Supermarkets are moving in on this $100B industry

The beauty industry generates more than $100 billion in revenue worldwide and supermarkets are getting in on the action.

Men’s personal care items is a category on the rise, projected to hit $276 billion by 2030. Ever since the pandemic, products promoting better health have also been an upswing, as living a healthy lifestyle has become top of mind for consumers. Those types of products have also generated big sales at many grocery stores. 

Statista sees the health and beauty category doubling from 2019 levels over the next five years, and, while much of the $449.6 billion it projects will come from ecommerce sales, supermarkets still have a large piece of that pie.

Susan Durfee, director of dairy, frozen, household, baby, pet, health and beauty care, and general merchandise at Williamsville, N.Y.-based Tops Friendly Markets, said the company saw strong growth in the health and beauty segments in 2022.

“We especially saw continued growth in areas of care, such as vitamins and nutritional supplements,” she said. “Cough and Cold is also spiking, driven by increased contact as people have returned to work, school, and other normal habits.”

That return to a more normal pre-pandemic lifestyle has meant some of the items that saw big bumps during the first few COVID years — such as hand sanitizers and disposable masks — are declining in sales, though they still remain above pre-COVID levels.

Related:There’s fierce competition for beauty care share

Ted Williams, director of non-foods omnichannel merchandising for The Giant Company, the Carlisle, Pa.-based operator of Ahold Delhaize USA’s Giant/Martin’s supermarkets, cites this past year’s health and beauty segments as favorable to previous years.

“Due to supply chain challenges and economic pressures, many brands continue to face difficulty,” he said, noting that the company’s own brands—Giant Brand, Nature’s Promise, Taste of Inspirations, CareOne, Always My Baby, Etos, Companion, and Smart Living—provide customers cost-effective alternatives in instances were brand availability waivers.

That has kept both categories seeing solid sales.

“The health and beauty section delivers on The Giant Company’s customer promises — to simplify shopping, inspire fresh ideas, and create healthier communities,” Williams said. “It provides convenience and a one-stop shopping experience that meets the needs of today’s busy families.”

In the new 2023 Trends Report by Natural Grocers, the supermarket predicts sustainability as a huge driver for the health and beauty sales.

The report noted that consumers will be lowering their plastic footprint one bottle at a time and turning to solid body care products, which are more environmentally friendly than typical bottled shampoos, conditioners, soaps, and lotions. These solid bars are plastic free and sometimes completely packaging free, as the bars are made with less water than liquid versions and last longer.

Related:Beauty products seek a way back in supermarkets

Natural Grocers’ consumer research also revealed that demand for ingestible body care is increasing as people take a more holistic approach to their skin care. In fact, it noted that 30% of women had purchased an ingestible skincare product in the last year, which is almost double the figures from five years ago. And looking at the 25- to 34-year-old age group, the percentage rises to 57%.

“While these supplements will surely help us look our best, they’ll also support other areas of health, especially those crucial for healthy aging,” the report reads. “In 2023, we’ll see consumers learning about more ways to support that healthy glow from within, while also seeing a rise in demand for supplement products that contain ingredients like collagen or antioxidants to support holistic skin health.”

Marketing Measures

Beauty companies spent nearly $7.7 billion on advertising in 2022, according to Statista, meaning that many of those products sold in supermarkets have great word-of-mouth already thanks to the sizeable investment in ads.

When it comes to health and beauty products, Tops Friendly Markets relies on the staples of weekly ads, monthly display call outs, and e-coupon promotions to get the word out about what it offers in the department.

“We have found that the displays in bins by the registers that are seasonally relevant do very well for us,” Durfee said. “Also, seasonal endcaps (cough & cold, skin care, sun care) show solid numbers due to increased visibility as customers walk the store.”
 

Segmentation Matters

There are literally thousands of new health and beauty products coming to market each year and staying up on the trends and observing what’s popular is important in creating a department that taps into what consumers desire.

“Movement of product as well as sales trends help determine which products to carry,” Durfee said.

After all, as Williams says, consumers vote with their wallets, which helps point to decisions on top and bottom performing items.

“Segmenting categories allows us to determine if an item should be discontinued,” he said. “To add new items, our teams must first determine if the proposed new item will contribute more than what is being discontinues over time.”

Looking Ahead

There doesn’t appear to be any slowdown for the health and beauty segment in the years ahead, as more products get developed and more people look to better their lives.

“We believe there will be continued growth as people concentrate on self-care,” Durfee said.

Those at Natural Grocers agree that the market is just getting stronger as people turn to their grocery aisles for the health and beauty items they need.

A welcome increase in rings at the register is predicted for the year ahead.