Thursday 2nd December, 2021

Issue No.69

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CBD beauty and cosmetics sales are expected to double in 2021

Sales of hemp-derived CBD beauty and cosmetics products could almost double in 2021 to $600 million, according to analytics firm NielsenIQ.

The boost will be driven by more products coming to market this year in major retail chains as more stores follow Sephora, Ulta, and others in the CBD beauty categories.

Beauty and cosmetics products, including face lotions, serums, and skin nourishment/replenishment products accounted for about 18% of all hemp-CBD product sales in 2020, bringing in roughly $340 million in sales.

woman with teal hospital head gown. CBD beauty

Nielsen predicts the category, which does not include pharmaceutical and marijuana-derived CBD products, will continue growing market share in the coming years and will eventually account for 20% of total CBD sales for 2021.

With further supply-chain improvements and favorable guidance from the FDA, the beauty and cosmetics category could top $2 billion by 2025.

“For many existing brands in the cannabinoid space, the cosmetic and beauty space present a logical category extension to branch into,” said Rick Maturo, Nielsen’s associate director of client service for cannabis.

“Those categories are well-established in leveraging the growing and continuing trend of functional ingredients such as good-for-you or from-the-earth,” Maturo added.

But there are challenges for retailers, manufacturers, and brands going forward.

Unlike other CBD categories, beauty and cosmetics sales are driven primarily by women, especially young women.

assorted make-up brushes closed up photography. CBD beauty

Nielsen survey data shows that women under 35 are most likely to use the category today and in the next 12 months.

This may limit the ability of brands to broaden the appeal to other segments, like men.

And with most cosmetics and beauty products not formulated or intended to address internal needs like sleep or anxiety, the category is not appealing to two of the biggest reasons consumers to turn to CBD beauty.

But the category does appeal to a large segment of female users, some of whom are already embracing cannabis and cannabinoids as part of their wellness and self-care routines, Maturo said.

The price might be a barrier to new customer adoption as CBD beauty and cosmetic products are often more expensive than their non-CBD counterparts.

According to Nielsen, the average consumer spent around $36 on beauty and cosmetics products in 2020.

But there is a large variability in prices in the category compared to other CBD products, as the products have different usage and replenishment cycles, Maturo said.

CBD beauty consumers use the products more often when compared to other categories, such as gummies, with 42% saying they apply a beauty product at least weekly.

Maturo pointed out that cosmetics brands are already adept at building loyalty using tools like social-media influencers. 

“If they can become ingrained as part of a consumers’ daily routine…the inclusion of natural ‘good-for-you ingredients can go a long way in guaranteeing longterm traction with consumers.”

CBD beauty investment

topless man covering face with white powder. CBD beauty

A European Union directive is due to become law in February 2021, recognizing cannabidiol (CBD) as an ingredient in cosmetic products, derived from cannabis extract or tincture, or resin. This document provides countries in the European Union with references for raw materials that are suitable for cosmetic production. As of this moment, the EU has only recognized synthetic cannabidiol as a form of cannabis extract.

A key step for the growth of this new branch of the cosmetics industry in the European Union has been its recognition and inclusion in the CosIng of Cannabidiol of Natural Origin. The EIHA, the European Association for Industrial Hemp, has strongly supported this move. 

Around the world, CBD Beauty is becoming more and more popular. The unbridled competition among cosmetic manufacturers, as well as an increasing focus on the use of natural ingredients in cosmetics, have led many manufacturers to invest in research and development focusing on CBD's properties in recent years. 

There is evidence that Low-THC Cannabis sativa L. extracts may provide numerous beneficial benefits to the human body, including improved skin conditions thanks to their antioxidant properties, restored balance when excessive sebum production is present, and increased collagen and elasticity levels. 

The study by Technario, published on businesswire.com this past October, has estimated that technology will grow by 31% each year between 2020 and 2024. At the end of the period, the market is estimated to be worth $3,09 billion. Market research company Million Insights estimates the sales of cannabis-derived skincare products will reach €1.7 billion in 2026, which is a significant increase over the standings at present.

As far as CBD Beauty is concerned, the main market is currently not only North America, but the official recognition of CBD by the European Union will enliven the process of industrialization and the sale of CBD-based cosmetic products within the Union.

woman wearing red, white, and black aztec top. CBD beauty

Did you learn about CBD beauty? You can check some other related content right here:

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