17 MAY | Companies in the beauty sector recover from covid

They recover their sales and increase their workforce. However, concerns are growing about the increase in supply costs and the scarcity of some raw materials.

More than 125 companies from the cosmetics, perfumery and personal care industry participate in the V Barometer of the beauty sector organized by the Beauty Cluster and Nueva Investigación, with the support of ACCIÓ.

Companies that carry out their activity in different phases of the value chain have participated in the study: their own brand of product, manufacturing for third parties, services to companies and/or consultancy, containers and packaging, ingredients, active ingredients and/or essences, devices , appliances, accessories, distribution, online and/or retail sales.

Results extracted from the V Barometer of the cosmetics, perfumery and personal care sector.

The data provided by the study are optimistic and show a positive trend in the growth of companies.

  1. Companies in 2021 have recovered from Covid, more than 70% have increased their sales and almost 50% have increased their workforce. 30.8% of the companies, whose turnover has increased, has grown above 15%.
  1. The perception of the future is positive: Companies are optimistic, 74% consider that their turnover will grow in 2022 and 46% that their workforce will increase. 49.3% of the companies whose sales expect to increase consider that they will do so by more than 10%.
  1. Regarding the perception of the company, it follows the same line. Companies have a positive perception of their situation compared to their competitors. 50% of companies consider that their situation is better, and only 5% believe that they are worse off than their competition.
  1. The risks and concerns that the sector has changed compared to the previous year. What worries most this year is the increase in supply costs (88%) and the scarcity of some raw materials (52%). The Covid has ceased to pose a significant risk for companies, 12.5% of those surveyed show concern about covid in 2022, while in 2021 this figure stood at 76.8%.
  1. Companies consider that inflation will have a significant effect in the short and medium term, but that it will be reduced in 2023 (62%).

Fairs and face-to-face events have always been an essential meeting point for the cosmetics, perfumery and personal care industry, the negative impact caused by covid is being left behind. More than 84% of companies confirm that they are already attending face-to-face events and fairs, at a national level, on a regular basis.

As for international travel, more than 64% say they plan to travel internationally this year for business despite Covid.

In reference to the meetings, only 10% do not receive clients or suppliers in person due to Covid issues.

What are the main advertising channels used by the beauty industry?

In 2022 there is a significant change compared to 2021 and face-to-face sales visits is the most chosen strategy, doubling the data from previous years. In 2021, only 28.6% of the companies surveyed stated that commercial visits were their main channel, while in 2022 this figure rose to 75.8%.

This media is used, above all, by companies dedicated to: their own brand of products, services to companies and/or consultancy, ingredients, active ingredients and/or essences.

The commitment to advertising through online media increased from 63.4% to 64.8%. It is interesting to note that Instagram and LinkedIn continue to be the preferred networks, regardless of the activity of the company. Tik-Tok is the fastest growing social network, while YouTube and Facebook are losing strength as media used.

Advertising at the point of sale falls from 23.3% to 20.3%.

Professional magazines are once again the most used traditional media (77.6%), especially by companies dedicated to their own brand of products and ingredients and/or active ingredients. TV regains importance and Podcats break out as another mean of communication chosen by companies.

Areas in which it is planned to invest in 2022

Despite the fact that the budget dedicated to R & D & I in 2022 is less than in 2021, there are 3 areas in which it is planned to invest in 2022 that stand out above the rest:

  1. 53.9% of companies will invest in the launch of new product lines.
  1. 49.2% will invest in equipment and facilities.
  1. 53.1% will invest in own research and development.
  1. Investment in personnel training grows to 53.9%.
  1. The investment in improving production processes will drop from 43.7% to 35.9%.
  1. Investment in the purchase of intangibles (patents, information) also decreased from 24.1% to 13.3%.

Demand estimation

The demand that is going to increase the most is that of natural products (90%). The channels whose demand most companies consider will increase are Spas and hotels, beauty centers and hairdressers.