Inside the Prestige Haircare Boom

High-end hair care is making its way to the forefront of the beauty scene.

In 2021, prestige hair care sales grew 32% to $2.6 billion and the category is expected to double in size over the next two years, said beauty industry adviser Larissa Jensen. at market research firm NPD.

Brands see the boom: Living Proof has recorded five straight quarters of sales growing more than 30%, chief executive Zach Rieken said, while hair care company DpHUE is expected to achieve double-digit sales growth this year , the company said. K18, a biotech hair care brand focused on reversing damage, said sales increased by 3,000%.

Standard products like shampoo and conditioner are not the main drivers of this growth. After the pandemic shutdowns, consumers began experimenting with salon-level treatments at home, and shoppers now continue to try new hair oils, restorative serums, and scalp treatments.

Consumers are especially interested in products that contain new ingredients, like Olaplex’s bond-building technology, and are looking for specific formulations that treat damaged hair or dry scalps, in a behavior change that Priya Venkatesh, Vice -senior president of skincare and haircare merchandising at Sephora, called “hair skinification”.

“Why would you buy a shampoo that simply cleanses your hair when you could buy one that penetrates your dermis and helps create healthier hair?” said Cassandra Grey, Founder and President of Violet Gray and Global Beauty Advisor at Farfetch.

The fastest-growing prestige hair-care products cost more than $25, Jensen said, and shoppers are willing to pay top dollar for them as well.

Each player hopes to replicate the success of Olaplex, which went public last year with a valuation of over $15 billion and achieved $598 million in sales last year. (The brand’s stock price has fallen in recent months.)

In recent months, Sephora has launched K18, along with Jonathan Van Ness and Crown Affair’s JVN hair care line, which makes luxury hairbrushes and other clean hair care products. This month, Ulta has a line coming from Kardashian hairstylist Andrew Fitzsimons. He also launched sk*p, founded by the founder of skincare brand Farmacy Beauty, and black-owned haircare line Mielle. Skincare brands like Augustinus Bader, Dr. Barbara Strum and The Ordinary are also launching hair products, and CPG conglomerates are making acquisitions in the space. Procter & Gamble bought Ouai from Jen Atkin late last year.

Booming haircare startups must compete in a landscape still dominated by mass-market giants. But experts say they can still build a meaningful business, as long as brands pay attention to evolving ingredients and are able to stand out with innovative packaging or impactful marketing.

“It’s a massive undertaking, and there’s a lot of room to play,” Gray said. “Think about having the best product that delivers on an authentic promise, in a category where ingredients and effectiveness matter.”

All eyes on the ingredients

Innovative formulas with science-backed ingredients are becoming table stakes in hair care.

Olaplex is the pioneer, having developed a cult following since its founding in 2014 for its star ingredient, bis-aminopropyl diglycol dimaleate, which repairs broken bonds in hair. (The brand has also been the subject of recent public concern over the inclusion of lilial, an ingredient banned by the EU due to alleged infertility concerns. Olaplex told BoF that although the ingredient “l phasing out is limited to the EU, Olaplex has proactively removed the lillial from our #3 Hair Perfector worldwide.”)

Other brands are finding success with a similar approach. K18, launched in late 2020, has developed ingredients from synthetic biology applications used by the pharmaceutical industry for products that repair hair damage. The brand would have reached $75 million in retail sales in 2021 and raised $25 million in funding from VMG Partners in January.

With the so-called “hair skinification”, brands are paying more attention to the scalp and incorporating ingredients more traditionally associated with skincare. In early 2021, shaving giant DTC Harry’s launched Headquarters, a scalp-focused haircare brand.

Olaplex products focused on hair repair.

Consumers looking for solutions to thinning or hair loss are drawn to classic skincare ingredients like “Hyaluronic Acid, Tea Tree, Peppermint, and Rice Water “said Jessica Philips, vice president of merchandising at Ulta. Fitzsimons’ new line offers products with hyaluronic acid and ceramides, while brands like Briogeo and Monpure make products with retinol.

Mark Veeder, the founder of hair care company sk*p, told BoF he knew the brand needed to hit the market with an innovative ingredient to help the brand stand out in a crowded space. He developed “G-HoneyBiome,” bio-fermented honey that Veeder says boosts the microbiome.

“Consumers want something that actually makes a difference,” Veeder said. “Many of them are now learning that their scalp is an integral part of their hair system.”

Ingredient innovation has become a way for brands to signal product efficacy, which is a top concern for hair care customers.

“There’s so much bullshit out there because [companies] are trying to make money,” Gray said. “The beauty [brands] that are growing rapidly are those that are backed by science and produce breakthrough and innovative products.

But while beauty shoppers may be more inclined to spend on specialty hair products, many will still associate them with big-brand shampoos. To allocate resources to meet consumer demand, Beauty Independent editor Claire McCormack recommends that brands devote R&D budgets to solution-focused articles.

“Buyers don’t always want expensive cleaners because they wash right away, but they will buy specialty products…that treat and repair,” she said.

How to stand out

In selling hair products, inclusivity is paramount. The beauty industry has long neglected black shoppers and other consumers of color who may not want slick textures or sleek hair, but are still looking for specialty formulas. Both Sephora and Ulta have taken the 15% pledge and are increasing their stock of black-owned brands and products for natural hair.

Inclusiveness is also important in marketing, said Fitzsimons, who chose to feature models with all types of hair textures in her brand images.

“Women have been told that one type of hair is glamorous, but all hair textures should be loved,” Fitzsimons said.

The new hair care line from celebrity stylist Andrew Fitzsimons offers products for multiple textures.

And in crowded haircare aisles — McCormack described beauty retailer shelves as “a circus” — packaging can also help brands stand out. Some hair care brands, like Olaplex, K18 and dpHUE have opted for more minimalist branding, but McCormack said there are ways to capture the customer’s eye, with colors or uniquely shaped packaging. Startups like Nolé, By Humankind and Christophe Robin make solid shampoos to eliminate plastic while sk*p manufactures its hair care products in biodegradable cardboard.

Ulta’s Philips also recommended haircare brands capture the new excitement by producing content that will help customers understand a product’s effectiveness.

“A lot of it is about content, where you can build a community that’s really excited about the brand,” she said. “It can help these smaller brands break through.”

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