauty, supported by the greater demand for clean formulations and growing interest in self-care,” agrees CB Insights in its 120+ Companies Shaping The Future Of Self-Care report.

In line with the significant increase in the number of new skin care launches over the past few years has been the rise of indie brands, many of which focus on a specific category within skin care.


“There has never been a better time for indie skin care brands" - Janet Milner-Walker, founder and Director, Bespoke Advantage


“There has never been a better time for indie skin care brands, as a lot of what would previously have been considered a hindrance to their success can now be transformed into their core strengths,” says Milner-Walker.

She notes that by investing their marketing budget into one focal area, it enables them to be seen as the ‘expert’ go-to brand.

“While they may later branch out into other products, financially to start with, it enables them to gain the coverage they might not have been able to if they had spread their marketing budget over promoting the brand as opposed to a single product or category.”

An example is Vintner’s Daughter, which was founded in 2012 based on a single product, Active Botanical Serum, formulated to contain botanicals, nutrients and balancing properties, and to replace several standard skin care steps.

“The brand has grown successfully over the years and they have now released an Active Treatment Essence,” says Milner-Walker. This approach has also been taken by Huda Kattan with her debut skin care brand Wishful, which launched last month with just one product, Yo Glow Enzyme Scrub.

The exfoliating scrub is designed to be a solution to lackluster skin, a skin care challenge that Kattan herself has shared since starting her cult beauty blog ten years ago.

One size fits no one

Brands have also spotted the opportunity to offer more inclusive lines within skin care – something that the industry has previously been criticised for long neglecting. A strong movement to celebrate and support diverse skin types has emerged, with brands including Urban Skin Rx and Virginia Stone creating products for a range of different skin tones.

“More brands are also addressing women over the age of 45, as well as focusing on specific concerns like menopause,” adds Milner-Walker. These include brands such as Perricone MD and Neal’s Yard Remedies, as well as new entries such as SeeMe Beauty, a US skin care line set up by three P&G employees in 2019 for women in their 40s and 50s who are noticing changes in their skin as estrogen levels decline.

Equally, brands are focusing on ‘period skin’ as the feminine care movement comes to the fore with ranges like Amareta offering products for use at different stages through the cycle.

Acne acceptance

Acne care has also been revisited as the skin positivity movement spurs more brands to hone in on acne acceptance through their campaigns, and the development segment has become a target for high-level innovation from both established beauty brands like Neutrogena and Oriflame and start-ups such as Starface, ZitSticka, Blume and Squish Beauty, as research shows that breakouts and adult acne are becoming increasing concerns for consumers.

And as consumers grow more knowledgeable about the impact of both external and internal factors on their skin, from their menstrual cycle and stress to pollution and the damaging effects of the sun and climate change, so they are starting to understand the role of the skin as part of the whole body.

Microbiome skin care has blossomed in recent years, and, frequently referred to as skin care’s biggest trend, beauty and personal care heavyweights are ploughing millions into research and new products, while independent brands are also pushing to take a pioneering role in the market.

One of the first brands to target the microbiome with a range of probiotic skin care products was Mother Dirt. Jennifer Cookson, Director of Research and Product Development, tells Cosmetics Business: “Research into the role of the cutaneous microbiome in skin and overall health has helped to spur an increase in probiotic skin care products.

"Our understanding of how ingredients can alter and affect the microbiome has changed the way formulators create skin care products and has additionally encouraged innovation from raw material vendors.”

The race is on

The impact of ongoing skin microbiome research on future skin care product development could be immense. As consumers understand that everyone has their own unique microbiome, the need for personalised skin care will inevitably grow.

“Johnson & Johnson and Elizabeth Arden have dedicated teams working on this, addressing all skin care concerns from ageing to acne,” says Milner-Walker. “Through maintaining the bacterial homeostasis on our skin, we can achieve better hydration as well as product penetration.”

And while the race is on to find the biggest scientific breakthroughs in microbiome skin care, so too has competition ramped up within personalised skin tech, with 2020 already having seen two major players announce or launch game-changing devices that offer customised skin care in the home.

As skin care shifts towards taking a more individual and specific approach to responding to consumers’ needs, brands have an opportunity to build a closer relationship with their customers. And this will be a key factor for the future growth of the skin care market.

“Although this is a highly competitive category, the success of a skin care brand has always been heavily reliant upon building a direct relationship with their customer.

Provided that a brand continues to innovate, educate and build up a solid relationship with their customers, there is no reason why this growth will not continue,” says Milner-Walker.


Brands should take note of the success of ingredient-led products which cater to specific skin care needs and, crucially, help shoppers to find the products which are right for them.Steph Filletti, Health and Beauty Expert, Kantar

Skin care consumers tend to stick to the skin care brands they trust, fearing that a new product or brand might not work as well, or result in an adverse reaction. This is set to change as bespoke skin care becomes more widely accepted, particularly as consumers begin to understand the importance of our microbiome.Janet Milner-Walker, founder and Director, Bespoke Advantage


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Trend #1: Pimple power

Credit: Blume

With 95% of people between the ages of 11 and 30 being affected by acne to some extent, according to the NHS, acne is overwhelmingly normal, and it is now finally being perceived that way too.

Thanks to a radical shift in the portrayal of the skin condition on social media and in magazines, acne is “no longer seen as a condition to be airbrushed away,” says Lucie Greene in the Light Years 2020 report.

“Spot-prone skin may affect most people at some point in their lives and it is great to see high profile social media creators talking openly about their own struggles with their skin,” adds Johnson & Johnson skin care expert Rebecca Bennett. “This has really helped normalise the conversation and bring discussions out into the open.”


Source: NHS


Celebrating skin

The launch of brand campaigns such as Blume’s #CelebrateSkin initiative have also helped to fuel the rise of acne positivity. The self-care brand’s campaign features a photo campaign picturing models with acne and shows that people “can celebrate and be proud of their skin – regardless of its adherence to outdated, unattainable societal standards.”

The increased attention – and normalisation – that spot-prone skin is receiving in skin care has also resulted in the category being re-imagined from a product development and marketing perspective, with traditional manufacturers in the segment updating their approach and launching new lines, and niche entries proliferating.

Neutrogena Clear and Soothe, which launched in January, has been inspired by turmeric, which can have anti-inflammatory and antibacterial activity, in a range designed for sensitive, spot-prone skin.

Bennett says: “In the past, many manufacturers would or could only provide quite harsh cleansing and degreasing products as these were thought best to help with spot-prone skin. Consequently, skin dried out and became red and sore – often still with spots.

"Now we are able to provide ingredients that help deal with spot-prone skin in gentler formulations that won’t dry out the skin, which can mean that skin can stay soft and healthy – this can then follow through into marketing, by educating the consumer that products suitable for spot-prone skin don’t need to dry out skin, leaving the skin comfortable.”

Not only are formulations becoming more effective and less harsh on skin, brands are taking a new approach to product development in order to respond to increased market demand.

Taran Ghatrora, CEO and co-founder of Blume, tells Cosmetics Business: “Traditionally, acne products have been made to be quite intimidating, and not to mention harmful to the body beyond where the acne exists. Like our Meltdown acne treatment, we hope to see product development lean towards a path of inclusivity, health ingredients, and doesn’t take away from someone’s time under the sun, the hydration of their skin or preventable side effects.

"We hope that the language around acne products will become more positive, because for many, acne continues into adulthood. It isn’t just a puberty experience.”

According to the American Academy of Dermatology, adult acne is on the rise, and Alain Mavon, Senior Director of Science and Innovation at Oriflame, notes that the market is responding: “We are definitely seeing a shift on the market and new needs for products for adults that target blemishes and breakouts. From the consumer’s point of view, it is not just about the skin – they want to tackle breakouts in a holistic way.”

Oriflame’s new NovAge Clarifying System offers three targeted products to help control different breakout issues often linked to hormones, lifestyle choices and stress.

NovAge Oil Balance Solution reduces excess sebum, Breakout-Defence Emulsion helps control breakout occurrence and scar visibility and 24-Hour Blemish Correction is a fast action solution for breakouts.

Niche brands and start-ups are also helping to propel acne care into new territory as one of skin care’s most innovative segments. Starface, which launched in the US in September 2019 and has just entered the UK this month, focuses on pimple positivity with its debut product, the Hydro-Star.

The playful star-shaped fluorescent yellow hydrocolloid patches make a quirky statement on the face, and are clinically proven to accelerate spot healing by drawing out pus, blocking outside bacteria and preventing the user from picking skin.

Squish’s hydrocolloid Flower Power Acne Patches are “like emojis for the face”, says Greene, and aim to help everyone accept and have fun with their skin. What is interesting about these products, is that they “chime with young consumers, increasing willingness to be proud of their flaws, rather than hide them away,” says Greene.

Pimple patches have surged in popularity over the past 12 months, with Google charting particular interest in Australia and the US. Peter Tighe, Consultant and Partner of Vice Reversa, a brand that launches this month with a range of microneedle patches including Pimple Reversa that aims to prevent and reduce spots from the first sign of an outbreak, says that patches are “a logical development as they focus directly on the area concerned without affecting healthy skin”.

Education and opportunity

Growth, and competition, in this sector is set to continue. Between 2019 and 2025 the global market for cosmetic acne products is forecast to grow by a CAGR of 3.8% to reach an estimated US$3220m, according to Market Study Report LLC.


Forecast global value and growth, 2019-2025

Cosmetic acne products market. Source: Market Study Report LLC


As the volume of products designed to treat different types of acne increases, brands will need to focus on educating consumers so that they can find the most effective products for their particular needs.

Bennett says: “Educating the acne sufferer about their skin and how to best look after it is crucial if the best results are to be obtained and maintained.”

Brands can also develop the acne care category beyond the face, says Bennett: “Back and chest acne can be very upsetting, especially in the summer months, so perhaps more could be done for body acne.”

According to a survey of 1000 members within Blume’s community, 18% of those with body acne are so bothered by it that they avoid going out. There is also more that brands can do to continue conversations around skin positivity.

In Blume’s study 71% said they have experienced depression, anxiety, low self-esteem or felt alone because of it. “There’s still much to do in erasing the shame or taboo around acne,” says Ghatrora, noting how Blume connects with its community beyond its products.


“In the future, we will be taking a different approach to the way we treat acne, as we explore the connection with prebiotics" - Alain Mavon, Senior Director of Science and Innovation, Oriflame


The next big opportunities for acne care will ultimately come from research into the skin microbiome, believes Mavon. “The industry will be looking at how we can stimulate the growth of good bacteria, particularly for the treatment of P acnes.

"In the future, we will be taking a different approach to the way we treat acne, as we explore the connection with prebiotics.”

Some brands are already tapping into this approach: new skin care brand Kinship which offers five products including acne treatment Pimple Potion, which features a proprietary microbiome technology based on a plant-based pre-probiotic derived from the fermentation of lactobacillus to support the skin’s barrier.


More brands could provide consumers with communities to support and educate them through the use of online forums or webinars to tackle the side effects of acne, which often include low self-esteem and lack of confidence.Janet Milner-Walker, founder and Director, Bespoke Advantage

Developing products to target body acne is one area for brands to explore, while research that focuses on the role of the microbiome in acne is likely to yield new product opportunities.


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Trend #2: Skin tech 4.0

Personalisation is the crystal ball of skin care. From skin-analysing mirrors to DNA-based prescribed face care, over the past five years this growing sector has started to shine a light on the possible directions the industry will travel to arrive at the future of skin care.

The latest evolution brings personalisation into the home, with skin tech devices that deliver freshly formulated and individually tailored skin care for immediate use – a breakthrough that moves the trend to the next level from both a technological and formulatory perspective.

Romy Paris was first to unveil this type of device with the launch of Figure at the 2018 Consumer Electronic Show (CES). What has changed now, three years on, is that the world’s largest cosmetics companies are betting on at-home personalisation devices as the future of skin care.

L’Occitane Group, L’Oréal and Shiseido have all invested heavily to bring new or soon-to-launch products to market. The starter pistol has fired and the personalised skin tech race has begun in earnest.

Research from Forrester reveals that 77% of consumers have chosen, recommended or paid more for a personalised service or experience, and Nick Vaus, partner of Free The Birds says that there is “a huge opportunity available to fulfil these consumer needs and desires.”

“With the recent launch of L’Oréal’s Perso, L’Occitane’s DuoLab and Shiseido’s Optune, the next generation of at-home beauty personalisation has arrived that can take into account an individual’s skin state, health, menstrual cycle, mood and local climate condition and much more besides,” he adds.

DUOLAB

DuoLab, a start-up launched within L’Occitane Group’s incubator and accelerator platform in Marseille, debuted its face care device in January, offering multiple capsule combinations including three moisturising bases and five targeted concentrates, and a patented emulsification process that delivers a freshly formulated dose in 90 seconds.

“Being emulsified at the last moment has some advantages for ingredients like vitamin C, as it is encapsulated in airtight capsules so keeps all of its benefits,” Laureline Beauvais, Marketing Director of DuoLab, tells Cosmetics Business.

The tool heats the cream to the skin’s temperature to help its absorption, and claims to be currently the only preservative-free personalised face care, as the technology allows ingredients to be blended at the last moment. The brand has also launched an app and AI-based diagnostic tool to assess the user’s skin profile, enabling them to switch their face care to deal with its changing needs.


L’ORÉAL’S PERSO

L’Oréal’s Perso is an AI-powered at-home cartridge-based system that creates personalised on-the-spot skin care in four steps. Starting with the launch of the Perso app, the user takes a photo which is analysed, then environmental conditions such as weather, temperature, UV index, pollen and humidity that can influence the state of the user’s skin are considered. Next, the user enters their personal skin care concerns into the app as well as texture and hydration level preferences; and finally the device uses the data to dispense of a single dose.

The device will be launched in partnership with a leading L’Oréal skin care brand in 2021, and custom formulas for lipstick and foundation will follow. Guive Balooch, Head of L’Oréal’s Technology Incubator, which developed Perso, says: “Already in the US, 75% of female consumers currently use, or are interested in trying, a skin care device. In major cities of China, women own on average two types of at-home beauty devices [source: Mintel]. Having identified this need, we developed Perso to bring smart skin solutions to the user’s home.”


Faff-free, fast and effective

But this is no easy road to travel. “The challenge of personalisation is meeting consumers’ significantly raised expectations of products promising to be uniquely tailored to them and to deliver that product with minimal faff,” says Vaus.

“Not only do they need to work pretty much perfectly – and fast – to warrant the level of investment in the gadget and refills, it also needs to be as easy as using subscription customised products, like Function of Beauty’s hair care.”

Vaus notes the technical challenges presented by devices, which can only have a limited number of ingredients in its cartridges, and adds that “convincing consumers that the extra step of scanning their face and generating the products is worthwhile is a big ask. Keeping the routine utterly streamlined is essential.”

Janet Milner-Walker, founder and Director of Bespoke Advantage, also highlights the challenges created by the cost of such devices – for example Optune’s subscription service costs ¥10,000 (US$92) per month and the DuoLab device is priced at £250, with a duo pack of 14 base and targeted concentrate capsules costing £35.

Milner Walker says: “The nature of bespoke negates developing products that allow for economies of scale. Allowing for diversity and differentiation comes at a cost; there are also considerations with how to retail and market these products, as well as manage stock or automate processes to allow for their bespoke nature.”

Although brands cannot predict whether at-home personalised skin care devices will enter mainstream everyday use, they’re clearly willing to invest heavily in order to find out.

Laureline Beauvais, Marketing Director of DuoLab, says: “If devices make life easier then yes, they can enter the mainstream, and this is something crucial for DuoLab. We really wanted to have a real added value over conventional skin care or other devices which don’t have all the benefits of DuoLab.”


“I believe we're now living in one of the fastest growing stages in beauty tech which drives forward personalised beauty cosmetics" - Guive Balooch, Head of L’Oréal’s Technology Incubator


Guive Balooch, Head of L’Oréal’s Technology Incubator, adds: “Technology has the power to improve the quality of beauty consumers’ lives, and I believe we’re now living in one of the fastest growing stages in beauty tech which drives forward personalised beauty cosmetics.

"I think AI has the potential to really bring personalisation to a level of mass that has never been seen before and will be able to create smart devices that can transform people’s beauty results based on the detection of various concerns, e.g. a single wrinkle or sunspot.

“The convergence of technology, lifestyle and beauty is pushing the industry forward – we’re already using design and tech to provide precision and empower consumers to create their own experiences and products though technology. Hopefully in ten years, AI and AR can play a role in helping the beauty industry be filled with truly personalised and inclusive experiences.”


New innovations in personalised skin care devices enable users to mix active ingredients fresh each day, in the home, which historically has only been possible in a laboratory. This brings new experiences to the consumer that are not offered on shelves.

With the level of cost, additional steps and change of routine that such devices ask of the consumer, brands working in this area must prove that their solutions offer significantly greater value than regular skin care products can offer.


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Trend #3: A microbial future

Across the industry, microbiome skin care has been declared the next big thing in beauty. “I think we can bet that in a couple of years it will be a must-have in beauty,” says Laureline Beauvais, Marketing Director of L’Occitane Group’s personalised skin-tech startup DuoLab.

“Just as scientists made amazing discoveries about the microbiome of the gut in the 2000s and 2010s, now scientists are looking very closely at the power of microbiome for the skin and right now amazing studies are being done on this.”

“Many companies are starting to discover the huge continent that is the skin microbiome. It is a very exciting opportunity,” adds Alain Mavon, Senior Director of Science and Innovation at Oriflame.

So influential is this industry trend that the skin care market is constantly buzzing with new active ingredients, emerging specialist brands and products, range reformulations, announcements of research partnerships and acquisitions, as indie brands and legacy companies alike take a stake in its future.

Victoria Beckham’s new Cell Rejuvenating Power Serum claims to balance the microbiome, and new La Roche-Posay product Lipikar Baume AP+M, for very dry and eczema-prone skin, introduces a new ingredient, Aqua Posae Filiformis, that is claimed to limit the growth of staph bacteria.

Meanwhile Oriflame recently launched NovAge Skin Priming Essence that contains marine prebiotic Saccharide isomerate, to stimulate the natural skin renewal and promote the narrowing of pores.

An epicentre of investment

“The direction of travel is very interesting if you look at where the big money is going,” says Nick Vaus, Partner at Free The Birds. “Think Givaudan’s investment in its Applied Microbiomics Centre of Excellence in Toulouse, France, with resulting ingredients coming out like Brightenyl for skin brightening and skin firmness, Revivyl for faster skin renewal and Yogurtene Balance a skin balancer.

"L’Oréal has also teamed with uBiome, the leader in microbial genomics and, of course, Unilever Ventures invested in Gallinée.”

Vaus notes that the big beauty players are likely to continue to use microbiome claims in the more synergistic way of making microbiome-balancing product additions to existing ranges, rather than launching standalone brands.

Indeed, plenty of that is happening elsewhere in the market. One new brand entry is For The Biome, which has been created by the founders of New Chapter, a supplement brand now owned by P&G.

For The Biome’s Sentient Skincare range contains prebiotics, postbiotics, and phytonutrients and claims to awaken communication between the skin and its microbiome.

Another is SL&Co, launched by Bite Beauty founder Susanne Langmuir, with debut product aN- Hydra The Powder of Youth No. 1, a powder multi-tasking cleanser with vegan Lactobacillus ferment to protect good bacteria on the skin.

Vaus believes that active-driven indies that are able to make big microbiome claims will be “well-placed to develop truly powerful offers with supplements and personalisation going forward.”

But while research and innovation is rapidly developing, microbiome skin care is really only just emerging. Vaus says: “It’s still a tiny fraction of the market.

"Mintel’s Global New Product Database (GNPD) looking at launches in more than 60 countries shows microbiome-oriented facial skin care launches doubling, but still only representing 8% of launches overall. So while brands like Esse, Gallinée, Mother Dirt, Aurelia, Tula, LaFlore, Ayuna and Glowbiotics are making beauty industry headlines, it’s still very much nascent.”

What will it take for the microbiome trend to reach its glowing potential? A positive factor is that consumer interest has already been piqued. Janet Milner-Walker, founder and Director of Bespoke Advantage, notes that the search for microbiome skin care on Google increased by 110% in 2019.

She explains: “As we become more aware of the importance of gut health, so we have become more aware of the health of our skin.”


Source: Mintel


As many as nine in ten US millennials say they have tried or would like to try probiotics in facial skin care products, according to Mintel. “Yet there still remains a perception gap,” says Vaus.

“Just 9% say that probiotic ingredients improve their appearance. So more consumer education is a must if microbiome skin care is truly to reach its full potential.”

“There is so much information out there about gut health but more attention needs to placed on what it means to have healthy skin,” believes Paul Schulick, founder and President of For The Biome.

“As the interest in health continues to grow, consumers will start to question what impact the products they are using on their skin have on its microbiome. What is the impact of harsh peels on the skin, or of retinol on the microbiome?”


“There is so much information out there about gut health but more attention needs to be placed on what it means to have healthy skin" - Paul Schulick, founder and President, For The Biome


“There’s some very important, growing evidence that the biodiversity on your skin is a true reflection of your overall health,” he adds, noting that people will increasingly understand that there are different strains of microbial life.

“We’re seeing strains like L. reuteri that are capable of upregulating hormones, and L. rhamnosus that has the ability to counter anxiety. Skin conditions are rising, as are mental health conditions like anxiety and depression, and there is more understanding that they are not separate identities,” says Shulick.

Shulick believes that as major corporations start to raise the conversation about microbiome skin care – as Unilever’s Dove has been doing via TV commercials, YouTube and through its website – its understanding and increasing adoption by consumers will follow.

But with high levels of consumer distrust, companies will need to ensure that they offer more credibility so that consumers can appreciate that the products are both effective and safe, he says.

Equally, brands will need to carefully consider how they intend consumers to use the products. Fiona Glen, Head of Projects at The Red Tree, says: “If they are using products to balance the microbiome, would they need to be used exclusively in order for them to work properly, if the use of other products could imbalance them? Is it realistic to expect consumers to make this switch? Brands need to think about these types of questions.”

There are also regulatory factors to consider. “Probiotics are still a challenge in Europe as regulations prohibit the use of live bacteria in cosmetics,” says Mavon.

“But we have some solutions. The use of probiotic extracts still provide benefits to the skin and we can continue to progress solutions to the consumer, for example with strains that have anti-inflammatory, barrier repair and moisturisation benefits.

"Technology is delivering benefits and can we prove those benefits to the consumer, for example through clinical testing.

“Microbiome skin care will develop more and more targeted solutions for skin care as research develops,” adds Mavon. “Everyone is at the start, but the race is on, and it’s super exciting."


Education and communication will be key for the microbiome skin care market to grow.

As we become more knowledgeable about our skin, and how no one has the same microbiome, the need for personalised skin care suddenly makes a lot more sense.Janet Milner-Walker, founder and Director, Bespoke Advantage


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Trend #4: Filtered by lifestyle

Skin care may still be thriving as a category – Technavio recently released an estimated global growth rate of 4.2% for 2020 – but for many of the biggest and most established players, competition has never been tougher.

Figures shared with Cosmetics Business reveal that the top five prestige skin care brands in the UK lost more than 5% of market share between 2016 and 2019 due to the challenge from smaller brands, according to NPD Group’s Director of Beauty Europe, Mathilde Lion.


“More and more new brands are appearing in the market with a very specific positioning, and this is challenging the big brands" - Mathilde Lion, Director of Beauty Europe, The NPD Group


“Skin care in the UK used to be very concentrated on the top players, but more and more new brands are appearing in the market with a very specific positioning, and this is challenging the big brands,” says Lion.

Other countries have experienced similar shifts too: in Germany, the top five brands overall have lost 1% share over the past two years in a market that is currently growing by 3%.

The changing consumer

Online retailer Cult Beauty has also noticed a consumer shift towards skin care that focuses on specific lifestyle concerns – and a surge of new brands are responding to exactly that.

It recently launched a campaign called The Skindie Brands that celebrates the rise of independent skin care by focusing on contemporary living, honing in on certain concerns and providing the knowledge needed to make the industry less confusing.

Bessie Hitcham, Assistant Buyer at Cult Beauty, says: “The feeling of not being able to find a brand that resonates has spawned a growing swathe of brands that cater to specific needs (Volition), personalities (Plenaire) and core values (vegan brand Versed).

Beauty is a community and within it there are different demographics but a lot of common problems. Think ‘plane face’, which inspired Summer Fridays to create the now iconic Jet Lag Mask, and Skin Design London, which brings the in-office experience to your bathroom.”

The category has seen a metoric rise in brands focusing on specific concerns, from ‘period skin care’ from brands like Amareta and Faace (see Brand Spotlight) to brands focusing on acne (see Trend 1), and skin tone rather than skin type, such as luxury brand Virginia Stone.

Fiona Glen, Head of Projects at The Red Tree, notes the advantage that this approach has given niche brands. “It is an opportunity to target consumers with a clear point of difference, and it has evolved from consumer appetite.”

However, brands do need to be aware of the potential implications of this type of approach. Glen says: “I think there is a thin line between creating differentiation and being too niche, because although a certain approach might appear to be an obvious point of difference, consumer interest in trading into it could be quite limited. Brands need to be looking at market research, and to think about what incremental sales it would bring to a retailer.”

The crucial element here is for brands to fulfil a new need, and to go beyond their targeted approach. “New entries need a strong founder story, they need to be sustainably managed with aesthetically pleasing packaging, all at a high performing level. A brand has to have the whole package, and it has to all work together,” says Glen.

Plenaire, for example, was founded by Namrata Kamdar who, having a young daughter, noticed that Gen Z was being largely ignored by retailers, so launched a line dedicated to consumers from the age of 15.

Plenaire offers fully recyclable, BPA-free packaging, and is vegan and cruelty-free, but also features Instagrammable designs to appeal to young consumers.

Striking a balance

For established players, it is more important than ever to stay updated on the latest trends to remain competitive with today’s switch-happy consumers.

But equally, they should aim to strike the difficult balance between taking knee-jerk reactions to trends and waiting to see how successful they become, says Glen, and bear in mind that just because a brand is prominent, it doesn’t mean it’s successful.

“Take CBD skin care,” says Glen. “It’s one of the biggest recent trends with many niche players, but the feedback from retailers has been overall pessimistic. We are yet to see a major player really go after it.”

While it can be difficult to establish whether a trend is hype-driven or genuinely sales-based, Glen believes that some areas of white space to further explore include streamlined and multifunctional products, as well as a resurgence of ingredients such as squalane and cica.

Hitcham agrees: “There are as many brands going back to simple ‘how can we use existing ingredients’ (Oat Cleansing Balm from The Inkey List and Apple Cider Vinegar Peel Pads from Volition are good examples) as there are labs all over the world working toward the next breakthrough ingredient.”


Despite the fact that the market feels saturated, that is still a lot that brands can do to differentiate.Fiona Glen, Head of Projects, The Red Tree

With customers self-identifying specific concerns through the literature they are reading online, they are shopping by category, filtering as far as they can.Bessie Hitcham, Assistant Buyer, Cult Beauty


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Trend #5: Shaking up sunscreen

Credit: Caudalie

As the spotlight shines on rising temperatures and ocean-safe ingredients, as consumers grow more knowledgeable about sun-induced ageing and skin cancer, and as product expectations evolve, new opportunities are emerging in sunscreen.

In the Light Years 2020 report, Lucie Greene founder of futures practice Light Years predicts a fresh onset of innovation that is set to update the sector.

“As more consumers prioritise sun protection, expect to see a rise in beautifying and sustainable sunscreen solutions that fit seamlessly with a luxurious skin care regime.”

With recent research from NASA scientists revealing that 2019 was the second-hottest year on record, and the UK reaching its highest-ever recorded temperature last July (38.7 ̊C) according to the Met Office, protecting the skin from the damaging effects of the sun has become a necessity in even traditionally temperate climates and for extended parts of the year.

Nick Vaus, partner at Free The Birds, says that while sun care has been long consigned to functional use for short periods, things have altered in the last couple of years – not only because of the warming climate, but because of changes in how consumers treat their skin, and more sophisticated product requirements.

Noting data from Transparency Market Research, which forecasts growth of 6% for the sun care market, to reach around $25 billion by 2024, Vaus says a variety of factors are at play: “from innovative formulations and formats, the rise in retinol and acid usage in skin care routines necessitating daily SPF usage and government policy and education trying to inhibit the growth of skin cancer and protect the environment.”


Forecast global value and growth, 2024

Total sun care market Source: Transparency Market Research


Changes are also being seen within retail and in new regulations that are being introduced in some parts of the world. “As of 2020, Walgreens will no longer sell sun care products below SPF15.

Meanwhile, Hawaii and Key West have banned the sale of sunscreen containing the coral-harming chemicals oxybenzone and octinoxate, with similar bills going through other US states’ legislatures,” says Vaus.

The result of all this, he adds, is that “there will be more sun care product usage, but its performance and environmental impact will be under ever closer scrutiny.”

The new standards

Credit via instagram @ultrasunuk

Proving your credentials to consumers is key, and Ultrasun took a step ahead earlier this year by becoming the world’s first sun care brand to be awarded the ocean-friendly credential EcoSun Pass.

Abi Cleeve, MD of Ultrasun UK, tells Cosmetics Business that this meant “going beyond the absence of four identified ingredients to meet ‘Reef Friendly’ status to address the whole picture from ocean to soil and endocrine considerations”.

She adds that giving consumers peace of mind on vital issues such as this removes a potential barrier to their use of UV protection.

US mineral sunscreen brand Badger was in January awarded the Protect Land + Sea Certification, another ocean-friendly standard. And Caudalie last year launched a new Ocean Protect-certified sun care range with five products formulated without coral-harming filters oxybenzone and octinoxate as well as chemical filters that it says are suspected of being endocrine disruptors.

Proving your credentials to consumers is key, and Ultrasun took a step ahead earlier this year by becoming the world’s first sun care brand to be awarded the ocean-friendly credential EcoSun Pass.

Abi Cleeve, MD of Ultrasun UK, tells Cosmetics Business that this meant “going beyond the absence of four identified ingredients to meet ‘Reef Friendly’ status to address the whole picture from ocean to soil and endocrine considerations”.

She adds that giving consumers peace of mind on vital issues such as this removes a potential barrier to their use of UV protection.

US mineral sunscreen brand Badger was in January awarded the Protect Land + Sea Certification, another ocean-friendly standard. And Caudalie last year launched a new Ocean Protect-certified sun care range with five products formulated without coral-harming filters oxybenzone and octinoxate as well as chemical filters that it says are suspected of being endocrine disruptors.

With certain sunscreen ingredients being called into question for their safety – in 2019 the FDA called for industry testing on active ingredients in sunscreens to evaluate whether they can be absorbed through the skin and into the body, and again in 2020 for further testing, especially with regards to chronic use – further brands are responding to the demand for alternative options.

Love Sun Body became the first and only sunscreen brand to gain Ecocert Cosmos certification in the US with its natural mineral sun care, while it also claims reef-safe and vegan status.

And REN Clean Skincare’s launch of its first mineral sunscreen in March last year – which the brand names as “one of the cleanest SPF formulas currently on the market” – went on to be the brand’s fastest selling product ever launched, according to REN’s Chief Executive Arnaud Meysselle.

The product is also packaged in 50% recycled plastic with a 100% recycled cap, and despite being silicone-free, claims to be absorbed without being chalky and contains rice starch for its mattifying extracts to perfect the skin.

Creating finishes to make sunscreen application feel more like a skin care step is now becoming a game-changer for brands. La Roche-Posay is moving away from the greasier finish of traditional formulas by using Intelimer Technology in its Shaka Ultra-Light Fluid for improved wearability.

“Sun care has for a long time been clinical, but it is improving,” says Fiona Glen, Head of Projects at The Red Tree.

“The two biggest opportunities are in form and texture. When a manufacturer can crack changing the application process from something a consumer needs to do to something they want to do, that will be a big change.”

Glen notes two big challengers in the segment that are having a go: California-based 70%+ certified organic brand Coola and French brand Mimitika. Coola’s Sun Silk Drops SPF30 are formulated to feel light on the skin and its proprietary Full Spectrum 360 Complex is proven to go beyond UVA and UVB to help mitigate the effect of blue light, infrared and pollution.

Mimitika, meanwhile has been well received for its light, non-sticky textures and status as a cruelty- free and vegan brand that is also free of parabens and nano-particles.

Another player shaking up the market is Supergoop, which last year introduced a cream eyeshadow that offers broad spectrum SPF30 protection called Shimmershade, and Poof Part Powder, an SPF45 shampoo-like powder for the scalp and hair.

And 2020 will see the launch of a brand that claims to create a new sector within sun care that blends technology and consumer health.

Lumasol, founded by Sophia Hutchins, will introduce a high SPF mist that can be applied after make-up that features interactive packaging that changes colour when exposed to UVA and UVB rays to let the user know when they need to reapply.

Heating up competition

According to Glen, there is room for more challenger brands on the market, but they should be aware of the weight of the existing competition.

“Established brands are doing a very good job, and although the category feels like it is due a change, the reality is that brands attempting to do that will find it harder than it would obviously seem to be.”


“Being able to offer elevated products throughout the year that can perform well under make-up or indeed as make-up will be essential - Nick Vaus, Partner, Free The Birds


Existing brands will, however, come under increasing pressure as competition and product expectations grow. “Brands will need to be able to explain what’s in their sun care, with mineral or physical formulations likely to win out and traditional ‘chemical’ brands needing to re-engineer their formulations or at the very least being able to offer credible education as to why they are taking this approach,” believes Vaus.

He adds: “Being able to offer elevated products throughout the year that can perform well under make-up, or indeed as make-up, will be essential. And with that also comes more products from mainstream SPF brands that meet the needs of people of colour, that don’t cause a chalky cast, that come in multiple shade ranges and suit oilier skin that is prone to hyperpigmentation with actives that prevent and treat pigmentation marks”


Sunscreen has become a more pressing concern for consumers. In response, brands are creating innovative formulas that are pleasant to use and wear, while boasting all- important sustainability credentials. Invisibility – with no tell-tale white film – is also key, and physical, or mineral, sunscreen formulations are particularly in demand.Lucie Greene, Light Years 2020 report

Priority must be given to constantly reviewing the removal of ingredients that may be flagged as ‘of concern’ as more information through research becomes available.Abi Cleeve, MD, Ultrasun UK


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Country highlights


UK

In many ways, skin care is resisting well to challenges in the UK, which include store closures and declining footfall. Prestige women’s facial skin care grew by 2% in 2019 – although it is a far cry from the 8% gain the segment made two years ago, according to The NPD Group.

“But there is still dynamism in some segments,” says NPD’s Director of Beauty Europe, Mathilde Lion, noting particular growth in exfoliators, toners and products that focus on different steps within the skin care routine.

“The market has seen a lot of change, with new players coming in that weren’t there three years ago. The main growth driver is exclusive and private label brands. Brands such as The Ordinary and Charlotte Tilbury have entered the top 20 and are growing in the rankings.”

Kantar has also picked up on this trend. Growth within the total £1.4bn UK skin care market (which increased by 1.5% overall), was largely driven by the success of facial skin care products, a segment that Steph Filletti, Health and Beauty Expert at Kantar, described as seeing “considerable innovation and a number of new market entrants.”


UK: Skin care market, value and growth, 2019

52 w/e 26 January 2020. Source: Kantar


“The facial skin care market saw spend per buyer increase by 3.9% as a boom in the popularity of niche brands made its mark,” adds Filletti. “These include up-and-coming brands like Sukin, Balance Me and The Inkey List, which all put their sustainable and ingredient-led credentials front and centre.

"Retailers like Boots and Sainsbury’s capitalised on the growth of niche brands in 2019 by profiling them alongside more established brands – and they were rewarded with an increase in younger shoppers coming through their doors,” she explains.

But while the anti-ageing market has felt the impact of niche brands like Nip+Fab, Filletti notes that the stand-out player of 2019 was in fact traditional brand No7.

“This was down to the launch of No7 Laboratories, which proved effective in attracting new shoppers and introducing premium products to the anti-ageing market,” she notes.

Other skin care categories were not so fortunate. Sales of body care, baby and hand products lagged in 2019, but Filletti believes that brands can learn from the weaker performances.

“Body skin care products have experienced decline throughout the year as beauty regimes are increasingly squeezed by time-poor consumers. With the number of women claiming to be pushed for time increasing by half a million since 2015, brands should find ways of winning back buyers through new, multi-use products.”


Germany

Germany’s prestige skin care market experienced its third year of consecutive growth in 2019, rising by 3% in value to total €8m, according to The NPD Group.

“Most sub-categories are doing well, including body care, which grew by 17% and is unusual in the prestige market,” says Lion. “Men’s skin care also performed well (+3%), but growth was mainly driven by women’s facial skin care (+3%) with anti-ageing rising by 2% and moisturisers up 5%.”

The market is also seeing growth in some basic segments such as exfoliators (+12%) and clarifiers and toners (+7%). “Basic segments are growing even faster than anti-ageing, which is quite different to what we used to have in prestige.

"Today’s trends have gone back to basic routines of exfoliating, hydrating and moisturising,” adds Lion. Masks have really fallen off the radar, declining by 13% in 2019.


Germany: Top 3 prestige skin care brands, 2019

Source: The NPD Group


As in many other countries, today’s growth in Germany is coming from smaller, challenger brands and this is creating some shifts in the market. “Three years ago Rituals was number six in the skin care market, but it’s now number three, and gaining ground in Germany.

"By contrast, the country’s top five brands overall lost 1% share over the past two years,” says Lion.

Exclusive brands are also booming in Germany and now represent 14% of the skin care market, according to NPD. As a result, retailers are keen to line their shelves with new, exclusive ranges.

For example, in December, Douglas announced its exclusive partnership with Kylie Jenner’s Kylie Skin, making it the premium retailer’s biggest skin care launch of 2020.


US

Skin care continued to thrive in the US in 2019, with NPD reporting sales growth of 5% for prestige products, and natural brands holding court as the top growth contributor.

Representing 30% of total prestige skin care dollar sales, natural brands grew by 14% last year, compared with 2018. However, ‘clean’ brands, which now represent 13% of prestige skin care sales, grew by a staggering 39% in 2019.

The space has exploded in recent years as retailers such as Follain, Credo and Sephora have focused on the segment, and brands like Herbivore, Honest Beauty, First Aid Beauty and Drunk Elephant have become some of the category’s most popular players.

In the space of four years, ‘clean’ skin care brands have essentially doubled sales volume and share – in 2016 they represented just 6% of total skin care sales.

“‘Clean’ brands are taking on a role as experts at education, curation and connection,” Larissa Jensen, Vice President, Beauty Industry Advisor at The NPD Group, tells Cosmetics Business.

“Brands that have an initiative toward ‘safe’ or ‘clean’ ingredients are using emotional creation stories to connect with consumers. These brands also tend to have a different launch cadence which in turn creates a more curated assortment with less noise and more simplicity. In the future, we expect ‘clean’ to become a consumer expectation similar to transparency,” she explains.

Market intelligence agency Mintel agrees. Its 2030 Beauty & Personal Care Trends report states: “In 2030, the clean beauty industry will just be the beauty industry.”

In fact, the past year has seen new ‘clean’ skin care brands launch at more affordable price points, such as vegan line Versed, which debuted at Target last spring. Products are priced under $20 each, and the brand recently attracted investment from LVMH Luxury Ventures, which perhaps signals the conglomerate’s future intentions to explore mass market skin care.

Other ‘clean’ product launches have been met with a degree of backlash. Revlon’s Prime Plus Perfecting + Smoothing Makeup + Skincare Primer, which carries the EWG Verified mark, was recently criticised by cosmetic formulators on social media for teaming with the EWG – a group that has been accused by cosmetic chemists of fearmongering.


Multi-use products remain key for brands looking to win back buyers to body skin care.

Indie, exclusive and ‘clean’ brands are driving growth in skin care markets. Demand for ingredient transparency will continue to grow and brands will be increasingly scrutinised for making misleading claims.


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Outlook

Credit: Glossier

Just as skin health will remain a huge focus for consumers and knowledge around their own particular skin concerns develops, the skin care market is poised to maintain its own robust growth for a while longer.

According to Euromonitor, global skin care sales are forecast to rise by over 6% both in 2020 and 2021, when the total category will be worth $162.6bn.


Forecast global value and growth, 2020-2021

Source: Euromonitor International


But the beauty market is a cyclical beast, and industry experts agree that when the time comes for the currently dwindling colour cosmetics category to make its grand return to glory, skin care will inevitably be affected.

Emma Fishwick, Account Manager at NPD UK Beauty, says: “Historically, NPD data has detected a shift between make-up and skin care every four to five years. Based on this, and the slowdown in make-up that began to take hold in 2017, I anticipate we’ll see make-up rebound in a few years.”

“We can expect a slow down in skin care and a return to growth in make-up as both categories are linked,” adds Mathilde Lion, Director of Beauty Europe at The NPD Group.

“But it won’t happen in the way that we have seen before. The desire for consumers to treat their skin well will remain and there will be a stronger focus on skin care benefits in make-up. The crossover between these two segments is not new, but it will become even more important in the future.”

Unlike the BB cream trend, which first surfaced nearly a decade ago, and took a make-up-acting-as-skin care approach, the new trend will see skin care act more as make-up, for example, moisturisers with subtle perfecting benefits.

Fiona Glen, Head of Projects at The Red Tree, agrees that this area holds strong potential for brands. “There is definitely a consumer appetite for make-up that works hard but on a subtle level, which brands like Farsali and Glossier are doing.”

A finishing touch

Glossier’s recent launch Futuredew is an oil-serum hybrid that according to the brand gives “the light- reflecting, soft-focus finish you usually get from make-up”, but with the moisturising and brightening benefits of skin care.

“Futuredew is your skin, but glowier,” says Glossier. And Farsali’s oil-balancing serum Liquid Powder contains French pink clay to leave a light powdered finish on the skin.

“This is an up and coming skin care trend,” says Glen. “There are a lot more opportunities for direct- to-consumer, standalone brands and retailers to bridge the gap between skin care and cosmetics.”

Lion believes that ingredients will continue to be the key focus for both consumers and brands. “The need for them to have a real effect on the skin grows stronger, while the expectation is for them to be more natural, more efficient and completely safe.”

The skin care category also has strong potential for further development in Asia, especially among Chinese consumers, she says. “There is also space to cater for different skin needs, such as for the ageing population, and within personalisation. Skin care continues to carry a lot of potential in its own right.”

Featured Companies

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