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Cosmetics

The cosmetics manufacturing industry consists of roughly 3,500 businesses in the U.S. and accounts for $53 billion in annual revenue, with consumer sales making up approximately 43% of the total. Some cosmetics ingredients can be susceptible to crude oil prices; as prices fall, costs drop (and vice versa).

Competition is high, and the number of cosmetics businesses is expected to rise through 2022. Manufacturers and wholesalers are also seeing changes in their retail customer base. Companies such as Ulta and Sephora are taking sales from department stores, while drugstores are stocking more high-end products.

Innovation trends point toward organics, products for an aging population, and sun protection. Overall, sluggish growth is expected for the industry through 2022, with a 0.6% per annum growth rate; most of which is expected to come from consumers seeking high-value products, as well as rising household incomes and continued population growth.

Product categories within the cosmetic industry include skin care, perfumes & colognes, hair care, cosmetics (lipstick, eye shadow, foundation, mascara), and nail products. Goods are typically sold through beauty supply stores, department stores, drug stores, mass merchants, supermarkets, and high end beauty shops. Market share concentration is low, with the four largest players (Procter & Gamble, L’Oréal, Unilever, Avon) accounting for approximately 25% of industry revenue. Raw materials inventory consists of organic/inorganic chemicals and compounds, with typical machinery and equipment (M&E) comprising container fillers; conveyors; mixers; kettles; unscramblers; sealers; cappers; wrappers; labelers; lab equipment; packaging machinery and weigh scales; and warehouse racks and forklifts.

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