More than $236.9 billion.
This story first appeared in the February 25, 2016 issue of WWD. Subscribe Today.
That is the personal-care industry’s contribution to the gross domestic product of the U.S., according to a study that the Personal Care Products Council will roll out at its annual meeting at the Breakers in Palm Beach, Fla., next week.
The unveiling of the study will occur just as Thia Breen, group president for North America at the Estée Lauder Cos. Inc., makes her debut as PCPC chairman. In a wide-ranging interview with WWD, Breen discussed some of the issues that the conference will tackle. She noted that the industry is enjoying high growth, and that industry figures are more robust given that The NPD Group now includes additional channels of distribution, mostly involved in direct selling, including Ulta Beauty.
One touchy issue is bound to be the question of how to provide more employment, especially for the middle class, as debates over income inequality rage over the political landscape.
Again, the new report had something to say on the issue. Lezlee Westine, president and chief executive officer of PCPC, said of the PricewaterhouseCoopers study, the industry was responsible for providing more than 3.6 million jobs. The states with the largest number of jobs directly and indirectly supported by the industry are California, Texas, New York, Florida and Illinois, she noted.
You May Also Like
According to the study, in 2013, the average U.S. household spent more than $600 on personal-care products and services. Industry products and services are purchased by individuals of all ages; for example, households led by individuals age 75 and over spent more than $490 annually on average. Between 1990 and 2014, employment in the U.S. personal-care products industry increased by 43 percent. Much of the growth in the personal-care products industry is attributable to the services segment, where employment increased by 62 percent over this period.
Breen’s first priority, she said, is to ensure the organization is serving all member companies, particularly by staying close to state- and federal-level legislative issues. “There’s a lot of interest in our industry, and that means sometimes there are different regulations that we need to be aware of. Also, the strength of small businesses is a very important component for us,” said Breen, noting that creative technology and breakthrough products often come from these niche players.
Biggest legislative issues? “This year, we were successful in getting the microbeads legislation through,” Westine said. “We’ve proven that even in a dysfunctional political environment, we’re able to get things done. We continue to stay very strongly committed to bipartisan cosmetics legislation. We’ve been at it a long time, and we’re very optimistic — many key committees have said they want to work with us, so we think 2016 is our year. Also, we continue to show that the need to promote sound science is key.”
While once PCPC could be counted on to have issues with two groups — NGOs and California and its regulations — Westine said PCPC is having meaningful conversations with both parties. “We’ve had a lot of California lobby days and we now have relationships with people in the state and Congress, so when something comes up we’re able to tamp it down a little bit,” said Westine, noting that Sen. Dianne Feinstein (D, Calif.) has helped facilitate dialogues between the factions. “Also, we’ve done well reaching out to certain moderate NGOs. We’ve even had conversations with those that, in the past, were not as reasonable or basing their arguments on sound science. We’re having dialogues, rather than sitting in our respective offices and throwing bombs at each other. Based on a lot of those conversations, we’ve seen a lot fewer attacks on the industry. I anticipate, and I’m very hopeful, that we will have several NGO partnerships to announce soon.”
Expected to help with the education process, cosmeticsinfo.org, PCPC’s ingredient Web site, has grown 112 percent, said Westine, and it’s been rejiggered to be more consumer-friendly.
There will also be a focus on international business. “We’ve strengthened our environmental science capability, and we’re working hard on global harmonization,” Westine said. “At this meeting, we will have a dozen or so different international associations, and on Wednesday [March 2] we will have a global summit, where we’ll go over work projects and key issues, such as microbeads, e-commerce and digital communication. I believe it’s a great service to the industry, to show that we have one voice and one vision for beauty.”
One issue likely to arise is China’s controversial compulsory animal testing and ingredient registration policies, and Westine noted that the organization recently sent a delegation to China to discuss possible solutions. Another delegation headed to Brussels to hash out European Union concerns, such as microbeads, with Cosmetics Europe.
“Right now, we don’t launch in China at the same time as we do everywhere else, because the registration policies are so onerous,” Breen said.
Last year’s hot-button issue, the Trans-Pacific Partnership Agreement, has made significant progress. The agreement, which includes 12 countries — the U.S., Japan, Malaysia, Vietnam, Singapore, Brunei, Australia, New Zealand, Canada, Mexico, Chile and Peru — has been compared to the European Union agreement. TPP’s goal, PCPC says, is to strengthen economic ties between member nations and remove onerous tariffs. The agreement was finalized in October and signed in New Zealand on Feb. 4.
“With the inclusion of an Annex on cosmetics products, TPP is the first trade agreement to promote regulatory convergence and address technical barriers to trade that impede the personal-care products industry,” said Francine Lamoriello, executive vice president of global strategies for PCPC. “The Annex provides an important framework for international regulatory best practices that will raise standards and allow our industry to continue to provide safe, innovative products in a timely fashion to consumers around the world.”
Continued Lamoriello: “The cosmetic and personal-care products industry is a global industry that requires open markets and transparent, consistent regulatory environments. International trade is a critical component to the success of our industry, and significantly contributes to our ability to compete globally, to expand manufacturing and employment, and to support other industries, such as advertising, packaging and transportation. The personal-care products industry also provides continued technological innovation and supports small- and medium-sized businesses.”