INDUSTRY REPORT 32562
Cosmetic & Beauty Products
Manufacturing in the US
Glossed over: Declining input prices will likely support industry profit growth
Christian Perdomo | August 2022
IBISWorld.com
1-800-330-3772
info@IBISWorld.com
Cosmetic & Beauty Products Manufacturing in the US
August 2022
Contents
Recent Developments......................................................... 3
COMPETITIVE LANDSCAPE.......................... 26
ABOUT THIS INDUSTRY.................................. 5
Industry Definition................................................................5
Major Players...................................................................... 5
Main Activities..................................................................... 5
Supply Chain....................................................................... 6
Market Share Concentration............................................. 26
Key Success Factors........................................................26
Cost Structure Benchmarks............................................. 27
Basis of Competition......................................................... 30
Barriers to Entry............................................................... 31
Industry Globalization........................................................ 31
INDUSTRY AT A GLANCE................................ 7
MAJOR COMPANIES...................................... 33
Executive Summary............................................................ 9
Market Share Overview..................................................... 33
Related Companies........................................................... 33
L'oreal Usa, Inc................................................................. 34
Procter & Gamble Co........................................................ 36
Estee Lauder Companies Inc............................................ 38
Unilever N V...................................................................... 40
Coty Inc............................................................................. 42
INDUSTRY PERFORMANCE..........................10
Key External Drivers.........................................................10
Current Performance........................................................ 11
INDUSTRY OUTLOOK.................................... 14
Outlook.............................................................................. 14
Industry Life Cycle............................................................. 16
PRODUCTS & MARKETS............................... 17
Supply Chain..................................................................... 17
Products & Services.......................................................... 17
Demand Determinants...................................................... 18
Major Markets....................................................................19
International Trade............................................................ 20
GEOGRAPHIC BREAKDOWN........................ 22
Key Insights....................................................................... 22
Business Locations........................................................... 25
OPERATING CONDITIONS............................ 44
Capital Intensity................................................................. 44
Technology & Systems......................................................45
Revenue Volatility..............................................................46
Regulation & Policy........................................................... 47
Industry Assistance........................................................... 48
KEY STATISTICS............................................ 49
Industry Data..................................................................... 49
Annual Change..................................................................49
Key Ratios......................................................................... 49
Industry Financial Statement............................................. 50
ADDITIONAL RESOURCES............................52
Additional Resources........................................................ 52
Industry Jargon..................................................................52
Glossary............................................................................ 52
CALL PREPARATION QUESTIONS............... 54
Role Specific Questions.................................................... 54
External Impacts Questions.............................................. 55
Internal Issues Questions.................................................. 55
2
IBISWorld.com
Cosmetic & Beauty Products Manufacturing in the US
Recent
Developments
August 2022
Higher interest rates lower commodity prices
Increased commodity prices over the past year is expected to slow, driven by widespread supply and demand
imbalances. A convergence of supplier buildup, lower feedstock prices, and inflation has contributed to price
declines. Higher real interest rates are expected to continue price declines, likely hurting producers of commodities
moving forward.
Declining crude oil prices pose opportunity, but signal risk
Declining crude oil prices have been advantageous to producers in sectors as diverse as food production to
petrochemicals. However, falling crude oil prices are a sign of mounting recession fears, which may pose longerterm economic consequences for these operators even as input prices fall. Recession concerns globally have also
strengthened the US dollar, which may have a negative impact on US companies that operate internationally moving
forward.
This section last udpated October 08, 2022
3
IBISWorld.com
Cosmetic & Beauty Products Manufacturing in the US
August 2022
About IBISWorld
IBISWorld specializes in industry research with coverage on thousands of global industries. Our comprehensive data and in-depth analysis help
businesses of all types gain quick and actionable insights on industries around the world. Busy professionals can spend less time researching
and preparing for meetings, and more time focused on making strategic business decisions that benefit you, your company and your clients. We
offer research on industries in the US, Canada, Australia, New Zealand, Germany, the UK, Ireland, China and Mexico, as well as industries that
are truly global in nature.
4
IBISWorld.com
Cosmetic & Beauty Products Manufacturing in the US
August 2022
About This Industry
Industry Definition
This industry prepares, blends, compounds and packages beauty products and cosmetics. Products included in this
industry are perfumes, makeup items, hair preparations, face creams, lotions and other toiletries. Toothpastes,
toothbrushes, soaps and body washes are not included in this industry.
Major Players
L'oreal Usa, Inc.
Procter & Gamble Co
Estee Lauder Companies Inc.
Unilever N V
Coty Inc.
Blistex Inc.
Mana Products Inc.
Colorlab Cosmetics Inc.
Lady Burd
Labtec Cosmetics
Lon Cosmetics Ltd.
Medusa’s Make-Up
Body Dimensions Industries Inc.
Main Activities
The primary activities of this industry are:
Manufacturing natural and synthetic perfumes
Manufacturing shaving cream, shaving preparations and aftershave products
Manufacturing haircare products
Manufacturing face and body creams, beauty creams or lotions and hand cream or lotions
Manufacturing sunscreen products
Manufacturing cosmetics, including face powders, eye shadows, lipsticks and mascaras
Manufacturing bath salts and talcum powders
Manufacturing deodorants and depilatory products
Manufacturing nail care preparations and nail polishes
Manufacturing toilet cream or lotions
The major products and services in this industry are:
Perfumes, toilet waters, and colognes
Hair preparations
Dentifrices, mouthwashes, gargles and rinses
Creams, lotions and oils
Cosmetics
Other
5
IBISWorld.com
Cosmetic & Beauty Products Manufacturing in the US
August 2022
Supply Chain
SIMILAR INDUSTRIES
Sanitary Paper Product
Manufacturing in the US
Soap & Cleaning Compound
Manufacturing in the US
Hand Tool & Cutlery
Manufacturing in the US
Vacuum, Fan & Small Household
Appliance Manufacturing in the US
Hair & Nail Salons in the US
RELATED INTERNATIONAL INDUSTRIES
Global Cosmetics Manufacturing
Cosmetics, Perfume and
Toiletries Manufacturing in
Australia
Cosmetic & Personal Care
Product Manufacturing in China
Perfume & Cosmetics
Manufacturing in the UK
Cosmetic & Beauty Product
Manufacturing in Canada
6
IBISWorld.com
Cosmetic & Beauty Products Manufacturing in the US
August 2022
Industry at a Glance
Key Statistics
Key External Drivers
$47.7bn
Revenue
Annual Growth
Annual Growth
Annual Growth
2017–2022
2022–2027
2017–2027
-0.7%
0.8%
% = 2017–22 Annual Growth
-1.2%
1.5%
Consumer confidence index
Per capita disposable income
-0.4pp
2.0%
Labor force participation rate of
women
Trade-weighted index
1.9%
Research and development
expenditure
$2.9bn
Profit
Industry Structure
Annual Growth
Annual Growth
2017–2022
2017–2022
POSITIVE IMPACT
Concentration
Low
-2.9%
MIXED IMPACT
6.1%
Profit Margin
Annual Growth
Annual Growth
2017–2022
2017–2022
-0.7pp
Revenue Volatility
Medium
Capital Intensity
Medium
Industry Assistance
Medium / Steady
Regulation & Policy
Medium / Increasing
Technology Change
Medium
Barriers to Entry
Medium / Increasing
Industry Globalization
Medium / Increasing
NEGATIVE IMPACT
4,305
Competition
High / Increasing
Businesses
Annual Growth
Annual Growth
Annual Growth
2017–2022
2022–2027
2017–2027
4.7%
2.7%
Key Trends
 Consumers are increasingly seeking innovative formulas
and beneficial ingredients
55,127
 Smaller brands can cater to growing niche markets by
branding themselves as hand-crafted locally
Employment
Annual Growth
Annual Growth
Annual Growth
2017–2022
2022–2027
2017–2027
1.0%
1.3%
 The industry tends to regularly attract new entrants due to its
moderate barriers to entry
 Along with revenue growth, the number of enterprises is
expected to increase
 Operators are expected to continue investing in research
and development
$3.4bn
Wages
 The industry is expected to become more globalized
Annual Growth
Annual Growth
Annual Growth
2017–2022
2022–2027
2017–2027
-0.6%
1.2%
7
Life Cycle
Mature
 Profit has decreased during the period, along with revenue
IBISWorld.com
Cosmetic & Beauty Products Manufacturing in the US
August 2022
Products & Services Segmentation
Major Players
SWOT
STRENGTHS
High Profit vs. Sector Average
Low Customer Class Concentration
Low Product/Service Concentration
High Revenue per Employee
WEAKNESSES
High Competition
Medium Imports
High Capital Requirements
OPPORTUNITIES
High Revenue Growth (2022-2027)
Labor force participation rate of women
THREATS
Low Revenue Growth (2005-2022)
Low Revenue Growth (2017-2022)
Low Outlier Growth
Low Performance Drivers
Per capita disposable income
8
IBISWorld.com
Cosmetic & Beauty Products Manufacturing in the US
August 2022
Executive Summary Glossed over: Declining input prices will likely support industry profit
growth
The Cosmetic and Beauty Products Manufacturing industry produces personal care goods for everyday use, such
as deodorant, shaving cream and dental floss, and specialty cosmetic products, such as eyeliner and perfume.
Rising per capita disposable income over most of the five years to 2022 has supported revenue. As consumers
began to recover from the effects of COVID-19 (coronavirus), revenue increased 5.2% in 2021. However, industry
revenue is estimated to fall at an annualized rate of 0.7% to $47.7 billion over the five years to 2022, with this drop
was mainly due to the COVID-19 (coronavirus) pandemic and including an increase of 1.4% in 2022 alone. Profit
has also decreased during the period, along with revenue.
A rising number of middle-aged people has provided an opportunity for developments in antiaging and luxury
products. Moreover, rising consumer spending during most of the period has contributed to demand for luxury and
discretionary products, particularly for products with beneficial ingredients. Increasing awareness of innovative,
inclusive, technical and sustainable products has been the trend for consumers during the current period. As
disposable income has increased, consumers have had more flexibility to purchase discretionary industry products.
Additionally, exports have supported revenue growth, with the exception of 2020, with exports primarily destined for
Canada, China, the United Kingdom and Mexico. Aided by social media marketing and increased demand for USmade products, online businesses, such as Glossier Inc., have been especially well-positioned to reach consumers
internationally.
Over the five years to 2027, industry revenue is expected to return to growth, increasing at an annualized rate of
0.8% to $49.8 billion. As the industry returns to producing products after retrofitting facilities to adjust to the
coronavirus pandemic, the industry will likely return to growth. Rising consumer confidence and disposable income
are expected to contribute to some increases in spending on discretionary industry products. The world price of zinc,
which represents a key input for industry operators, is expected to decline, which will still support profit growth during
the outlook period. Additionally, a slowdown in imports moving forward will likely provide an opportunity for
increased revenue for domestic producers.
9
IBISWorld.com
Cosmetic & Beauty Products Manufacturing in the US
August 2022
Industry Performance
Key External
Drivers
Consumer confidence index
The Consumer Confidence Index mirrors consumers' sentiment about the state of the economy and reflects trends
in unemployment and disposable income. Consumers are more likely to purchase cosmetic and beauty products
when the Consumer Confidence Index is high because many industry goods are considered discretionary. The
Consumer Confidence Index is expected to increase in 2022.
Per capita disposable income
Per capita disposable income determines an individual's ability to purchase goods or services, such as cosmetics
and beauty products. While many of the industry's products are nondiscretionary, such as shampoo and deodorant,
the industry also manufactures nonessential luxury goods, such as perfume and makeup. When disposable income
increases, so does demand for discretionary products, which boosts revenue. In 2022, per capita disposable income
is expected to decrease, posing a potential threat to the industry.
Trade-weighted index
The trade-weighted index (TWI) measures the strength of the US dollar compared with the currencies of the United
States' major trading partners. The appreciation of the dollar makes US-made cosmetic and beauty products less
affordable for foreign customers, limiting industry exports. Additionally, an increase in the TWI makes foreignmanufactured goods more affordable, decreasing demand for domestically produced products. The TWI is expected
to increase in 2022.
Research and development expenditure
Investment in research and development (R&D) drives new product development in the industry. As public and
private R&D funding grows, industry operators will likely have better access to advanced ingredients and
methodologies for producing cutting-edge products. R&D expenditure is expected to increase in 2022.
Labor force participation rate of women
The labor force participation rate of women measures the percentage of civilian, noninstitutionalized women aged 16
and older that are employed or unemployed but looking for work. As this rate increases, more women are likely to
demand industry products. In 2022, the labor force participation rate of women is expected to increase, representing
a potential opportunity for the industry.
10
IBISWorld.com
Cosmetic & Beauty Products Manufacturing in the US
Current
Performance
August 2022
The Cosmetic and Beauty Products Manufacturing industry produces
personal care goods for everyday use, such as deodorant, shaving cream
and dental floss, and specialty cosmetic products, such as eyeliner and
perfume.
Industry products range in price and quality, appealing to a variety of consumers. The industry has benefited from
strong per capita disposable income growth over most of the five years to 2022; however, consumer spending and
consumer confidence sharply declined in 2020. Nevertheless, due to the recovery of the economy and access to
COVID-19 (coronavirus) vaccines, consumer spending and confidence increased again in 2021, contributing to
increased demand for most discretionary industry products. However, IBISWorld estimates industry revenue will
decrease an annualized 0.7% to $47.7 billion over the five years to 2022, including an increase of 1.4% in 2022
alone.
SHIFTING CONSUMER TRENDS
Consumers have sought out mindful and healthy beauty products after
many were negatively affected by using masks with makeup.
Cosmetic makeup is the largest industry product segment, generating an estimated 34.1% of revenue in 2022.
Furthermore, consumers are increasingly seeking innovative formulas and beneficial ingredients, such as
cannabidiol (CBD), alpha hydroxy acid and probiotics. This is indicative of a shift in consumer preference, as
consumers take a more natural approach and focus on skincare. However, it has caused the industry's most
prominent product segment to decline, hampering industry revenue.
Furthermore, the number of adults aged 50 and older has increased in recent years, contributing to an increasing
emphasis on anti-aging beauty products. According to a 2017 study by OnePoll, women in their thirties spend more
on beauty products, especially antiaging, due to the rise in antiaging technology and the growing emphasis on
starting use of these products before signs of aging appear (latest data available). The largest demographic of
consumers for personal care products are consumers aged 35 to 54, making antiaging products especially profitable
in this industry.
MARKETING TRENDS
While marketing accounts for an estimated 1.3% of industry revenue in
2022, many operators have adjusted marketing budgets as consumers
change purchasing behavior.
11
IBISWorld.com
Cosmetic & Beauty Products Manufacturing in the US
August 2022
The growth of social media and e-commerce has driven more industry operators to connect with consumers directly
over the internet, such as investing in search engine marketing (SEM) to show up at the top of search results for
important keywords. Brands that have vertically integrated manufacturing and business processes contribute to
companies' mobility to quickly identify consumer preferences and translate those preferences into new products.
Direct-to-consumer marketing indicates that industry operators are adopting a more customer-centric approach,
focusing on building direct relationships with customers to create personalized experiences.
Smaller brands can cater to growing niche markets by branding themselves as hand-crafted locally and ethically or
by using free social media platforms, without spending large amounts of revenue on marketing and advertising
campaigns. For example, Glossier Inc. (Glossier) is a direct-to-consumer beauty company that manufactures
skincare, makeup and fragrance products that leveraged social media to directly involve consumers in product
development, ensuring that every product is inspired by real customers. Glossier then ensures all manufacturers
and suppliers of these new products comply with its code of conduct, which addresses its commitment to ethical and
responsible business. The company's products are sold in the United States, Canada, Sweden and the United
Kingdom.
INTERNATIONAL TRADE
Luxury foreign cosmetics, such as those from France, are in high
demand, especially due to the perceived higher quality.
Industry imports are estimated to satisfy 26.2% of domestic demand in 2022, up from 21.0% in 2017. The value of
imports has increased an annualized 5.4% to $13.7 billion over the five years to 2022. Due to domestic demand for
foreign brands, such as L'Oréal, the United States primarily sources cosmetics and skincare products from suppliers
in France, Canada, Italy and South Korea; combined, these countries account for an estimated 55.4% of industry
imports in 2022. Additionally, both high- and low-end product lines have exhibited import growth in recent years as
the trade-weighted index has slightly increased, rendering foreign products more affordable for domestic customers
and fulfilling the values of American buyers.
International demand for US-made goods grew during the period before a sharp decline in 2020, mainly as a result
of the coronavirus pandemic. The value of exports decreased an annualized 1.4% to $9.0 billion over the five years
to 2022. Exports to China account for 7.8% of industry exports in 2022, while Canada remains the largest export
market for industry goods, accounting for an estimated 23.3% of exports in 2022. Other significant recipients of US
cosmetics and beauty products are the United Kingdom and Mexico, accounting for 6.4% and 6.1%, respectively, in
2022.
INDUSTRY STRUCTURE
Due to its moderate barriers to entry and plethora of niche market
opportunities, the industry tends to regularly attract new entrants.
The number of industry enterprises has grown an annualized 4.7% to 4,305 operators over the five years to 2022.
Employment has also expanded, growing at an annualized rate of 1.0% to 55,127 workers during the same period.
Profit, measured as earnings before interest and taxes, has decreased over the past five years, accounting for 6.1%
of revenue in 2022, down from 6.8% in 2017. Volatile input costs during most of the period, such as the price of zinc,
have contributed to declining profit because it is used as a key ingredient in many industry products.
12
IBISWorld.com
Cosmetic & Beauty Products Manufacturing in the US
August 2022
Historical Performance Data
13
Per capita
disposable
income
($)
Enterprises
(Units)
Employment
(Units)
Exports
($m)
Imports
($m)
Wages
($m)
Domestic
Demand
($m)
2,965
2,918
49,615
9,208
8,838
3,201
48,735
38,947
3,115
3,068
48,169
9,414
9,323
3,221
53,106
40,117
9,208
3,452
3,399
47,597
9,350
9,429
3,165
55,520
41,383
51,566
9,037
3,516
3,462
48,528
9,194
10,058
3,210
52,431
41,822
2017
49,528
7,709
3,473
3,415
52,517
9,685
10,569
3,499
50,412
42,699
2018
51,551
7,531
3,557
3,503
55,895
9,928
11,361
3,510
52,985
43,885
2019
49,585
7,281
3,820
3,770
50,592
9,923
10,732
3,224
50,394
44,645
2020
44,753
6,561
4,029
3,973
51,912
8,484
9,545
3,202
45,814
47,255
2021
47,097
7,034
4,223
4,164
54,127
8,869
11,637
3,344
49,864
48,617
2022
47,749
7,098
4,361
4,305
55,127
9,019
13,744
3,403
52,474
46,436
Year
Revenue
($m)
IVA Establishments
($m)
(Units)
2013
49,105
7,523
2014
53,197
8,328
2015
55,441
2016
IBISWorld.com
Cosmetic & Beauty Products Manufacturing in the US
August 2022
Industry Outlook
Outlook
The Cosmetic and Beauty Products Manufacturing industry is expected to
experience growth over the five years to 2027 as the economy recovers
from the COVID-19 (coronavirus) pandemic and consumer spending
continues to rebound.
Since several of the industry's product segments are considered essential, many products experience consistent
consumer demand, which will likely support revenue during the outlook period. Although the industry is expected to
return to growth, revenue growth will likely be pressured as the industry continues to experience increased
competition from imports. As a result, industry revenue is expected to increase an annualized 0.8% to $49.8 billion
over the five years to 2027.
NEW ENTRANTS, NEW MARKETS
Along with revenue growth, the number of enterprises is expected to
increase, rising an annualized 2.7% to 4,912 operators over the next five
years.
With a highly competitive market, new entrants will likely need to take advantage of innovative product lines and
niche markets to establish themselves among top producers, such as Estée Lauder Companies Inc. (Estée Lauder).
Industry trends, such as the increased production of organic and all-natural beauty products, are expected to
continue over the coming years, as operators attempt to set themselves apart from the competition. Additionally, the
move toward digital marketing, the emphasis on corporate social responsibility and the incorporation of sustainable
practices are expected to persist.
Employment is projected to increase along with the number of industry operators, rising an annualized 1.3% to
58,919 workers over the five years to 2027. Industry profit is expected to increase moving forward as operators
benefit from less volatile input costs. Additionally, industry profit will likely be supported by more stable purchases.
PRODUCT ENHANCEMENT OPPORTUNITIES
The product portfolio of the industry will likely continue to change as
participants pursue new growth opportunities.
Consumer preferences and tastes will likely shift to reflect a wider acceptance of currently underrepresented product
lines. For example, a continuing focus on sun protection will lead to the development of new products that have
better or longer-lasting benefits or the interest of men in cosmetics. Additionally, the increased popularity of social
media platforms emphasizes the importance of color, diversity, texture and packaging of products. Operators are
expected to continue investing in research and development to formulate new and innovative products with a special
emphasis on products that photograph well and are sustainable.
Also, concerns about carbon footprints are expected to encourage manufacturers to find new eco-friendly resources,
develop new products and introduce new packaging. Secondly, the substitution of plastic for paper in packaging is
under development. Likewise, consumers' need for products made with fewer ingredients and more natural
ingredients will likely continue to drive demand for goods labeled as organic. While the Food & Drug Administration
14
IBISWorld.com
Cosmetic & Beauty Products Manufacturing in the US
August 2022
(FDA) does not have a definition for organic cosmetics or beauty products, some brands use the term to market
products.
Industry operators will likely focus more on offering a wide variety of products to accommodate a diverse consumer
base. For example, it has become standard to offer foundation lines with a wide color selection to accommodate all
skin tones, so operators that only offer a select number of foundation colors are not expected to be able to compete.
Additionally, products aimed at curly hair textures, a previously underserved market, are expected to continue
growing in popularity.
EFFECT OF GLOBALIZATION
IBISWorld anticipates that the value of imports will decrease an
annualized 0.2% to $13.6 billion over the five years to 2027.
Imports as a share of domestic demand is expected to decrease slightly as a decline in the trade-weighted index
(TWI) enables US products to be relatively more affordable. Over the next five years, consumer spending and
consumer confidence are expected to grow, and thus, domestic demand for luxury products may increase. The
slowdown in imports and rise in consumer spending will likely provide an opportunity for increased revenue for
domestic producers.
The value of exports is expected to increase an annualized 1.5% to $9.7 billion over the five years to 2027 as
foreign demand for US goods remains strong. The TWI is expected to decline an annualized 2.1% over the five
years to 2027, which will likely make US products relatively more affordable abroad. Rising e-commerce and social
media platforms are expected to prevent sudden decreases in exports. For example, while a relatively new
company, Glossier Inc.'s online business model enables it to ship products to primary US export destinations, such
as Canada and the United Kingdom, among others. In contrast, established industry operators, such as Revlon Inc.
and Estée Lauder, are not as well-positioned to take advantage of exports and global online trade, due to relying on
distribution through traditional retail channels to drive sales. The industry is expected to become more globalized as
these large operators expand into foreign territories and acquire smaller operators.
Performance Outlook Data
15
IVA Establishments
($m)
(Units)
Enterprises
(Units)
Employment
(Units)
Exports
($m)
Imports
($m)
Wages
($m)
Domestic
Demand
($m)
Per capita
disposable
income ($)
Year
Revenue
($m)
2022
47,749
7,098
4,361
4,305
55,127
9,019
13,744
3,403
52,474
46,436
2023
48,244
7,306
4,469
4,416
55,993
9,148
13,800
3,453
52,896
46,792
2024
48,685
7,420
4,579
4,530
56,824
9,336
13,679
3,500
53,029
47,185
2025
49,031
7,490
4,703
4,659
57,516
9,451
13,662
3,539
53,242
47,558
2026
49,428
7,617
4,834
4,795
58,173
9,579
13,656
3,577
53,505
47,909
2027
49,768
7,742
4,946
4,912
58,919
9,697
13,631
3,619
53,702
48,269
2028
50,159
7,875
5,050
5,020
59,660
9,828
13,618
3,661
53,949
48,888
IBISWorld.com
Cosmetic & Beauty Products Manufacturing in the US
Industry Life Cycle
The life cycle stage of this industry is
August 2022
Mature
LIFE CYCLE REASONS
The number of industry companies is growing
There is a wholehearted acceptance for industry products
Product segments are well defined, but innovation drives demand for new product lines
The Cosmetic and Beauty Products Manufacturing industry is in the mature phase of its life cycle. Many of the
industry's product segments are considered nondiscretionary, experiencing consistent consumer demand. However,
industry value added (IVA), which measures an industry's contribution to the overall economy, is expected to
stagnate over the 10 years to 2027, while US GDP is expected to grow at an annualized rate of 1.8% during the
same period.
Imports as a share of domestic demand is expected to increase over the 10 years to 2027, indicating that
companies have increasingly outsourced production to reduce associated production costs. Additionally, the number
of industry operators is estimated to increase over the 10 years to 2027. More companies entering the industry
indicates that there are some opportunities for new companies, particularly in niche or premium markets taking into
account the needs of consumers. Despite strong growth in the number of new companies, other factors point to this
industry's maturity, such as recent merger and acquisition activity of niche brands within the industry. The domestic
market fully accepts the industry's existing products, but innovators are introducing new product technology, as
evidenced by L'Oréal USA's 2018 acquisition of Modiface Inc., a company that creates augmented reality for beauty
brands, such as those that enable consumers to visualize makeup products on themselves. This has also been
demonstrated by the introduction to the Meta Inc.'s Metaverse, in which consumers and brands can interact in a 3D
space. Although there is room for product expansion, the wholehearted acceptance of the industry's products
indicates that the industry is mature.
16
IBISWorld.com
Cosmetic & Beauty Products Manufacturing in the US
August 2022
Products & Markets
Supply Chain
Key Buying Industries
Key Selling Industries
1st Tier
1st Tier
Beauty, Cosmetics & Fragrance Stores in the US
Soap & Cleaning Compound Manufacturing in the US
Pharmacies & Drug Stores in the US
Chemical Product Manufacturing in the US
Supermarkets & Grocery Stores in the US
Laminated Plastics Manufacturing in the US
Hair & Nail Salons in the US
2nd Tier
Department Stores in the US
Inorganic Chemical Manufacturing in the US
2nd Tier
Organic Chemical Manufacturing in the US
Consumers in the US
Petrochemical Manufacturing in the US
Products & Services
The COVID-19 (coronavirus) pandemic decreased demand for the
Cosmetic and Beauty Products Manufacturing industry overall.
However, some industry products are considered more nondiscretionary than others, including shampoo,
conditioner and deodorant. Therefore. demand for non-discretionary products was less affected than discretionary
products.
COSMETICS
Cosmetics is the largest product segment within the industry, accounting
for an estimated 34.1% of revenue in 2022.
The array of products in this segment is extensive and includes lipstick, eye shadow, nail polish, mascara, blush,
eyeliner and several other product types. The antiaging trend has also affected this segment, with specialized
products that combine cosmetics and skincare ingredients. For example, L'Oréal USA Inc. purchased IT Cosmetics
LLC, which is known for its antiaging, makeup-skincare hybrid products. The recent push for organic and
environmentally friendly cosmetics has reinvigorated a product line as companies advertise themselves as cruelty
free or vegan.
This segment experiences large amounts of innovation and is subject to quickly changing trends. For example, color
cosmetics have gained traction as consumers are more willing to experiment with bold colors and as product
innovation has resulted in higher-quality pigments. Companies that are able to be early adopters or even starters of
these trends are able to secure more consumers. In addition, the interest of men in cosmetics has been increasing,
presenting a great opportunity for the segment. This segment is highly competitive and relies on effective marketing,
increasing as a share of revenue over the five years to 2022.
CREAMS, LOTIONS AND OILS
Creams, lotions and oils account for an estimated 25.6% of revenue in
17
IBISWorld.com
Cosmetic & Beauty Products Manufacturing in the US
August 2022
2022.
This category includes facial creams; body, hand and face lotions; and sunscreen, sun tan lotions and oils. These
products can be some of the most expensive in the industry. For example, two ounces of some skin products sell for
more than $200.00. A focus on antiaging treatments has boosted this segment's popularity, and in turn, the share of
revenue over the past five years as the desire to preserve youth increases. For example, toning lotions, essences,
serums and facial oils are more commonly used to further enhance skincare.
Preventative skincare has also gained popularity, bolstering demand for sunscreen to prevent photoaging caused by
the sun's rays. Consumer concerns about appearance, coupled with advances in technology, have paved the way
for this segment's ascent. At the same time, men's skincare products have become a significant product category
within the industry, as men have increased spending on facial skincare products over the past five years.
HAIR PREPARATIONS
Haircare preparation products account for an estimated 17.7% of industry
revenue in 2022.
Products in this segment include hair color, shampoos, conditioners, rinses, hair sprays, pomades, mousses, gels
and restorative treatments. Haircare is a mature segment of the industry, as it includes necessary products, such as
shampoo, and is saturated with product varieties targeted at niche markets. For example, there are products
specifically aimed toward fine hair, color-treated hair, textured hair and other specific hair types. Similar to
cosmetics, there has been an increased awareness of ingredients of haircare products, opening the opportunities for
other niche markets, such as sulfate-free shampoo, organic products and products with added benefits from
ingredients, such as moringa oil and cannabidiol. Moreover, the haircare segment includes products designed for
both professional and daily at-home consumer use. This segment has stagnated as a share of revenue over the
past five years.
DENTIFRICES, MOUTHWASHES, GARGLES AND RINSES
Dentifrices, mouthwashes, gargles and rinses account for an estimated
10.4% of industry revenue in 2022.
This segment includes oral hygiene products, such as floss, mouthwash and denture cleaners and adhesives. Since
many of these products are nondiscretionary, IBISWorld estimates that this cohort of products has remained fairly
stable as a share of industry revenue over the past five years.
PERFUMES, TOILET WATERS AND COLOGNES
Perfumes, toilet waters and colognes account for an estimated 10.6% of
industry revenue in 2022.
The popularity of celebrity-endorsed fragrances has worked to stimulate segment sales over the past five years.
Despite the segment's relatively low percentage of revenue generation, the industry must invest in fragrance
research and development because popular scents cycle, similar to fashion trends. Only a few brands and scents
have withstood the test of time as many fragrances, especially celebrity fragrances, gain and lose popularity quickly.
OTHER
Other industry products account for an estimated 1.6% of revenue in 2022,
and include shaving preparations and depilatories.
This segment also includes deodorants and antiperspirants; manicure preparations, including nail polish and nail
polish remover; nonmedicated feminine cleansing products; nonmedicated powders, including talcum, face and foot
powders; bath salts and bubble bath preparations; and shaving gel, creams, lotions and powders and aftershave
preparations. This segment has declined slightly as a share of revenue over the past five years.
Demand
Determinants
Demand for industry products is dependent on fashion trends, product
developments and marketing strategies.
Additionally, celebrity endorsements also affect demand, particularly within the fragrance segment, where many
products are endorsed by singers, models, actors and fashion labels.
18
IBISWorld.com
Cosmetic & Beauty Products Manufacturing in the US
August 2022
Industry players consistently invest in developing and marketing new products. Since consumers generally do not
increase the volume of personal care purchases, marketing is aimed at convincing consumers to trade up, promising
better quality, multifunctionality and convenience. Social media platforms such as Instagram or TikTok are being
used as virtual product displays. Also, brands seek alliances with influencers to reach its consumers in these
platforms. Industry operators also focus on developing entirely new product lines, such as men's skincare brands, to
attract new consumer spending. An increase in investment in research and development is likely to increase
demand for industry goods.
Physiological and environmental attitudes also determine demand for industry products. Research has linked certain
cosmetic ingredients to long-term health problems, which has led many consumers to shy away from certain
products. As a result, products featuring natural and organic components have increasingly gained favor in the
market. Similarly, consumers concerned with the negative environmental effects of personal care item production
and disposal are increasingly opting for green products. Environmental concerns can range from company hiring
practices to the plant species used in certain products. Often, environmentally friendly and organic goods carry
higher price tags, and therefore, increased demand for these products has a positive effect on industry revenue.
Disposable income and consumer confidence also play large roles in determining demand for cosmetic and beauty
products. While some products, such as shampoo and deodorant, are less responsive to income changes, a large
portion of beauty products are considered discretionary, and therefore, are quickly cut when budgets are tight. Some
consumers do not eliminate use completely, but rather switch to a lower-priced label in place of a brand-name item.
For example, as consumer spending fell in 2020 due to the COVID-19 (coronavirus) pandemic, consumers spent
less on cosmetics, particularly as stay-at-home orders lessened demand for cosmetics. Demand for
nondiscretionary items, such as shampoo, deodorant and skincare, persisted, but decreased overall.
Major Markets
The COVID-19 (coronavirus) pandemic decreased demand for the
Cosmetic and Beauty Products Manufacturing industry due to decreased
consumer spending.
However, demand from consumers in lower income segments is expected to decrease more so than demand from
consumers in higher income segments.
CONSUMERS EARNING MORE THAN $200,000
Consumers earning more than $200,000 account for 18.6% of industry
revenue in 2022.
Consumers in this segment benefit from high disposable income levels, and therefore, are able to purchase more
premium cosmetics and other personal care items. These wealthy consumers are also most likely to shop at highend department stores and specialty retailers, where high-value industry goods are sold. Over the five years to
2022, this consumer demographic has remained stable as a share of revenue.
CONSUMERS EARNING BETWEEN $100,000 AND $199,999
Consumers earning between $100,000 and $149,999 and between $150,000
and $199,999 are anticipated to account for 12.5% and 12.8% of industry
revenue in 2022, respectively.
19
IBISWorld.com
Cosmetic & Beauty Products Manufacturing in the US
August 2022
These consumers benefit from higher disposable income, leading to stronger demand for industry goods.
Furthermore, many of the consumers in these segments are aspirational shoppers and are likely to splurge on small
luxuries, such as designer lipsticks or brand-name shampoos. Over the past five years, demand from these income
quintiles has slightly expanded as companies develop more mid-tier luxury products to cater to these demographics.
Moreover, moderately priced industry products have increased in quality and variety over the past five years, driving
demand from these consumers.
CONSUMERS EARNING BETWEEN $30,000 AND $99,999
Consumers earning between $30,000 and $99,999 are expected to account
for 28.7% of industry revenue in 2022.
Consumers in this segment have reduced disposable incomes. Thus, these consumers are more likely to buy lowvalue industry goods that do not carry a high price tag and fewer nondiscretionary products. As increasing
disposable income enables these consumers to purchase industry products, this market is expected to expand. This
segment has stagnated as a share of revenue over the past five years.
CONSUMERS EARNING LESS THAN $29,999
Consumers earning between $15,000 and $29,999 and less than $14,999
are expected to account for 4.6% and 3.9% of industry revenue in 2022,
respectively.
Consumers in these income brackets are the least likely to experiment with trying new products and will likely only
buy nondiscretionary products due to limited disposable income. IBISWorld estimates that these two segments have
expanded as share of revenue over the past five years, as higher levels of per capita disposable income have
enabled consumers in these income demographics to increase spending on industry products.
EXPORTS
Exports account for 18.9% of revenue in 2022.
Overseas retailers depend on the perceived high quality of US-made goods to entice foreign buyers, most notably,
Canada, China, United Kingdom and Mexico. Over the five years to 2022, rising consumer spending in foreign
countries has supported demand for US exports, however, increasing import competition has decreased this
segment's share of revenue.
International Trade
20
Exports in this industry are
Medium and Steady
Imports in this industry are
Medium and Increasing
IBISWorld.com
Cosmetic & Beauty Products Manufacturing in the US
August 2022
The industry largely operates domestically, with exports accounting for 18.9% of industry revenue and imports
satisfying 26.2% of domestic demand in 2022. The value of exports has decreased at an annualized rate of 1.4% to
$9.0 billion over the five years to 2022, partially due to the appreciation of the US dollar, which has caused US
goods to be more expensive in foreign markets.
The value of imports has increased at an annualized rate of 5.4% to $13.7 billion over the five years to 2022. For the
majority of the period imports increased as domestic consumers with increasing disposable income have demanded
discretionary products from European manufacturers. Overall, strong demand during most of the period supported
import growth. While imports declined significantly due to the COVID-19 (coronavirus) pandemic, they rebounded
the following year as the economy recovered and trade resumed. France and Italy account for an estimated 26.0%
and 9.8% of imports, respectively, in 2022 as many popular brands are currently based in those countries. For
example, the industry's largest company, L'Oréal USA Inc., is headquartered in France. Additionally, Asian beauty
products have gained popularity for the affordability and focus on gentle and natural ingredients. South Korea is a
country recognized for innovation in cosmetics with, accounting for 7.4% of imports in 2022, growing significantly in
recent years. South Korea's trend is to produce sustainable, eco-friendly and climate-conscious lifestyle products,
something that the American market considers when purchasing products from the industry. Furthermore, the
appreciation of the US dollar has made imported products more affordable domestically. As a result, demand for
both high-end and affordable products have been increasingly satisfied by imports.
Canada is a large source and destination for trade within this industry. The country's proximity to the United States
and the advantage of duty-free trade experienced under the United States-Mexico-Canada Agreement (USMCA),
and previously NAFTA, enables Canada to engage in high levels of trade with the United States. Canada accounts
for an estimated 12.3% of imports and 23.3% of exports in 2022. Mexico is expected to account for 6.1% of exports
in 2022.
21
IBISWorld.com
Cosmetic & Beauty Products Manufacturing in the US
August 2022
Geographic Breakdown
Key Insights
California
1,041 Est.
New Jersey
$9.6bn
Most Establishments Highest Revenue
Arkansas
27.2%
Alabama
-17.0%
Missouri
$170.4k
California
7,198
Fastest Growth
Slowest Growth
Highest Average
Most Employees
Wage
State Data for Cosmetic & Beauty Products Manufacturing in the US (2022)
State
Alabama
22
Establishments
Establishments
Growth Rate
(2017-2022)
Revenue
49
18.5%
$108.7m
Revenue
Growth Rate Employment
(2017-2022)
-17.0%
422
Employment
Growth Rate
(2017-2022)
Wages
Wages
Growth Rate
(2017-2022)
4.2%
$8.2m
-15.9%
IBISWorld.com
Cosmetic & Beauty Products Manufacturing in the US
August 2022
State Data for Cosmetic & Beauty Products Manufacturing in the US (2022)
Establishments
Establishments
Growth Rate
(2017-2022)
Revenue
Employment
Growth Rate
(2017-2022)
Wages
Wages
Growth Rate
(2017-2022)
Alaska
4
5.9%
$37.6m
-5.4%
54
-1.8%
$2.9m
-2.9%
Arizona
93
6.8%
$215.2m
-0.1%
418
2.9%
$15.0m
-0.4%
Arkansas
14
-4.9%
$763.3m
27.2%
578
15.0%
$44.0m
22.0%
California
1,041
4.2%
$5.7bn
-1.3%
7,198
-1.1%
$404.0m
-1.2%
Colorado
113
8.8%
$380.5m
1.2%
709
2.6%
$27.1m
1.4%
Connecticut
51
-3.2%
$612.9m
-5.8%
927
1.7%
$45.2m
-5.0%
Delaware
20
7.4%
$239.4m
5.4%
263
2.8%
$15.1m
3.0%
Florida
296
2.6%
$1.9bn
2.0%
2,809
4.6%
$135.6m
2.1%
Georgia
86
-0.5%
$760.7m
8.5%
1,078
5.1%
$52.9m
8.1%
Hawaii
33
3.3%
$69.6m
12.8%
95
7.9%
$5.1m
13.5%
Idaho
20
-4.4%
$466.3m
2.3%
854
5.6%
$33.7m
2.7%
Illinois
209
4.8%
$1.9bn
-3.9%
2,363
-3.4%
$133.5m
-4.2%
Indiana
48
6.5%
$439.4m
3.4%
477
0.9%
$30.8m
3.2%
Iowa
22
4.1%
$485.3m
16.1%
547
13.8%
$32.1m
14.6%
4
0.0%
$56.1m
0.1%
61
-0.3%
$3.3m
-1.5%
Kentucky
17
-4.1%
$386.4m
7.0%
555
10.0%
$58.9m
24.8%
Louisiana
24
-0.8%
$17.8m
-9.9%
29
-1.3%
$1.3m
-9.6%
Maine
26
18.8%
$84.3m
-9.4%
109
-8.7%
$5.7m
-10.1%
Maryland
32
8.8%
$642.2m
18.4%
517
8.5%
$38.2m
14.4%
Massachusetts
68
6.8%
$319.6m
6.3%
455
6.3%
$22.9m
6.6%
Michigan
78
8.0%
$1.6bn
-2.3%
1,310
-9.2%
$108.3m
-2.5%
Minnesota
85
4.9%
$1.0bn
8.4%
1,012
3.2%
$71.6m
8.7%
Mississippi
43
27.0%
$419.0m
17.8%
633
23.6%
$33.5m
21.8%
Missouri
59
-1.3%
$803.8m
0.1%
341
-16.4%
$58.1m
0.5%
Montana
30
7.4%
$3.9m
-5.2%
36
8.4%
$264.2k
-5.9%
Nevada
43
6.1%
$21.3m
-2.0%
61
21.5%
$1.5m
-1.6%
New
Hampshire
29
10.0%
$212.7m
-1.5%
127
-15.0%
$15.0m
-1.6%
New Jersey
278
1.1%
$9.6bn
1.8%
7,026
-0.1%
$674.3m
1.8%
New Mexico
30
10.8%
$48.6m
6.2%
97
5.3%
$3.4m
6.2%
New York
245
-0.3%
$3.6bn
-1.3%
4,400
0.1%
$254.8m
-1.1%
North Carolina
127
6.9%
$4.7bn
10.9%
5,117
1.9%
$328.3m
10.6%
State
Kansas
23
Revenue
Growth Rate Employment
(2017-2022)
IBISWorld.com
Cosmetic & Beauty Products Manufacturing in the US
August 2022
State Data for Cosmetic & Beauty Products Manufacturing in the US (2022)
Establishments
Establishments
Growth Rate
(2017-2022)
Revenue
Employment
Growth Rate
(2017-2022)
Wages
Wages
Growth Rate
(2017-2022)
4
0.0%
$38.8m
-4.9%
56
-1.0%
$3.0m
-2.5%
Ohio
93
10.7%
$3.3bn
8.8%
3,949
15.4%
$226.6m
8.4%
Oklahoma
13
3.4%
$65.9m
5.4%
147
7.8%
$4.8m
6.1%
Oregon
91
3.4%
$243.3m
2.3%
286
-1.9%
$17.4m
2.6%
Pennsylvania
120
5.7%
$1.7bn
0.8%
3,384
-2.2%
$116.2m
0.6%
Rhode Island
8
2.7%
$110.0m
0.2%
119
-0.2%
$6.5m
-1.4%
South Carolina
16
-2.3%
$75.0m
-11.6%
125
-4.3%
$5.3m
-10.2%
South Dakota
8
2.7%
$104.3m
0.3%
118
-0.2%
$6.4m
-1.4%
70
4.6%
$1.3bn
-4.6%
1,561
-4.5%
$94.0m
-4.3%
211
-0.3%
$2.7bn
3.1%
2,849
0.9%
$189.8m
3.1%
Utah
94
24.1%
$451.2m
11.6%
636
11.2%
$28.9m
9.4%
Vermont
16
7.8%
$292.1m
16.2%
381
17.2%
$17.6m
12.5%
Virginia
30
7.4%
$890.8m
11.0%
1,136
13.9%
$64.5m
12.8%
135
11.9%
$172.2m
6.0%
277
6.9%
$12.0m
5.7%
8
2.7%
$102.8m
-0.3%
116
-0.8%
$6.3m
-1.9%
70
8.8%
$80.3m
-10.3%
160
-9.3%
$5.4m
-11.2%
State
North Dakota
Tennessee
Texas
Washington
West Virginia
Wisconsin
24
Revenue
Growth Rate Employment
(2017-2022)
IBISWorld.com
Cosmetic & Beauty Products Manufacturing in the US
Business Locations
August 2022
The industry is highly concentrated in the West and Mid-Atlantic, which account for an estimated 32.1% and 18.2%
of industry revenue in 2022, respectively. California specifically has the highest concentration of industry
establishments, home to an estimated 24.8% in 2022; comparatively, New Jersey represents the third-largest
concentration, accounting for an estimated 7.4% of industry establishments in 2022.
With its high population and fashion-forward metropolises, California represents an extremely large market for
industry products. Companies that locate manufacturing facilities close to downstream markets are able to save on
transportation costs, and therefore, the West is an attractive location for industry operators seeking to boost profit.
The Mid-Atlantic, which includes New York and New Jersey, is also an appealing location for industry operators, as
it is close to upstream chemical producers and downstream consumers in New York City. Facilities in New York and
New Jersey are also close to major shipping ports, which have become increasingly important over the five years to
2022, as more operators have engaged in trade to expand the industry's market. New York is the second-largest
state in this region, behind New Jersey, by number of industry establishments, home to an estimated 6.3% in 2022.
25
IBISWorld.com
Cosmetic & Beauty Products Manufacturing in the US
August 2022
Competitive Landscape
Market Share
Concentration
Concentration in this industry is
Low
The industry exhibits a low level of market share concentration, with the four largest companies generating nearly
27.1% of industry revenue in 2022. According to data from the US Census Bureau, more than 60.0% of companies
employ fewer than 20 people, which is indicative of the highly fragmented nature of this industry. Therefore, large
industry operators with significant market share, such as L'Oréal USA Inc. (L'Oréal) and Estée Lauder Companies
Inc., are rarities in this industry. Merger and acquisition activities have been rampant in recent years. For example,
L'Oréal acquired Youth to the People Inc. in 2021. Over the five years to 2022, the Procter & Gamble Company
acquired TULA Skincare. Also, Coty Inc. completed the acquisition of a 20.0% ownership interest in Kim Kardashian
West's business. However, while merger and acquisition activity are common among major players, small operators
are still able to thrive in the industry as the prevalence of the internet makes it easier for shoppers to research and
buy industry products online. Additionally, consumers have become more interested in niche products, such as
goods produced in small batches, creating more opportunities for small industry operators. Over the five years to
2022, market share concentration has been steady as the four largest companies have maintained their industryrelevant revenue growth.
Key Success
Factors
IBISWorld identifies 250 Key Success Factors for a business. The most important for this industry are:
Production of premium goods/services:
Customers often purchase premium industry products if they are perceived as being higher-quality goods.
Effective product promotion:
High brand visibility is important in increasing sales of mass-market cosmetics and toiletries.
Access to niche markets:
If not a major player, niche and ultra-niche positioning is important for success in the industry.
Having marketing expertise:
This industry changes rapidly as new ingredients, product formulations and trends develop. Consumers prefer the
most innovative and effective products, so being able to quickly adopt new technology is important to keep
consumers.
Having a good reputation:
In this highly competitive industry, marketing and brand reputation development are very important to gaining market
share. Building a brand identity and cultivating loyal consumers is crucial for differentiating products and cultivating
loyal customers.
Attractive product presentation:
As many products in this industry are luxury products, consumers expect high-quality and attractive packaging and
presentation of products.
26
IBISWorld.com
Cosmetic & Beauty Products Manufacturing in the US
August 2022
Cost Structure
Benchmarks
Profit
Costs and returns for industry operators depend on the size, location,
supply contracts and mix of products. Profit, measured as earnings
before interest and taxes, is relatively high, accounting for an estimated
6.1% of revenue in 2022. Large companies can keep costs low through
relationships with suppliers and well-established distribution networks,
and these decreased costs often translate to higher profit.
Additionally, some operators, such as Estée Lauder Companies Inc.
(Estée Lauder) and L'Oréal USA Inc. (L'Oréal), create high-quality
products that command higher prices, which enables them to earn
higher returns under favorable economic conditions. However, the
discretionary nature of such products also makes these companies
more vulnerable to economic downturns when consumers cut
discretionary spending. Profit has declined over the five years to 2022
as industry operators have spent more on research and development.
Wages
Wage costs account for an estimated 7.1% of industry revenue in 2022.
Human capital is important within this industry, especially for high-end
items. Employees must perform inspection and quality control to ensure
the highest-quality product is delivered to downstream buyers.
Companies that are small and manufacture niche products are likely to
allocate more revenue to wages, as the manufacture of these products
is more personal and requires more oversight. Over the five years to
2022, wage costs have remained relatively steady as a share of
revenue.
27
IBISWorld.com
Cosmetic & Beauty Products Manufacturing in the US
August 2022
Purchases
Purchase costs account for a large share of revenue, accounting for an
estimated 38.5% of revenue in 2022. Manufacturers must buy inputs,
such as alcohols, chemicals, dyes, essential oils and minerals to use in
the production of cosmetics and beauty products. Any changes in raw
material prices affect a company's costs, and ultimately, its profitability.
Additionally, the cost of product packaging is included as a purchase
cost for the industry; some companies package products in-house,
while others contract packaging and labeling out to third-party operators
(IBISWorld report 56191). Regardless of how the company chooses to
package its products, the cost associated with product presentation is
high, as industry sales depend on appearance.
Marketing
Marketing costs account for 1.3% of revenue in 2022, as operators use
advertising, promotional materials, marketing research, product
sampling and publicity to build brand awareness. Marketing has
traditionally been very important in the highly competitive cosmetics
field, with companies spending significant amounts annually on print
advertising, partnering with influencers, celebrity endorsements,
billboards for high-profile cosmetics brands, sample products and public
relations packages. As a result, marketing expenditures for the industry
operators can easily exceed the industry average. For example, large
industry operator Revlon Inc. spent 18.5% of its revenue on marketing
in 2021, while Coty Inc. spent 21.6% of its revenue on marketing in
fiscal 2021 (latest data available). Industry operators that rely less on
luxury product sales spend less on marketing. For example, the Procter
& Gamble Company spent an estimated 10.8% of revenue on
marketing in fiscal 2021 (latest data available) since most products are
affordable and nondiscretionary.
28
IBISWorld.com
Cosmetic & Beauty Products Manufacturing in the US
August 2022
Depreciation
Depreciation costs are expected to account for 1.6% of industry
revenue in 2022 as operators strongly rely on heavy machinery to blend
and mass-produce cosmetic and beauty products.
Rent
Rental costs are estimated to account for 0.6% of revenue in 2022 as
many operators own manufacturing facilities.
Utilities
Utility costs are expected to account for 0.3% of revenue in 2022.
Utilities as a share of revenue have remained relatively stable over the
five years to 2022.
29
IBISWorld.com
Cosmetic & Beauty Products Manufacturing in the US
August 2022
Other Costs
Other industry costs are estimated to account for 44.4% of industry
revenue in 2022. Industry operators also incur costs related to
accounting and legal issues. A significant cost for industry operators is
the amount spent on research and development (R&D). The amount
spent on R&D varies based on the resources available. For example,
Estée Lauder allocated 1.5% of revenue to R&D in fiscal 2021 (latest
data available). While the amount invested in R&D varies by company
size and product mix, most growing companies in this industry will likely
spend some revenue on product development to stay relevant and
marketable.
Basis of
Competition
Competition in this industry is
High and the trend is Increasing
INTERNAL COMPETITION
The Cosmetic and Beauty Products Manufacturing industry is highly
competitive.
Due to the industry's moderate barriers to entry, the number of industry enterprises has increased, rising at an
annualized rate of 4.7% to 4,305 operators over the five years to 2022. With so many industry players,
manufacturers aim to stand out from the crowd in several ways. Price is particularly important for everyday items,
such as shampoos and low-end cosmetics. Since products within these segments are not highly differentiated, price
can lead downstream buyers to choose one brand over another. For high-quality, niche products, price is less of a
competitive factor because consumers make purchases based on promised performance.
Quality is another important basis of competition for industry participants. High-quality items or those perceived as
high quality, carry a price premium, which boosts company revenue and profit. Premium packaging, such as
metallization, is an indicator of product quality. Also, consumers are associating quality with the environment. For
this reason, vegan and sustainable products are gaining in popularity. Consequently, over the past five years,
middle-tier product manufacturers have invested money in appearance to attract consumers on the basis of
perceived quality.
Speed and versatility are growing in importance as small beauty companies with specific target consumers seek out
industry operators that are able to quickly manufacture innovative products to stay ahead of industry trends. For this
reason, research and development of new products, including investment in marketing and product packaging, has
increased automation and the verticalization of manufacturing has given some operators competitive advantages
over others. As more small business owners enter the cosmetics and beauty products industry, manufacturers that
can accommodate business owners' requests will likely have a competitive advantage over other manufacturers.
Additionally, the ability to move a product quickly from the idea stage to development is important for meeting rapidly
changing consumer demand.
In line with the general consumer trend toward natural and environmentally friendly products, industry consumers
are becoming increasingly aware of the ingredients in industry products and of manufacturing practices. Over the
past five years, the focus on naturally made or organic personal care items has intensified. Most notably, cosmetic
products containing parabens, which have been tied to cancer, are being eschewed in favor of paraben-free
products. The Food and Drug Administration (FDA), which is the regulating body for the industry, does not have a
30
IBISWorld.com
Cosmetic & Beauty Products Manufacturing in the US
August 2022
definition for what constitutes organic cosmetics or beauty products, though brands use the term to market products.
In general, a company's ability to respond to shifting consumer tastes and ingredient preferences is important to its
success.
EXTERNAL COMPETITION
External competition exists from overseas manufacturers.
The industry competes with low-cost imports from China and Mexico and with high-end products from France and
Italy. Since the cosmetics and beauty products industry in South Korea is especially innovative, domestic
manufacturers also compete with Asian imports on the basis of innovation and price. Imports satisfy 26.2% of
domestic demand in 2022, up from 21.0% in 2017.
Barriers to
Entry
Barriers to Entry in this industry are
Medium and the trend is Increasing
Barriers to entry into the Cosmetic and Beauty Products
Manufacturing industry are moderate. Established
manufacturers, which benefit from economies of scale
and scope, can pose a barrier for potential entrants. This
is especially true for nondiscretionary goods, such as
shampoo and deodorant which have less opportunity for
new entrants to add value or carve out a niche. These
operators have cost-minimizing measures and
promotional resources in place, which give them an
advantage in competing for downstream shelf space.
These companies generally have products with wellestablished brand names, which pose another barrier to
entry for new companies with unknown product names.
These large companies can also more easily afford the
sort of product development necessary for growth in this
increasingly complex industry. When consumer spending
is low, major companies, such as the Procter & Gamble
Company, can leverage income from other business
segments to invest money into industry marketing and
product development, cushioning them from drops in
discretionary product sales. Smaller companies seeking
to enter the industry will likely need to find niche markets
so to not have to compete with major companies and can
avoid significant investments in marketing and product
development.
Barriers to Entry Checklist
Competition
High
Concentration
Low
Life Cycle Stage
Mature
Technology Change
Medium
Regulation & Policy
Medium
Industry Assistance
Medium
The industry is in the mature stage of its life cycle, and
many of the industry's product categories are saturated.
This creates another barrier, by limiting the scope for new
entrants with products similar to those already available.
However, niche and developing markets can offer an
opportunity for aspiring beauty product manufacturers.
Capital investments can also act as a barrier for new
entrants. Cosmetic and beauty product manufacturing
requires more factory and production equipment, which
can be costly. Securing financing is a hurdle all new
companies must overcome.
Industry
Globalization
Globalization in this industry is
Medium and the trend is Increasing
The Cosmetic and Beauty Products Manufacturing industry displays a moderate level of globalization. The largest
companies operate on a global scale, reflecting the industry's worldwide reach. For example, the industry's largest
player, L'Oréal USA Inc., accounts for an estimated 8.7% of industry revenue in 2022. The industry also has
moderate levels of imports and exports. Imports have satisfied a significant share of domestic demand over the five
years to 2022, standing at 26.2% in 2022. Exports are also expected to represent a significant share of revenue, at
18.9% in 2022, with exported cosmetic and beauty products generating an estimated $9.0 billion in 2022. This level
of international trade exposes the industry to global economic factors, including fluctuations in exchange rates,
supply levels and other sociopolitical factors.
31
IBISWorld.com
Cosmetic & Beauty Products Manufacturing in the US
32
August 2022
IBISWorld.com
Cosmetic & Beauty Products Manufacturing in the US
August 2022
Major Companies
Market Share Overview
Related Companies
Competitors
Company Type
Employee Segment
Revenue ($m)
Market Share (%)
Profit ($m)
L'oreal Usa, Inc.
All Star
500+ Employees
4,264.1
8.93
803.5
Procter & Gamble Co
Incumbent
500+ Employees
3,613.2
7.57
827.8
Estee Lauder Companies Inc.
All Star
500+ Employees
2,974.9
6.23
443.3
Unilever N V
Golden Goose
500+ Employees
2,401.1
5.03
300.0
Coty Inc.
Disruptor
500+ Employees
1,029.0
2.16
194.3
Blistex Inc.
Laggard
100–499 Employees
119.9
0.25
7.4
Mana Products Inc.
Laggard
500+ Employees
99.0
0.21
6.1
Colorlab Cosmetics Inc.
Laggard
20–99 Employees
17.5
0.04
1.1
Lady Burd
Laggard
20–99 Employees
12.0
0.03
0.7
Labtec Cosmetics
Laggard
10–19 Employees
10.5
0.02
0.7
Lon Cosmetics Ltd.
Laggard
10–19 Employees
8.8
0.02
0.5
Medusa’s Make-Up
Laggard
10–19 Employees
8.8
0.02
0.5
Body Dimensions Industries Inc.
Laggard
10–19 Employees
2.2
0
0.1
33
IBISWorld.com
Cosmetic & Beauty Products Manufacturing in the US
August 2022
Companies with 5.0% industry market share are displayed in the PDF version of this report. You can view insights for all companies associated
with this industry on my.ibisworld.com
L'oreal Usa, Inc.
Company Overview
Brands & Trading
Names
CeraVe Essie Garnier Kiehl's L'Oreal Lancome Maybelline NYX Professional
Makeup Pureology Ralph Lauren (fragrance) Redken SkinCeuticals Urban Decay
Description
L'oreal Usa, Inc. is a private company with an estimated 12,000 employees. In the US, the company has a notable
market share in at least one industry: Cosmetic & Beauty Products Manufacturing, where they account for an
estimated 8.9% of total industry revenue and are considered an All Star because they display stronger market
share, profit and revenue growth compared to their peers.
Analyst Insights
COMPANY TYPE
Private Company
TOTAL COMPANY
REVENUE
$4.3bn
EMPLOYEES
12,000
L'Oreal reaches 100% carbon neutrality in United States
Before Climate Week NYC, L'Oreal USA announced that it had successfully reached carbon-neutralty for all
operations it directly conducts (stages 1 and 2) across 25 United States sites in 10 states. This goal was
accomplished four years earlier than the company's plan of neutrality by 2025. L'Oreal USA achieved this goal by
deploying the largest commercial solar array in Kentucky, and support of local renewabe energy initiatives. The
company seeks to reduce stage 3 emissions (the entire supply chain and product life cycle) 25% by 2030.
[https://www.prnewswire.com/news-releases/loreal-usa-achieves-carbon-neutrality-across-all-ussites-301379978.html]
ESG Structural
L'Oreal faces lawsuits on product origins, toxic ingredients
In the past three weeks, L'Oreal has been targeted by two separate class action lawsuits from consumers. The first,
released in February, alleges that L'Oreal intentionally obscured labeling of proven-toxic Polyfluoroalkyl Substances
(PFAS) present in their waterproof mascera products. The second lawsuit, filed only days later, argues that the
French text and labeling on L'Oreal products intentionally misleads consumers to pay a higher price thinking that
the product is imported, despite the product actually being manufactured in North America. Both lawsuits are still
pending. [https://topclassactions.com/lawsuit-settlements/consumer-products/beauty-products/lorealwaterproof-mascara-class-action-alleges-product-contain-hidden-toxic-substances/,
https://topclassactions.com/lawsuit-settlements/consumer-products/beauty-products/loreal-class-action-allegesproducts-not-made-in-france-despite-paris-representations/]
ESG
L'Oreal names new CEO for USA division
As the world's largest cosmetics maker, L'Oreal's annoucement of a CEO change to David Greenberg for its USA
division was surprising and major news for the entire cosmetics industry. Stéphane Rinderknech, who served as the
United States division CEO during the entire COVID-19 pandemic, announced suddenly that he was stepping down
and leaving L'Oreal after two decades. Greenberg has been at the company for almost three decades, holding
various leadership positions across the US and accelerating the company's digital initiatives.
[https://wwd.com/beauty-industry-news/beauty-features/new-ceo-of-loreal-u-s-a-named-1235102405/]
ESG Structural
34
IBISWorld.com
Cosmetic & Beauty Products Manufacturing in the US
August 2022
L'oreal Usa, Inc.
Company Overview
Industry Market
Share, Revenue
and Profit
Estimated Industry Market Share
8.93% Strong
Current Year
(2022)
Estimated Industry Revenue
$4.3bn Strong
Current Year
(2022)
Estimated Profit Margin
18.84% Moderate
Current Year
(2022)
35
IBISWorld.com
Cosmetic & Beauty Products Manufacturing in the US
August 2022
Procter & Gamble Co
Company Overview
Brands & Trading
Names
Pampers Mr. Clean Febreeze Tampax Braun Crest Cheer Scope Tide Olay Pantene
Essences Swiffer Bounty Charmin Venus Gillette Old Spice Head & Shoulders Dawn
Description
Procter & Gamble Co is a public company headquartered in Ohio with an estimated 105,000 employees. In the US,
the company has a notable market share in at least six industries: Shaving Razor Manufacturing, Sanitary Paper
Product Manufacturing, Diaper Manufacturing, Mouthwash Manufacturing, Cosmetic & Beauty Products
Manufacturing and Hand Tool & Cutlery Manufacturing. Their largest market share is in the Shaving Razor
Manufacturing industry, where they account for an estimated 43.5% of total industry revenue and are considered an
All Star because they display stronger market share, profit and revenue growth compared to their peers.
COMPANY TYPE
Public Company
TOTAL COMPANY
REVENUE
$3.6bn
EMPLOYEES
106,000
Herbal
Other Industries
Sanitary Paper Product Manufacturing in the US
Hand Tool & Cutlery Manufacturing in the US
Soap & Cleaning Compound Manufacturing in the US
Diaper Manufacturing
Shaving Razor Manufacturing
Mouthwash Manufacturing
Analyst Insights
Company completes over-the-counter healthcare business acquisition
Proctor & Gamble Company (Proctor & Gamble) in fiscal 2019 completed the acquisition of the over-the-counter
(OTC) healthcare business Merck KGaA (Merck OTC) for $3.7 billion. Merck OTC primarily sells OTC consumer
healthcare products across Europe, Latin America and Asia. After the acquisition, Merck OTC is included in Proctor
& Gamble’s personal health category. Moreover, in the same fiscal year the company dissolved its PGT Healthcare
partnership, a project with Teva Pharmaceutical Industries, Ltd (Teva) in the OTC consumer healthcare business.
Labor M&A New Activity
Company provides $110 million investment in North Carolina
In 2022, the company will invest $110.0 million to expand its manufacturing facility in Greensboro, NC by 80,000
square feet. This investment is projected to create 46 jobs for the facility. This investment is a community effort
since The Guilford County Economic Development Alliance worked with other local organizations to secure Proctor
& Gamble’s investment in the county. The Plant Manager Elke Feierabend mentioned that the expansion in its
operations in Greensboro will help meet demand for its products and better serve its customers.
Labor New Activity
The First Hawaiian Bank increased its stake in its shares of Proctor & Gamble
The First Hawaiian Bank increased its stake in its shares of Proctor & Gamble by 44.7% in the fourth quarter of
2021. After this increase, the First Hawaiian Bank owns 16,660 shares valued at $2.7 million. Additionally, Center
for Asset Management LLC increased its holding in the company by 13.5% in the fourth quarter of 2021. Center for
Asset Management LLC shares went up to 10,619, which are valued at $1.7 million. Furthermore, Mountain Captain
Investment Advisors Inc also increased its shares of Proctor & Gamble. In the fourth quarter of 2021, its total
shares of the company’s stock increased to 12,615 which are worth $2.0 million.
Labor M&A New Activity
36
IBISWorld.com
Cosmetic & Beauty Products Manufacturing in the US
August 2022
Procter & Gamble Co
Company Overview
Industry Market
Share, Revenue
and Profit
Market Share
7.57% Strong
Current Year
(2022)
1.2%
Annual Growth
(2018–22)
Industry Revenue
$3.6bn Strong
Current Year
(2022)
5.4%
Annual Growth
(2018–22)
Profit Margin
22.91% Strong
Current Year
(2022)
37
14.8%
Annual Growth
(2018–22)
IBISWorld.com
Cosmetic & Beauty Products Manufacturing in the US
August 2022
Estee Lauder Companies Inc.
Company Overview
Brands & Trading
Names
Too Faced Origins Tommy Hilfiger Lab Series Bobbi Brown Estee Lauder Aramis Aerin
Beauty Michael Kors Jo Malone London Le Labo M*A*C La
Mer GlamGlow Smashbox DonnaKaran Editions De Parfums Frederic Malle Kilan Paris Clinique
Ford Beauty DKNY Aveda Bumble and bumble Dr.Jart+ Darphin Paris
Description
Estee Lauder Companies Inc. is a public company headquartered in New York with an estimated 48,670 employees.
In the US, the company has a notable market share in at least three industries: Perfume & Fragrance
Manufacturing, Lipstick Manufacturing and Cosmetic & Beauty Products Manufacturing. Their largest market share
is in the Perfume & Fragrance Manufacturing industry, where they account for an estimated 15.2% of total industry
revenue and are considered a Rising Star because they display lower market share, but displaying stronger profit
and revenue growth than some of their peers.
COMPANY TYPE
Public Company
TOTAL COMPANY
REVENUE
$3.0bn
EMPLOYEES
63,000
Tom
Other Industries
Online Perfume & Cosmetic Sales
Lipstick Manufacturing
Perfume & Fragrance Manufacturing
Analyst Insights
ESL releases updated environmental commitments
The Estee Lauder Companies (ELC) announced that the company is deepening its commitment to the Estee Lauder
Companies Foundation’s (ELCCF) support of new non-profit partners who are leading critical, on the ground work in
communities are the world. The company states that these partners are helping to advance restorative
conservation solutions, tackle plastic waste, support responsible sourcing practice and enhance local livelihoods,
particularly of women, which all play vital roles in addressing climate change and uplifting communities.
Additionally ELC states they are continuing their work and investment in reducing emissions, developing more
responsible packaging solutions and minimizing waste across the business.
ESG Structural
ELC announces change in key leadership
On March 11, 2022 The Estee Lauder Companies Inc (ELC) announced key leadership appointments for its Travel
Retail Business. Following the announcement that Oliver Bottrie, the current Global President, Travel Retail and
Retail Development will retire in June 2022, ELC made the following appointments. Israel Assa will succeed Botrrie
as Global President, Travel Retail Worldwide. Javier Simon, will succeed Assa and will be named President,
Commercial, Travel Retail Worldwide. Finally, Andrea Dorigo is Senior Vice President, General Manager, Global
Retail and Head of Commercial, North America.
Structural
ESL releases update regarding the company’s response to the Ukraine war
The Estee Lauder Companies (ESL) suspended the company’s business investments and initiatives in Russia in
early March in response to the Russian invasion of Ukraine. Additionally, the company has suspended all
commercial activity in Russia, including closing all owned and operated stores as well as brand sites and
shipments to any retailers in Russia. Furthermore, ESL has committed $1.0 million in support of relief efforts in
Ukraine and the company will be donating ELC products to those in need.
ESG Structural
38
IBISWorld.com
Cosmetic & Beauty Products Manufacturing in the US
August 2022
Estee Lauder Companies Inc.
Company Overview
Industry Market
Share, Revenue
and Profit
Market Share
6.23% Moderate
Current Year
(2022)
0.7%
Annual Growth
(2018–22)
Industry Revenue
$3.0bn Moderate
Current Year
(2022)
3.6%
Annual Growth
(2018–22)
Profit Margin
14.9% Moderate
Current Year
(2022)
39
-0.7%
Annual Growth
(2018–22)
IBISWorld.com
Cosmetic & Beauty Products Manufacturing in the US
August 2022
Unilever N V
Company Overview
Description
Unilever N V is a public company headquartered in New Jersey with an estimated 148,000 employees. In the US,
the company has a notable market share in at least four industries: Mayonnaise Production, Herbal Tea Production,
RTD Tea Production and Cosmetic & Beauty Products Manufacturing. Their largest market share is in the
Mayonnaise Production industry, where they account for an estimated 40.8% of total industry revenue and are
considered an Incumbent because they display strong market share, but lower profit and revenue growth than
some of their peers.
COMPANY TYPE
Public Company
TOTAL COMPANY
REVENUE
$2.4bn
EMPLOYEES
148,000
Other Industries
Cotton Personal-Care Product Manufacturing
Herbal Tea Production
Tea Production in the US
Soap & Cleaning Compound Manufacturing in the US
Mayonnaise Production
Ice Cream Production in the US
RTD Tea Production
Analyst Insights
Unilever to change its organizational model
At the beginning of 2022, Unilever announced that it would be restructuring its company organization model. This
change is expected to shift their focus to a more categorical structure for business operations. The new model
includes 5 reorganized categories: Beauty & Wellbeing, Personal Care, Home Care, Nutrition, and Ice Cream. This
new model is expected to help the company scale its global capabilities. In response to this change, the company
has also announced a reorganization of management.
Discontinued Activity New Activity Structural
Unilever to acquire skin care brand Paula’s Choice
In 2021 Unilever announced that it would be acquiring the skin care brand Paula’s Choice. Paula’s Choice has been
around since 1995 and has a strong base of consumers, this acquisition helps to strengthen Unilever’s presence
across North America, Europe, and Asia.
Discontinued Activity New Activity
Business segment Unilever Life to be acquired by RS Group
Unilever announced in February of 2022 that the RS Group would be acquiring its business segment Unilever Life.
Unilever Life is a multi-level marketing business segment based in Thailand. As part of the acquisition, RS Group
will be absorbing Unilever’s portfolio of brands including Beyonde, Aviance, iFresh. The deal is expected to be
completed in the summer of 2022 and the financial details of the deal are unknown.
Discontinued Activity New Activity
40
IBISWorld.com
Cosmetic & Beauty Products Manufacturing in the US
August 2022
Unilever N V
Company Overview
Industry Market
Share, Revenue
and Profit
Market Share
5.03% Moderate
Current Year
(2022)
0.9%
Annual Growth
(2018–22)
Industry Revenue
$2.4bn Moderate
Current Year
(2022)
5.8%
Annual Growth
(2018–22)
Profit Margin
12.49% Moderate
Current Year
(2022)
41
0.0%
Annual Growth
(2018–22)
IBISWorld.com
Cosmetic & Beauty Products Manufacturing in the US
August 2022
Coty Inc.
Company Overview
Brands & Trading
Names
Coty Consumer
Coty Luxury
Description
Coty Inc. is a public company headquartered in New York with an estimated 11,430 employees. In the US, the
company has a notable market share in at least three industries: Perfume & Fragrance Manufacturing, Cosmetic &
Beauty Products Manufacturing and Lipstick Manufacturing. Their largest market share is in the Perfume &
Fragrance Manufacturing industry, where they account for an estimated 30.2% of total industry revenue and are
considered an All Star because they display stronger market share, profit and revenue growth compared to their
peers.
COMPANY TYPE
Public Company
TOTAL COMPANY
REVENUE
$1.0bn
EMPLOYEES
11,012
Other Industries
Lipstick Manufacturing
Perfume & Fragrance Manufacturing
Analyst Insights
First global fragrance manufactured with sustainable ethanol successfully developed
Coty began manufacturing the world’s first globally distributed fragrances made using carbon-captured ethanol in
January 2022. Currently being manufactured at the company’s Granollers, Spain facility, the fragrances are being
made using CarbonSmart ethanol, which is being produced by LanzaTech. While which brands will use this ethanol
have not been released, these fragrances will reach stores in the coming months. Coty is also ahead of schedule on
its goal to integrate sustainable ethanol into a majority of its fragrances by 2023
Balance Sheet ESG New Activity
Kardashian West's brand valued at $1.0 billion after Coty investment
In February 2022, Coty combined with 35 other cosmentics and personal care companies as part of the
EcoBeautyScore Consortium. This partnership aims to develop an industry-wise environmental scoring system for
cosmetics, which will aid consumers in making sustainable beauty purchases. A first prototype for the scoring
system is expected to be released by the end of 2022, which will include a selection of product categories. The
system will then be verified by independent parties. As environmentalism and sustainability gains in popularity, a
commitment to such ideals could prove valuable in securing consumer loyalty
Balance Sheet ESG M&A New Activity
Coty joins EcoBeautyScore Consortium
In January 2021, Coty completed its purchase of a 20.0% stake in Kim Kardashian West’s skincare business, an
agreement that was initially announced in June 2020. The $200.0 million investment value’s Kardashian West’s
business at $1.0 billion. Coty and Kardashian West will enter new beauty categories and focus on global expansion.
This will include development of a skincare line, which is on track to be launched in fiscal 2022. Kardashian West is
responsible for creative efforts, while Coty will lead the portfolio’s development
ESG New Activity
42
IBISWorld.com
Cosmetic & Beauty Products Manufacturing in the US
August 2022
Coty Inc.
Company Overview
Industry Market
Share, Revenue
and Profit
Market Share
2.16% Moderate
Current Year
(2022)
0.5%
Annual Growth
(2018–22)
Industry Revenue
$1.0bn Moderate
Current Year
(2022)
7.7%
Annual Growth
(2018–22)
Profit Margin
18.89% Strong
Current Year
(2022)
43
0.0%
Annual Growth
(2018–22)
IBISWorld.com
Cosmetic & Beauty Products Manufacturing in the US
August 2022
Operating Conditions
Capital
Intensity
The level of capital intensity is
Medium
The Cosmetic and Beauty Products Manufacturing industry
is characterized by a medium level of capital intensity. For
every $1.00 spent on labor, the industry spends an
estimated $0.23 on capital in 2022. The level of capital
intensity has declined slightly over the five years to 2022.
Many industry products, including hair- and skincare, are
mass-produced; however, a small portion of very
specialized skincare products and cosmetics may require
higher levels of human input.
Most industry revenue comes from larger manufacturers
with high levels of output and fast turnaround times. These
larger companies rely heavily on capital, as machinery is
required to fulfill large orders in a time-efficient manner.
Smaller companies, however, are likely to invest less in
machinery and more in human labor, as many of these
companies do not experience high enough demand to
warrant the purchase of machinery. These smaller
companies are more likely to operate in niche areas of the
industry and require more employee involvement in the
manufacture of products, therefore requiring less capital
investment.
44
IBISWorld.com
Cosmetic & Beauty Products Manufacturing in the US
Technology &
Systems
August 2022
Potential Disruptive Innovation: Factors Driving Threat of Change
Level
Factor
Disruptive
Effect
Description
Low
Rate of
Innovation
Unlikely
A ranked measure for the number of patents
assigned to an industry. A faster rate of new
patent additions to the industry increases the
likelihood of a disruptive innovation occurring.
Very High
Innovation
Concentration
Very Likely
A measure for the mix of patent classes
assigned to the industry. A greater
concentration of patents in one area increases
the likelihood of technological disruption of
incumbent operators.
Low
Ease of Entry
Unlikely
A qualitative measure of barriers to entry. Fewer
barriers to entry increases the likelihood that
new entrants can disrupt incumbents by putting
new technologies to use.
Very High
Rate of Entry
Very Likely
Annualized growth in the number of enterprises
in the industry, ranked against all other
industries. A greater intensity of companies
entering an industry increases the pool of
potential disruptors.
Very Low
Market
Concentration
Very
Unlikely
A ranked measure of the largest core market for
the industry. Concentrated core markets
present a low-end market or new market entry
point for disruptive technologies to capture
market share.
The rate of new patent technologies entering the industry is low, which limits the potential for innovations. A low rate does
not mean that innovations cannot occur, just that the likelihood of some innovation materializing as a threat is lower.
However, the concentration of technologies is high in this industry. This suggests that industry operators have exposure to
potentially unforeseen areas of innovation.
Additionally, this industry's structure makes it difficult for new operators to enter and succeed. These barriers have the
potential to disincentivize potential disruptors. Despite these barriers, the industry is experiencing a rapid growth in the
number of companies. A difficult operating environment for new entrants combined with a large cohort of them may create a
situation where these companies may take on a disruptive trajectory in non-traditional markets.
Major market segments for industry operators are relatively diversified. The spread of market segments suggests that there
are limited entry points other than those already served my incumbent operators.
Operators are not exposed to significant technological disruptions since many
provide an essential end product that cannot be easily replaced.
Cosmetics and beauty products will likely have consistent demand due to the functionality in daily life and style factor.
There will likely be many individuals seeking these products, both for personal enjoyment and functionality. There are
trends to change the chemical makeup of beauty products, and the testing process involved in research and development.
Although these are changes that will likely be adopted across the industry, the same manufacturers will still be responsible
for fulfilling the downstream demand. Overall, there are not any significant disruptions that would make the industry
irrelevant or replaced by another industry due to the nature of the end product.
The level of technology change is
Medium
The Cosmetic and Beauty Product Manufacturing industry experiences a
moderate level of technological change.
In general, cosmetic and beauty product manufacturers mix and blend readily available ingredients, including emollients,
humectants, surfactants, fats and oils, fragrances, dyes, cleansing agents, mineral oils and waxes. As the industry has
grown more competitive, product innovation and reformulation have become more important to companies seeking to
45
IBISWorld.com
Cosmetic & Beauty Products Manufacturing in the US
August 2022
expand market share. As a result, research and development (R&D) is an increasingly important investment for operators.
R&D efforts often support premiumization of industry products. For example, there is ongoing research in regard to the use
of intelligent nanoparticles in antiaging cosmetics; the particles are released once the beta-galactosidase enzyme, an aging
enzyme, is detected. Artificial Intelligence (AI) has been increasing in the industry. The Procter & Gamble Company and
L'Oréal USA Inc. use the latest AI technology to identify different skin breakouts and concerns of their consumers to
optimize the quality of their products. AI is helping to drive growth, and shape the future of the industry. In addition, the
industry is paying close attention to the Metaverse to get the latest requirements from its consumers. Companies that can
release products that are new, scientifically backed and perceived as high-quality will likely be more competitive in the
market. As disposable income rises over the five years to 2027, customers will likely be more able to spend money on
these discretionary products. Cosmetics manufacturers also need to keep up with formulation changes and trends, such as
with the recent rise in popularity of liquid lipsticks.
The majority of industry companies employ fewer than 20 workers; however, most of these small companies do not make
enough annual revenue to support serious investment in major batch manufacturing technology. Instead, to stand out in this
competitive industry, many small companies focus on more manual production techniques, including the creation of smallbatch, custom-blended cosmetics and use of high-quality ingredients. Companies creating these types of cosmetics will
likely need acute understanding of chemicals and highly specialized labor skills, as opposed to heavily funded R&D efforts
or investments in large-scale heavy manufacturing technology.
The growing consumer preference for environmentally friendly goods has affected the production process and the
packaging of industry products in recent years. Companies increasingly design products and packaging to minimize waste
and environmental affect. In April 2019, ALPLA and BillerudKorsnäs announced the development of a paper bottle as an
alternative to plastic packaging. Major industry operators publicly market sustainability goals of reducing carbon dioxide
emissions and reducing the amount of waste that goes to landfills.
Revenue
Volatility
The level of volatility is
Medium
The Cosmetic and Beauty Products Manufacturing industry experiences
moderate volatility overall.
Over the five years to 2022, revenue grew as much as 5.2% in 2021 and dropped 9.7% in 2020. However, the large drop in
2020 is primarily due to the COVID-19 (coronavirus) pandemic, with this significant decrease having raised revenue
volatility. The industry includes both inexpensive and high-end products manufacturers. Consequently, revenue volatility
within the industry can vary greatly by company. Some industry companies such as the Procter & Gamble Company aim for
customers with low-price everyday necessities, such as shampoo and deodorant. Companies with such a strategy will
generally be less subject to market fluctuations and revenue volatility will accordingly be lower. Conversely, prestige
cosmetic companies, such as Estée Lauder Companies Inc., have built business models on retailing high-end discretionary
products, which are more sensitive to general market conditions, such as consumer confidence levels. Industry revenue
generally falls due to tight economic times, as consumers with limited disposable income cut back on discretionary
spending. However, major industry operators are large companies that can afford to take short-term hits to profit to retain
long-term market share. Accordingly, companies can compensate for these declines by investing in marketing and product
development.
46
IBISWorld.com
Cosmetic & Beauty Products Manufacturing in the US
Regulation &
Policy
The level of regulation is
August 2022
Medium and the trend is Increasing
The major regulating body governing the Cosmetic and Beauty Products
Manufacturing industry is the US Food and Drug Administration (FDA).
The FDA enforces the laws and regulations relating to the manufacturing, labeling and marketing of cosmetics. The basic
regulatory requirements with which manufacturers of cosmetics and personal care products distributed in the United States
must comply are the Food, Drug and Cosmetic (FD&C) Act and the Fair Packaging and Labeling (FP&L) Act. Over the five
years to 2022, more individuals and groups have advocated for increased regulation of cosmetic and beauty products,
largely in response to misleading labeling practices and a lack of transparency in ingredients.
ADULTERATED OR MISBRANDED COSMETICS
The FD&C Act prohibits the distribution of cosmetics that are adulterated or
misbranded.
A cosmetic product is considered adulterated if it contains a substance that may make the product harmful to consumers
under customary conditions of use. The legislation also protects consumers against products containing filthy, putrid or
decomposed substances. A product is misbranded if its labeling is false or misleading, if it does not bear the required
labeling information or if the container is made or filled in a deceptive manner.
COSMETIC LABELING
Cosmetics distributed in the United States must comply with the labeling
regulations published by the FDA under the authority of the FD&C and FP&L
Acts.
Labeling refers to all labels and other written, printed or graphic matter on or accompanying a product. The label statements
required under the FD&C Act must appear on the inside and on any outside container or wrapper. FP&L Act requirements,
such as ingredient labeling and statement of the net quantity of contents on the main display panel, only apply to the label
of the outer container. In some cases, third-party packaging and labeling companies are responsible for ensuring
accordance with the FP&L Act; however, if industry players opt to package and label goods in-house, the company will be
fully responsible for fulfilling all requirements mandated by the act.
DECLARATION OF INGREDIENTS
The FDA requires cosmetics producers to clearly state the component
ingredients of cosmetics available for retail sale to consumers.
Cosmetics not customarily distributed for retail sale, such as hair preparations or makeup products used by professionals
on customers, are exempt from this requirement, provided these products are not also sold to consumers at professional
establishments or workplaces for consumption at home. Individual states may also impose additional regulations in regard
to ingredient declaration. For instance, the California Safe Cosmetics Act of 2005 requires cosmetic companies selling
products within the state of California to disclose details to the Department of Health Services of any ingredients that
contain chemicals identified as causing cancer or reproductive toxicity, particularly chemicals in the phthalate family.
LABEL WARNINGS
Cosmetics that may be hazardous to consumers when misused must bear
appropriate label warnings and adequate directions for safe use.
According to the FDA, the statements must be prominent and conspicuous. Cosmetics in self-pressurized containers,
feminine deodorant sprays and children's bubble bath products are examples of products requiring such statements.
The FD&C Act does not require that cosmetic manufacturers or marketers test products for safety. However, the FDA
strongly urges cosmetic manufacturers to conduct appropriate tests to substantiate the safety of the cosmetics. If the safety
of a product is not adequately substantiated, it may be considered misbranded and be subject to regulatory action.
MICROBEADS BAN
In 2015, the Microbead-Free Waters Act of 2015 was passed, banning the
production of rinse-off toiletry products containing plastic microbeads.
47
IBISWorld.com
Cosmetic & Beauty Products Manufacturing in the US
August 2022
The microbeads, which are small polyethylene balls found in creams, scrubs and toothpastes, cannot be filtered out of
water at treatment plants. This has led to microbeads ending up in natural waterways, which is considered an
environmental issue. The ban required that all manufacturers remove microbeads from production by July 2017.
OTHER REGULATIONS
Other governmental agencies shape policies that may affect the industry,
including the Environmental Protection Agency (EPA), which is responsible for
infectious and hazardous waste laws; the US Department of Agriculture, which
is responsible for animal welfare compliance laws; the Federal Trade
Commission, which protects consumers from deceptive and unfair business
practices; and the Occupational Safety and Health Administration, which
evaluates potential chemical hazards to employees.
Moreover, any employing industry companies are subject to federal and state employment regulation, such as the Fair
Labor Standards Act, and all industry manufacturers are subject to the same environmental protection regulations to which
all manufacturers are subject, such as the Clean Air Act.
COVID-19
The COVID-19 (coronavirus) pandemic introduced new regulations to
industries across the United States.
Although, industry enterprises were largely deemed essential businesses and were permitted to remain operational, other
regulations were still implemented. Specific regulations may vary depending on state and local legislation, however typical
coronavirus related regulations include social distancing regulations, mask mandates and increased cleaning and sanitation
procedures. Regulations have decreased as more of the population has been vaccinated.
Industry
Assistance
The level of industry assistance is
Medium and the trend is Steady
Tariffs in the Cosmetic and Beauty Products Manufacturing industry vary
depending on the product and the material used to make the product.
For example, some essential oils are subject to a tariff of 4.2%, deodorants and antiperspirants are subject to a 4.9% tariff,
perfumed bath salts are subject to a 5.8% tariff, reducing import competition. However, beauty and makeup preparations,
including lipsticks, sunscreen, eye makeup, manicure or pedicure preparations, powders and petroleum jelly, are not
subject to tariffs.
The Personal Care Products Council is a national trade association. The organization works as an advocate and educator
for industry members. CosmeticsDesign.com is an industry website featuring daily online news for industry participants, and
the publication also offers a free e-newsletter discussing relevant topics affecting the industry.
COVID-19
In response to the COVID-19 (coronavirus) pandemic, the US government passed the Coronavirus Aid, Relief and
Economic Security (CARES) Act (2020) and the Coronavirus Response and Consolidated Appropriations Act (2021). These
acts were implemented to provide economic assistance to American workers, small businesses and industries. Within the
CARES Act, the Paycheck Protection Program (PPP) specifically aims to assist small businesses with maintaining payroll
and covering overhead costs. Although these acts are not specific to the industry, they affect industry operators and
employees.
48
IBISWorld.com
Cosmetic & Beauty Products Manufacturing in the US
August 2022
Key Statistics
Industry Data
IVA Establishments
($m)
(Units)
Enterprises
(Units)
Employment
(Units)
Exports
($m)
Imports
($m)
Wages
($m)
Domestic
Demand
($m)
Per capita
disposable
income ($)
Year
Revenue
($m)
2013
49,105
7,523
2,965
2,918
49,615
9,208
8,838
3,201
48,735
38,947
2014
53,197
8,328
3,115
3,068
48,169
9,414
9,323
3,221
53,106
40,117
2015
55,441
9,208
3,452
3,399
47,597
9,350
9,429
3,165
55,520
41,383
2016
51,566
9,037
3,516
3,462
48,528
9,194
10,058
3,210
52,431
41,822
2017
49,528
7,709
3,473
3,415
52,517
9,685
10,569
3,499
50,412
42,699
2018
51,551
7,531
3,557
3,503
55,895
9,928
11,361
3,510
52,985
43,885
2019
49,585
7,281
3,820
3,770
50,592
9,923
10,732
3,224
50,394
44,645
2020
44,753
6,561
4,029
3,973
51,912
8,484
9,545
3,202
45,814
47,255
2021
47,097
7,034
4,223
4,164
54,127
8,869
11,637
3,344
49,864
48,617
2022
47,749
7,098
4,361
4,305
55,127
9,019
13,744
3,403
52,474
46,436
2023
48,244
7,306
4,469
4,416
55,993
9,148
13,800
3,453
52,896
46,792
2024
48,685
7,420
4,579
4,530
56,824
9,336
13,679
3,500
53,029
47,185
2025
49,031
7,490
4,703
4,659
57,516
9,451
13,662
3,539
53,242
47,558
2026
49,428
7,617
4,834
4,795
58,173
9,579
13,656
3,577
53,505
47,909
2027
49,768
7,742
4,946
4,912
58,919
9,697
13,631
3,619
53,702
48,269
IVA Establishments
(%)
(%)
Enterprises
(%)
Employment
(%)
Exports
(%)
Imports
(%)
Wages
(%)
Domestic
Demand
(%)
Per capita
disposable
income (%)
Annual Change
Year
Revenue
(%)
2013
-1.19
-4.50
6.27
6.53
-1.59
3.65
8.18
-3.13
-0.50
-1.98
2014
8.33
10.7
5.05
5.14
-2.92
2.23
5.49
0.61
8.97
3.00
2015
4.21
10.6
10.8
10.8
-1.19
-0.68
1.14
-1.75
4.55
3.15
2016
-6.99
-1.86
1.85
1.85
1.95
-1.68
6.66
1.42
-5.56
1.06
2017
-3.96
-14.7
-1.23
-1.36
8.21
5.34
5.07
9.00
-3.85
2.09
2018
4.08
-2.31
2.41
2.57
6.43
2.50
7.49
0.32
5.10
2.77
2019
-3.82
-3.32
7.39
7.62
-9.49
-0.05
-5.54
-8.15
-4.89
1.73
2020
-9.75
-9.91
5.47
5.38
2.60
-14.5
-11.1
-0.71
-9.09
5.84
2021
5.23
7.21
4.81
4.80
4.26
4.53
21.9
4.46
8.84
2.88
2022
1.38
0.91
3.26
3.38
1.84
1.68
18.1
1.75
5.23
-4.49
2023
1.03
2.93
2.47
2.57
1.57
1.43
0.40
1.46
0.80
0.76
2024
0.91
1.55
2.46
2.58
1.48
2.05
-0.88
1.37
0.25
0.84
2025
0.71
0.94
2.70
2.84
1.21
1.24
-0.13
1.11
0.40
0.78
2026
0.80
1.69
2.78
2.91
1.14
1.34
-0.05
1.07
0.49
0.73
2027
0.68
1.63
2.31
2.44
1.28
1.23
-0.18
1.16
0.37
0.75
Key Ratios
Year
IVA/Revenue
(%)
Imports/
Demand
(%)
Exports/
Revenue
(%)
Revenue per
Employee
($'000)
Wages/
Revenue
(%)
2013
15.3
18.1
2014
15.7
17.6
2015
16.6
2016
Employees per
estab.
(Units) Average Wage ($)
18.8
990
6.52
16.7
64,523
17.7
1,104
6.05
15.5
66,867
17.0
16.9
1,165
5.71
13.8
66,492
17.5
19.2
17.8
1,063
6.23
13.8
66,147
2017
15.6
21.0
19.6
943
7.06
15.1
66,624
2018
14.6
21.4
19.3
922
6.81
15.7
62,800
2019
14.7
21.3
20.0
980
6.50
13.2
63,731
2020
14.7
20.8
19.0
862
7.15
12.9
61,674
2021
14.9
23.3
18.8
870
7.10
12.8
61,788
2022
14.9
26.2
18.9
866
7.13
12.6
61,732
2023
15.1
26.1
19.0
862
7.16
12.5
61,667
2024
15.2
25.8
19.2
857
7.19
12.4
61,599
2025
15.3
25.7
19.3
852
7.22
12.2
61,536
2026
15.4
25.5
19.4
850
7.24
12.0
61,496
2027
15.6
25.4
19.5
845
7.27
11.9
61,423
Figures are inflation adjusted to 2022
49
IBISWorld.com
Cosmetic & Beauty Products Manufacturing in the US
August 2022
Industry Financial Statement
Historical Average
Industry Multiples
2017
2018
2019
2020
3-Year
5-Year
10-Year
EBIT/Revenue
11.7
9.0
8.3
8.6
8.6
11.4
16.6
EBITDA/Revenue
17.0
14.7
14.1
14.5
14.4
16.8
22.7
Leverage Ratio
6.1
7.1
7.4
7.2
7.2
6.4
5.2
2017
2018
2019
2020
3-Year
5-Year
10-Year
2.6
2.4
2.4
2.6
2.5
2.7
3.8
Income Statement
2017
2018
2019
2020
3-Year
5-Year
10-Year
Total Revenue
100.0
100.0
100.0
100.0
100.0
100.0
100.0
Business receipts
88.3
86.8
86.2
86.1
86.3
87.6
89.9
Cost of goods
58.0
60.0
59.7
58.3
59.4
57.4
53.8
Gross Profit
42.0
40.0
40.3
41.7
40.6
42.6
46.2
Salaries and wages
8.4
9.5
9.8
9.8
9.7
8.6
8.0
Advertising
1.1
1.2
1.3
1.4
1.3
1.1
1.6
Depreciation
4.9
4.9
4.7
4.4
4.7
4.6
4.4
Depletion
0.6
0.7
0.8
0.8
0.8
0.7
0.8
Amortization
2.2
0.0
0.4
0.7
0.4
1.1
1.4
Rent paid
3.5
3.4
3.0
2.7
3.0
3.1
2.1
Repairs
1.9
1.4
1.2
1.1
1.2
1.5
1.1
Bad debts
1.2
1.2
1.2
1.2
1.2
1.2
0.7
Employee benefit programs
2.8
2.7
2.5
2.3
2.5
2.6
2.3
Compensation of officers
2.1
1.9
2.0
2.1
2.0
2.2
1.7
Taxes paid
2.6
2.4
2.4
2.6
2.5
2.7
3.8
Interest Income
2.4
1.9
1.6
1.5
1.6
2.1
1.5
Royalties
3.7
2.7
2.1
1.7
2.2
3.2
2.8
Rent Income
2.3
2.0
1.8
1.7
1.9
2.0
1.3
Net Income
5.2
2.6
2.0
2.2
2.3
4.8
8.7
2017
2018
2019
2020
3-Year
5-Year
10-Year
Industry Tax Structure
Taxes Paid/Revenue
Expenses
Other Income
Balance Sheet
Assets
Cash and Equivalents
4.9
5.5
6.0
6.2
5.9
5.4
3.2
Notes and accounts receivable
17.4
17.3
17.3
17.4
17.4
17.4
16.0
Allowance for bad debts
0.2
0.3
0.3
0.3
0.3
0.3
0.2
Inventories
4.4
4.3
4.2
4.1
4.2
4.3
3.5
Other current assets
5.6
5.9
6.1
6.2
6.1
5.8
4.3
Other investments
34.3
31.8
29.7
28.2
29.9
32.3
38.1
Property, Plant and Equipment
16.1
16.2
16.2
16.2
16.2
16.1
15.3
Accumulated depreciation
10.8
10.3
9.8
9.4
9.8
10.3
9.4
Intangible assets (Amortizable)
21.4
22.7
23.8
24.7
23.7
22.5
21.6
Accumulated amortization
3.6
3.9
4.1
4.3
4.1
3.8
3.1
Other assets
8.8
8.8
8.8
8.8
8.8
8.8
7.0
Total assets
100.0
100.0
100.0
100.0
100.0
100.0
100.0
Accounts payable
10.9
10.8
10.7
10.6
10.7
10.8
12.6
Mort, notes, and bonds under 1 yr
6.1
6.1
6.1
6.2
6.1
6.2
6.1
Other current liabilities
7.8
8.7
9.3
9.8
9.3
8.5
6.5
Loans from shareholders
1.9
2.2
2.5
2.6
2.4
2.1
2.5
Mort, notes, bonds, 1 yr or more
21.1
21.9
22.8
23.6
22.8
21.9
19.9
Liabilities and Net Worth
Other liabilities
10.4
11.0
11.5
11.9
11.5
10.8
9.5
Total liabilities
100.0
100.0
100.0
100.0
100.0
100.0
100.0
Capital stock
5.9
5.9
5.9
5.8
5.8
5.9
4.9
Additional paid-in capital
33.3
32.3
31.7
31.2
31.7
32.6
36.1
Retained earnings, appropriated
0.0
0.0
0.0
0.0
0.0
0.0
0.0
Retained earnings-unappropriated
-2.4
-3.6
-4.2
-4.4
-4.1
-3.1
14.8
Cost of treasury stock
2.1
2.2
2.4
2.7
2.4
2.3
13.7
Net worth
42.0
39.4
37.2
35.5
37.4
39.8
42.9
50
IBISWorld.com
Cosmetic & Beauty Products Manufacturing in the US
Liquidity Ratios
August 2022
2017
2018
2019
2020
3-Year
5-Year
10-Year
Current Ratio
1.3
1.3
1.3
1.3
1.3
1.3
1.1
Quick Ratio
1.1
1.1
1.1
1.1
1.1
1.1
0.9
Sales/Receivables
5.5
5.5
5.5
5.5
5.5
5.5
6.0
Days' Receivables
66.3
65.9
65.9
66.1
66.0
66.5
61.2
Days' Inventory
29.0
27.3
26.7
26.8
26.9
28.7
24.4
Inventory Turnover
12.6
13.4
13.7
13.6
13.6
12.8
15.5
Payables Turnover
5.1
5.3
5.4
5.3
5.3
5.1
4.2
Days' Payables
71.7
68.7
68.2
69.0
68.6
72.2
91.4
Sales/Working Capital
7.6
7.5
7.5
7.3
7.4
7.5
19.6
Coverage Ratios
2017
2018
2019
2020
3-Year
5-Year
10-Year
Interest Coverage
296.7
221.5
212.9
231.1
221.9
308.9
420.1
3.4
1.8
0.3
1.0
1.1
1.4
1.0
Leverage Ratios
2017
2018
2019
2020
3-Year
5-Year
10-Year
Fixed Assets/Net Worth
1.2
1.4
1.5
1.6
1.5
1.4
1.2
Debt/Net Worth
2.4
2.5
2.7
2.8
2.7
2.5
2.4
Tangible Net Worth
0.4
0.4
0.4
0.4
0.4
0.4
0.4
Operating Ratios
2017
2018
2019
2020
3-Year
5-Year
10-Year
Return on Net Worth, %
26.9
21.9
21.3
23.2
22.1
26.7
35.9
Return on Assets, %
11.3
8.6
7.9
8.2
8.3
10.8
15.8
Sales/Total Assets
1.0
1.0
1.0
1.0
1.0
1.0
1.0
EBITDA/Revenue
17.0
14.7
14.1
14.5
14.4
16.8
22.7
EBIT/Revenue
11.7
9.0
8.3
8.6
8.6
11.4
16.6
2017
2018
2019
2020
3-Year
5-Year
10-Year
Debt Service Coverage Ratio
Cash Flow & Debt
Service Ratios (% of
sales)
Cash from Trading
5.4
48.7
5.4
57.0
37.0
24.4
17.2
Cash after Operations
-37.3
40.4
-37.3
39.7
14.3
-6.3
-17.9
Net Cash after Operations
-13.7
39.3
-13.7
33.3
19.6
6.3
-1.2
Debt Service P&I Coverage
Interest Coverage (Operating
Cash)
-1.2
26.5
-1.2
13.0
12.8
7.2
4.0
0.0
2.0
0.0
1.3
1.1
0.6
0.4
Source: IRS SOI Tax Stats; US Census Bureau; IBISWorld
51
IBISWorld.com
Cosmetic & Beauty Products Manufacturing in the US
August 2022
Additional Resources
Additional
Resources
Cosmetics Business
http://www.cosmeticsbusiness.com
CosmeticsDesign.com
http://www.cosmeticsdesign.com
Personal Care Products Council
http://www.personalcarecouncil.org
US Census Bureau
http://www.census.gov
Industry Jargon
COSMETIC
A product used for cleansing, beautifying, promoting attractiveness or altering the appearance.
DIRECT SALES
The marketing and selling of products directly to consumers in a location other than a store or other fixed retail site.
PARABEN
A chemical used widely in cosmetics as a product preservative. Recent research has linked parabens to cancer.
PREMIUMIZATION
A trend in which companies attempt to increase revenue by offering more enhanced, value-added products, often at
a higher price to consumers.
SOCIAL MEDIA INFLUENCER
An individual with a large following on social media who has established credibility in a specific industry. Social
media influencers often work with brands to promote products.
WHOLESALE BYPASS
A popular trend within retail and manufacturing industries in which producers supply goods directly to stores,
eliminating the middleman.
Glossary
BARRIERS TO ENTRY
High barriers to entry mean that new companies struggle to enter an industry, while low barriers mean it is easy for
new companies to enter an industry.
CAPITAL INTENSITY
Compares the amount of money spent on capital (plant, machinery and equipment) with that spent on labor.
IBISWorld uses the ratio of depreciation to wages as a proxy for capital intensity. High capital intensity is more than
$0.333 of capital to $1 of labor; medium is $0.125 to $0.333 of capital to $1 of labor; low is less than $0.125 of
capital for every $1 of labor.
CONSTANT PRICES
The dollar figures in the Key Statistics table, including forecasts, are adjusted for inflation using the current year (i.e.
year published) as the base year. This removes the impact of changes in the purchasing power of the dollar, leaving
only the "real" growth or decline in industry metrics. The inflation adjustments in IBISWorld’s reports are made using
the US Bureau of Economic Analysis’ implicit GDP price deflator.
DOMESTIC DEMAND
Spending on industry goods and services within the United States, regardless of their country of origin. It is derived
by adding imports to industry revenue, and then subtracting exports.
EMPLOYMENT
The number of permanent, part-time, temporary and seasonal employees, working proprietors, partners, managers
and executives within the industry.
ENTERPRISE
A division that is separately managed and keeps management accounts. Each enterprise consists of one or more
establishments that are under common ownership or control.
ESTABLISHMENT
The smallest type of accounting unit within an enterprise, an establishment is a single physical location where
business is conducted or where services or industrial operations are performed. Multiple establishments under
52
IBISWorld.com
Cosmetic & Beauty Products Manufacturing in the US
August 2022
common control make up an enterprise.
EXPORTS
Total value of industry goods and services sold by US companies to customers abroad.
IMPORTS
Total value of industry goods and services brought in from foreign countries to be sold in the United States.
INDUSTRY CONCENTRATION
An indicator of the dominance of the top four players in an industry. Concentration is considered high if the top
players account for more than 70% of industry revenue. Medium is 40% to 70% of industry revenue. Low is less
than 40%.
INDUSTRY REVENUE
The total sales of industry goods and services (exclusive of excise and sales tax); subsidies on production; all other
operating income from outside the firm (such as commission income, repair and service income, and rent, leasing
and hiring income); and capital work done by rental or lease. Receipts from interest royalties, dividends and the sale
of fixed tangible assets are excluded.
INDUSTRY VALUE ADDED (IVA)
The market value of goods and services produced by the industry minus the cost of goods and services used in
production. IVA is also described as the industry's contribution to GDP, or profit plus wages and depreciation.
INTERNATIONAL TRADE
The level of international trade is determined by ratios of exports to revenue and imports to domestic demand. For
exports/revenue: low is less than 5%, medium is 5% to 20%, and high is more than 20%. Imports/domestic demand:
low is less than 5%, medium is 5% to 35%, and high is more than 35%.
LIFE CYCLE
All industries go through periods of growth, maturity and decline. IBISWorld determines an industry's life cycle by
considering its growth rate (measured by IVA) compared with GDP; the growth rate of the number of establishments;
the amount of change the industry's products are undergoing; the rate of technological change; and the level of
customer acceptance of industry products and services.
NONEMPLOYING ESTABLISHMENT
Businesses with no paid employment or payroll, also known as nonemployers. These are mostly set up by selfemployed individuals.
PROFIT
IBISWorld uses earnings before interest and tax (EBIT) as an indicator of a company’s profitability. It is calculated as
revenue minus expenses, excluding interest and tax.
REGIONS
West | CA, NV, OR, WA, HI, AK
Great Lakes | OH, IN, IL, WI, MI
Mid-Atlantic | NY, NJ, PA, DE, MD
New England | ME, NH, VT, MA, CT, RI
Plains | MN, IA, MO, KS, NE, SD, ND
Rocky Mountains | CO, UT, WY, ID, MT
Southeast | VA, WV, KY, TN, AR, LA, MS, AL, GA, FL, SC, NC
Southwest | OK, TX, NM, AZ
VOLATILITY
The level of volatility is determined by averaging the absolute change in revenue in each of the past five years.
Volatility levels: very high is more than ±20%; high volatility is ±10% to ±20%; moderate volatility is ±3% to ±10%;
and low volatility is less than ±3%.
WAGES
The gross total wages and salaries of all employees in the industry.
53
IBISWorld.com
Cosmetic & Beauty Products Manufacturing in the US
August 2022
Call Preparation Questions
Role Specific
Questions
Sales & Marketing
How is your company affected by imports?
Rising imports pressure industry demand, as domestic demand for imports eats into demand for industry goods.
Conversely, decreasing imports tend to increase domestic demand.
The value of imports for the industry has increased over the five years to 2022.
How have imports from low-wage countries like China and Mexico impacted your operations?
Low-cost industry imports satisfy demand from low-income consumers, while luxury imports, such as products from
France, satisfy demand from high-earning consumers.
Low-wage countries tend to be able to offer lower prices since input costs are lower.
Strategy & Operations
Has your company been exposed to volatile input prices over the past few years?
Fluctuations in the world price of crude oil over the past five years have had a strong impact on industry purchase
costs and profit margins in recent years.
Has your company explored acquisition opportunities in areas with well-established infrastructure?
Acquisition activity is prevalent among the largest players in this industry, as large industry operators acquire small
players in order to expand market share.
Technology
Is your company investing in technology like augmented reality to establish a competitive edge?
Investment research and development (R&D) is key to success in this industry, since operators rely on R&D to set
themselves apart.
Companies are increasingly focusing on environmentally friendly technology processes to adapt to consumer
preferences.
Have you been able to automate your manufacturing process to ensure fast turnaround time?
Trends in this industry change rapidly so operators that can identify trends, manufacture products then get the
products to shelf quickly have a competitive advantage.
The unique circumstances brought by the coronavirus pandemic challenged operators to adapt quickly.
Compliance
How does your company ensure all health and safety requirements are met?
Large industry operators hire internal compliance teams that ensure the health and safety of all employees and
downstream customers.
The coronavirus has increased regulations surrounding health and safety requirements. Including, social distancing
regulations, mask mandates and increased cleaning and sanitation procedures.
Does your company have proactive sustainability goals?
Many major players in this industry focus heavily on environmentally friendly practices and sustainability goals.
Including, reducing carbon dioxide emissions and using more environmentally friendly packaging such as
thermoplastic resin.
Finance
How do your company's profit margins compare to your main competitors'?
The average industry profit margin is relatively high, with large operators, such as Estee Lauder, reporting margins
even higher than the average.
How has input price volatility affected profit margins over the past 12 months?
Industry profit has been supported in recent years by falling input prices, such as the world price of crude oil. The
IBISWORLD.COM
54
Cosmetic & Beauty Products Manufacturing in the US
August 2022
coronavirus has increased volatility in input prices.
External Impacts
Questions
Impact: Consumer Confidence Index
How linked are the sales to your products to consumer confidence? Does your company produce both essential and
nonessential goods to protect revenue?
Consumers are more likely to purchase cosmetic and beauty products when confidence is high, as many industry
goods are considered discretionary.
The recovery of the economy and access to COVID-19 vaccines increased confidence for 2021
Impact: Trade-weighted index
Do you monitor changes to the trade-weighted index? What percentage of your revenue comes from exports?
The appreciation of the dollar makes US-made products less affordable for foreign customers, limiting industry
exports while boosting imports.
Impact: Households earning more than $100,000
What high-end and value-add products do you offer to customers? What percentage of your revenue is derived from
luxury products?
Lavish industry goods retail at a higher price point than most essentials and are large drivers of industry revenue.
When the percentage of households earning more than $100,000 in annual revenue increases, so too does demand
for nonessentials, which boosts revenue.
Internal Issues
Questions
Issue: Production of premium goods/services
What premium goods does your company offer? What percentage of your revenue is derived from such products?
Customers will often purchase premium industry products if they are perceived as being higher-quality goods.
Consumers with higher disposable income levels are most likely to purchase these goods.
Issue: Production of goods currently favored by the market
Which niches, if any, do you cater to? How do you keep track of the latest trends or help set them?
If not a major player, niche and ultra-niche positioning is important for success in the industry.
Issue: Having marketing expertise
How do your market your company's products to the general public? Does your advertising target any specific
markets?
In this highly competitive industry, marketing and brand awareness are very important to gaining market share;
however, this factor is somewhat less important in the niche and ultra-niche markets.
IBISWORLD.COM
55
IBISWorld helps you find the industry
information you need – fast.
With our trusted research covering thousands of global industries, you’ll get a quick and intelligent
overview of any industry so you can get up to speed in minutes. In every report, you’ll find
actionable insights, comprehensive data and in-depth analysis to help you make smarter, faster
business decisions. If you’re not yet a member of IBISWorld, contact us at 1-800-330-3772 or
info@ibisworld.com to learn more.
DISCLAIMER
This product has been supplied by IBISWorld Inc. (‘IBISWorld’) solely for use by its authorized licenses strictly in
accordance with their license agreements with IBISWorld. IBISWorld makes no representation to any other person
with regard to the completeness or accuracy of the data or information contained herein, and it accepts no
responsibility and disclaims all liability (save for liability which cannot be lawfully disclaimed) for loss or damage
whatsoever suffered or incurred by any other person resulting from the use of, or reliance upon, the data or
information contained herein. Copyright in this publication is owned by IBISWorld Inc. The publication is sold on
the basis that the purchaser agrees not to copy the material contained within it for other than the purchasers own
purposes. In the event that the purchaser uses or quotes from the material in this publication – in papers, reports,
or opinions prepared for any other person – it is agreed that it will be sourced to: IBISWorld Inc.
Copyright 2022 IBISWorld Inc.