As 2024 kicked off, new products backed by Hollywood's biggest celebrities were coming to market, including Beyoncé haircare brand Cécred in January and Dwayne Johnson's skincare label Papatui, which launched just last month.
And no wonder: The success of brands including Jessica Alba's The Honest Company and Rihanna's Fenty Beauty has cast the notion of creating star-driven products quite alluring, with 60% of all celebrity brands founded in the past six years.
Alcohol, especially tequila in the wake of George Clooney's success with Casamigos, has been a particularly active space. On the beauty front, celebrity brands crossed $1 billion in sales as of November 2023, according to NielsenIQ, growing nearly 58% in a year — over five times faster than the beauty industry overall.
And yet the industry may not be as lucrative or glamorous as it might seem. With the possibility of consumer fatigue setting in, it's become clear that it takes more than a big name or a strong following to attract customers initially.
Last September, Jared Leto shut down his Twentynine Palms skincare label just one year after its launch in 2022. Item Beauty by Addison Rae and Selfless by Hyram also faced removal from Sephora stores. Companies such as Amyris, a biotech company that has backed a slew of A-list fragrance and cosmetic brands, filed for bankruptcy in August, and Morphe exited business in the U.S. earlier in 2023, despite working closely with social media influencers.
The 2023 graveyard of overzealous celeb brands also includes Hello Bello by Kristen Bell and Dax Shepard, after being hit by high production and shipping costs. And in 2024 alone, Jaclyn Hill Cosmetics was shut down, and Venus Williams' cosmetics brand EleVen is "on pause."
The number of celebrity brands in the market is beginning to decline, with more facing challenges to stay afloat as performer entrepreneurs rush into new ventures without clear commitment and/or a business plan.
This is especially true in the beauty market, as 53% of all celebrity retail brands involve beauty and cosmetics. The market is awash in rampant overvaluation, with optimistic creators not realistically accounting for established brands in each product category. This leaves little room for starry-eyed new entrants, as many of the brands have tried to scale too quickly.
So what can we learn from the few that have remained strong in the business?
• The product needs to make sense for the creator. Take Wiz Khalifa's Mistercap Mushrooms. The mushroom-growing kit sprouted in 2023 from the Grammy-winning rapper's own idea and underwent years of development for the brand, packaging and promotion.
Mistercaps are marketed as a "culinary mushroom," prompting a clever adjacency to the hallucinogenic kind that may be more familiar to his fan base, and Khalifa leverages this synergy to help spread awareness for the niche brand, as well as the positive effects mushrooms can have on both body and mind.
• The celebrity creator needs to be consistently engaged with the product. Selena Gomez's Rare Beauty makeup and skincare line has garnered net sales of over $400 million as of March, with a percentage of that going to support her commitment to mental health services through the Rare Impact Fund.
The singer-actress is intent on harnessing her strong social media following to promote the products, with mentions of Rare Beauty making up 25% of her Instagram posts as of January 2023.
• And the celebrity product must be well received. As shown by the rapid-fire growth of Kim Kardashian's Skims, a product valued at $4 billion as of last year, consumers are drawn to products that give them the desired outcome. With a successful business strategy focused on inclusion, Skims has gathered up to 5.8 million followers on Instagram and nearly 26,000 hashtags for #skimsreview on TikTok.
In 2024, it is no longer an option for celebrities to simply start a brand as a quick cash grab, as the market is simply saturated. Meghan Markle, for example, just launched her lifestyle brand American Riviera Orchard — named for the Santa Barbara region where she and Prince Harry have settled in the U.S. Despite any buzz factor over the initial homemade strawberry jam, Markle has said she doesn't expect the c ompany to make a profit until next year. And whether it will enter Goop territory far remains to be seen.
Naturally, stars are a fitting vehicle for companies to spread brand awareness, and that formula might be successful if the goal is to attract onetime buyers. In the long run, though, it's committed ambassadors and innovative products that prevail, and we've begun to see celeb entrepreneurs pay the price for inflated expectations. In the end, 2024 will be a pivotal year for distinguishing the winners from those who fall short.
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