World’s Top 50 Cosmetics Brands Lose Over $12 Billion Worth of Brand Value
The total value of the world’s top 50 most valuable cosmetic brands has declined by 9%, decreasing from US$137.5 billion in 2020 to US$124.8 billion in 2021.
As a large and diverse sector, there have been mixed fortunes for cosmetics brands, with colour cosmetics the most negatively impacted segment, recording an average brand value decline of 15%. Multi-level marketing brands – including Avon (brand value down 24% to US$772 million) and Oriflame (down 1% to US$802 million) - have faced a 12% drop in brand value on average. The sector’s largest brands in hair care, razors, and fragrance have also been hard hit with an average brand value drop of 10%.
That being said, according to Brand Finance’s Global Brand Equity Monitor, the cosmetics sector has the highest reputation of all sectors globally – only matched by the food sector. A strong reputation, and thus a strong brand, will stand cosmetics brands in good stead to recover at pace in the coming year.
The pandemic has undoubtedly forced change upon the cosmetics sector, from stifling demand - a result of lifestyle changes and financial uncertainty - to the rapid rise of digitalisation and e-commerce. Brands that have shown savviness and the ability to adapt will bounce back from the turmoil of the last year, unlike those that have failed to adapt quickly enough.
Annie Brown, Associate, Brand Finance
L’Oréal strikes again
L’Oréal has retained the title of the world’s most valuable cosmetics brands for the 2nd consecutive year, despite recording a 13% brand value loss to US$10.2 billion. The drop in brand value is largely a result of the brand’s financial outlook dipping, a consequence of the pandemic.
For the first time, Brand Finance has conducted global market research, as part of the Global Brand Equity Monitor, for L’Oréal and L’Oréal Paris brands. The research demonstrates that the brand’s reputation among consumers is significantly lower outside of Europe and North America, particularly in markets such as India, China, and Japan. At the end of last year, the brand undertook some strategic reshuffling of L’Oréal’s geographic zones - with APAC being separated into North and South – a potential indicator of future growth plans post-pandemic.
The beauty behemoth’s position in the market still remains a cut above the rest and it boasts an incredibly strong heritage in the sector. It has been 50 years since L’Oréal first used the slogan “because you’re worth it” and the phrase still bears meaning to consumers today, with the brand successfully remaining relevant through product innovations and continued fresh marketing.
Yves Rocher up impressive 71%
Yves Rocher (brand value US$2.4 billion) is the fastest growing brand in this year’s Brand Finance Cosmetics 50 2021 ranking, following an impressive 71% brand value increase and simultaneously jumping eight spots from 28th to 20th.
Yves Rocher is bouncing back following a sharp decline in brand value is recent years due to the decision to pull out of the UK amid Brexit. The brand does, however, continue to perform well in mainland Europe. During the peak of the Coronavirus pandemic, Yves Rocher’s factories were repurposed to create alcohol gels, producing nearly 45,000 bottles a week.
Fresh and The Body Shop storm into ranking
New entrants Fresh (brand value US$1.1 billion), and The Body Shop (brand value US$725 million) are the second and third fastest growing brands, up 53% and 22%, respectively.
Entering the ranking in 36th position, Fresh - which was purchased by LVMH in 2000 – benefits from the combination of LVMH capital behind it, paired with the founders remaining in control.
The UK’s The Body Shop has claimed 49th position. The brand has undertaken a complete product and branding overhaul in recent years since it was bought by Brazil’s Natura &Co from L’Oréal, now positioning itself as an activist brand at the core, that will be ‘forever against animal testing’. Sales for the brand were solid on its e-commerce platform, which more than compensated for sales lost in stores, which number at 3,000 in more than 70 countries.
Natura is sector’s strongest
In addition to measuring overall brand value, Brand Finance also evaluates the relative strength of brands, based on factors such as marketing investment, customer familiarity, staff satisfaction, and corporate reputation. Alongside revenue forecasts, brand strength is a crucial driver of brand value. According to these criteria, Natura (up 19% to US$1.7 billion) is the world’s strongest cosmetics brand, with a Brand Strength Index (BSI) score of 86.7 out of 100 and a corresponding AAA brand strength rating.
According to Brand Finance’s Global Brand Equity Monitor research, Natura is perceived to be an extremely strong brand across Brazil and South America and although the brand is lesser known outside the region, its proposition remains favoured internationally thanks to the rise in popularity of natural brands.
The brand was largely able to shelter itself from the negative impact of the pandemic due to the diversified risk of its business operations, which covers a wide variety of products from bath, fragrance, body, and make up.
Furthermore, the brand is bolstered by the success of its parent company Natura &Co – which owns Aesop, The Body Shop and Avon – which scores well across corporate brand measures including governance, sustainability, and employee appeal.