Article - June 12, 2024
CEW Visionary Awards: 5 Honorees Highlight Growth in Health & Beauty
The health and beauty industry continues to capture attention from strategic buyers and financial investors with steady demand for a range of products. According to Circana, the U.S. beauty market expanded 11% to $108 billion in 2023 and was the only consumer segment of 24 tracked to post unit growth. While the sector's growth remains strong, U.S. beauty sales in the first quarter of 2024 slowed somewhat to 9% for prestige products and 2% for mass.1
Many important trends are driving persistent growth throughout the sector, including the “skinification of beauty,” or consumers’ preference for products with proven ingredients that deliver high performance and multiple benefits across beauty categories. In addition, a more holistic view of beauty and wellness, the affordability and expansion of beauty and personal care departments at mass retailers, and Gen Z and Gen Alpha’s increasing influence are other key trends creating industry growth. Supported by these tailwinds, several areas are particularly well positioned for success.
“Consumers want active ingredients that supercharge their skin and hair health, multitasking products, and fragrances for their well-being,” says Kelly McPhilliamy, a managing director in our Consumer Group. “Science-backed skin and hair care, cosmetics with benefits, SPF products, and body care are just a few standout product segments that buyers and investors are watching.”
These trends are driving entrepreneurship across health and beauty, giving rise to a wide range of exciting new businesses.
Spotlighting Exceptional Female Entrepreneurs
Credit: Shutterstock/Chelsea Lauren. 2024 CEW Visionary Awards honorees (left to right): Shontay Lundy, Creator and Founder, Black Girl Sunscreen; Katherine Power, Founder and Chairperson, Versed and MERIT; Partner, Greycroft; Donda Mullis, Founder and CMO, Raw Sugar Living; Randi Christiansen, CEO and Co-Founder, Nécessaire; Amy Liu, CEO and Founder, Tower 28
At this year’s CEW Visionary Awards, presented by Harris Williams, five forward-thinking health and beauty founders were honored. Each possesses extraordinary strategic and creative vision and has built success and leadership in the beauty industry.
Below, they discuss the inspiration behind their brands, success factors for scaling their businesses, and attributes they seek in a growth partner.
What was the inspiration for your brand and product offering?
We felt body care was an afterthought. With Nécessaire, we wanted to create the personal care we truly need that supports our health and wellness. We wanted people to Treat Your Body Like Your Face by infusing facial-grade skincare ingredients at clinical concentrations into body care and offering solutions for every body concern, including dry skin, KP, body acne, aging, and more. Nécessaire is driven by results and efficacy, but we aim to be responsible and use our business to make a positive environmental impact.
What have been the key success factors for scaling the business?
Our growth is measured by our environmental responsibility. From creating formulas people want to use every day to packaging that carefully considers different recycling standards, we aim for responsibility throughout the entire product lifecycle. As we’ve grown and have striven to be a steward of responsible luxury, Nécessaire has increased its commitments and partnerships with a variety of environmental causes and achieved B Corp Certification.
Beyond capital, what are the most important characteristics in a growth partner?
A partner who believes in your mission. We want to continue to be the pioneer of prestige body care and responsible beauty. All our previous growth partners saw the beauty of our mission, which helped our partnerships to flourish and the brand to grow.
What was the inspiration for your brand and product offering?
As a longtime eczema sufferer, I couldn’t enjoy the best part of being an executive working in the beauty industry: trying out the products! Clean alternatives were either too expensive or sensitizing, and “safe for sensitive skin” options were clinical and boring, making me feel like a patient. Launched in 2019, Tower 28 is a beauty company inclusive of all skin tones, skin types, budgets, and beauty philosophies, while being the first beauty brand that’s 100% clean, vegan, and free of every known skin irritant.
What have been the key success factors for scaling the business?
I believe our dedication to authenticity at every touchpoint, along with my driving mission to do well by doing good, has resonated with both customers and retail partners. Ultimately, we stay in our lane and remain true to our core values and mission.
Beyond capital, what are the most important characteristics in a growth partner?
Vision and values. Choosing a growth partner is a lot like picking a life partner—it’s important to have the same values and goals.
What was the inspiration for your brand and product offering?
The inspiration behind Black Girl Sunscreen was to take care of Black people’s skin, of all ages, from the sun. The gap in the market came to me as a Black woman looking for sunscreen that didn’t leave a white cast. The sun care market for Black women wasn’t established until Black Girl Sunscreen, and now we’re on a mission to stay true to our customers while honoring their complexion. We also provide BGS Kids products, which are specifically formulated for little ones and sensitive skin.
What have been the key success factors for scaling the business?
Several important elements helped Black Girl Sunscreen to scale, including establishing a strategy and sticking to it, understanding the right direction for our brand, building a brilliant marketing team, knowing how to manage retail buyers (including when to say yes or no), creating a strong infrastructure, and securing financial resources.
Beyond capital, what are the most important characteristics in a growth partner?
When considering a potential growth partner, it’s crucial that they have complete belief in your brand, they and the people around them are always rooting for you, and you're not simply a return on investment.
What was the inspiration for your brand and product offering?
Raw Sugar Living is a clean body and hair care brand with a mission to deliver wellness solutions through plant-powered formulas that contain zero harmful ingredients. After noticing that existing clean products were priced too high and not accessible to everyone, we were inspired to create a brand that offered clean, vegan formulations and unique fragrances at an affordable price point.
What have been the key success factors for scaling the business?
Establishing a robust operational foundation, including optimizing manufacturing processes, managing logistics efficiently, and securing reliable suppliers, was crucial for Raw Sugar to scale successfully. As our company grew, it also became essential to bring in talent with diverse skill sets. Lastly, successful scaling involves a measured approach and prioritizing key markets strategically.
Beyond capital, what are the most important characteristics in a growth partner?
When considering a growth partner, it was vital to us that their values align with Raw Sugar’s brand mission and purpose—down to the individual people. Secondly, specialized capabilities are also important. Different growth partners bring unique strengths to the table, and finding one who can address specific gaps in our business is helpful for sustained success.
What was the inspiration for your brand and product offering?
Versed and MERIT were born out of a personal need, reinforced with consumer data, and paired with a gap in the marketplace. For Versed, there was white space in mass beauty as consumers desired cleaner formulas and functional skin care at an affordable price. Our goal was to establish a brand that offers prestige-quality skin care at a mass price point. MERIT was inspired by seeking cleaner makeup formulas and not finding any brands I connected with. We developed MERIT as a clean, luxury color line with a lower price point than other luxury brands.
What have been the key success factors for scaling the business?
Ensuring that the right team of incredibly talented executives is in place has allowed each brand to scale. Once my companies reach a certain size, I bring in a CEO that is a true industry expert with proven experience in taking a high-growth business to the next level.
Beyond capital, what are the most important characteristics in a growth partner?
When deciding on a growth partner, it’s essential for them to be a true strategic partner for the business. Whether that's finding the right accounting firm or recruiting a major hire, having a partner who has an opinion and expertise in all areas of business is irreplaceable.
A Bright Future
Health and beauty is a sizeable and fast-moving space with plenty of ways to capitalize on consumers’ everyday needs and key trends related to the environment, social causes, brand authenticity, and digital experiences. With so much innovation and a variety of growing product categories, this highly fragmented sector can be a great place to launch and scale a business. “The lifeblood of the industry is driven by the creativity, vision, and tenacity of entrepreneurs like the CEW Visionary Awards honorees,” says McPhilliamy.
As these businesses grow, many will attract the attention of M&A investors. “Innovative, mission-driven brands with differentiated products and loyal communities will be the most sought after, especially those in on-trend categories,” adds McPhilliamy. “As the founders we talked to can attest, there’s an important role to be played by thoughtful growth partners with a passion for the sector.”
Health and beauty is an attractive area for investment due to its positive fundamentals and supply and demand factors that support increased M&A activity. Strategic buyers and private equity platforms rely on M&A to fuel growth and fill portfolio white spaces, while the pipeline of independent and investor-backed companies that need to secure exits continues to grow.
Contact our senior professionals to discuss M&A dynamics and potential opportunities across health and beauty, as well as our work with female founders highlighted in several recent transactions below.
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