The beauty industry is resilient and keeps on growing

There was an overwhelming feeling of optimism amongst the speakers and crowd at the conference for the beauty industry’s long-term fundamentals and growth prospects.

Recent performance demonstrates the resilience of the beauty industry. In Q1 2023, the mass beauty market in the US generated $7 BN of sales, a 10% increase compared with the Q1 2022 [1]. Prestige beauty especially is a consumer category that has grown by 16% in sales this past quarter[2]. Consumers see beauty as an indispensable category, Circana recently noted that although some consumers are cutting back on purchases because of inflation, seven in 10 are not reducing their beauty spending[3]. During the pandemic, companies reallocated resources to their supply chain and there was a reduction in innovation[4], with new products representing only 1.5% of sales compared to an average of 5% of sales pre-pandemic[5]. We expect a renewed focus on innovation will support future growth. 

Accelerating demographic shifts are shaping the future of beauty

Gen-Z in focus

Speakers at the summit focused in on Gen-Z, the generation of consumers born after 1996, and the increasing importance of their cultural influence over buying power and spending habits for the beauty industry.

  • What do they want? – Gen-Z consumers aspire to be unapologetic in their self-expression and prioritize the ‘unvarnished truth’ from brands. This is typically measured by a brand’s commitment to diversity and inclusion - unedited advertising materials, cruelty free products, and diverse product offerings – authenticity sells[6]. 40% of Gen Z respondents to a recent survey said that diversity and inclusion is the most important brand value when shopping for beauty products[7].
    • Millennials, the generation born between 1981 and 1996, prioritize more of an airbrushed and affordable aesthetic. With a combined spending power of $350 billion in the US alone[8], appealing to both generations is critical for the future of beauty.
  • The power of social media – As Gen-Z consumers have grown up in a world with social media, they are essentially ‘fluent’ in communicating through this medium. They are acutely aware of their representation online and view social media as the primary platform to keep up with the latest beauty trends and tips (62% prioritize TikTok for this, and 80% prioritize Instagram)[9]. This demographic is also most likely to make a purchase based on creator content on social media (41% compared with 33% for millennials)[10].


Addressing diversity in brand offering and representation in the workplace

Leaders of industry focused in on the changing definition of beauty. As the US population becomes more diverse and consumers move away from the Eurocentric archetypes, brands that celebrate diversity in all its forms – both in their boardrooms and product offerings – are being celebrated themselves.

  • In products and stores - The beauty industry has a big role to play, and opportunity, in addressing the changing face of US consumers. Discussions centered around product innovation and brands addressing diversity in their product offerings – Fenty Beauty set the bar high on its debut in 2017 with one of the most extensive foundation shade ranges on the market[11] - as well as retail experience. Speakers at the conference discussed the need for better training to enable retailers to cater for a diverse consumer base in store and offer the same level of recommendations and expertise across the board.
  • In the office – Representation in the workplace and boardroom was top of mind. e.l.f Beauty was singled out as having an employee base that reflected their consumer – their Board of Directors has at least 2/3 women and 1/3 minority representation, making it one of only four public companies in the US to meet such criteria[12]. e.l.f Beauty Chairman and CEO, Tarang Amin, recently noted that this was directly connected to the firm’s ‘extraordinary stock price performance’ – up 23.27% year-to 8 March 2023 whilst the S&P Consumer Index was down 10.97% over the same period[13].


Silver opportunities in doing away with antiquated stereotypes on the 50+ consumer

Speakers turned the spotlight on the ‘silver opportunity’ with the 50+ consumer. Brands such as L’Oréal and e.l.f Beauty recently enlisted several notable industry figures aged 57 – 85 to star in advertising campaigns[14], prioritizing appealing directly to the Gen X and Baby Boomer demographics. Brands can stand to gain by following suit, and not ignoring this underrepresented and wealthy consumer base.

  • Long gone is the stereotype that consumers over 50 are sedentary and tech averse. They are starting new careers and leading active lifestyles, with 25% of consumers in this age group now active members of health clubs and gyms, up 35% since 2012[15]. Trinny London, a direct-to-consumer beauty brand valued at £250 M[16], uses unedited photos of women aged 18 – 60 in advertising campaigns. By prioritizing realism over aspiration, the brand represents an image of older consumer who is often underrepresented – and now boasts a customer base with 26% aged 55+[17]
  • Consumers in this older demographic are an economic force. In 2021, active consumers aged 55+ held 70% of the country’s wealth and accounted for over 40% of all consumer spending in the US[18]. Moreover, older consumers have larger spending power, projected to spend just under $15 TN globally by 2030, up from $8.7 TN in 2020[19]. We believe that brands who direct their advertising to this demographic will benefit from the short-term high disposable income


Wellness is the new frontier

With the wellness movement growing rapidly, and the beauty and personal care segment expected to lead the charge in this growth[20], brands are prioritizing products that collaborate beauty and skincare. Consumers increasingly perceive beauty regimen and selfcare practices as integral to a healthy lifestyle, and brands that can offer both, are proving successful. 

  • The Well, a one-stop-shop wellness retail concept, offers not only products and services but is also partnering with a developer to offer a branded condominium building in Miami incorporating the wellness and selfcare lifestyle. Selfcare and mental health concepts, including The Well and Peoplehood, are seeing a surge in demand for wellness centered events to promote social connectivity and self-improvement but also help corporate teams connect in a healthy way
  • The ‘medicalization’ of beauty is also a meaningful trend. Consumers are very sophisticated when it comes to ingredients and formulas and are also looking for figures of authority when looking for products and services. Dermatologists, medical spas and other professional channels are a fast-growing channel for the sales of beauty products and services.
    • In 2021, investing behind this trend, Gryphon Investors acquired Revision Skincare a fast growing, leading professional skincare brand focused on delivering clinically-proven and highly-efficacious skincare products that are distributed by dermatologists, plastic surgeons and medical spas[21]


The beauty industry has shown resilience and we believe in its capacity to keep growing in years to come. We expect that M&A activity will remain robust driven in part by the emergence of brands in tune with shifting demographics, a greater focus on efficacy and dynamic omni-channel strategies.


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[4] ‘Circana Breaks Down Beauty's Growth’, Beauty Inc, The Silver Summit, page 21, May 19 2023

[5] ‘Circana Breaks Down Beauty's Growth’, Beauty Inc, The Silver Summit, page 21, May 19 2023







[12] CNBC, Mad Money with Jim Cramer and E.L.F Beauty CEO Tarang Amin, February 3 2023

[13] CNBC, Mad Money with Jim Cramer and E.L.F Beauty CEO Tarang Amin, February 3 2023






[19] The Silver Economy is Coming of Age: A Look at the Growing Spending Power of Seniors –, 14 January 2023, Wolfgang Fengler

[20] Health and Wellness Market by Product type, Distribution channel, and Geography - Forecast and Analysis 2023-2027, October 2022,

[21] Gryphon Investors Announces Acquisition of Revision Goodier - Gryphon Investors (