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Why Beauty Is The Hottest Bet In Consumer M&A

adminMay 28, 20263 Mins read1

Why Beauty Is The Hottest Bet In Consumer M&A

The Business of Fashion Presents the Business of Beauty

The first half of 2026 has already seen its fair share of M&A transactions across the consumer goods world. Unilever acquired vitamin gummies brand Grüns for $1.2 billion, while Henkel announced its acquisition of premium haircare brand OLAPLEX for more than a billion, alongside Gen Z brand Not Your Mother.

Meanwhile, L’Oréal finalized the acquisition of Kering Beauté, the beauty division of luxury group Kering, which includes Creed and the licensing of Bottega Venetta, Gucci and Balenciaga perfume and beauty lines, all for a value of $4 billion. Private equity funds are equally hungry for beauty brand takeovers, with Advent International acquiring bodycare brand Salt & Stone for an undisclosed sum.

And while e.l.f beauty’s acquisition of Rhode and L’Oréal’s acquisition of Medik8 date back to 2025, these transactions also reinforced a broader shift already reshaping the industry: consumer groups are increasingly targeting modern brands operating at the intersection of beauty, performance, wellness and lifestyle.

The Quest For High-Growth, Premium Yet Accessible Beauty Brands

BeautyMatter’s Deal Intex M&A tracked 83 transactions in Q1 2026, up 40.7% from a year earlier. Both private equity funds and groups like L’Oréal appear to be chasing “masstige” brands: premium yet accessible brands, with strong community and cultural relevance.

Loyalty has also become an essential component in acquisition appeal. Grüns operates a solid subscription-model, with high retention and 80% daily use, while Rhode has cultivated a strong fanbase, with community engagement driving product development, conversations and sold-out products after launch. Both brands also successfully evolved beyond DTC into scalable omnichannel models.

Brian Folmer, founder of FirstLook Ventures, a private investment club focused on high-growth consumer brands, explained the growing appetite for high-potential beauty and wellness brands: “They are profitable, high-growth businesses with high repeat rates and sticky customers. They leave meat on the bone for the acquirer with room to continue to grow the business across retail and new product development.”

Many of these brands are experiencing double-digit growth-rates while maintaining a sharp positioning and identity. They have a strong founder story (Salt and Stone, Grüns, Rhode), but don’t rely on storytelling alone to scale. What increasingly sets these companies apart is innovation and a differentiated value proposition in one of the most saturated categories in consumer goods.

For example, Salt & Stone might be well-known for its deodorants, but from the start it positioned itself as much as a fragrance brand as a bodycare one. The brand elevated itself into the niche fragrance space, offering premium scents and clean ingredients, targeting both wellness and beauty enthusiasts. Dave Paresky, Director at Advent International, told WWD after the group’s acquisition of the brand: “We felt the right alignment and connection on where they wanted to take the brand, and where they were driving equities with consumers around a luxurious feel but a clean product that aligns nicely with wellness trends but also delivers a fantastic experience.”

Acquiring Brands Shaping The Future Of Beauty

Rhode largely expanded the introduction of peptides and food aesthetics into skincare amongst the TikTok and GenZ audiences with its Peptide Glazing Fluid and the resulting “glazed donut” skin aesthetics. Grüns reinvented and simplified the supplement category in less than three years. Salt & Stone thrives in a hybrid space between functional, clean beauty and fragrance categories. These brands exemplify well the shift beauty has slowly been undergoing.

As highlighted in HighSnobiety’s latest report, “The Status Economy: Beauty”, wellness and health have become essential parts of the beauty universe. “We’re seeing the the traditional boundary between beauty (looking good)
and wellness (feeling good) disappearing. Consumers now see beauty as part
of a broader wellness routine that includes nutrition, sleep, mental health, and fitness, and products are evolving accordingly,” shared Lizi Aston, the global communications and collaborations at Decium, with HighSnobiety.

Beauty is now converging with health and wellness entirely. The lines between skincare, supplements, functional beverages and longevity are increasingly blurred, making brands with strong positioning in this hybrid space especially attractive acquisition targets. Unilever’s divestment from its food unit in favor of doubling down on beauty further reflects where major groups see long-term growth opportunities.

Still, exposure to “masstige” or wellness alone is no guarantee of investment interest. The brands commanding the highest valuations are pairing cultural relevance with operational discipline: strong EBITDA, scalability, high repeat purchase rates and retail expansion. As Folmer told us: “The founders building today, who experienced the post-Covid VC pullpack, know they must build efficient and profitable businesses going forward,” adding that when thinking about investing, his fund looks for “a strong thesis on why a brand will flourish over the next 10 years, creativity in customer acquisition, and operational efficiency.”

Further proof that today’s most sought-after beauty brands are no longer just selling products to make consumers look good. They are building scalable ecosystems at the intersection of beauty, wellness, community and culture.

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