Top ten cosmetic industry trends to look out for in 2016

In no order of preference of priority, here is the list of ten trends we think you should put on your radar, which will be explained in greater detail once you have seen the video.

• Sustainability – packaging, water scarcity and microbeads
• Biotech – winning consumers
• Neurocosmetics – combining wellbeing and sensorial
• DIY beauty formulations – blending at home
• Organic – ingredient supply issues and more defined products
• Experiential retail – a destination channel
• Financial forecast –  Look out for Coty and indie brands
• Pro-aging products – more launches in 2016
• Latin American region – slower growth will reshape market
• Beauty on a micro scale – no more one size fits all

Simon:​ Hello, and welcome to this latest addition of CD Buzz. From the CosmeticsDesign team, I'm Simon Pitman.

Deanna:​ I'm Deanna Utroske. Today, we're forecasting the top 10 trends of 2016. Let's get started.

Simon:​ So sustainability. I've identified three areas for next year where it's going to be very important. And the first one would be packaging. Eco-friendly and recyclable packaging will continue to be very important for consumers. And they'll be looking out for that in 2016.

The second area would be water. Now consumers are getting more and more aware that water is a scarce commodity. So in line with this, manufacturers' claims that they're using less water in the manufacturing process and in the formulation will win bonus points. Likewise, we'll be looking at products with less water use claims.

And then the final one would be micro beads. Now snooze or you lose on this one in 2016. Because by the end of 2017, it's likely to be outlawed.

Deanna:​ In 2016, Biotech will win consumers over. We'll see consumer demand for science based beauty satisfied with products touting eco-designed or green chemistry products, like YÜLI Skincare. This gives ingredient manufacturers carte blanche to think beyond what is familiar and invent what is possible.

Simon:​ Next trend is neurocosmetics. We've spoken about this in a previous edition of CD Buzz. Like I said, I'm not entirely convinced by this trend. But it is interesting that it underlies the convergence of well-being with the sensorial which are two very important trends. And I think off the back of this we're going to be seeing more and more consumer products with these kind of claims.

Deanna:​ There will be a surge of products which are intended to be blended. DIY brands like Lolly Beauty will be the preferred method of personalizing skin care, hair care, and color cosmetics. Manufacturers will move to create DIY ingredients that make sense in the hands of consumers the same way that the food industry say, makes a protein powder to be stirred into a smoothie.

Simon:​ Yes, and next up is the organic trend. Now this has been on our radars for many years. But it's really starting to come in to its own now with most market researchers agreeing that in the United States this category is growing in double digit figures. Now I've spoken to a lot of ingredient suppliers this year and they've all said that the market is on fire. The demand for these kind of ingredients is incredible. But this is throwing up challenges for them to source reliable, year round supplies of raw materials. Now on the consumer product side in 2016, look out for increasingly defined, organic products.

Deanna:​ Look for experiential retail to take over in the new year. This trend will go beyond omni-channel thinking and compel shoppers to touch and feel a brand's product both online and in stores with doors. Experiential retail will not only ensure that every touch point is a possible point of sale, but that every touch point is a destination the shopper's journey wouldn't be complete without. Formulators will help brands succeed here by developing products with sensorial brand cues.

Simon:​ So turning to financial predictions for 2016. Now I predict that there's going to be continued merger, and acquisition activity in specific areas of the industry. Now Coty was hot on the acquisition trail this year, namely with that huge acquisition of P&G brands, valued at 12.5 billion earlier this year. It says, it's still on the acquisition trail. So there could be more to come in 2016.

Deanna:​ There will be more pro-aging product lines in 2016. Consumer passion for fitness and wellness alongside the fact that people are living better lives longer makes room for brands like White Hot Hair and more subtle product lines that support natural beauty looks at every age. Manufacturers will necessarily test for effective results of their ingredients on older skin and hair as well as develop new ingredient portfolios to keep up with the shift.

Simon:​ So next up, I'd like to focus on the Latin American region. Now the big news here is that growth is slowing considerably in the Latin American region, mainly off the back of Brazil, the largest economy which recently went into a recession. And the longer term forecast doesn't look so good. On the consumer side, in the Latin American region, the economic difficulties are likely to translate into lower consumer spend.

Deanna:​ In the new year, savvy brands will seriously re-imagine market size and focus. In today's global economy, lumping consumers together according to generation or ethnic background is a bit antiquated. It makes better business sense to formulate and market according to needs and tastes with a psychographic approach. And similarly, the increased consumer appetite for farm-to-face brands, indie beauty and artisanal products illustrates that a sizable percentage of the market responds well to micro-economic solutions. So keep visiting Cosmetics Design to see all this, and more unfold in 2016. We'll see you next year.

Simon:​ Looking forward to seeing you then.