According to research firm NielsenIQ, CBD beauty and cosmetics sales will nearly double in 2021 to $600 million.
Beauty and cosmetics, including facial lotions, serums and skin nourishment and renewal products, accounted for approximately 18% of the CBD market in 2020, with about $340 million in sales.
Nielsen says CBD cosmetics will continue gaining market share, reaching 20% of the overall CBD market by the end of 2021. With supply-chain improvements and favorable FDA regulations, the category could reach $2 billion by 2025.
“For many CBD brands, cosmetics and beauty are a very logical way to diversify products,” said Nielsen associate director Rick Maturo.
Retailers, manufacturers and brands face challenges, however. Unlike other CBD categories, beauty and cosmetics sales are primarily driven by women, particularly young women. This may somewhat limit brands' reach among male customers.
CBD's biggest uses concern sleep and anxiety. Because cosmetics do not carry those expectations, brands may struggle to appeal to existing CBD users. Given CBD's effects on skin health, however, that should not last long. As CBD awareness grows, use of related products will also rise.
Price is another challenge. CBD-containing products cost more than those without it, which may lead customers to choose alternatives. As CBD becomes more widespread and producer numbers rise, prices should fall.
