The U.S. prestige beauty industry generated $22 billion in 2021, a 30% increase in dollar sales, versus 2020, according to The NPD Group. By category, fragrance outperformed all others in 2021 with sales up 49%, year-over-year, followed by hair products (up 47%), makeup (up 23%), and skin care (up 18%).
 
According to the newly released NPD report, in 2021, the beauty industry saw continued growth from pandemic top-sellers including perfumes, scented candles, facial exfoliators, nail care, and hair care products. At the same time, makeup foundation, hair styling products, and other segments of the market started to recover as consumers began returning to workplaces, events, and other social activities.
 
“The beauty industry is unique in its ability to instill self-confidence and change the way people feel,” said Larissa Jensen, beauty industry advisor at NPD—and a member of Beauty Packaging’s Board of Advisors. “These timeless abilities keep our industry relevant and important in the minds of our consumers — regardless of circumstances or lifestyle changes. As was the case across the retail world, the beauty market faced hurdles in 2020 but proved its resiliency in 2021.”

Face Makeup Sales

As consumers began to resume social and work activities, face makeup product sales, including foundation, primer, and tinted moisturizer, grew double digits, as did makeup-setting sprays and removers.
 
The makeup category generated growth in areas such as cream and stick blushes and other products prevalently used in YouTube videos and other social media. In addition, brands created by makeup artists and social influencers had the highest revenue gains among all the makeup brand types.

Hair Care Grows

Within the hair category, hairsprays, gels, mousses, and other styling products returned to growth in 2021, with hair-styling product sales up 45%, versus 2020. The hair-styling segment is expected to rise another 15% in 2022. According to new data in the Future of Hair Report from NPD, growth will continue through 2024.

Skin Care Revenue

Core skin care product sales, including facial cleansers, creams, and serums, grew between 15% and 24%, versus 2020. Sales of targeted products, like eye and lip treatments, also increased. Clinical skin care brands contributed the highest revenue gains to the category. In 2021, clinical surpassed natural as the largest brand type in skin care, based on revenue.

A Fragrant Treat

The fragrance category registered double-digit growth against both 2020 and 2019, as consumers looked to treat themselves. Sales of perfumes, colognes, and other fragrance juices increased by 61%, year over year, as sales of candles, reed diffusers, and other home scents grew by more than 20%. The fourth quarter accounted for 45% of fragrance category sales revenue in 2021, growing by 35% during the critical holiday selling season.

Looking Ahead

“As we move through 2022, the beauty companies that will thrive are those that harness the industry’s unique ability to spread joy, while also recognizing the opportunities of a changed consumer and retail environment,” added Jensen. “We can expect more change to unfold in 2022, but, along with these changes, new opportunities for the beauty industry will present themselves.”