Report Highlights

Cosmetic Products in the U.S.: Market Overview

The U.S. cosmetic products market was valued at US$96.8 billion in 2024 and is forecast to reach US$139.8 billion by 2032. Its structure is bifurcated: multinational groups such as Estée Lauder Companies, L'Oréal USA and Procter & Gamble command shelf space in mass and prestige channels, while thousands of independent brands have grown through direct-to-consumer and social commerce. Private enterprise drives formulation, marketing and channel strategy, while government sets the perimeter through the Federal Food, Drug, and Cosmetic Act of 1938 and the Fair Packaging and Labeling Act of 1966.

Unlike drugs, most cosmetics have never required FDA pre-market approval, so the industry has operated on manufacturer self-certification and post-market enforcement. That model kept entry barriers low and encouraged rapid launch cycles among independent brands. Government has been the dominant force where states intervened, most notably through California's Safe Cosmetics Act of 2005, administered by the California Department of Public Health, which forced national reformulation of ingredients identified as carcinogens or reproductive toxicants. Ingredient safety benchmarks have otherwise been set largely by private actors, including the independent Cosmetic Ingredient Review.

Policy-Driven Growth in U.S. Cosmetics

The Modernization of Cosmetics Regulation Act of 2022 (MoCRA), enacted through H.R. 2617 within the Consolidated Appropriations Act, 2023, is the principal demand driver. It requires facility registration and product listing with FDA, safety substantiation for every marketed product, and reporting of serious adverse events within 15 business days. Each obligation creates paid demand for safety assessors, stability and microbial testing, pharmacovigilance systems and regulatory staff, lifting contract laboratory and compliance-services revenue, particularly among mid-sized brands that previously lacked formal safety files.

Minnesota's Amara's Law, codified under Minnesota Statutes section 116.943, prohibits intentionally added PFAS in cosmetics from January 1, 2025, with enforcement by the Minnesota Pollution Control Agency. Brands that cannot run state-specific formulas reformulate nationally, which increases demand for fluorine-free film formers and silicone-based substitutes in longwear and waterproof products. Separately, Section 301 tariffs imposed under the Trade Act of 1974 on Chinese-origin packaging and cosmetic components raise input costs and shift sourcing toward domestic packaging suppliers.

Regulatory Barriers and Compliance Costs

The most material barrier is FDA's registration and listing regime, administered by the agency's Office of Cosmetics and Colors. Facilities must register and renew biennially, and each product must be listed with its ingredients, while the small business exemption applies only to firms with average annual sales below US$1 million, adjusted for inflation. Non-compliant facilities risk suspension of registration under MoCRA, and FDA holds mandatory recall authority, meaning a single adverse-event cluster can halt distribution. Safety substantiation adds a documented dossier cost for every SKU.

State-level barriers add labelling and disclosure costs. California's Proposition 65, the Safe Drinking Water and Toxic Enforcement Act of 1986, is administered by the Office of Environmental Health Hazard Assessment and requires clear warnings for listed chemicals, generating frequent private enforcement suits. Under the California Safe Cosmetics Program, administered by the California Department of Public Health, manufacturers must report products containing ingredients identified as carcinogens or reproductive toxicants. Labelling must also conform to 21 CFR Part 701, while advertising claims face Federal Trade Commission scrutiny under Section 5 of the FTC Act.

Policy-Created Opportunities in the United States

MoCRA's talc provision creates a new testing market. FDA's rulemaking requiring asbestos testing for talc-containing cosmetics, proposed in late 2024, obliges brands to validate methods such as polarised light microscopy and transmission electron microscopy. Accredited laboratories already operating under ISO/IEC 17025 for consumer product chemistry are positioned to capture this demand, with powder, eyeshadow and talc-based baby care lines the first categories affected.

Minnesota's PFAS prohibition and the Section 301 tariff environment create two further opportunities. Fluorine-free longwear and waterproof formulations open a niche for silicone and hydrocarbon-based film formers that suppliers can sell to national brands. Contract manufacturers registered with FDA and located domestically benefit from tariff-driven reshoring of packaging and filling, while firms offering MoCRA-compliant adverse event reporting and safety assessment fill a gap that many mid-sized brands cannot manage in-house.

Market at a Glance

Leading Market Participants

• Estée Lauder Companies
• L'Oréal USA
• Procter & Gamble
• Unilever
• Coty Inc.
• Revlon
• Shiseido Americas
• Beiersdorf
• Kenvue
• e.l.f. Beauty

Regulatory and Policy Environment

The primary legislation is the Federal Food, Drug, and Cosmetic Act of 1938, as amended by the Modernization of Cosmetics Regulation Act of 2022, administered by the U.S. Food and Drug Administration. Key compliance requirements include facility registration with biennial renewal, product listing with ingredient disclosure under 21 CFR Part 701, safety substantiation documentation for every product, serious adverse event reporting within 15 business days, and labelling under the Fair Packaging and Labeling Act. Upcoming changes include FDA's talc asbestos testing rule, proposed in late 2024, and the cosmetics Good Manufacturing Practice rulemaking that MoCRA mandates, both of which will add verification obligations for manufacturers.

Compared with regional peers, the U.S. framework is permissive pre-market but stringent in enforcement. The European Union's Regulation (EC) No 1223/2009 requires a safety assessment by a qualified assessor, notification through the Cosmetic Product Notification Portal, and enforces an Annex II list of more than 1,300 prohibited substances, whereas the FDA prohibits only a handful of ingredients outright. Canada's framework under the Food and Drugs Act requires notification to Health Canada and applies the Cosmetic Ingredient Hotlist. The U.S. model minimises launch delay but shifts risk into litigation and recall authority.

Long-Term Policy Outlook for Cosmetics in the U.S.

By 2032, the most consequential change will be finalisation of FDA's cosmetics Good Manufacturing Practice rule, which MoCRA requires the agency to develop and which will align production standards with established FDA quality frameworks. Talc asbestos testing will become routine across powder categories. Congress has also considered the Personal Care Products Safety Act, which would set a federal standard for ingredient review and reporting, but its passage is not assured, so state legislatures will continue to drive chemical restrictions in the interim.

These changes will reshape market structure. Compliance costs for testing, registration and adverse-event systems scale poorly for small brands, accelerating consolidation toward multinational groups and contract manufacturers able to absorb regulatory overhead. Reformulation toward PFAS-free and talc-verified formulas will raise per-SKU development costs, while domestic sourcing pressure from tariffs will keep packaging supply chains regionalised. Brands that build audit-ready safety dossiers now will hold a durable advantage as enforcement intensifies.