Consumer shopping trends shaping celebrity CPG brands

These days, it seems like there’s a new celebrity-founded CPG brand announced everyday—this year alone, Beyoncé, Serena Williams, and even The Rock were a few major names to debut new brands.

They’ve proven their ability to grab headlines and retail placements, but with the exception of a few brands, their impact on consumers’ wallets hasn’t completely stolen the show just yet. These are the major shopping trends shaping celebrity beauty and food and beverage brands, and the challenges that may lay ahead.

Starstruck

Celeb beauty brands, as of November 2023, have reached $1 billion in sales, according to NielsenIQ. But through April 2024, sales rose to just $1.1 billion, with their growth rate softening to 12%, down from 44% at the end of 2023, due largely to celebrity cosmetic brand sales. Meanwhile, Logan Paul’s hydration beverage brand Prime pulled in $1.2 billion alone in annual sales last year, per Bloomberg.

While a wider swath of celebrity beauty brands have established near or above 1% household penetration, they only on average land at 2.8%, while food and beverage brands have achieved an average of 20.3% penetration, thanks largely to Prime (24.1% penetration) and MrBeast’s Feastables (4.7%), per Numerator. In beauty, Rihanna’s Fenty Beauty leads the pack with 4.8% household penetration, followed by Selena Gomez’s Rare Beauty (which is reportedly worth $2 billion) at 3.4%.

Retailers like Ulta have been relying on new celeb brands to bring in customers. While Ulta Beauty reported a sales slowdown in its first quarter, CEO Dave Kimbell said in the beauty retailer’s first quarter earnings call last month that exclusives with celebrity brands Wyn by Serena Williams and Kylie Jenner Fragrance were among the efforts driving sales and consumer acquisition and re-engagement. Kimbell also noted that strengthening its assortment—including other celeb exclusives like Bella Hadid’s fragrance brand Orebella—was part of its plan to kickstart growth.

Melanie Bartelme, food and drink analyst at Mintel, noted that there is more of a “natural connection” between celebrities and beauty brands (especially because celebrities are often known for their appearance) than there is with food and beverage, and differ in terms of consumption patterns.

“It is completely acceptable to be like, ‘Well, I have 20 different lipsticks, like that is part of how I engage with beauty. It’s a little bit different to be like, I have 20 different condiments, because 20 different celebrities I like have created them,” she said.

Show business

Celebrity brands reach largely Gen Z and millennial consumers, per Numerator. These groups are also the most aware of brands’ affiliation with a celebrity, while only 22% of Boomers were aware of brands’ association with a celebrity. In general, 32% of celebrity brand shoppers knew a brand has a celebrity affiliation, and 1 in 5 could identify who it actually was. Numerator analyst Shawn Paustian told Retail Brew via email that as Gen X and Boomers continue to account for a significant chunk of CPG shopping, getting an “in” with younger consumers may not be enough.

“For these brands to succeed as they expand distribution and open to a wider audience today, the marketers of these brands will need to build up their traditional marketing muscles that long-standing consumer brands have done, such as launching trade promotions, building retail partnerships and diversifying their marketing mix,” Paustian said.

Numerator also found that celeb beauty brands—even Rare Beauty and Fenty, the two with the highest penetration—have repeat purchase rates below the 39% average for beauty brands. Circana data also shows that prestige celebrity brand makeup sales dipped 5% year over year in Q1, though fragrance, skin care, and hair saw sales boosts.

Now, some investors are starting to reassess how they look at celeb brands, with Springdale Ventures founding partner Genevieve Gilbreath telling Modern Retail that the product and business itself is becoming more essential, and a celeb founder is just “icing on the cake.”

In food and beverage, a bad-tasting product is an issue “no matter who makes it,” and as consumers, and even content creators, “look a little more critically” at these products, it’s “going to come down to what that particular consumer really values,” Bartelme said.

“Even the most revered names in entertainment and social media cannot carry the weight of a brand on their own,” Paustian said. “If a brand begins to focus on traditional brand principles such as driving product quality, it could be an even more salient threat than they are today.”