Unlocking Sustainability Opportunities in Health and Beauty

July 2024

This report highlights the urgency for companies in the Health and Beauty sector to adopt transparent, effective sustainability communication to manage risks, meet legislative demands and leverage opportunities. It emphasises the necessity for firms to substantiate their sustainability claims, nurturing stakeholder trust, enhancing brand loyalty and propelling business growth in a fast-paced, competitive landscape.

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This report comes in PPT.

Key findings

Reinforce sustainability communication by providing clear and specific evidence

Amid growing climate regulations, corporations need to better articulate and validate their sustainability efforts. With only 10% of firms communicating sustainability effectively to consumers, clear proof of environmental contributions through precise claims and in-depth reporting is crucial for trust and differentiation.

The rising demand for sustainable products is fuelling revenue growth

Sustainability is fuelling expansion in the beauty and health industry, with sustainable products retail value sales growing at 9% CAGR (2020-2023), surpassing their non-sustainable counterparts. With consumers increasingly choosing sustainable options, opportunities rely on sustainable products that address key challenges such as sustainable sourcing and packaging.

Sustainability expands across BPC categories

Consumers’ increasing interest in product ingredients is expanding sustainability's influence beyond skin care to fragrances, sun care, deodorants and colour cosmetics, which saw double-digit growth in retail value sales from 2020 to 2023. This is primarily fuelled by popular claims such as “natural”, “vegan” and “cruelty-free”, with sustainable packaging claims gaining momentum.

Product formulation awareness boosts sustainability in consumer health

Growing consumer focus on holistic wellness, preventative health and ingredient transparency is boosting the industry performance, especially VDS and sports nutrition, which lead globally with 51% and 46% digital shelf shares, respectively. This increase is largely driven by “natural”, “vegetarian” and “No-GMO” claims, with sustainable sourcing claims also on the rise.

Sustainability as a premium does not resonate anymore, particularly in affluent markets

Consumers today prioritisesustainability, but not at the expense of quality and affordability. They seek efficient, sustainable solutions that also align with their budgets. Consequently, emphasising the value proposition of products is key, particularly in fragrances and colour cosmetics, where sustainable alternatives carry a 23% and 17% higher price tags, respectively.

Unlocking sustainability opportunities in health and beauty
Passport Sustainability: What's covered?
Key findings
Despite climate concerns, only half of companies will thrive with sustainability features
Providing substantiated proof is key to reinforce sustainability initiatives communication
Consumers are willing, but need support to embrace sustainability
Growing appetite for products carrying sustainability claims pushes revenues
Sourcing, packaging and recycling top health and beauty corporate sustainability plans
Sustainability in beauty and personal care overview
Top trends impacting consumers’ purchasing decisions
Sustainability spreads across categories driven by clean beauty demand
Corporates are showing real commitment on curbing virgin plastic use
Beauty and personal care sustainability examples
Affluent smaller countries lead in spend per capita, as sustainability offer is reasonably priced
Technology and digitalisation to enhance transparency and boost consumer education
Sustainability in consumer health overview
Top trends impacting consumers’ purchasing decisions
Multi-purpose demand paves the way for innovative cross-category solutions
The industry accelerates on sustainable sourcing, but still needs to address packaging
Consumer health sustainability examples
Spend per capita varies according to local treatment approach preferences
Lifestyle, digitalisation and channel shift to boost performance in the medium term
Opportunities for growth
Evolution of sustainability in beauty and health
Questions we are asking
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