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The Beauty Economy

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Independent publication by 27 / 09 / 2015 # 339 raconteur.net Learn how to de-stress with wellness in mind 02 As the pace of life shows little sign of slowing down, 20 and 30-somethings are taking an holistic approach to wellness Women are taking the lead in business 05 A big employer of women, the beauty industry offers a career path from counter to boardroom for the brightest recruits Spending power of the eternal grey pound 03 The desire of the growing 50-plus age group to look good is making the beauty industry listen and respond British hairdressers rule the waves 06 Superstar status and expertise combine to give haircare brands fronted by British celebrity hairdressers a head start Beauty is big business for Britain The beauty industry is at last being recognised by the government as a major contributor to the UK economy as spending on cosmetics and personal care continues to rise OVERVIEW KATHRYN HOPKINS W hile it is true to say that econ- omists don't spend much time, if any at all, discuss- ing Charlotte Tilbury's new make-up range, the difference between BB, CC and EE creams or what shade of Too Faced bronzer would suit their skin type, there is one item that has successfully made it into economic theory – lipstick. The lipstick effect, the idea that people buy themselves cheap treats when times are tight, has been in play since the depths of the downturn in 2009 and, while consumer spending is yet to recover to the levels that the government would like to see, shoppers have definitely been splashing their cash on beauty and skincare products. According to Mintel, the market research company, the UK's beauty and personal care market was worth a pretty impressive £16.6 billion in 2014, up from £13.8 billion in 2009. Within that, cosmetics sales reached £1.34 billion last year, while sales of women's facial skincare hit £1.06 billion. However, with infla - tion hovering close to record lows combined with tentative signs of a long-awaited pick-up in wage growth, the lipstick effect may soon be replaced with Brits feeling better off, which will no doubt translate into further spending on these items. As a result, spending on beauty and skin - care in the UK is expected to reach new highs in 2015, with Mintel forecasting that consumers will spend an average of £342.90 this year. While higher wages are expected to trans - late into higher spending, the global finan- cial crisis and following years have meant consumers have become adept at seeking out a bargain. For that reason, the latest Premium Market Report found there has been a large number of new budget beauty brand launches, such as Kiko and Poundland, "which have struck a chord with value-seeking consumers who mix and match cheap and expensive brands". In particular, Poundland's Make Up Gal - lery range recently won first prize in The Grocer Gold Awards for the best own-label launch of the year in 2015 and received a rave review from Vogue. Nevertheless, it was another stellar year for premium make-up. UK sales of premi - um beauty products have been robust over the past three years, growing on average be- tween 5 and 6 per cent per annum. Successful new launches include Char- lotte Tilbury, make-up artist to the stars, unveiling her eponymous range at the end of 2013, which will no doubt help these fig- ures grow further as she adds new products to her offering, such as the magic foundation. At the same time, across the beauty and skincare sector, four interesting trends have continued to emerge over the past year. The first being men's skincare rising in popularity, with UK sales of men's facial skincare coming in at £96 million. Two British companies that have been making inroads in this sector are Scara - mouche & Fandango, a men's grooming and skincare company that launched in 2013, and Bulldog, which started life ten years ago when Simon Duffy, its founder, noticed there were no straightforward skincare op - tions for men who wanted products packed with natural ingredients. The latter, which started to export in 2010, is now the UK's third-largest nation- al skincare brand for men and is available in a further 13 countries, including the United States, Germany, Australia, Sweden, Norway, Austria, South Korea, Thailand, Ireland and Spain. Mr Duffy says: "When we were first devel - oping Bulldog, we realised the mainstream products in the regular male skincare market were incredibly underwhelming and were not actually focused on men. Everything was a 'for men' version of famous female skincare brands, such as Nivea or L'Oréal. We decided to do things differently and set out to create skincare products that are purpose-built for men, using natural ingredients that really work." Secondly, organic skincare has also surged in popularity, with the likes of successful food blogger Deliciously Ella telling her readers that she tries to use only natural beauty and skincare products. One company that has been capitalising from this is Balance Me. Rebecca Hopkins, co-founder and director of the company, says as a brand it "identified a gap in the market for high-tech, premium natural Brit - ish skincare at affordable prices, and has challenged what natural beauty stands for in this country by pushing the boundaries with innovative and cutting-edge formulations across skin, bath, body and haircare ranges". Next are beauty and skincare products for older women, with the number of women over 50 at its highest level ever. According to the Premium Market Report, with more spending power than women half their age, they are a prime target for beauty brands looking for new growth opportunities. As a result, more brands are using older models in their advertising, such as Char - lotte Rampling for NARS and Helen Mirren for L'Oréal Paris. Finally, the last year has also seen major brands become much more aware of the power of beauty bloggers, including Fleur De Force, Zoella, A Model Recommends and ViviannaDoesMakeup. This is demonstrated by how some are using these women as the face of their brands instead of traditional celebrities, such as ac - tresses and singers, as well as sponsoring some of their content. For example, Eyelure, the false eyelash brand, recently unveiled a collaboration with Fleur De Force, whose YouTube channel has three to five million viewers a month. However, despite the beauty industry being a huge business, it has always been treated as the ugly sister compared with the fashion industry, which is lavished with at - tention from government ministers. This may be starting to change though as it looks like that the government, especial- ly George Osborne, is finally starting to pay some attention to the sector. "The Chancellor's relationship with CEW [Cosmetic Executive Women] and the beauty industry has been very positive. He certainly had some encouraging things to say about us at the reception he held for us last October. I also know that he has been very helpful to brands that have approached his office for advice and direction," says Caroline Neville, president of the Cosmetic Executive Women. "Now CEW have connected with the Chan - cellor and presented our talented industry to him, I think we can look forward to re- ceiving the recognition our British beauty brands deserve, in the same way that the British fashion industry has been so suc- cessfully supported." Although this publication is funded through advertising and sponsorship, all editorial is without bias and sponsored features are clearly labelled. For an upcoming schedule, partnership inquiries or feedback, please call +44 (0)20 3428 5230 or e-mail info@raconteur.net Raconteur is a leading publisher of special-interest content and research. Its publications and articles cover a wide range of topics, including business, finance, sustainability, healthcare, lifestyle and technology. Raconteur special reports are published exclusively in The Times and The Sunday Times as well as online at raconteur.net The information contained in this publication has been obtained from sources the Proprietors believe to be correct. However, no legal liability can be accepted for any errors. No part of this publication may be reproduced without the prior consent of the Publisher. © Raconteur Media Distributed in Published in association with BEATRICE AIDIN Winner of five jour- nalism awards for the Financial Times, she contributes to How To Spend It, Tatler Spa Guide and Harper's Bazaar. CAMILLA KAY Former associate editor of InStyle, she is co-founder of Gloss & Content creative, with clients including Marie Claire and Cosmopolitan. ROSIE GREEN Award-winning beauty writer, she is acting beauty director at Red and former beauty director at Elle. EVIE LEATHAM Former beauty director at Stylist, she has worked at Glamour and Tatler, and contributes to NET- A-PORTER's The Edit and Grazia. EMMA GUNAVARDHANA Beauty and health writer, she contributes to Women's Health, Sunday Times Style, The Pool and is a guest presenter on QVC. LYNNETTE PECK Journalist and styl- ist, she launched Cosmopolitan Hair & Beauty magazine, and was associate editor of Now. AHMED ZAMBARAKJI Grooming editor of Shortlist Mode and formerly with Arena, he is a regular contributor to Mr Porter, GQ, GetTheGloss and AskMen. KATHRYN HOPKINS Property and eco- nomics correspond- ent at The Times, she was a spokeswoman at HM Treasury and economics reporter on The Guardian. CONTRIBUTORS BUSINESS CULTURE FINANCE HEALTHCARE LIFESTYLE SUSTAINABILITY TECHNOLOGY INFOGRAPHICS raconteur.net/beauty-economy-2015 RACONTEUR Publishing Manager Alice Leahy Digital and Social Manager Rebecca McCormick Head of Production Natalia Rosek Design Vjay Lad Grant Chapman Kellie Jerrard Production Editor Benjamin Chiou Managing Editor Peter Archer PREMIUM BEAUTY MARKET (£M) Source: I. Matthews Spending on beauty and skincare in the UK is expected to reach new highs in 2015 Share this article on social media via raconteur.net THE BEAUTY ECONOMY Make-up Female fragrances Male fragrances Skincare £300m £400m £500m £600m £700m £800m 473 524 576 454 485 501 744 772 795 369 384 390 £2.26bn 2014 £1.67bn 2013 £2.17bn Total 2012 will be spent on cosmetics by the average woman in the UK during her lifetime £100k Source: Bionsen

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