2023 Health & beauty innovation report
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2023 Health & beauty innovation report Celebrating innovation trends and outstanding product innovations from 2022 NielsenIQ Beauty Vertical + BASES April 2023 © 2023 Nielsen Consumer LLC. All Rights Reserved. © 2023 Nielsen Consumer LLC. All Rights Reserved.
Your
presenters
today
Stephanie Jarosz Anna Mayo
Director Vice President
BASES Account Development NielsenIQ Beauty Vertical
© 2023 Nielsen Consumer LLC. All Rights Reserved. 2At NielsenIQ, we celebrate innovation
At NielsenIQ, we know that innovation is crucial to brand success. In
fact, 60% of top innovators strongly emphasize innovation as a critical
corporate priority 1. However, we’d be remiss to not mention the constant
state of crisis facing manufacturers in the past few years – COVID-19,
supply chain challenges, inflationary pressures, and more.
These market-wide headwinds challenged manufacturer processes,
ultimately contributing to a 19% decline in new health & beauty care
launches compared to 20192. Those who continued to prioritize innovation
in the prior 3 years were primed for continued success – growing
distribution on average by 9%. Those who pulled back lost an average of
7% 3.
In the face of change, innovation endures. And companies who continue
to prioritize innovation through a crisis come out stronger4.
At NielsenIQ and BASES, our driving force is client success. We deliver
the Full View, the world’s most complete and clear understanding of
consumer buying behavior that reveals new pathways to growth.
1- Source: BASES Building a Modern Innovation Ecosystem, 2021
2,3 - Source: BASES Innovation Measurement; NielsenIQ Answers on Demand scan and panel data, Total US xAOC WE
1/1/2022
4- -Source: McKinsey & Company ‘Innovation: The Launchpad Out of Crisis”, 2022;
© 2023 Nielsen Consumer LLC. All Rights Reserved.The Full View of the Beauty Marketplace +90 Markets Measured
Worldwide
Uncover blind spots and stay ahead of emerging trends
with a holistic view of beauty consumers
Understand the purchase drivers within the full
omnichannel marketplace with more coverage: Beauty Supply,
Department Stores, Drug, Grocery, Dollar, Mass, Club, Specialty, Direct to
Consumer.....
Innovate to meet the ever-changing consumer
demand from sustainability claims, search terms to pack sizes
Win the digital shelf, improve sales performance and
retailer collaboration through predictive analytics from cutting-edge
profitability, assortment, supply chain AI solutions
Our promise
NielsenIQ delivers the Full View, Execute successful, data-driven strategies with access to
the world’s most complete and global, beauty industry experts and thought leaders
clear understanding of consumer
buying behavior that reveals
new pathways to growth.
…. Beautopia is possible
© 2023 Nielsen Consumer LLC. All Rights Reserved.Health and beauty remains a growth category
Health & beauty sales (B) Strong growth Solid growth Growth
(> +10% ) (+5-10% ) (+0-5% ) Decline
$195.7 +6.1% Upper respiratory Cosmetics & Pain relief +4.9% Sexual health -0.3%
$184.4 +23.0% nail +9.1%
Oral hygiene +4.9% Bath &
Ear care +23.1% Feminine care +8.2% shower -0.4%
$62.3 +12.4% Sleep aids
$55.4 Fragrance +15.3% Facial skin & alertness +2.3% Itch relief -9.9%
care +7.2%
Deodorant +14.8% Foot care +1.7% First aid -12.9%
+3.4% HBL +6.0%
Sun care +11.4% Hair removal +0.3%
Hair care +5.7%
Adult incontinence
$133.4 +11.1% Medical accessory +5
$129.0
.6%
Vitamins
& supplements +5.4%
Eye care +5.3%
2021 2022 Beauty & Personal Care Categories
GI care +5.2%
Health Categories
In-store Online
Source: NielsenIQ Omnishopper Total Available Retailers Omni, In store, Online FY 2022 w eek ending 12/31/2022
© 2023 Nielsen Consumer LLC. All Rights Reserved.Innovation Measurement helps to measure and manage new products
introductions
The Innovation Measurement tool uses artificial intelligence to automate and streamline the coding for millions
of product characteristics. This allows us to intelligently identify and classify innovations in real time that combines with
sales data for true, objective innovation measurement
Apply Innovation
Identify new SKUs – remove Limit to
type characteristics
graphics and small size and category SKUs achieving 1%
changes national ACV
characteristics
© 2023 Nielsen Consumer LLC. All Rights Reserved.10% of Health and Beauty sales attributed to innovation
These new innovations set up brands for future success
% of sales due to innovation
% of sales due to innovation Remaining sales
Manufacturers growing
Bath & shower 12% innovation sales in 2022 were
Hair care 12%
2.9X
Cosmetics & nail 10%
Facial skin care 10%
Hair removal 7%
Deodorant 6%
Feminine care 6%
more likely to grow overall sales
Oral hygiene 5%
Adult incontinence 2%
compared to those with stagnant
or declining innovation sales.
(Personal Care)
Source: NielsenIQ Innovation Management, Beauty & Health Categories, 2022 & BASES Innovating Out of Crisis Thought Leadership, 2022
© 2023 Nielsen Consumer LLC. All Rights Reserved. 8Line extensions make up the majority of innovations
But can pose a risk of cannibalization if incrementality potential is not prioritized
Innovation by type
Bath & shower 1 in 4 innovations may end
Hair care up shrinking the brand
Cosmetics & nail franchise
Facial skin care
Hair removal
Only 1 in 5 FMCG
Deodorant
manufacturers use
Feminine care
incrementality as a firm stage
Oral hygiene
gate action standard – which
Adult incontinence
is critical to stave off
Line extension Special collection New brand/brand extension New sub-brand cannibalization and drive
growth
Source: NielsenIQ Innovation Management, Beauty & Health Categories, 2022, BASES Thought Leadership How to
Launch More Incremental Innovations, 2019
© 2023 Nielsen Consumer LLC. All Rights Reserved. 9Not all line extensions are created equal
Top manufacturers grow through product formulation and format type extensions
35%
64% Variety 32%
Line Extension
76% 24%
Size 20%
25%
Special Collection Novel Combination 15%
16% 12%
Product 6%
New Brand/brand 7% Feature/formulation 13%
Extension 7% 11%
Pack Size 8%
3%
New Sub-brand Product Type/form 5%
1% 9%
5%
Package Form 5%
Other MFRs
1%
Subline
MFRs growing both Total Sales & 1%
Innovation Sales in 2022 vs 2021
Source: P3Y BASES Innov ation Measurement (US) January 2023 Total US xAOC + Conv
NOTE: Data not currently av ailable f or specif ic categories
© 2023 Nielsen Consumer LLC. All Rights Reserved. 10Manufacturers have pulled back on their
innovation agenda
Despite the fact that innovation growth boosts overall
growth
US – Number of innovations ‘19 vs ‘21
Total CPG -19%
Alcoholic Beverages -10%
Baby Care 3%
Confectionary and Snacks -22%
Food -20%
Homecare -34%
Non-Alcoholic Beverages -19%
Personal Care -19%
Pet Care -5%
Source: BASES Innov ation Measurement; NielsenIQ Answers on Demand scan and panel data, Total US xAOC WE 1/12022
Note: Manuf acturers included had a minimum 100 innov ations ov er the past 3 y ears
© 2023 Nielsen Consumer LLC. All Rights Reserved.Innovators grow distribution and command premium prices
Now, more then ever, it is important to make innovation a priority
Aggregate P3YR of Innovation Launches as of Jan 1, 2019 – Jan, 1 2022
Compare 2019 (“Pre-COVID”) vs 2020 vs 2021 (“Endemic-COVID”)
Innovators Non-Innovators
Positive % change innovation launches vs 2019 Negative % change innovation launches vs 2019
▪ 94% increased TDPs (avg +9%) ▪ 41% lost TDPs (avg -7%)
▪ 88% grew $ Share (avg +9%) ▪ 38% lost $ Share (avg -11%)
Takeaway: Innovators maintain relevance with retailers and shoppers
Source: BASES Innov ation Measurement; NielsenIQ Answers on Demand scan and panel data, Total US xAOC WE 1/1/2022
Note: Manuf acturers included had a minimum 100 innov ations ov er the past 3 y ears (2019 – 2021)
© 2023 Nielsen Consumer LLC. All Rights Reserved. 12Health & beauty
2022 innovation
trends
© 2023 Nielsen Consumer LLC. All Rights Reserved.Top innovation trends in health & beauty for 2022
Clean and sustainable Trusted representative Personalization and Ingredient focus
inclusivity
© 2023 Nielsen Consumer LLC. All Rights Reserved. 14Our evaluation criteria
In this report, we seek to highlight brands that represent meaningful
category innovation and are representative of key trends that we are
observing across health and beauty. This is only a snapshot of the
innovations from 2022 and may not include some larger innovations if
they do align with these trends.
We considered innovations that...
■ Are selling in-store, in our XAOC measured market
■ Are part of the Health & Beauty department
■ Represent a new 'brand low’, ‘brand high’, SKU, or found success in a
new category
■ Started selling in July 2021 or later (First month sales of $500k or
greater)
■ Had sales that reached over $3 mm in year 1*
Online sales are especially important to health & beauty, making up 32%
of sales in 2022. To acknowledge this important channel, we considered
brands that were new to selling online and experiencing rapid growth,
whether through their own website or an e-commerce retailer
This analysis only looks at year 1 sales and does not include any analysis
of the out-year potential
*Year 1 sales will not include a full 12 months of data for products that launched after January 2022
© 2023 Nielsen Consumer LLC. All Rights Reserved.Innovation Trend #1: Clean and
sustainable
The trend towards clean and sustainable products continues across the
entire CPG category. Consumers are showing increasing concern about
climate change and the state of the environment and are evaluating their Total Health & Beauty $112B +5.5%
choices and habits to identify their individual climate impacts. In a recent
survey, we found that 70% of US consumers find it important to make $ L52 % CYA
sustainable choices, and 27% of those have incorporated changes into
Clean Label 482M 36.2%
their daily lives. Consumers overwhelmingly tell us that the responsibility
for sustainability progress lies with brands, retailers, and consumers Paraben Free 55.2B 9.5%
themselves.
Sulfate Free 45.7B 10.1%
When it comes to beauty, clean and sustainable attributes continue to Free from Phthalates 39.1B 11.5%
grow and out-pace the total category, even in a time of rising price
inflation. Consumers continue to look for brands that are “free from”,
cruelty free, vegan, plant based, reusable/refillable packaging, low carbon Recyclable* 31.6B 9.1%
products, and more.
Sustainable 7.9B 5.8%
The clean and sustainable trend is one where we see enduring growth Cruelty Free* 7.6B 16.5%
and interest, it is safe to say this will be a long-lasting trend. To stay on
Sustainable Packaging 4.3B 3.9%
top of this trend, brands should actively be evaluating their product
packaging and formulations, as well as how they communicate their clean
credentials and sustainability initiatives to consumers.
Source: NIQ Discover RMS Total US xAOC FY 2022 WE 12/31/22. All attributes represent claims QUALIFIED unless indicated by an * sy mbol f or STATED
NIQ 2023 Sustainability Report – Ranked on US vs Global
© 2023 Nielsen Consumer LLC. All Rights Reserved.Beauty brands capitalizing on the clean and sustainable trend
Lottie color cosmetics Monat hand body lotion True Botanicals hair care
Brand name
Manufacturer Lottie London Monat Global True Botanicals
Launch date April 2022 August 2021 June 2022
Launch channel In Store Online Online
Y1 sales $5.4 mm $4.7 mm $3.8 mm
Description 100% cruelty-free, paraben-free, Cruelty-free MLM brand that is Clean and sustainable skincare
and vegan cosmetics brand that known for their haircare, skincare, products now extending into hair
capitalizes on their social media and wellness products extending care
presence into hand body lotion products
© 2023 Nielsen Consumer LLC. All Rights Reserved.Health brands capitalizing on the clean and sustainable trend
Health by Habit vitamins & Physician’s Choice vitamins & Incognito feminine care
supplements supplements
Brand name
Manufacturer Zuru PTE LTD JB7 LLC Fempro I INC
Launch date July 2021 July 2021 December 2021
Launch channel In Store In Store In Store
Y1 sales $12.6 mm $10.4 mm $9.3 mm
Description Vitamins with no artificial colors, Vitamins containing high quality Feminine care brand that is made
flavors, or sugars ingredients that are sustainably by women, free from irritants or dye
sourced, scientifically backed, and
third party tested
© 2023 Nielsen Consumer LLC. All Rights Reserved.Activation Inspiration - Clean and Sustainable Success Principles
Call out sustainability Provide clear guidance on Reinforce additional Ensure sustainable
benefits on front of pack pack when behavior benefits of sustainable packaging meets
change is needed packs consumers needs
• Simple and easy to process call • When a behavior change is • Help shoppers understand the personal • Sustainable packing needs to be
benefit of the new forms/ packaging
outs best resonate with shoppers needed, intuitive placement of effective packaging
simple messaging is key • Sustainability drivers are 3x more likely
to drive preference when associated with • “Impractical cap; I like the older
other benefits system better”, "The cap isn't
• “I like that it is a pocket format that is sturdy and breaks; Not to
easy to transport, handle etc.”, "Product mention – leaking in my purse"
size is compressed so it uses less
space”, "Smaller size so lesser trash”
© 2023 Nielsen Consumer LLC. All Rights Reserved.Innovation Trend #2: Trusted Representative
Leveraging a well known public figure to promote a brand or product
Celebrity Doctor Influencer
Celebrity owned brands or Doctor/physician owned, Social media influencers
celebrity advertised created, or recommended promoting brands or launching
brands their own
• Celebrity beauty brands • Dermatologist tested: $4.6B
overall growth rate: $538M + + 6.8% • The average US adult spent
40.1% 48 minutes a day on Tik Tok
• Gynecologist in 2022
• 1.7% of cosmetics and nail recommended: $351M -
grooming are coming from 5.1% • Influencer marketing spend
celeb brands with Rare jumped 12.2% in the US in
Beauty and Fenty Beauty as • Pediatrician recommended: 2022
top brands $209M + 22.1%
Source: NielsenIQ Discover RMS Total US xAOC FY 2022 WE 12/31/22
NielsenIQ Omnishopper Panel | 12 months through 12/03/2022 | Health & Beauty Care
Source: Statista 2023 ; Source: HubSpot 2023
© 2023 Nielsen Consumer LLC. All Rights Reserved. 22Beauty brands capitalizing on the trusted representative trend
Rodan + Fields hair care Lume body wash, wipes, and Fenty Beauty fragrance
sets; and hand body lotion
Brand name
Manufacturer Rodan & Fields Lume Kendo Holdings
Launch date October 2022 July 2021 August 2021
Launch channel Online Online Online
Y1 sales $22.1 mm $18.7 mm $11.8 mm
Description From the same creators as All body female deodorant, created Rihanna, after already successfully
Proactiv, an MLM brand by an OBGYN, now offering body launching a cosmetics and skincare
specializing in derm-inspired wipes line, now enters fragrance
skincare products, expanding
into hair care
© 2023 Nielsen Consumer LLC. All Rights Reserved.Health brands capitalizing on the trusted representative trend
Proactiv, MD, SOLUTION, + facial skin care Mary Ruth’s vitamins & supplements
Brand name
Manufacturer The Proactiv Company SARL Mary Ruth’s
Launch date August 2021 August 2022
Launch channel In Store In Store
Y1 sales $17.3 mm $8.0 mm
Description Dermatologist-tested approach to prevent and Created by MaryRuth Ghiyam, a certified health
treat acne breakouts. Online to in store launch, educator, nutritional consultant, and culinary chef.
now in Drug and Target. Online to in store launch, now in Food and Mass.
© 2023 Nielsen Consumer LLC. All Rights Reserved.Activation Inspiration – Trusted representative
NIQ Breakthrough Innovation Winners that leveraged trusted representatives for growth
2022: Horizon Organic Growing Years 2021: Hello Bello Baby Care 2020: Lumify Eye Drops
• Sought out experts to build the best nutritional • Co-founded with Kristen Bell & Dax Shepard • Fueled by new drug development with a
bundle to deliver premium baby care at non-premium positioning that bridged the gap between eye
prices care & beauty
• Emphasized trusted pediatrician involvement
in pack design • Leveraged the couple’s large audience and • Activated with sampling with makeup artists
• Partnered with Baby Center and health care playful authenticity to connect with parents and influencer campaigns
providers to further drive awareness among • Created a mission-based brand because of • Encouraged trial with eye care professionals
influential/credible sources. Kristen & Dax’s vision to drive credibility
Source: BASES Breakthrough Innovation Report 2020,2021,2022
© 2023 Nielsen Consumer LLC. All Rights Reserved. 25Activation Inspiration – Trusted Representative
Social media content impacts consumers from discovery to purchase
Discovery Purchase Usage
54% of social media users
browse social media to
research products before making
a buying decision
Maybelline Lash Sensational Tarte Cosmetics,
Sky High, US, 2022 2023
Sources: Clootrack.com, How does social media influence consumer behavior?, Available February, 2021. R&D conducted in September 2020 in the US, China, Mexico, and France.
© 2023 Nielsen Consumer LLC. All Rights Reserved. 26
© 2023 Nielsen Consumer LLC. All Rights Reserved.Innovation Trend #3:
Personalization and
Inclusivity Sexual Wellness Men’s
• Sexual health: $1.9B +4.2% • Men’s focus #1 search term in
Consumers are increasingly looking for brands
• Sexual health supplements: $142M personal care online in 2022, up 14%
and products that feel like they were made just
+7.2% • #menskincare has over 849M views
for them, and can solve their unique needs.
on TikTok
This trend is increasingly manifesting in the
exploration of ‘taboo topics,’ include products
providing solutions for menopause, aging,
men’s cosmetics, acne acceptance, sexual
health, mental health and more.
Personalization and inclusivity are targeting Reframing Aging Mental Health
the user, not the mass market. The new • Online searches “for aging”/anti-aging: - • Mood supplements: $151M, +5.6%
products also provide openness and 8% • 25% of Americans report suffering
comfortability on the products such as sexual • For Mature Women: +11% from depression, and 9% suffer from
health as personal health, hair loss, mental ADD
health.
Source: NielsenIQ Discover RMS Total US xAOC FY 2022 WE 12/31/22
Source: Label Insights Emerging Attributes Jan 2022-Dec 2022
Source: NielsenIQ Annual Shopper Health Survey, 2022
© 2023 Nielsen Consumer LLC. All Rights Reserved.Beauty brands capitalizing on the personalization and inclusivity trend
No7 Lift & L’Oreal Men Expert Essential Design hair Gimme Clips hair Quiet & Roar bath &
Luminate facial skin hair care care care shower
care
Brand name
Manufacturer The Boots Company L’Oreal SA Design Essentials Durha, Enterprises P&G
Launch date January 2022 March 2022 November 2021 June 2022 September 2021
Launch In Store In Store In Store In Store In Store
channel
Y1 sales $11.9 mm $9.0 mm $7.1 mm $4.1 mm $3.7 mm
Description A No7 line specifically Offered in seven natural A black owned business, Hair accessories Bath & Shower scents
for aging skin shades, works to its products aim to specifically designed to for an improved mental
diminish the appearance provide healthy hair accommodate various health and state of mind
of gray hairs styling products that hair types
address specific hair
needs
© 2023 Nielsen Consumer LLC. All Rights Reserved.Health brands capitalizing on the personalization and inclusivity trend
Cake sexual health Emer’gen-C Kidz Fiore feminine care GNC Men’s* vitamins &
vitamins & supplements supplements
Brand name
Manufacturer Hello Cake Haleon Ontex BV GNC Holdings Inc
Launch date February 2022 December 2021 June 2022 June 2021
Launch In Store In Store In Store In Store
channel
Y1 sales $13.3 mm $6.9 mm $4.9 mm $3.5 mm
Description Sexual health products Immune health formulated Feminine care brand Vitamins and supplements
thoughtfully designed for for kids brought over from Mexico formulated for men that
specific types of play contain specific ingredients
to cater to their needs
*GNC Men’s did not have a month that reached $500,00
© 2023 Nielsen Consumer LLC. All Rights Reserved.Activation Inspiration – Personalization and Inclusivity
How to find success among a targeted group:
● Satisfy unmet needs to bring in new
customers (to the brand or banner)
● Bring an advantage that expands
usage/elevates buying velocity among target
● Offer unique solutions that disrupt category
buying
● Carry a premium price (justified by superior
performance)
Source: BASES Thought Leadership Do Not Miss the Target 2020
© 2023 Nielsen Consumer LLC. All Rights Reserved.700%
Trend #4: Ingredient 160%
Niacinamide*
650%
focused 140%
600%
Consumers are so educated nowadays Vitamin C
about the ingredients that go into their 120%
550%
products. More and more we are seeing
consumers search and shop in an 100%
Hyaluronic Acid
‘ingredients first’ manner. Just as important Rose Oil
as which ingredients a product contains, 80% Lavender Oil
are what it leaves out, and replacing
perceived bad ingredients with ‘better for
$ % Chg vs 3 YA
Alpha Hydroxy Acid
60% AHA
you’ ingredients continues to be an Shea Nut Oil
enduring trends for shoppers. Tea Tree Oil Coconut
40% Honey
Vanilla Aloe Extract
While the specific hot ingredients are 20% Salicylic Acid* Retinol
constantly changing, the long standing
Benzoy l Peroxide* Argan Oil
trend is that the consumer is becoming 0%
more educated on what to look for and 0 5,000 10,000 15,000 20,000
25,000 25,000
65,000 30,000
70,000
what their needs are. We see here the key
ingredient terms that trended in 2022 and TDP Bubble size denotes total sales in L52 weeks
their growth and distribution. Source: NIQ Discover RMS, NIQ Product Insight, Total US xAOC; 52 weeks WE 12/31/22 vs 3YA
Label Insights Jan 2022-Dec 2022. Bubble size denotes total sales in L52 weeks. All attributes represent claims QUALIFIED unless indicated by an * symbol for STATED
© 2023 Nielsen Consumer LLC. All Rights Reserved.Beauty brands capitalizing on the ingredient focused trend
Dr Squatch deodorant Olay Vitamin C + Dove Body Love bath & TruSkin facial skin care
and bath & shower Peptide facial skin care shower
Brand name
Manufacturer Dr Squatch Inc P&G Unilever TruSkin Partners Inc
Launch date November 2021 October 2021 March 2022 March 2022
Launch In Store In Store In Store In Store
channel
Y1 sales $44.2 mm $17.8 mm $16.2 mm $7.3 mm
Description Personal care items with Formulated with Vitamin C, This shower collection Tested skin care that
natural products and no Vitamin B3, and Peptides to features ingredients like provides plant-based
harmful ingredients, brighten skin hyaluronic serum and formulas to benefit your skin
specifically formulated for colloidal oatmeal, and is
men naturally derived and sulfate
and paraben-free
© 2023 Nielsen Consumer LLC. All Rights Reserved.Health brands capitalizing on the ingredient focused trend
Burt’s Bees Kids upper respiratory Lolleez upper respiratory
Brand name
Manufacturer Perrigo MomeezChoice
Launch date September 2021 October 2021
Launch channel In Store Online
Y1 sales $5.5 mm $3.4 mm
Description Child friendly immune and health support Lollipops specifically designed to soothe
made with ingredients inspired by nature children’s throats, Non-GMO and organic,
gluten, dairy, and nut free
© 2023 Nielsen Consumer LLC. All Rights Reserved.Activation Inspiration – Ingredient Focused
Educated consumers look out for specific ingredients
© 2023 Nielsen Consumer LLC. All Rights Reserved.Innovation continues to be a growth driver for health and beauty, how does your brand fare?
Innovation launches have declined in Attaching a trusted figure to a brand
health & beauty, but those who can help break through the clutter
continue to innovate see outsized and gain consumer trust more
gains quickly
While online continues to be a Savvy consumers are becoming
growth driver in health & beauty, in more educated about what
store remains important for product ingredients they do, and don’t want
discovery and reach in their products
Clean and Sustainable remains an Everyone wants to feel as if the
enduring trend in health & beauty, products they use were made for
with products continuing to see them in mind, focusing on niche
success by putting health and planet solutions can be a way to delight
first these shoppers
© 2023 Nielsen Consumer LLC. All Rights Reserved. 35Thank You!
For more information, get in touch!
Anna Mayo Stephanie Jarosz
Anna.Mayo@nielseniq.com stephanie.jarosz@nielseniq.com
https://www.linkedin.com/in/anna-mayo/ https://www.linkedin.com/in/stephanie-jarosz/
https://nielseniq.com/global/en/landing-page/beautys-inner-circle/ https://niq.com/beauty
© 2023 Nielsen Consumer LLC. All Rights Reserved. 36You can also read