Analysis of the CBD Cosmetic Market for 2022
Times were never so exciting for investing in the CBD cosmetic market. The year 2021 has been revolutionary in many ways. It demonstrated that how mature and resilient is the industry as it kept growing even in pandemics. But more vitally, it has been a year of improved European regulations.
The European Union has finally recognized cannabidiol (CBD) as safe for adding to cosmetics. Until now, only synthetic CBD could be added to cosmetics. But in February 2021, the EU added cannabis extract or resin or tincture to the CosIng database. CBD cosmetics regulations update will ensure future growth. In addition, the requirement for organic CBD oil for cosmetics will increase.
CosIng is a European database of components that may be added to cosmetics. This decision will definitely provide much-needed impetus to the CBD cosmetic industry. As lack of clarity in specific regulations, the risk of being fined kept European manufacturers from venturing into the CBD cosmetic market.
In fact, European Industrial Hemp Association (EIHA) proposes a three-tier approach in its position paper:
- To strictly regulate high dose CBD products and consider them as medications.
- Recognize a medium dose of up to 70 mg/d as food supplements, thus allowing its wider use, like silymarin, ginkgo biloba, or certain vitamins.
- Allow wider use of low concentration CBD in food products, cosmetics, and other items for daily use.
CBD Cosmetic Market Size
At present, CBD infused cosmetic market is quite disintegrated, and numerous players dominate it. However, such a scenario offers lots of opportunities for new entrants. Because entering the consolidated market dominated by few brands is challenging.
There is poor understanding regarding the global CBD cosmetic market size, as data is quite hazy. Nonetheless, one can confidently say that the global CBD cosmetic market is anywhere between 1 billion to 1.5 billion USD. And what is more attractive is that this segment is fast growing.
CBD has provided many small-time players to come up with value-added, premium cosmetics. However, the good thing about CBD infused cosmetics is that many lesser-known players are able to charge a much higher price for their products.
CBD is now in almost every kind of cosmetic product like mascara, creams, moisturizers, facemasks, oils, cleansers.
Some companies are also introducing CBD infused products for more specific needs like helping with oily skin, managing acne, reducing skin irritation, and much more.
CBD Cosmetic Industry Growth
Here again, the projections differ. Nonetheless, the market report by Technavio suggests that the market has witnessed a CAGR of nearly 25% in the last few years, and this growth rate is only expected to accelerate.
There is no doubt that the US remain the market leader. It is because the EU has been more stringent regarding the widespread use of CBD. Further, European agencies took longer to legalize CBD infused cosmetics. At present, the US alone is about 40% of the global market. However, the EU will definitely pick up in the near future and may become as strong as the US market or even exceed it.
Entering this segment may help existing CBD manufacturers to expand their portfolio. In addition, it may be a good idea for existing cosmetic producers to come up with CBD infused range of cosmetic products. It is evident that CBD infused cosmetics will continue to enjoy premium prices in the foreseeable future.
Current CBD Cosmetic Industry Trends
Most trends clearly indicate that CBD is bound to become one of the essential components in the cosmetics industry. Further growth in the sector will be supported by ongoing research.
In the EU, it is already legal to claim CBD benefits for skin like antioxidants, skin conditioning, skin protection, and even anti-sebum.
Most users view these cosmetic products as cosmeceuticals; thus, they are not just buying them to enhance their beauty but also to get rid of some minor but chronic skin-related issues.
It is quite possible that CBD would see much broader use in even more skin conditions like eczema or psoriasis in the future.
CBD can considerably help overcome skin redness, dullness and has a calming effect.
CBD oil is quite a new trend in cosmetics, as evident from the graph below. Although there has been some interest in it for the last 10 years, it has really picked up from 2017 onwards. The growth of interest in CBD oil is incredible.
Is CBD going to be the next big thing in cosmetics? CBD beauty trend seems to confirm that. So CBD oil makeup product is the next big thing.
For those considering entering the segment, these are the best days. Despite interest in CBD cosmetics for the last 10 years, it is vital to understand that the main increase in interest has only been since 2019. So, the market is relatively nascent, and there are few established players. It means that the initial challenges of entering this segment are low.
Essentia Pura’s Analysis of the CBD Cosmetic Market
Here are Essentia Pura’s takes on the CBD cosmetic market:
- It is still a nascent market, with low market access costs
- There has been a sudden increase in interest in CBD cosmetics since 2019, thus a sudden upsurge expected in the market in coming years
- CBD market in EU may pose CAGR of above 30% for next five years, or at least up to 2025
- The legalization of natural CBD extract and its addition to the CosIng database will further boost the EU CBD cosmetics market
- One can still expect a premium price for CBD cosmetics
- Demand for CBD cosmetics private label will increase
Opportunities for CBD Cosmetic Businesses in 2022
CBD can be added to almost every kind of cosmetic product. Therefore, it does not essentially have to be targeted at managing some skin conditions. In fact, decorative cosmetics will remain a bigger segment than cosmeceuticals. Thus, more people would buy CBD infused mascara than CBD products for managing acne.
People buy CBD cosmetics due to perceived benefits. They believe that CBD cosmetics are in some way superior, and it may be the case in some instances. Thus, CBD infused creams, moisturizers, serums, soaps, masks, lip balms, eye balms are all in trend and offer opportunities.
To conclude, CBD cosmetics offer an excellent opportunity to expand the existing CBD business. It is an equally good segment for newcomers. It is still a segment in its infancy, ready to witness a boom in coming years.