Will Beauty's Recent String Of Strong Sales Doom The Lipstick Index?

In 2020, Circana, the market research firm then called NPD, estimated prestige beauty sales dropped 19%. Since then, they’ve only risen, though at a lower rate each year. They increased 30% in 2021, 15% in 2022 and 14% in 2023. In the first half of this year, Circana reports prestige beauty …

Rachel Brown·August 19, 2024·2 min read

The 30-second read

In 2020, Circana, the market research firm then called NPD, estimated prestige beauty sales dropped 19%. Since then, they’ve only risen, though at a lower rate each year. They increased 30% in 2021, 15% in 2022 and 14% in 2023. In the first half of this year, Circana reports prestige beauty sales climbed 8%, and mass beauty sales were flat.

Going forward, the firm forecasts continued growth for prestige beauty, but at a slower pace. Bloomberg opinion columnist Andrea Felsted is less sanguine about the fate of beauty industry sales. In a column published on Aug. 8, she writes the “lipstick index,” the term for people snapping up relatively affordable beauty products during economic downturns, “may not be so pronounced this time” if there’s a recession.

The reason Felsted gives for the possible deterioration of the lipstick index is that consumers have already stuffed their makeup bags and cabinets full of products like lip oils, body care creams and perfumes. She explains, “Years of blockbuster growth in the beauty industry means there may be less need to stock up…It’s hard not to think we’ve reached peak beauty.”

We were wondering whether beauty investors, investment bankers, suppliers, consultants and others agree with the forecasts made by Felsted or Circana—or if they have a completely different take on the beauty industry’s future sales performance. So, for the latest edition of our ongoing series posing questions relevant to indie beauty, we asked 17 of them to provide their takes and answer the following question: What are your predictions for the beauty business for the rest of the year?