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Cosmetics Industry

Cosmetics and personal care industry overview

Economic overview

Valued at €77 billion at retail sales price in 2015, the European cosmetics and personal care market is the largest in the world.

The largest national markets for cosmetics and personal care products within Europe are Germany (€13 billion), United Kingdom (€12.5 billion), France (€11.3 billion), and Italy (€9.7 billion).

The following product categories hold the largest share of the European market: skin care and toiletries (€19.9 billion), hair-care products (€15 billion), fragrances/perfumes (€12.1 billion), and decorative cosmetics (€10.7 billion).

Exports of cosmetic products from Europe totalled €17.2 billion (trade value) in 2015. France and Germany were Europe’s main exporters, exporting more than €8.8 billion combined.

The European cosmetics and personal care industry generates significant intangible assets, defined as non-monetary value that cannot be seen, touched or physically measured, like brands and patents. The total value of Europe’s leading cosmetics brands is estimated to exceed €45 billion. Of the world’s 50 leading cosmetic brands, 26 are domiciled in Europe.

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Socio-economic impact

The cosmetics and personal care industry brings at least €29 billion in added value to the European economy annually. €8 billion is contributed directly by the manufacture of cosmetic products and €21 billion indirectly through the supply chain.

Including direct, indirect and induced economic activity, the industry supports at least 2 million jobs. 179,000 people are employed directly, and a further 1.6 million indirectly in the cosmetics value chain.

For every 10 people employed in the European cosmetics and personal care industry, a further two jobs are generated in the wider economy as a result of employees spending their wages on goods and services.

Moreover, by attracting investment from outside of the EU, developing intangible assets like brands, and investing in R&D, the cosmetics and personal care industry is helping to enhance the competitiveness of the European economy and contributing to future prosperity.

The vast majority of Europe’s 500 million consumers use cosmetic and personal care products every day to protect their health, enhance their well-being and boost their self-esteem. Ranging from antiperspirants, fragrances, make-up and shampoos, to soaps, sunscreens and toothpastes, cosmetics play an essential role in all stages of our life and have important functional and emotional benefits.

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Industry value-chain

The cosmetics and personal care industry value chain comprises five levels:

  1. Inputs to production. Companies that provide the raw materials required to manufacture cosmetic and personal care products. There are over 100 companies manufacturing cosmetic ingredients in Europe. 
  2. Manufacturing. Product manufacturers and suppliers of supporting activities e.g. marketing and IT. There are more than 4,600 enterprises manufacturing cosmetics in Europe, the vast majority of which are SMEs.
  3. Distribution and wholesale. There are approximately 20,100 enterprises involved in the wholesale of cosmetics in Europe, the majority of which are located in Italy (18%), Spain (14%), and France (11%).
  4. Retail and beauty services. Product vendors like salons, department stores, online stores and pharmacies. There are also approximately 45,700 specialist stores and 55,000 retail outlets selling cosmetic products in Europe.
  5. Consumers. Individuals who purchase cosmetics and personal care products represent the final link in the value chain.

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Research & Science

The cosmetics and personal care industry is a science-driven and highly innovative sector which makes large investments in R&D. Most large companies in our industry spend between 1.5% and 4.5% of their annual turnover (sales) on R&D, with some spending considerably more.

There are at least 33 scientific innovation facilities in Europe that carry out research in relation to cosmetics and personal care. Large industry players have multiple research centres that focus on product development, market research and regulatory compliance respectively.

Over 26,000 scientists are employed in the European cosmetics sector, from a diverse range of disciplines including physics, microbiology, biology, toxicology, physiology, rheology, nanoscience, analytical chemistry and genetics to name a few.

Patent activity is a useful indicator for innovation. Approximately 6,000 patents were filed by the European cosmetics and personal care industry in 2011 (European Commission, 2013) and in 2009, we were awarded 10% of all patents granted in the EU.

Read more about our industry’s efforts to promote science and research and innovation and future trends in the Cosmetics Industry driven by R&D.

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Sustainability

Sustainable development strives to meet the needs of the present without compromising the ability of future generations to meet their own needs, based on three pillars: economic development, environmental protection and social responsibility.

In line with these pillars, our industry’s sustainable development practices accomplish the following:

  1. Generate economic benefit through high value jobs and growth. This must always be underpinned by safety and innovation. 
  2. Reduce our environmental footprint. We place a strong emphasis on environmental responsibility and supporting voluntary and self-regulatory initiatives. For instance, our industry is lowering its CO2 emissions by reducing energy consumption, water consumption and waste generation throughout the product life cycle e.g. by using recycled materials for products and packaging, and taking steps to limit the amount of waste going to landfills.
  3. Enhance the social value of our products and support the communities in which our products are manufactured (including value chain) or purchased. Our industry has invested heavily in programmes that enhance the communities in which participants across our value chain operate. Numerous specific initiatives are underway within areas including health education, fair trade, health research and provision of education opportunities.

Sustainability is a key concern for the European cosmetics industry and companies – both large and small – are proactively participating in voluntary and self-regulatory initiatives. In line with the United Nations Global Compact (2015), some of the largest cosmetics companies in Europe have created codes of conduct for their suppliers in order to establish harmonised criteria in the areas of corruption, human rights and environmental protection, which must be met if they are to work together.

Read more about our industry’s efforts to drive sustainable development

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