Ingredients before brands: the new priority of the cosmetics industry in America

Beauty industry trends: the ingredients of the cosmetic formula are the new purchase drivers, not the brand or a specific cream

The more savvy U.S. consumers become about cosmetic components, the more brands develop products focused on pivotal ingredients to care for the specific needs of each skin

Do beauty brands matter less than other factors in beauty products for American consumers today? Traditionally, brands in America have always been the leading indicators of quality, but as the new generation of consumers are becoming more informed about skin science, they are increasingly directing their choices away from a specific brand and toward the presence or absence of ingredients found within a cosmetic product. Net-a-Porter's (online luxury retailer) global beauty director Newby Hands first observed this trend from her customers in late 2019, as she highlighted at 'Net-a-Porter's 2022' annual beauty-trend presentation. The Hut Group (THG), the group that owns Look Fantastic and Cult Beauty, major online beauty retailers, has also noticed this trend over the past year. “We saw searches for ingredients start to climb rapidly, particularly within the skincare category, growing over 229 per cent year on year,” explains Rachel Horsefield, CEO of THG Beauty.

In America, women (and men) are becoming more aware of what they put on their skin

The Internet has transformed the buying experience of the American beauty consumer, who is now in their search for cosmetics, is also drawn to the more 'technical' aspect of the products they use, starting with the characteristics of the active ingredients and their function. Through these searches, present-day consumers have the opportunity to quickly become 'skintellectuals'. These consumers have a greater awareness concerning the particular needs of their skin and the products best suited to their skincare routine. “Consumers are becoming more and more actively interested in looking for active ingredients that really work, and they no longer rely solely on the commercial claims they read on a product. They want to get a personalized skin care regimen with the specific products they need,” said Hands of Net-a-Porter.

Finding a cosmetic product from its constituent ingredients: beauty e-commerce companies implement a search function by cosmetic ingredient

Some beauty brands and retailers have implemented a search function on their e-commerce that filters by cosmetic ingredients to help customers find the product with the formulation that best suits their needs. Australian cosmeceutical brand Alpha-H upgraded its website in 2019 to improve its search function and allow for more word variations and searches related to both products and educational content on blog posts, according to Tina Randello, Alpha-H's commercial director. In 2021, Net-a-Porter and Glow Recipe both launched a dedicated ingredients tab page on their e-commerce sites. “We have observed that most of our customers who are more informed and skincare-conscious buy twice as much as the average,” says Sarah Lee, co-founder and co-CEO of Glow Recipe. “Using search engines has become an essential part of the path to purchase,” continues Randello of Alpha-H. “As a fast-growing brand, we acquire a significant number of new customers each month who buy online on our site, and we have observed that the ingredient search function is widely used”.

Which are the top-selling cosmetic products in America?

"Big brands continue to maintain a high level of trust, but Net-a-Porter customers are now primarily looking for ingredients such as retinol, hyaluronic acid, niacinamide, and vitamin C. Searches for these components on Net-a-Porter have increased by nearly 700% since 2020," Hands says. "Customers now prioritize tested and safe ingredients, rather than a famous brand name," observes Horsefield of THG Beauty, who adds that "retinol is having a resurgence in popularity and has seen double-digit growth every year, while vitamin C is a universal ingredient that meets the needs of a wider range of consumers and therefore is highly sought after in the composition of creams and serums." Horsefield added that "this year, for the first time, salicylic acid surpassed the demand for niacinamide and hyaluronic acid, a trend related to a new skin disorder called Maskne or mask acne".

Innovating the product through revolutionary molecules is the keyword. Here are the best-selling new brands in America

U.S. consumers' enthusiasm for the cosmetic ingredients used in products has paved the way for new brands that focus on pivotal ingredients, both in terms of product formulation that ensures the most suitable care for each skin, and in terms of branding and communication that emphasizes label transparency.

An absolutely revolutionary brand in this sense is The Ordinary, whose successful skincare line stems from the use of natural substances with basic active ingredients without added fragrances; transparency about the ingredients used and production costs; minimal packaging; and no animal testing. TikTok was behind the success of this brand, so much so that it caused the so-called "The Ordinary mania".

The Ordinary is part of the Deciem Group, acquired by Estée Lauder Companies (ELC) in 2021. Deciem, with its six brands - The Ordinary, Niod, Hylamide, The Chemistry Brand, Hif and Loopha - generated revenues of about $460 million in 2020, according to ELC. Another ingredient-oriented brand is The Inkey List, who just revealed to beauty magazine Glossy that it is on its way to becoming a $100 million brand.

Beauty brands developing beauty formulas around a pivotal ingredient are steadily increasing in America. Alpha-H, which sells on Cult Beauty, has developed a serum that combines 14 percent glycolic acid and 1 percent granactive retinoid, which is considered a first in the industry and in high demand. The brand's line of vitamin serums - which contain vitamin C, vitamin A (retinol), vitamin E (ceramides), and vitamin B (niacinamide) - has also achieved explosive growth, according to Randello of Alpha-H.

The most sought-after supermolecules for skin care in the U.S. market

Glow Recipe's recent launches include the avocado recovery serum, based on five skin-identical ceramides, and the guava vitamin C anti-dark spot serum, formulated with encapsulated vitamin C and extract-rich guava seed oil. "We are seeing strong interest in the ingredients on social media, with many questions from customers. Our approach is to modernize technologies based on clinically proven ingredients to create unique formulas," says Christine Chang, co-founder and co-CEO of Glow Recipe, which recently reached $100 million in sales.

"Emerging trends on cosmetic molecules include aloe vera and snow fungus, also known as tremella fuciformis, which is even more effective than hyaluronic acid at retaining moisture in the skin," Horsefield explains. "Consumers will continue to demand treatments that help improve the skin barrier and soothe irritated skin due to prolonged use of masks," Chang of Glow Recipe predicts instead. Chang is very pleased with the positive response of the brand's customers to the company's latest launch: a toner that reduces the appearance of enlarged pores based on polyhydroxy and alpha hydroxy acids and the avocado recovery serum. "Ingredients that help restore the skin barrier and unclog pores will continue to be on trend throughout 2022 and into 2023," she concludes.

The American beauty and skincare market changes: safe products win

"Trust and authenticity are other key requirements. Clinical studies should support marketing claims," advises Hands of Net-a-Porter. Cult Beauty recently partnered with the digital transparency platform Provenance to develop a third-party verification tool that can check the transparency of beauty product compositions, processing methods and environmental impact. "Beauty consumers who are tired of 'greenwashing' are not only demanding label transparency, they also want to be assured that brand claims are actually true: from being carbon-neutral to accurate clinical studies," says Inge of Cult Beauty. "Brands that are willing to innovate and demonstrate their reliability, transparency and willingness to act now to ensure the safety of their products will be rewarded by American consumers.”