SoPost industry round up | October sees luxury boom

The start of the fourth quarter of 2025 is seeing the beauty and CPG industry settling into a relatively sophisticated equilibrium. On one side, persistent economic caution is amplifying ongoing consumer demand for proven value and high-efficacy, multi-tasking products. On the other, relentless tech-driven innovation - from biotech ingredients to hyper-personalization via AI - is reshaping entire industries at breakneck speed. Luxury, masstige and mass brands that learn to master this balance are poised to dominate the holiday season and beyond.

The luxury realignment

One of the most significantly strategic moves in luxury beauty took place in October, and is poised to profoundly reshape the competitive balance of the fragrance segment globally.

Indeed, the announcement of L'Oréal's acquisition of the Kering Beauté business for €4 billion (approximately $4.86 billion). This recent deal immediately signals an incredibly strong strategic position, and highlights a massive investment in the high-growth luxury fragrance segment.

As part of the acquisition, L'Oréal gains direct ownership of the luxury fragrance house Creed. This instantly bolsters its presence in the coveted niche fragrance market. Crucially, the deal also grants L'Oréal 50-year exclusive fragrance licences for more iconic Kering houses, including Bottega Veneta and Balenciaga. It also includes the rights to assume the 50-year Gucci fragrance licence upon its current expiration, expected in 2028. This ensures that L'Oréal  will command a dominant share of the global prestige fragrance market.

For Kering, the sale - under the helm of its new CEO - is a move to reduce net debt, which stood at €9.5 billion at the end of June. Analysts estimate that the deal will help the luxury conglomerate refocus on its core fashion business, after the beauty division posted a €60 million operating loss in the first half of the year.

In the wider FMCG sphere, October saw Unilever cement its strategic focus. The company published a shareholder circular regarding the planned demerger of its ice cream business into a separate listed entity, The Magnum Ice Cream Company N.V. The transaction is expected to complete in November, and is part of a broader strategy to simplify Unilever's portfolio and focus on higher growth, more profitable segments. This also includes the sale of its prestige skincare brand, Kate Somerville. The company was sold to Rare Beauty Brands in mid-October.

Separately, the Swiss fragrance giant Givaudan announced its acquisition of US-based fragrance house, Belle Aire Creations, with the aim of strengthening its B2B agile scent development capabilities in the North American region.

The convergence of prestige, efficacy and household value

As month one of Q4 draws to a close, North America maintains its position at the forefront of tech-driven growth and premiumization, while the European markets continue to navigate cautious consumer spending with a dual strategy of accessible value and sustainable luxury.

North America
The North American market is projected to grow at a CAGR of 5.20% between 2025 and 2034, and remains defined by an aggressive embrace of premiumization, digital commerce and efficacy across beauty and personal care. The US market size, set to reach $105.1 billion in 2025, is exceptionally reliant on digital sales, which account for 41% of all beauty and personal care sales. Consumer spending is heavily directed towards premium and ultra-efficacious skincare, with 70% of beauty brands now prioritizing hyper-personalization via AI.

In North America, October was a month of significant brand activation:

In skincare, brands with highly dedicated and influential customers continue to shape the market. While Hailey Bieber’s Rhode launched new under-eye patches at Sephora, the debut of prestigious Japanese brand Decorté launched at Ulta Beauty. This is a strategic launch, leveraging the Japanese beauty market’s estimated 3.9% CAGR through 2030.

In cosmetics and haircare, the market saw new celebrity endorsements and product innovations. Estée Lauder named award-winning Nia Long as its first brand ambassador exclusive to North America, while celebrity hairstylist, JVN Hair, launched its Perfèct StyleFix Stick. Meanwhile, MUA, Hung Vanngo, debuted his eponymous Beauty Creamy Matte Longwear Lipstick. Digital innovation remains a high priority, demonstrated by e.l.f Cosmetics launching an innovative partnership with Twitch for its native in-stream live-shopping.

In the FMCG grocery and household sector, the focus is on maximizing consumer value and convenience. Procter & Gamble (P&G) underscored this with the October nationwide launch of Charmin’s “biggest role yet” (1700 sheets). This is a clear strategy to deliver cost-saving convenience to consumers. The continued shift toward plant-based alternatives and functional foots also remains strong, supported by high consumer purchasing power and the technical specialization seen in Givaudan’s recent acquisition, strengthening its supply of household and personal care scents.

United Kingdom
The UK beauty sector, which saw its GDP contribution grow by 5% in 2024, is navigating a challenging economic climate. Due to persistent inflation pressures, the consumer strategy of ‘high-low’ beauty is dominant. Despite this, October was a period of high revenue driving events and major launches.

The annual British Beauty Week (20-26 October) anchored retail activity, with Boots celebrating the opening of its first-of-its-kind fragrance boutique in Broadgate Central, launching over 400 new scents from luxury and niche houses to elevate its fragrance portfolio. This aligns with the seasonal surge driven by premium beauty advent calendars, with some valued over £1,000 driving significant Q4 revenue.

In the mass market, Superdrug launched over 400 Korean beauty products, capitalizing on the enduring appetite for efficacious skincare at value. CeraVe launched its first makeup removing cleansing balm, exclusively at Superdrug, and new autumnal cosmetics and haircare collections from Vieve and Hair by Sam Mcknight launched too.

France
France is projected to grow its cosmetics market by 3.3% between 2025 and 2026, with its premium beauty and personal care market alone estimated at $8.52 billion this year. The market is characterized by an unwavering demand for prestige, heritage and uncompromising sustainability standards.

In beauty, October was dominated by strategic positioning and innovation. The L'Oréal/Kering M&A activity underscores France’s dominance in fine fragrance - a sector where L'Oréal reported accelerated momentum in its home market as of Q3 2025. Indeed, France hosted COSMETIC 360 in Paris, the global innovation trade show, which reaffirms France’s status as a leader in sustainable cosmetics technology and development. Domestically, L'Oréal Paris bolstered its mass-market offerings with new launches like the Revitalift Eye Bag Instant Eraser and the Elvive Glycolic Gloss haircare range, driving organic growth.

In FMCG retail and compliance, the operational challenge is centered on market consolidation and mandatory transparency. Indeed, the official commencement of the ecoscore mandatory environmental labelling on October 1 for textiles, pushes French brands to accelerate sustainable sourcing across all consumer goods.

Germany
Germany remains the single largest national market in Europe. Its beauty market value is estimated at $22.4 billion in 2025, projected to grow at a 4.76% CAGR. The market is driven by a highly rational consumer base, prioritizing clinical performance, natural ingredients and clear labelling. Demand for dermocosmetics remains strong across both mass and premium tiers, projected to advance at a 5.55% CAGR.

In beauty and personal care, October saw major strategic brand activations from German Leaders. Beiersdorf celebrated the 100th anniversary of the NIVEA blue tin, and announced the extension of its global partnership between NIVEA MEN and Real Madrid through 2030. This underscores a long-term commitment to global brand equity. Meanwhile, the company has said organic growth in its consumer business - which also includes Eucerin and La Prairie is expected to be 2.5% for the full 2025 financial year. This means that Beiersdorf has downgraded its growth forecast, due to a "slower market environment".

Concurrently, Douglas Group launched its new international brand campaign platform, WELCOME TO BEAUTIFUL, designed to unify communication and drive crucial Q4 sales for events like Beauty Friday (Black Friday). This activity highlights the fierce omnichannel competition in the German market, where the online retail segment is forecast to post a strong 6.41% CAGR.

In the FMCG grocery sector, consumer sentiment remains highly cautious, with 62% of German consumers feeling negative about the national economic situation. This caution means strong domestic players are focusing on value for money and high-quality offerings are performing well. 

The strategic shift towards niche luxury continues

Across both beauty and non-beauty FMCG, global brands are executing a strategic shift aimed at establishing control over future high-margin segments. The L'Oréal and Kering deal exemplifies this in luxury, securing dominance in the high-growth fragrance category. This quest for scarce, efficacious assets is mirrored in skincare, seen in Rhode’s continued North American retail disruption, and the demand for high-tech dermocosmetics in Germany. 

The ultimate differentiator in the upcoming months and into 2026 will be how the fusion of digital agility and value-driven efficacy continues globally. The winners will be those who manage the strategic complexity of the market, while balancing consumer cost cutting, with the premium innovation required for high-growth segments.