Beauty & Wellness Industry Outlook (Baird)

Summary

• The combined beauty and wellness market is valued at $140.7 billion.p.7
• Beauty deal activity was up 78% in Q3'24 compared to Q3'23 and YTD deal volume was up 18%.p.14
• Skincare grew +4% and makeup +2% year over year in the U.S. in 2024.p.5
• Fragrance grew +13% and haircare +5% year over year in the U.S. in 2024.p.6
• IPO activity improved +48% YoY, with ~80 IPOs priced in 2024.p.18
• The sponsor M&A exit count rose +20% vs. last year.p.10
• The U.S. personal care contract manufacturing market has a CAGR of 7.8%.p.16

Key insights

1. Masstige is the fastest growing skincare segment, up 17% in 2024 compared to prestige +2% and mass +3%.p.5
2. Prestige lip products saw a 10%+ increase in sales in 2024.p.5
3. Prestige haircare sales grew 14% in 2024.p.6
4. Ulta is expanding its Wellness Shop to all 1,385 stores.p.7
5. Over 11,000 cosmetics products in the U.S. may face price increases as tariffs are enforced.p.8
6. 46% of consumers aged 18 - 34 have made a purchase on TikTok Shop.p.8
7. PE distributions fell to a 15-year low in 2024, pressuring sponsors to monetize portfolio companies.p.10