Why Affordable, Private-label Beauty Brands Are on the Rise

Just as total beauty saw a post-pandemic swell in sales, the private-label category has more quietly been having a boom of its own. 

The sector, which designates retailer-owned beauty and personal care brands such as Sephora’s Sephora Collection; Ulta Beauty’s similarly eponymous — and recently revamped — product range; Target-owned Up&up and more, has been gaining status as entrants proliferate — and more shoppers bite. 

The timing of this growth is no coincidence. Beauty consumers today are entering the category younger than ever (see: “Sephora kids”); are diversifying more often (look to the demise of the “signature fragrance”), and are prioritizing value in ways that go beyond price — all shifts that private-label lines are well-poised to capitalize on. 

On top of this, mounting economic uncertainty — historically a favorable circumstance for private-label overall — could further fuel the category as a result of consumer pullback in discretionary spending. 

“Retailers tend to turn to private-labels at the same time that consumers start to pinch pennies when questions about the economy loom,” said Jacqueline Flam Stokes, senior vice president of beauty, drug and OTC retail at NielsenIQ. She noted, however, a unique circumstance about the private-label beauty landscape today.

“The interest isn’t purely economic,” Flam Stokes said. “There’s this greater understanding about what private-label can be, at a moment when consumers feel more empowered and have a greater understanding of what products, attributes and ingredients are important to them.” 

While Baby Boomers and other mature consumers have long defined the dominant private-label shopper, data from NielsenIQ shows a growing embrace of the category by Gen Zers and Millennials, 67 percent of whom report feeling private-label products are “just as good” as those by national brands. 

Higher-income shoppers — defined as those with $100,000-plus salaries — are also increasingly adopting the category, with 72 percent echoing the same. In both cases, positive sentiment saw a marked hike beginning in 2021, and continued growth since. 

Circana data for the Private Label Manufacturers Association also shows private-label beauty grew 10.4 percent in 2023 to $3.9 billion, outpacing food and non-food private-label categories. 

Today, roughly 9.5 percent of all health and beauty sales come from private-label brands, with the highest sales volumes coming from the drug, mass, grocery and club channels, while specialty beauty — which comprises just under 5 percent of private-label sales — has “a big opportunity now to play in private-label in a stronger way,” Flam Stokes said. 

Retailers across the spectrum are deepening their claims in the category. In 2024, Walgreens unveiled its “dupe” Walgreens Premium Skincare Collection comprising affordable alternatives to popular prestige products. Among them: a $22.99 Body Butter Firming Cream inspired by Sol de Janeiro’s hero $48 Bum Bum Cream — labeled as such, a Hydrating Lip Mask at half the price of Laneige’s viral Lip Sleeping Mask, and so on. 

The retailer has introduced more than 60 owned-brand products so far in 2025 — moving toward a target of 300 for the full year — and reported in its first-quarter fiscal year 2025 earnings that owned brand penetration was up 75 basis points to 17.8 percent. 

Also last year, Ulta relaunched its 2000-founded Ulta Beauty Collection with a trendier look and feel, plus an array of new products meant to appeal to Gen Z and younger Millennial consumers. The line is anchored in makeup, with bestsellers including a $10 Juice Infused Lip Oil and an $11 lip stain, though UBC is seeing its highest rate of new customer acquisition via body care. 

“Today’s guest is savvy — they’re shopping high-low and know how to spot value and quality, which you can really access in a private-label line,” said Alison Kohlenstein, vice president of private-label merchandising at Ulta, adding “It’s a way to differentiate, it’s exclusive and it gets the guest to keep coming back and falling in love.”

Indeed, retailer differentiation is becoming increasingly important — in part because of this growing level of customer discernment — but also because individual brands are diversifying their retail footprints more than ever as players like Amazon and TikTok Shop gain a meaningful share of beauty sales. 

While private-label has long been characterized by a reactionary — versus an innovative — approach to product development, Ulta is looking not just to capitalize on existing trends in the marketplace through UBC, but to position itself at the forefront of rising ones. 

“We’re working 18 to 24 months in advance on product development — sometimes, it’s about taking a bet on where the category is headed,” said Kohlenstein, adding that the general sweet spot is for new products to comprise roughly 20 percent of total UBC sales. 

Earlier this year, Credo Beauty unveiled a new body care line of its own called Credo Body featuring a trio of sugar kelp extract-powered products priced from $34 to $52. This followed the September 2024 launch of Credo Skincare, an in-house facial skin care line by the clean beauty retailer, which also operates an in-house color line, Exa Beauty, from 2020. 

“As a retailer, private-label is potentially attractive but there is also a lot of competition — there are many well-established brands within that lower price point,” said Manola Soler, a senior director in the Consumer and Retail Group of Alvarez & Marsal, pointing to the success of value-driven brands like CeraVe and E.l.f. Beauty, whose buzzy offerings are priced under $20 and, in many cases, under $10. 

“You need to have a good ‘why’ for bringing this new brand to market, and that ‘why’ needs to go beyond price,” she added. 

For Mecca, which is the largest beauty retailer in Australia and operates three in-house lines — Mecca Cosmetica (skin care) Mecca Maxima (makeup) and Kit: (skin care/wellness), understanding this has been crucial to succeeding in the space. 

“Value is so much more than price; price is important but product formulation, benefits, storytelling, packaging — those elements are just as essential,” said Marita Burke, chief Mecca-maginations officer, adding that Mecca Cosmetica’s hero To Save Face SPF, which costs $22 and is designed to be both ultra protective yet seamless under-makeup, is the retailer’s number-three stock keeping unit across the entire business. 

“For us, private-label needs to be focused on white space, rather than infringing on other spaces,” Burke said, adding that it also can’t rely on its value proposition alone. “We’re not just a commoditized, entry-level price-point brand — we’re an experiential brand, and we behave like a brand that needs to engage its customers every day — that makes a huge difference.” 

Case in point: Mecca Max is a repeat sponsor of the annual Sydney Gay and Lesbian Mardi Gras parade, and partnered earlier this month with the F1 Australian Grand Prix 2025. 

Other retailers like Sally Beauty, which operates multiple private-label lines including hair care brands Ion and Silk Elements, or Trader Joe’s, known for affordable dupes that benefit from the overall store’s perceived “better-for-your-health” vibe, are seeing recent motion, too. 

As far as categories to watch, Flam Stokes said that fragrances, “although a smaller base, are seeing meaningful growth in private-label in the same way that we’re seeing fragrance growth within national brands,” while private-label hair care dollars “have increased more than overall the overall [hair] category.” 

“In beauty, people are always looking for what’s new and what’s different — and, presented the right way, private-label can be new, too,” said Wendy Liebmann, chief executive officer of WSL Strategic Retail. “If you walk into a retailer and the retailer brand looks like a very acceptable proposition, you might think, ‘why wouldn’t I?’”

Consumers are especially primed to play in private-label in categories that are “more fashion-oriented,” Soler said. “Color cosmetics, products that feel more experimental — because the price is low, it’s less of a risk, even if it doesn’t work out.” 

And as private-label products step up in quality, sometimes, as Liebmann put it, “the trade-down is really only in price in the end.”