Why beauty and personal care products are ripe for acceleration in private label
A new report from L.E.K. Consulting, titled “The Burgeoning Private Label Opportunity in Beauty and Personal Care Products,” states that the store branded beauty and personal care products segment is ripe for acceleration.
According to Boston-based L.E.K. Consulting’s research:
• While U.S. penetration of private brands in beauty and personal care products is low compared with other consumer goods categories — about 4% of U.S. retail sales — key retailers are increasingly investing in private label beauty and personal care products because of consumer demand for a newer, more innovative product selection and a desire to increase their margins.
• There have been some notable pockets of growth in private branded beauty and personal care products recently. Growth of private label baby care products has outpaced that of branded products in the past two years, while the growth of private label men’s grooming products has surpassed that of branded products in that category for the past five years.
• The opportunity of investments in private branded beauty and personal care products extends all the way down the value chain.
• Consumer demand for products that are more natural or innovative can be met by private label retailers and manufacturers, especially when branded manufacturers come up short.
• Private brands have become more than just a value price point play; more retailers and manufacturers are aiming to premiumize products.
To see L.E.K. Consulting’s report, click here.