This week, I checked in with beauty and wellness investors to learn what trends and categories are piquing their interest for the second half of 2024. This includes science-powered hair- and skin-care made for all genders, as well as technology that serves women going through menopause. Additionally, the evocative new beauty campaign from E.l.f., Glossier’s new brick-and-mortar store and can’t-miss headlines.
As we approach the second half of 2024, investors are quietly deciding on the brands and categories they plan to target through the rest of the year. As expected, investors continue to be conservative: Global venture capital investments hit a near five-year low in the first quarter of this year, according to Pitchbook.
“There’s definitely somewhat of a slowdown as it relates to investing and the amount of capital that’s flowing toward beauty, as well as other categories,” said Anu Duggal, founding partner of the Female Founders Fund, which has made investments in Ceremonia, Mother Science and Violette_FR.
Because of this, Duggal is focused squarely on science-led innovation, specifically, skin care with clinical results or new, well-studied ingredients, as well as innovation in hair care. “The health of your scalp, and the health of our hair, is an area where there hasn’t been a ton of research or innovation. [Right now], hair care is an under-invested space,” she told Glossy.
Similarly, Lisa Wu of venture and growth equity investment firm Norwest Venture Partners, which has invested in Ritual vitamins, Madison Reed and PCA Skin, is aiming the group’s new $3 billion fund toward products with proven efficacy that can be widely marketed. Wu is most interested in clinical skin care with data-driven claims, including dermatologist-backed or -founded lines.
According to internal data compiled by Norwest Ventures, 92% of consumers prioritize product efficacy versus 81% that prioritize “clean” formulations, pointing to a growing need for clinical trials. The same data shows that consumers are four times as likely to purchase skin care from a professional founder over an influencer founder and three times as likely to buy hair care from an expert than an influencer.
“Health-conscious consumers are seeking voices of authority and efficacious products supported by scientific evidence,” Wu told Glossy. She said this will create new opportunities for doctors-turned-founders with devoted audiences within the creator economy. “We’re already seeing this play out in clinical skin care, beauty and body care. We see whitespaces in gut health, scalp health and women’s health, such as menopause,” she said.
Duggal is also interested in reaching women in menopause. But instead of products, Female Founders Fund is interested in entering the women-focused telehealth space and natural alternatives to hormone replacement therapy, which is increasingly more polarizing.
“Women, as a consumer group, is really pushing the trend of longevity,” said Andrea Hippeau, partner at Lerer Hippeau, an early-stage venture capital firm with investments in Glossier, Prose and Topicals. “This is the biggest trend we’ve seen, and it’s exciting because women’s health, as a category, has historically been under-invested in.”
She told Glossy that the biggest investible subtrends growing in the market include genetic testing companies, supplements and wellness modalities like cold plunges and infrared saunas, as well as women’s general longevity targeted toward those in their 30s and 40s.
Across the board, every investor Glossy spoke to shared the growing importance of proving all marketing claims from brands seeking investment. “There has to be something defensible,” said Rachel Hirsch, founder of Wellness Growth Ventures, which has made investments in BelliWelli, Deux and Cure, an electrolyte-based drink mix.
Hirsch sees a white space in women’s health and consumer packaged goods that support fertility, PCOS and menopause. She told Glossy she’s seen a convergence between health and wellness, with opportunities for wearable tech and other devices that assist in tracking and diagnostics.
Executive moves:
- Tiffani D. Carter has been appointed the first CMO of Pattern Beauty by Tracee Ellis Ross. Previously, Carter served as CMO of Danessa Myricks Beauty.
- Integrated wellness brand and members club The Well has appointed Zeev Sharon as chief development officer. Previously, he served as CEO and co-founder of NYC restaurant Mint Kitchen. The Well has wellness centers in New York City, Miami, Los Cabos and Mexico, among other locations.
News to know:
- Beautycounter, which was partially purchased back by founder Gregg Renfrew after parent company Counter Brands closed its doors in April, will not be relaunching the brand until late 2024. Originally, Renfrew announced on social media that Beautycounter would return a few weeks after the e-commerce site was closed, but a recent social media message from the founder revealed its return will be further delayed.
- Fendi launched a new collection of seven fragrances inspired by women who have impacted the brand over the last 100 years of business.
- Glossier opened a new store at Simon Properties’s The Forum Shops at Caesars Palace in Las Vegas on Thursday. This marks the brand’s 13th brick-and-mortar location, with its 14th location opening next in Dallas.
- Walmart announced plans Tuesday to cut hundreds of corporate jobs in its Dallas, Atlanta and Toronto offices and relocate remote workers to its headquarters in Bentonville, Arkansas, as well as its offices in the San Francisco Bay area and Hoboken, New Jersey. Walmart is the world’s largest retailer and the largest private employer with 2.1 million global employees.
- E.l.f. launched an evocative new media campaign calling out the lack of diversity in American boardrooms. It’s anchored by the messaging ‘so many Dicks.’ It’s a play on a statistic that there are more men named Richard, Rich and Rick (who share the common nickname Dick) on corporate boards than entire groups of underrepresented people, such as Hispanic, Black and Native American women, according to E.l.f.
- U.S. retail sales fell flat in April, according to the Commerce Department’s Census Bureau. Analysts report that as gas prices have increased, consumers are spending on essentials instead of luxuries.
- Grown Alchemist, the skin- and hair-care brand owned by L’Occitane Groupe S.A., will replace Kiehl’s as the locker room amenities partner for Equinox Gyms. Grown Alchemist is also the amenities partner for Delta Airlines.
Stat of the week:
The global waterless cosmetics market size is on track to reach more than $23 million by 2033, thanks to a 9.8% compound annual growth rate, according to a new report released by market research fund Custom Market Insights. This is estimated to grow from its 2023 estimate of $9.1 million.
Waterless cosmetics, which are made by brands like Lush, Ethique and celebrity hairstylist James Pecis’s new line Blu & Green, have gained popularity over the years as a more eco-friendly option since they require less resources to ship globally. The category includes concentrated products that are formulated with less water and some may require water for activation, such as shampoo bars, powdered cleansers, dry masks, solid perfume and oil-based skin care.
In the headlines:
China consumption slows as retail sales and investment data disappoint. Sustainable makeup brand Athr Beauty readies for relaunch under new ownership. Jo Malone London announced Tom Hardy as ambassador. Inside the Chinese beauty boom. The startups turning Ozempic into the next Botox. Supermodel Helena Christensen stars in the first-ever campaign for the customizable scalp care line Hårklinikken.
Need a Glossy recap?
Ulta Beauty has been quietly testing a gamified loyalty program called GlamXplorer. Confessions of a founder coaxed into retail for DEI: ‘We were set up for failure.’ The WNBA’s Los Angeles Sparks and Urban Decay renew beauty partnership. The TikTok-fueled rise and fall of Youthforia. Prequel Skin’s Dr. Sam Ellis: ‘There’s space for a dermatologist-founded brand that’s more approachable and not prestige’.
