L’Oréal, Beiersdorf, Givaudan and IFF unite for clear messaging across beauty chains

05 Feb 2024 --- A consortium of notable beauty, scent and personal care companies launched the Value of Beauty Alliance in Brussels. Industry players include L’Oréal Groupe, Beiersdorf, Givaudan, International Flavors & Fragrances, Kiko Milano and Ancorotti Cosmetics. 

The initiative is aimed at drawing attention to the beauty and personal care sector’s contributions to the European economy and society “beyond the surface-level perceptions of the industry.”

The alliance debuted with a report titled “What is the Value of Beauty,” which offers information about the industry’s value chain and social and economic effects.

The report examines the economic impact of the beauty industry at every stage of the value chain, from large multinationals to small and medium-sized businesses. 

Specifically, it highlights how each industry sector — from farmers and packaging experts to marketers and distributors — contributes to wealth creation and economic expansion.

“With six founding members, the alliance represents different facets of our sector. I would like to welcome all members of our extensive value chain, industry and associations, to join hands with the Value of Beauty Alliance. Together, we will amplify our voices and demonstrate the socio-economic significance of our industry for Europe,” says Nicolas Hieronimus, CEO at L’Oréal Groupe.

Economic contribution
The beauty and personal care sector remains extremely popular with students, attracting top talent, highlights Benjamin Voyer, Cartier-chaired professor of Entrepreneurship at ESCP business school and visiting professor in Psychological and Behavioural Science at the London School of Economics.

The report spotlights France as the world’s top exporter of beauty products, especially perfume, make-up and facial care products.“Careers in the beauty industry are highly aspirational for young graduates, ensuring a continuous pool of talent,” he comments.

“The strength of the beauty and personal care sector lies in its ability to continually push the boundaries and create new product and service categories. In this sector, while some product or service categories may mature, they are always replaced by new categories that renew consumer demand. Thus, the industry’s flywheel remains robust.”

“The value of the beauty and personal care industry to Europe’s economy lies not only in its ability to provide jobs and innovative products, as discussed in the report but also in the ‘feel-good’ aspect of the product and service category. From a consumer psychology perspective, beauty has the potential to contribute significantly to overall consumer well-being and happiness,” continues Voyer.

The report spotlights France as the world’s top exporter of beauty products, especially perfume, make-up and facial care products, contributing €15.6 billion (US$16.8 billion) to the nation’s trade balance in 2023. The contribution is noted to be the third largest contributor to the foreign trade balance.

Consumers look beyond surface appearance
The industry’s role in supporting health, well-being and cultural heritage is also in the spotlight. 

“The beauty and personal care industry has never been simply about superficial appearance,” reads the report. “How we look influences how we feel, and how we feel also depends on how others perceive us.”

“The physical well-being and mental health aspects of beauty and personal care are significant and should not be underestimated, particularly in a post-COVID environment.”

Supporting this, a recent study by Cosmetics Europe found that 72% of European consumers consider cosmetics and personal care products to be “very important” in daily life. The main reasons highlighted were these products improve quality of life, boost self-esteem and help social interactions.

“For 71% of European consumers, cosmetics are important in improving quality of life, for 70% in boosting their self-esteem,” says John Chave, director general at Cosmetics Europe. The top reason cosmetic products are used is that 88% of consumers believe cosmetics are effective ways to ensure personal hygiene. The second was to feel good about themselves, and the third was to protect their skin or hair.

Beauty products play a crucial role in daily hygiene, which contributes to overall health by preventing diseases, such as oral decay and skin cancer, and promoting personal care routines.The report adds that beauty products play a crucial role in daily hygiene, which contributes to overall health by preventing diseases, such as oral decay and skin cancer, and promoting personal care routines. 

“Treating skin conditions with suitable cosmetics is an important pillar of improving quality of life and skin health for people, and it needs to be promoted in our society,” says professor Dr. Matthias Augustin, dermatologist, scientist and university lecturer at the University Medical Center Hamburg-Eppendorf, Germany.

Moreover, beauty rituals are intertwined with cultural traditions, fostering a sense of identity and community across diverse societies. The report stresses that the beauty industry plays a role in promoting diversity and representation, inclusivity and social empowerment through programs like inclusive sourcing and community outreach that seek opportunities for marginalized groups.

Tech-powered advancements
Innovation is driving the continued evolution of the beauty industry, which, as the report notes, is centered around sustainability and customer well-being. 

“Fueled by the relentless pursuit of innovation with a strong focus on sustainability, this vast and diverse ecosystem stretches across Europe, contributing to our economy, supporting our health and well-being, and shaping our society and culture,” says Vincent Warnery, CEO at Beiersdorf.

Furthermore, AI is thought to transform skin care procedures, provide customized solutions and expand skin health research. 

Recently, Sia Partners shared key trends to shape industry this year: Unique and personalized client experiences and products, web3-powered beauty technology, end-to-end sustainability and beauty as a purpose.

“Data is a key turning point or asset that needs to be mastered for all players. That’s the only way for them to master and apply AI to every business domain,” Thomas Graffagnino, managing director at Sia Partners, told us.

Pioneering environmental sustainability
According to the report, sustainability efforts are seen in eco-friendly packaging and ethical sourcing.

For instance, industry players are increasingly leaning toward clean beauty, which spotlights alternatives to synthetics, cutting water use, and using renewable energy, as outlined in the report. Five beauty and personal care businesses were among the 13 firms worldwide to receive the Carbon Disclosure Project’s “Triple A” sustainability rating in 2022.

Recently, Chanel initiated the Traceability Alliance for Sustainable Cosmetics with 15 cosmetics makers, such as Dior and Estée Lauder, to enhance traceability in the beauty industry’s ingredient and packaging supply chains. 

A key highlight of the report is the industry’s progress in sustainability, with several companies achieving “triple A” ratings for their sustainability efforts. 

By Venya Patel