At CAGNY, the mood was clear: this is an industry that knows how to grow.

Pricing strategies have been stretched to the limit, AI is being integrated at every turn, and brands are finding new ways to keep consumers engaged. But beneath the surface, a question looms.

Are we building the future, or just optimising the present?

Some brands, like Coty, L’Oréal, and ELF Beauty, are actively rewriting the rules, expanding categories, and creating ecosystems that extend beyond the bottle. Others are relying on familiar levers: premiumisation, digital precision, and cost-cutting.

But how much further can these tactics go before they hit a wall?

2025 isn’t just another year of growth targets; it’s a moment of reckoning. Which brands will create something truly new? And which will optimise their way into irrelevance?

Here are five truths every leader in Beauty, Personal & Home Care needs to confront.

1 – The Premiumisation Paradox: How Much Further Can Pricing Go?

For years, Beauty and Personal Care have been able to push pricing without major resistance. But is that era coming to an end?

Luxury brands continue to expand their premium ranges, with Coty’s prestige fragrance business now accounting for over 60% of sales. But at the other end, ELF Beauty is proving that a strong brand at an accessible price point can deliver serious growth .

Consumers still want quality, but they are also getting smarter about where they spend. When everyone is premiumising, does premium still mean special?

“Our forecasts suggest that the category should grow at 5% to 7% led by premumisation and penetration growth in the US and in China.” – Kenvue CEO Thibaut Mongon

The real winners will be the brands that can justify their price, not just inflate it.

That means new experiences, tangible benefits, and a brand story that feels worth the spend.

2 – Wellbeing is the New Battleground; but What Does It Mean?

Once confined to skincare and self-care, “wellbeing” is now expanding into every part of life: personal care, fragrance and even home cleaning.

Coty is positioning itself at the intersection of beauty and wellbeing, but the most unexpected take came from Clorox. CEO Linda Rendle spoke about the emotional impact of a clean home, the rise of “fridgescaping,” and the endorphin boost consumers feel from tidying their spaces .

The bigger shift? Wellbeing is becoming about how people feel rather than just what they consume.

“What cleaning can do is provide mental and emotional well-being. When you have a messy home or messy desk, your cortisol increases and your stress increases. By using cleaning as a way to reduce clutter, you can reduce stress and improve well-being.” – The Clorox Company CEO Linda Rendle

But here’s the risk: if every brand latches onto wellbeing without depth, it becomes another empty marketing claim.

The brands that win will be those that define their role in wellbeing in a unique and credible way.

3 – Innovation is Getting Smaller—Where Are the Big Moves?

At CAGNY, the industry’s innovation mantra was “fewer, bigger, better.” But too often, “bigger” just meant another variation of the same thing.

Most companies showcased line extensions, premium packaging, and minor reformulations rather than true breakthroughs. More shades, more SKUs, more claims—but how many of these will reshape their categories?

There was a lot of talk by Kenvue, Colgate Palmolive, City and Church and Dwight spoke about reducing time-to-market, ensuring product pipelines move faster from ideation to shelf. But speed isn’t the same as reinvention.

“In 2025, we are significantly increasing our performance across all five levels of our extraordinary power framework. That will be powered by stronger investment, a renewed team focused on the right priorities, and a more disciplined approach to innovation.” – Kenvue Chief Growth Officer Charmaine England

The strongest moves weren’t just expanding existing categories; they were challenging what those categories even mean.

Coty’s expansion into ultra-premium fragrance makes sense because it taps into an emotional experience, not just a price tag. But where are the next category-defining moves in skincare, haircare, or home care?

If your innovation strategy is just optimising what you already make, you’re playing defence.

4 – AI is Beauty & Personal Care’s New Favourite Tool; but Is It Making Brands Smarter or Just Faster?

Unlike F&B, where AI was mostly used in supply chains and pricing, Beauty, Personal & Home Care is embedding AI directly into the creative process.

More brands are using AI to accelerate product innovation, marketing, and consumer engagement, but speed alone doesn’t guarantee breakthrough ideas.

Colgate-Palmolive made this clear in their boldest AI demonstration yet: generating new product concepts live on stage. The result? ‘Colgate Market Blitz,’ a caffeinated power mint, born in real-time through AI-driven ideation.

“All kidding aside, [AI] really is going to advance our progress in the area of innovation and I think get us much more efficient.” – Colgate-Palmolive CEO Noel Wallace

AI can drive smarter, faster decision-making.  But if every brand is feeding the same consumer insights into the same AI tools, does that lead to better ideas or just faster mediocrity?

AI is an enabler, but it’s not a differentiator unless brands make it one.

The ones who layer in human insight, intuition, and creativity will win.

5 – Beyond Products: The Shift to Ecosystems

What struck me most at CAGNY was how Beauty, Personal & Home Care brands aren’t just selling products anymore; they’re expanding into entirely new revenue models.

Diagnostics, subscriptions, AI-driven personalisation: these aren’t just buzzwords, they’re business moves designed to deepen consumer engagement and expand lifetime value.

AI-powered skin and hair diagnostics were was once marketing tools but now a gateway to hyper-personalised product recommendations and ongoing consumer relationships. Or subscription models: brands aren’t just selling one-off products; they’re ensuring repeat purchases with auto-replenishment and tiered memberships.

“We continue to fuel our growth through strong momentum in social media advocacy and recommendation. Our focus is on durable advocacy rather than only virality, ensuring long-term consumer engagement.” – Coty CEO Sue Nabi

The shift is clear: selling a product is no longer enough. Brands need to create ongoing engagement, new revenue streams, and relationships that extend beyond the moment of purchase

The question is: who is thinking beyond the product, and who is still stuck in old models?

The Future Belongs to the Bold

CAGNY 2025 made one thing clear: the Beauty, Personal & Home Care industry is at an inflection point. The strategies that fueled growth over the past decade – premiumisation, AI-driven efficiencies, and incremental innovation – are no longer enough on their own.

The strongest brands aren’t just reacting to consumer trends; they’re reshaping categories, building ecosystems, and rethinking value creation from the ground up.

But the reality is, not everyone is moving forward. Some brands are pushing boundaries: redefining wellbeing, using AI in creative ways, and turning one-time transactions into lifelong consumer relationships.

Others are optimising what they already have, playing it safe, and hoping incremental change will be enough.

It won’t be.

2025 is the year that will separate those who lead from those who simply manage decline.

The brands that will win won’t just move faster; they’ll move differently.

The question is: which side will you be on?