Beauty continues to hold the top spot as the fastest-growing industry in Canada. Sales revenue grew by 19% to $1.7 billion in the first half of 2023, versus last year, according to Circana, formerly IRI and The NPD Group. Unit demand was also strong across all categories, with units sold increasing across the board.
All beauty categories registered double digit growth in value and makeup was the fastest-growing category, with sales revenue up 25% in the first half, contributing over 40% of total beauty industry gains during this period. Face makeup sales grew by 33%, led by blush, bronzing and highlighting products, and setting sprays. “In Canada there is a heightened focus on complexion and healthy skin,” said Circana.
Hybrid products are a hit
This trend aligns with skincare being the largest category in Canada and growing – with sales revenue up 16% in the first half – and the ongoing ‘skinification’ trend, as makeup products with skincare benefits continue to sell well.
The ‘skinification’ trend is also playing out when looking at the evolution of lip makeup sales. Lip was the fastest growing segment in makeup, with sales up 42% in the first half, according to Circana. While lip color performed well, the strongest growth came from other lip makeup, predominantly hybrid products such as lip oils and balms. Collectively, these products, which are primarily intended to hydrate and moisturize with a tint of color, represent only one-quarter of lip makeup sales but contributed over 40% of the sales revenue gains in the first half.
The hair product market in Canada is also growing at a healthy clip. Hair category sales revenue posted a 17% increase in the first half of 2023. Hair styling products grew the fastest, followed by hair care including shampoos, conditioners, and masks, as consumers prep to go out while also continuing their at-home treatments and rituals.
“Amidst pricing pressures and financial uncertainty, Canadian consumers remain focused on health, wellness, and an overall investment in themselves, and they continue to see beauty products as an important component of these priorities,” said Alecsandra Hancas, Canadian beauty industry analyst at Circana. “Every beauty category is growing in terms of both revenue and units sold in 2023. The highest pricing increase came from fragrance, which is also telling of the consumer mindset and the high value they place on emotionally driven purchases.”
Consumers returned to in-store purchasing
Looking at channel performance, consumers returned to in-store purchasing and continue to spend more, on average, especially when shopping for makeup and fragrances. In-store sales outpaced the online channel, with sales up 20% in the first half, versus last year, and accounted for 75% of sales. Online sales, which remain elevated but have stabilized since pre-pandemic 2019 levels, grew across every category in the first half. Similar purchase patterns are happening online and in-store, with the strongest growth coming from the makeup segment, led by lip and face makeup.
A similar market momentum was recorded in Canada’s southern neighbor. According to Circana, U.S. prestige beauty sales grew by 15% in the first half of 2023, compared to the same period in 2022, with makeup ending the first half of 2023 as the fastest growing category.