Why indie cosmetic brands are being snapped up by the bigger players

By Simon Pitman

- Last updated on GMT

Why indie cosmetic brands are being snapped up by the bigger players
Cutting edge indie cosmetic brands have been leading the way in industry growth over the past few years, which explains why larger multinationals have been lining up to incorporate them into their portfolios.

In the US brands such as GlamGlow, NYX, Le Labo, Ren, and Dermalogica are amongst the most prominent names that have been bought up in recent years.

The secret to the success of these different brands has been that they have targeted specific demographic groups, including baby boomers, millenials and Generation Z-ers, with products that resonate and target their specific beauty needs.

Focusing in on core demographic groups

In 2014 independent beauty brands registered growth of almost 20% in the US, which is why the individual performance of these brands is closely tracked by the bigger multinationals wanting to tap into growth from new niches and brands that are doing something new or fresh.

A recently published report from Kline Group, titled Beauty’s Most Buyable Brands: Analysis of Booming Independent Brands in the United States​ has tracked the performance of 100 of the most interesting brands and takes a closer look at the best performing ones.

Indeed, the report highlights how 20 of the brands tracked showed either double- or triple-digit growth in 2014, thanks to a focus on niche treatments for anything from eyebrow care to a wide spectrum of skin care solutions and natural oral care.

Attracting investment while retaining innovation

Although many of these brands are eager to attract investment from multinationals and larger companies, they also want to ensure that the innovation that helped to put them on the map will continue to be the strength of the business by maintaining a smaller business model while tapping into the benefits of working within a much larger business model.

“Independent companies interact more closely and frequently with their consumers, allowing these companies to respond and innovate quickly to reflect the changing needs and tastes of consumers,”​ comments Karen Doskow, director at Kline’s Consumer Products practice.

“For example, CEO Craig Dubitsky of Hello Products, an oral care company experiencing triple-digit growth in 2014, answers all consumer e-mails and even provides consumers the chance to Skype with him on the company’s website. This shows a major difference between how a major company and an indie company have the capability to interact with consumers.”

Social media drives growth of indie brands

Many of these brands have also had the benefit of being established as part of the multimedia trend, with young, social media savvy teams driving growth and brand recognition by organizing multifaceted and sophisticated campaigns that get the message out in a targeted and efficient manner.

The Kline researchers point to You Tube and Instagram as being amongst the most effective tools to help promote brands through product reviews and product application tips, with companies such as NYX, e.l.f., Anastasia Beverly Hills, and Too Faced being highlighted as generating the most far-reaching social media campaigns that really engage consumers on a level never previously seen.

“In this day and age, where social media has become an integral part of consumers’ lives, this approach adds a modern spin to direct selling, a retail model struggling in the current environment,”​ comments Kelly Alexandre, the Kline analyst behind the research.

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