Personal Care Products Manufacturing

The US personal care products industry includes about 750 companies with combined annual revenue of $40 billion. Major companies include Procter & Gamble, Johnson & Johnson, and Estee Lauder. The industry is concentrated: the 50 largest firms account for nearly 70 percent of industry revenue.

This industry includes companies engaged primarily in preparing, blending, compounding, and packaging toilet preparations. Products produced include makeup, shampoo, creams and lotions, perfume, skin care products, sunscreen, mouthwash, and shaving products.

COMPETITIVE LANDSCAPE

Demand is driven by population growth and consumer preferences. The profitability of individual companies depends on product innovation, effective sales and marketing, and efficient operations. Large companies have scale advantages in purchasing, manufacturing, distribution, and marketing. Small companies can compete effectively by offering specialized products. The industry is capital-intensive: average annual revenue per worker is over $600,000.

PRODUCTS, OPERATIONS & TECHNOLOGY

Major products include cosmetics, hair products, and creams and lotions. Cosmetics (makeup, deodorant, and nail products) are 33 percent of industry revenue; hair products, 25 percent; and creams and lotions, 21 percent. Other products include perfume (10 percent); mouthwashes (2 percent); and shaving preparations (2 percent).

Cosmetics, such as lipstick, follow current fashion trends and come in a wide variety of colors. Lipstick is made of dyes and pigments in a fragranced oil-wax base. Ingredients are melted separately, and then oils and solvents are ground together with desired color pigments. The manufacturing process includes three distinct steps: melting and mixing ...