2023 Health & beauty innovation report

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2023 Health & beauty innovation report
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.
2023 Health & beauty innovation report
Your
presenters
today

             Stephanie Jarosz            Anna Mayo
             Director                    Vice President
             BASES Account Development   NielsenIQ Beauty Vertical

                                              © 2023 Nielsen Consumer LLC. All Rights Reserved.   2
2023 Health & beauty innovation report
At 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.
2023 Health & beauty innovation report
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.
2023 Health & beauty innovation report
Health & beauty
2022 performance

                   © 2023 Nielsen Consumer LLC. All Rights Reserved.
2023 Health & beauty innovation report
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.
2023 Health & beauty innovation report
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.
2023 Health & beauty innovation report
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.   8
2023 Health & beauty innovation report
Line 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.   9
2023 Health & beauty innovation report
Not 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.     10
Manufacturers 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.   12
Health & 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.   14
Our 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.   22
Beauty 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.   25
Activation 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.   35
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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

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