Cosmetics Top Dog in Prestige Market

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Title: Cosmetics Top Dog in Prestige Market
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For the first time in ten years, makeup has risen to the top prestige beauty category in the United States, according to the NPD Group. In 2006, prestige makeup sold US$3.1 billion and now makes up the largest dollar share of the prestige beauty industry, surpassing fragrance, with 37% of sales. In the last decade, the dollar share in the prestige beauty industry reportedly has shifted and makeup has increased 66% over the reported dollar volume in 1997. Prestige fragrance generated US$2.9 billion in 2006 and now makes up 35% of beauty dollars, down from 45% in 1997.

Prestige makeup reportedly went from 30% of sales in 1997 to 37% in 2006, according to NPD, and performance was consistent in cosmetics across nearly all the segments. The largest growth areas were the face and eye segments. Representing almost half of total makeup dollars, the face segment saw a gain of 3% to US$1.4 billion due primarily to new product launches.

“The latest trend bringing excitement into the face segment is mineral makeup," said Karen Grant, senior beauty industry analyst for the NPD Group, in a press release. "The recent popularity of mineral makeup illustrates that natural ingredients are resonating with consumers and have broad appeal.” She added that green beauty is reflecting changing world beliefs--that natural ingredients are viewed as being part of a lifestyle rather than just a trend.

Major fashion houses, like Chanel and Dior, have always had a hand in the beauty industry, but the NPD Group reports it is seeing more designers enter the cosmetics arena. “The number of designer brands has doubled since 1997 and we have seen an explosion of artist and alternative brands as well,” said Grant in a press statement. “These three types of niche or specialty brands now make up about 39% of the dollars in the prestige beauty industry. They’re keeping the younger audience attracted and involved in the playfulness and fun of the makeup category. We are even seeing a bump up in sales in prestige fragrances because of designer brands, particularly targeted to younger consumers,” said Grant.