Given its status as a mature industry, the UK Perfume and Cosmetics Manufacturing industry is expected to post moderate growth over the five years through 2016-17, according to latest report from IBISWorld, the UK’s largest publisher of industry research. Growing awareness of health and well-being will also result in the development of more health-oriented products. Continued product development, including natural, organic, cosmeceutical or nutraceutical fusion products, environmentally friendly and ultra-niche products will also help stimulate the demand for an increasing array of products.
London, United Kingdom (PRWEB) October 27, 2011
Perfume and cosmetics have a long history. By the 18th century the use of cosmetics and toiletries was common among most social classes and by the end of the 19th century the industry was associated with iconic names such as Rimmel, Boots, Elizabeth Arden, Chanel and Max Factor: brand names that still exist today. In 2010, the total cosmetics and toiletries (C&T) market within Great Britain was worth over £8.0 billion at the retail level.
At the UK manufacturing level the industry is considerably smaller, reflecting in part the global nature of the industry and the dominance of established global players that conduct their operations on a worldwide scale. This is reflected in the dominant role that international trade plays within the UK Perfume and Cosmetics Manufacturing industry.
Within the European Union, the United Kingdom is estimated to be the fourth-largest market (behind Germany, France and Italy), accounting for about 13% of C&T retail sales in 2009. It is also one of the top C&T exporters accounting for about 7.5% of EU C&T exports in 2010.
In line with its mature status, the UK Perfume and Cosmetics Manufacturing industry has undergone a period of consolidation in recent years, as several players have left the industry. Other global players have sought to close down UK manufacturing facilities in the face of intensifying international competitive pressures, as players from new geographic markets have entered the international arena.
Despite this, the industry remains progressive and is characterised by a high degree of innovation and the constant introduction of new or reformulated products. In the case of the European Union as a whole, major cosmetic companies replace or reformulate one quarter of their products every year. According to the Cosmetic Toiletry and Perfumery Association (CPTA), the UK cosmetics industry is competitive, dynamic and highly innovative. Many new products have recently been introduced, including eco-ethical products. New natural and organic products have been developed, partly in response to increasingly sophisticated consumer tastes and the rise of the ethical consumerism movement.
According to IBISWorld analyst, Arna Richardson, “In 2011-12 the UK Perfume and Cosmetics Manufacturing industry is expected to generate sales of about £3.02 billion at the manufacturing level as it continues to claw back ground lost during the financial crisis,” says Richardson. After contracting during 2008-09 and 2009-10, industry growth rates for the year will be a modest 2.2% as the industry contends with the influence of higher VAT rates on discretionary expenditure patterns. The marked contraction that occurred during these two years has also meant that the industry has shrunk in size, partly in line with the closure of several manufacturing facilities as global players reallocated their production resources in favour of higher growth geographic markets. "Revenue is expected to contract 1.0% per annum in the five years through 2011-12, with revenue levels still down marginally from 2006-07 levels of £3.17 billion.
Despite its maturity, the UK cosmetics and toiletries industry will continue to recover lost ground in the near term, which will offer potential for both domestic and international C&T manufacturers. Technological advances will remain a key driving force, in addition to the willingness of UK consumers to buy an increasing range of complex formulated products, including protection products (i.e. products offering protection properties against the elements or ageing) as well as green products, which are expected to become more mainstream. Revenue is anticipated to grow 1.9% per annum in the five years through 2016-17, bringing revenue up to an estimated £3.31 billion. In 2012-13 the industry is expected to post growth of 1.8%.
For more information, download the full report from IBISWorld on the Perfume and Cosmetics Manufacturing industry
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James Karklins
IBISWorld
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