The number of makeup brands looking to sell—Rare Beauty, Makeup By Mario, Kosas, Jane Iredale, Glossier and Merit among them—has been growing, but parties interested in buying them don’t seem to be, and it’s expected that not all of the brands will transact in the near term. 

During a panel discussion on color cosmetics at Beauty Independent’s Dealmaker Summit last month in New York City event venue Convene, Sasha Radic, managing director of beauty and wellness at investment bank Jefferies, offered an explanation for why some of the makeup brands are discovering it’s hard to nail down a deal, at least right now, and was instructive on how other brands can avoid that fate. She said, “Traditionally, the buyer universe for color is smaller. So, how do you as a brand showcase that you are built to last, that you have the architecture that people love so much in skincare?”

Answering her own question, Radic, who was joined by Sarah Woelfel, co-founder of Cult Capital, backer of makeup brands Subtl Beauty and Lawless, Jonathan Velazquez, co-founder of Poundcake, and Kimberly Villatoro, CEO of Patrick Ta Beauty, for the panel, continued, “The biggest successes in color have been built to be global. They’ve been built to be lasting, but they’ve been built around a very distinct point of view, whether that is they have a makeup artist founder [à la Bobbi Brown or Charlotte Tilbury], or they have an ingredient story [Ilia], or they have a view on inclusivity [Fenty].” 

Color cosmetics is being whiplashed by trend after trend driven by TikTok. Lip products, for example, have been blazing. Between 2023 and the first quarter of this year, market research firm Circana figures sales in the prestige lip product segment increased over 26%. Blush has followed lip merchandise as the trending product du jour, influenced by the blush-centered “strawberry girl” look popular on TikTok. Countless brands, including Rhode, Huda Beauty, Milk Makeup and Hourglass, have unleashed blushes this year.

The panelists underscored it’s crucial for makeup brands to assemble an assortment that can outlast fleeting trends. Radic said winning makeup brands “are connecting more broadly than any specific subcategory of the moment, and that makes those brands last and that lets these brands travel. How do you ensure that you have a brand that has something so clear and so distinct that, despite category ins and outs or geographies, it works?  How are you creating loyalty in your consumption pattern? How can you win replenishment categories where people come back to the same product over and over and over again? And that’s by building a really strong, replicable foundation.”

Patrick Ta launched in 2019 with body oil, lip gloss and a setting fan, but expanded its assortment to include bronzer and blush the same year. Sales of the brand’s Powder + Cream Blush Duo are benefiting from the blush trend, according to Villatoro, but she pointed out Ta, the makeup artist behind the namesake brand, has long been known for his expert blush technique, which involves using powder first and then cream.

Villatoro advised brands considering jumping on a product or shade trend to think about how that move will authentically serve brand identity and distribution. She said, “If you’re in Sephora, do you have a right to win in that category? Do you have a point of difference? Is the retailer going to support you in a meaningful enough way to make the investment and tools to develop that new formula and go after it worth it?”

Lawless launched bestseller Forget the Filler Lip Plumper Line Smoothing Gloss in 2021 to deliver a plumper pout without surgical enhancement. It’s initial purchase order for the product was 5,000 units, but it underestimated the demand. Lawless has since sold through approximately 500,000 plumpers, and its projected purchase order for 2025 is roughly 1.5 million units. “The growth has been stratospheric,” said Woelfel.

Forget The Filler Lip Plumper Line Smoothing Gloss

Forget The Filler Lip Plumper Line Smoothing Gloss

product in 2021 promising a plumper pout without surgical enhancement. When the brand first placed the purchase order at the end of 2020, it was for 5,000 units of a single sku, Rosy Outlook. It has now sold through approximately 500,000 plumpers and its projected purchase order for 2025 is approximately 1.5M units. 

Sephora showcased the gloss in a multi-brand clean beauty campaign and placed the product at the front of its stores nationwide. In addition, the beauty specialty retailer has featured the product in kits such as Sephora Favorites Hydrate & Plump Kit. Lawless Beauty has gondolas in 65 Sephora stores and is in full Sephora distribution with the chain’s clean end-cap. The brand has developed a hero franchise with 15 shades of plumping gloss, lip liners, lip masks, balm sticks and lipsticks, and it recently extended the Forget the Filler franchise into skincare with the product Perfecting Cream. 

Running a color cosmetics brand isn’t all glossy. Aside from fierce competition, Woelfel highlighted challenges around distribution and softening consumer demand. “It’s a pretty dense landscape from a retail channel perspective and so brands find themselves a lot of times at the mercy of those retailers, and they struggle to really negotiate from a point of offense,” she said. “We anticipate that we [consumer demand] could even continue to slow a little bit more over the course of the next few quarters.”

“How do you as a brand showcase that you are built to last?”

Woelfel identified inventory management and working capital as major pain points. “The cost to make and place initial purchase orders for new products has gone up,” she said. “Inventory requirements are higher. Labs are requiring larger MOQs.”

By the time Velazquez and his co-founder Camille Bell launched Poundcake in 2021, the brand had gone through three manufacturers. Poundcake’s red liquid lipstick Cake Batter comes in five shades of red made for different skin and lip tones. “We pretty much realized that we needed to treat all color how the industry treats foundation, so no universal shades,” said Velazquez. “Many manufacturers didn’t understand the complexity when we went in and weren’t appreciative of how picky we were when we got to that process because it requires a lot of testing.”

Poundcake used crowdfunding and a million-dollar prize from Pharrell William’s Black Ambition Black to finance production and enter Ulta Beauty and Credo doors. Still, the brand has run into fundraising obstacles. Radic mentioned the opportunity for brands focusing on diverse audiences is a promising one for investors, but emphasized the beauty industry has a long way to go to fully embrace inclusivity.

“People and strategics are really thinking about what are brands bringing to this offering, but I also think that it’s also very important for authentic voices to come through and speak to their own communities in their own ways,” said Radic. “There should be more room for lots of different types of brands that are speaking to lots of different audiences as well as the legacy brands.” 

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