Beauty, Technology, and the New Look

Color cosmetics went through different cycles.

I would say that back in the 2000s, there was a crop of new innovative color cosmetic companies like Urban Decay, NYX Cosmetics that started to disrupt the older brands like Bobbi Brown, etc.

Those companies, those innovative companies disrupted those brands and that basically they were gaining market shares against those brands that were owned by L'Oreal, Estee Lauder, Shiseido, and that fueled a very strong wave of M&A.

just to give you some context, those brands were helped by the creation of social media and it was easier to launch a brand and to really reach the final consumers.

Back in the day, when you were launching a brand, you had to have a huge advertising budget to be able to reach the final consumer.

So I think that created a high barrier to entries.

At the start of the social media wave, you were able to touch the consumer very quickly with very little dollars and that helped new entrepreneurs to launch those brands.

So that's what fueled that wave of M&A, but also helped those brands to grow.

That was the first part of the cycle.

After a while, consumers realized that putting makeup on their skin could affect the skin negatively, and the sector started to slow down.

And then COVID, obviously, with the stay-in-place orders, nobody was going out, restaurants were closed, and color cosmetics really was almost dead.

I put the nails in its coffin.

The new cycle is there is a new crop of disruptive company within the space and that focus more on clean ingredients and brands like Ilia, Kosas, Merit.

And those disruptors are the new disruptors in color cosmetics.

Very interesting.

Very dynamic sector and with a lot of companies right now going through sale.

So we'll see how, whether they are able to find a buyer.

Nice.