Beauty Observation | What does the rebound in performance of skin care product packaging suppliers indicate?

Luxury fragrance, beauty and skincare packaging suppliers are back in business.

The “Luxe Pack Monaco” exhibition held in Monte Carlo, Morocco not long ago sent a clear signal to the market, that is, driven by the continuous growth of the consumer market of beauty and skin care products, the packaging industry has also ushered in growth and growth. recover.

This exhibition, which aims to highlight eco-friendly design and provide sustainable solutions for brands, not only welcomed the largest number of exhibitors after the epidemic, but also attracted a large number of brands to seek sustainable packaging solutions and new suppliers. . Compared with 2021, the number of visitors to the exhibition increased by 20% to 9,430 people, of which 53% came from countries other than France, including the United States, the United Kingdom, Italy and the Middle East, and the number of international visitors increased by 5% year-on-year, which is in line with the Compared with 2019, the total number of participants increased by 5% year-on-year, and the number of exhibitors reached 450.

Denis Maurin, president of global sales and innovation at full-chain packaging supplier HCT Group, told WWD: “The entire beauty and skincare packaging industry has been hit hard during the COVID-19 pandemic, but from our last quarter’s earnings, we were There has been very good growth in terms of revenue and margins.”

Patrick Bousquel, EMEA managing director of Aptarbeauty+Home, a global leader in the design and manufacture of beauty dispensing solutions, noted that growth in market and consumer demand for premium fragrances, color cosmetics will drive Aptar’s sales in 2021 The rebound returned to 2019 levels, while sales related to fragrance products surpassed pre-pandemic levels.

Dominic Bakic, CEO of Bakic Packaging, said: “Although the packaging market is seeing recovery and growth, the environment for next year is still very uncertain. It is becoming more and more difficult to ship goods from all over the world.” Dominic Bakic pointed out, The current headwinds facing the market mainly come from the energy crisis caused by the Russian-Ukrainian war, general inflation in the European and American markets and rising raw material prices, all of which have a negative impact on the market outlook for next year.

In fact, a fact reflected in the recovering growth of the skincare packaging industry is the continued growth of the global fragrance and beauty skincare market. As two closely related upstream and downstream industries, the survival and development of the two are actually deeply tied together. Therefore, the opportunities and challenges faced by the skin care product packaging industry are the same as those of its downstream industry, the beauty and skin care products industry, which are also affected by the deterioration of the global economic environment. However, as one of the most proven and resilient industries in the post-epidemic era, even if the beauty industry faces foreseeable market headwinds, for now, the industry’s growth trend will continue.

As seen in the market phenomenon during the global recession caused by the 2008 financial crisis, the beauty and skincare industry has been affected very little, even though most industries are struggling to survive. At least since the epidemic so far, the performance of the major beauty giants has not seen a significant decline, and instead has grown rapidly at full speed.

“Looking ahead, while we see a degree of downside risk in the beauty and skincare market, none of these headwinds will be fatal to the industry. In fact, we think the industry will be a lucrative sales winner in the upcoming holiday season. one,” said Neil Saunders, Managing Director of GlobalData.

At the same time, he also pointed out that the “lipstick effect” still works today. While this theory is a bit of a cliché, it’s a fact put forward by beauty mogul Leonard A. Lauder. When the economy was down in the past, the “lipstick effect” would come as expected — consumers with shrinking wealth chose to buy cheap non-essential items represented by lipsticks, so as to satisfy their shopping desires and obtain spiritual comfort.

Take the rapid development of the perfume market after the epidemic as an example. In the context of the epidemic, wearing a mask has become a mandatory social requirement, which undoubtedly makes makeup temporarily meaningless. Therefore, perfumes that are not affected by isolation measures have become a new choice for self-consumption.

According to the “2021 China Perfume Industry Research White Paper” jointly released by Yingtong Group and Kantar Consulting, perfume has become the fastest-growing segment of the cosmetics category in the global market. Looking at the financial reports of major groups in 2021, it can also be found that the sales of perfume categories have shown a clear upward trend. According to the 2021 annual financial report of LVMH group, the sales of perfume and cosmetics department increased to 6.608 billion euros, an increase of 26%.

A few days ago, the latest financial report data released by L’Oreal Group also showed that total sales in the three months ended September 30 were 9.58 billion euros, a year-on-year increase of 19.7%, exceeding analyst expectations. Group CEO Nicolas Hieronimus said that even in the face of unstable factors such as the epidemic and inflation, L’Oréal still achieved very stable quarterly results and growth rates, noting that the company achieved double digits in all regions except North Asia increase. In addition, in the first nine months of 2022, the Group’s sales increased by 20.5% and 12% year-on-year to 27.94 billion euros.

Enjoy the perfume bonus, and Coty Group. In the second quarter of fiscal 2022, which ended on December 31, 2021, fragrance sales in the premium consumer segment maintained double-digit growth momentum, with new launches leading the pack in key markets.

However, with the gradual lifting of epidemic prevention and control measures in Europe and the United States, the return to the office and the recovery of offline social interactions have also begun to increase the demand for beauty and skin care products. “That said, consumers won’t give up the thrill of ‘consumer indulgence’ on little beauty products, which they see as a reward they deserve after a tough time. Beyond indulgence , many beauty and skincare routines are also deeply ingrained in people’s lives, so they don’t buy less beauty and skincare products.”

Beauty retailers generally appear to be optimistic about the upcoming holiday season, said Olivia Tong, an analyst at Raymond James. Tracey Travis, executive vice president and chief financial officer of The Estée Lauder Companies, told WWD: “The company is very optimistic about the upcoming holiday season and has some related marketing plans, such as we will launch some holiday promotions and holiday gift sets. “

Facing the market’s growth trend, Ulta Beauty optimistically raised its outlook for fiscal 2022 and expects net sales in the U.S. market to reach $9.65 billion to $9.75 billion, up from the previous forecast of $9.35 billion to $9.55 billion. expected. Moreover, Ulta Beauty also expects to launch more competitive promotions for the holiday season sales in the US market.

Chief Executive Dave Kimbell said in a conference call with analysts: “Looking ahead, we know there will be challenges, particularly the broader impact of rising inflation on our business and consumers. But we remain focused on beauty. We are confident in the resilience of the category and our ability to lead the beauty category and drive long-term profitable growth.”

Christophe Babule, Chief Financial Officer of L’Oréal Group, expressed similar confidence, saying: “Inflation may seem like an uncommon situation in Europe or North America, but as you can imagine, L’Oréal Group operates in 150 countries/ region, we’ve been managing inflation in many markets and we’ve figured out how to fix it over the years.”

If L’Oreal Group is to deal with possible problems with its large scale and full market coverage, then Estee Lauder Group has its own way. CFO Tracey Thomas Travis believes that the fact that the company focuses on high-end, luxury-grade products gives it stable pricing power: “Price power is, if you will, a beauty company that focuses on high-end and luxury-grade products. This is a key driver and key advantage for makeup companies. And we’ve also accelerated some cost-saving initiatives to offset the impact of inflation.”

Not long ago, Dave Kimbell also spoke to WWD about facing inflation and expectations for the second half of the year. “We’re optimistic about the road ahead,” said Dave Kimbell. “So far, we’ve grown more than expected this year. It’s truly a complex situation that we’ve never seen before, and there’s uncertainty on the consumer side, but The more this is the case, the more we have to keep in close contact with them. Regardless of the social environment, people still want to go out and be with other people and show their beauty and charm. As long as consumers’ pursuit of ‘beauty’ remains, the beauty industry can work.”

What is certain is that when the future prospects are more uncertain, the relatively low unit price of beauty and skin care products will become a carrier for people to reward themselves and please themselves. The satisfaction it brings is not as high as buying luxury goods. It takes a long time to wait, and its emphasis is on the pleasure and satisfaction brought by instant consumption. And this continues to drive the skincare packaging industry to continue to usher in recovery and growth. WWD

By Jason

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