Market Trends of Personal Care Contract Manufacturing Industry
Skin Care Segment to Dominate the Market
- The demand for skincare products, especially from millennials, is on the rise, driven by various factors such as the desire to delay the signs of aging, increasing awareness of skincare routines, and the influence of social media. This growing demand directly impacts the demand for such products in the market, aiding skincare manufacturing.
- For instance, according to research by the NPD Group in 2023, millennials spend an average of USD 135 on skincare products each year compared to USD 80 from Gen Xers and the USD 65 baby boomers spend, representing a difference in spending by millennials on skin care.
- Millennials' focus on skincare led to an increased emphasis on developing specialized formulations that cater to their specific needs and preferences. It includes products that incorporate organic and natural ingredients, as millennials prioritize sustainability and clean beauty. Consequently, contract manufacturers in the skincare industry are investing more in research and development to meet these demands.
- Skincare spending in all age groups increased in the recent past. Skin care product manufacturers are forced to outsource to contract manufacturers. According to Happi Magazine, in November 2022, 211 contract manufacturers for skin care products were in the United States. Skincare spending experienced growth and needs specific solutions for the face. In addition, Face cleansers generated sales for USD 1754.22 million in the facial skin care category, while USD 1130.9 billion was spent on facial anti-aging goods (Happi Magazine).
- The development of new and gender-specific products is a key driver of demand in the industry. Male consumers, for example, are increasingly seeking grooming products such as skin care, hair sprays, styling mousses, and deodorants tailored to their specific needs. This shift in consumer behavior increased the demand for contract manufacturers to produce these male-oriented personal care products.
- Overall, skin care products are gaining traction in both males and females. It also pressured the manufacturers to create gender-specific products causing them to shift from in-house manufacturing to contract manufacturing to scale up and reduce product costs.
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North America to Hold Major Share in the Market
- North America comprises the analysis of the United States and Canada. Consumers in North America are increasingly seeking personalized and unique personal care products. Contract manufacturers offer flexibility in formulation and packaging options, enabling brands to meet these demands. The ability to create custom products, such as organic, natural, or eco-friendly formulations, will drive market growth.
- The personal care and cosmetics industries are experiencing tremendous demand. Pure, natural, and organic substances significantly surpassed the use of chemicals due to people's growing concern about the products they use. Productions of makeup and color cosmetics are anticipated to increase due to growing consumer demand and enhanced knowledge of its benefits among working professionals. Major companies like P&G and Unilever are outsourcing mass-produced goods to concentrate on developing novel products. It is anticipated to drive the expansion of the contract manufacturing market.
- Throughout the projected period, it is anticipated that increasing aging in the United States population and rising demand for hair care products will favorably affect the market. The male population uses more personal care products due to the increased attention paid to personal grooming. Contract manufacturers specializing in developing and producing effective and innovative skincare solutions will experience heightened demand. Incorporating advanced ingredients, such as peptides, retinol, and antioxidants, will be crucial to cater to this market segment.
- Rapid technological advancements and changing consumer preferences necessitate continuous research and development efforts by personal care contract manufacturers. Innovations in product formulations, active ingredients, and delivery systems are crucial to stay ahead in the competitive landscape. Contract manufacturers investing in R&D capabilities will gain a competitive edge.
- Canada's growing focus on health and wellness increased the demand for personal care products promoting well-being. Contract manufacturers specializing in manufacturing products catering to specific health concerns, such as natural skincare, vegan formulations, or products with functional ingredients, will experience heightened demand.
- North America's personal care contract manufacturing market is poised for substantial growth in the coming years. Factors such as the growing demand for natural and organic products, regulatory compliance, customization, product innovation, cost efficiency and scalability, sustainability, collaborations and partnerships, digital transformation, and health and wellness trends will shape the market dynamics.
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