European cosmetic industry (Source: Cosmetics Europe)
- 2014 Turnover: €72.5 billion
- 4,500 companies of which over 4,000 SMEs
- €16.33 billion
- 140,000 direct jobs, in total around 1.7 million employees, of which 25,000 scientists
French cosmetic industry (Source FEBEA: Fédération française des entreprises de la beauté [French federation of beauty enterprises].)
- 2014 Turnover €10.8 billion
- around 300 companies
- 42,000 direct jobs
- €5.8 billion for cosmetics and €16.76 billion for the whole sector, leader in global exports.
The global cosmetics market is estimated at €198 billion (Source: Cosmetic Europe), with the USA accounting for €49 billion, Europe €69 billion, China €32 billion, Japan €18 billion, Brazil €16 billion, and India and Korea €7 billion each. With the exception of 2009, this market is relatively stable, with AAGR at around 3.8% for the past 10 years.
In terms of categories, this market is divided (Source: Consulytancy.uk) into skin products (35%), hair products (23%), make-up (17%), fragrances (13%), hygiene 11% and others. With a global market estimated at €7.7 billion in 2013 (2.3% of the market) and growing at a rate of 10%, organic and natural products could reach €12.6 billion in 2020.
The European retail cosmetics market in 2014 was estimated at €72.5 billion excluding tax (Source: Cosmetics Europe and depending on product definitions and exchange rates). Germany is the leading European market (€13.01 billion), ahead of France (€10.58 billion), the United Kingdom (€10.4 billion) and Italy (€9.39 billion). The European cosmetics industry recorded growth in sales of 0.5% in 2014; this was an upturn in relation to the 1.4% decrease recorded in 2013. The main markets record contrasting growth rates: the United Kingdom, at 5.3%, is ahead of Germany (1.6%) and France (0.1%), while Italy and Spain are both still on the decline (respectively -1.4% and -1.3%). In terms of category, make-up records a 1.2% growth and hygiene products a 1.3% growth.
The flagship categories in Europe remain skin care products and hygiene products, each with 25.4% of market share, followed by hair products (20.8%), fragrances (15%) and make-up (13.4%). The organic cosmetics market represents €2.8 billion, with 68% of products certified.
For many years, France has been the leader in global exports of cosmetic products, with 15.9% of market share in 2013, ahead of the United States (10.8%) and Germany (10.7%). With a 4% growth in exports in 2014 (of which €5.45 billion to Europe and €11.3 billion to the rest of the world) and a trade balance of €8.9 billion, the cosmetics industry is the second net exporting economic sector in France, behind aeronautics (€23.6 billion).
Total sales in the French cosmetics industry reached €10.8 billion in 2014. By category, beauty and skin care products account for 24.2% of sales, ahead of fragrances (20.2%), hygiene products (19.6%), hair products (13.7%), oral hygiene (9.6%), make-up (9%) and baby care (3.5%).
L’Oréal, a national emblem, continues to dominate the top 7 of worldwide manufacturers. And as testimony to French know-how, the Cosmetic Valley wants to create a national start-up network, «Beauty French Tech», for which an incubator will open in the autumn and will be able to welcome up to 60 start-ups. With consumers focusing increasingly on quality, product performance and perceived results, open to new technologies, to more sophisticated and natural products and to new connected models of sale and use, innovation in packaging is strategic!
SECTOR CHALLENGES RELATING TO PACKAGING
- The digital revolution and social networks are transforming distribution circuits as well as relations between consumers and brands. «Nao the robot», born in France at Aldebaran, now welcomes customers in Séphora stores and invites them to choose a plastic card equipped with NFC (near field communication) technology, which is a virtual basket allowing customers to fill a digital trolley with products which are not physically in the store. Objective: zero in-store stock. Touch-screens and terminals next to testers provide information on products and the opportunity to order them.
What is the role of packaging in a digital point of sale?
- This same digital revolution also opens up opportunities to customise packaging. QR codes and augmented reality can be printed on all types of material and can pass on a personal message or be used to test a make-up shade on the customer’s own photo.
- In response, and in addition to limited editions or eventfocused packaging, the customisation of packaging and products is developing with the aim of getting closer to customers and developing loyalty.
- European e-commerce of cosmetics is set to grow by 8% a year until 2019 (Source: Digital Beauty in Europe A.T. Kearney), i.e. four times the growth of the market. This shakes up the characteristics of the sector, which up until now focused on the need to smell and touch the products, as well as on the relationship with a sales advisor! In France, Great Britain and Germany, only 20% of people questioned said they did not want to buy cosmetics on-line. In France, promotions (70%), followed by price comparisons (66%), are the main reasons for buying cosmetics on-line, while purchasing their usual products comes third (53%). How can on-line sales be accelerated without altering the customer experience, and how can packaging be designed to contribute to this customer experience?
- Discussions on the Transatlantic Trade and Investment Partnership (TTIP) highlight the differences in regulations between the EU and the USA, where cosmetic products are considered as over-the-counter drugs and subject to very specific testing. Cosmetics Europe has worked with its American counterpart, the Personal Care Products Council, on a list of differences to smooth out. Only time will tell if the negotiations have been successful and if they will facilitate the international trade of cosmetic products and packaging.
- Cosmetics are also part of the eco-design drive: green formulations, efficiency of resources, choice of packaging to reduce environmental impact, and the Product Environmental Footprint (PEF) project to develop a harmonised method to calculate the environmental footprint are some of the collective and individual actions. L’Oréal, for example, announced that 53% of its new or renovated products have packaging with a reduced environmental footprint. Biopolymers are also making their entrance on this market, while aerosols are condensing.
- The cosmetics sector is also fighting waste. Some proof of this: increasingly precise dosing systems, packaging heading towards a 100% recycling rate, airless technology which conserves products longer, meaning preservatives are no longer necessary, and single-dose products to accompany globe-trotting customers.
- Lastly, and this is an essential point, product applications and customisation of skin care and make-up products are the subject of numerous innovative packaging concepts. Customers remember what they hold and what they use on their skin. An ergonomic applicator, metal tips to activate micro-circulation, vibrating brushes to apply mascara, rollons for hair removal creams, etc. are packaging elements which guide or re-invent natural gestures. In this context, connected packaging for perfect harmony between the product and the skin or face gives the product genuine added value. Proof that packaging is re-inventing products!
AMONG EXHIBITORS IN THE BEAUTY SECTOR:
ACE Solutions / ACTI PACK / ALPA BERTHOD / CVP, Creative Vision of Packaging / EMBATHERM / INVOLTEC INTERNATIONAL / KOCH PAC SYSTEME / MARIN G & C / MOM / OPTIMA / PET Power - RPC / PKB COSMETICS,TOILETRY AND FRAGRANCE FILLING LINES / PULVOREX / RATIONATOR MASCHINENBAU / SOLLAS FRANCE / TECNICOLL S.R.L. / TGM - TECNOMACHINES / TINARELLI SRL / Weckerle Machines / WUXI SUNMART SCIENCE AND TECHNOLOGY.
Source: Annette Freidinger-Legay, international packaging expert and consultant for the ALL4PACK Paris trade show.