Cosmetics Branding Company FORMA Brands Heads Straight For Gen Z

It’s not the optimal time to be a makeup brand. Reasons to apply any kind of cosmetics have dwindled with the work-from-home/eat-at-home conditions caused by the pandemic. And lipstick has gone out as face masks have come in. There is, however, one sweet spot in the business – and it’s the intersection of Gen Z, millennials and eCommerce.

Many companies are chasing that dynamic as the industry starts to see signs of a rebound. According to the NPD Group, in the second quarter of this year, sales of U.S. “prestige” beauty products totaled $2.8 billion, a 36 percent decline in sales from Q2 2019. However, online sales grew by 90 percent during that time, representing about 61 percent of total industry sales and a 70 percent share compared to in-store sales. Skincare was down 18 percent overall and up 93 percent online; makeup dropped 52 percent, with online growth of 79 percent.

One study found that 86 percent of global Gen Z customers spend money on cosmetics, and the category takes 70 percent of their overall outlay. With that target in mind, a newly restructured company has debuted to develop and market health and beauty brands for Gen Zers and millennials. Formerly known as Morphe Holdings, the newly minted FORMA Brands has recruited an impressive roster of executives, assembled a number of exclusive brands and set out to build a fast-track company that was first formed through equity firm General Atlantic in August of 2019.

“At General Atlantic, we partner with high-growth, innovative global brands and are impressed by the pace at which FORMA has scaled across channels, geographies and categories,” said Andrew Ferrer, managing director at General Atlantic and board member of FORMA Brands. “We look forward to the opportunity ahead to address the unmet needs of Gen Z and Millennial consumers.”

San Francisco-based FORMA is headed up by President Simon Cowell, who told PYMNTS that the company takes a three-pronged approach to the business. It will first act as an incubator to create original brands. Second, it will act as an accelerator to invest and partner with like-minded brands. Second, it will accelerate the delivery of products to key audiences through supply chain and infrastructure partnerships. Third, it is a curator and retailer serving consumers at FORMA’s 50+ global Morphe stores and global eCommerce sites.

As part of its omnichannel approach, Morphe has teamed up with such brands as Beauty Bakerie, P.Louise and Iconic London. Morphe.com has had more than 90 million unique visitors and over 200 million visits over the last year, according to the company.

“FORMA portfolio brands and products are selected, acquired or created to appeal to our audience’s tastes, needs and price points,” said Cowell. “It will allow us to authentically address opportunities in the broader beauty landscape, including color cosmetics, skincare, body care, haircare and health and wellness. While we incubate, accelerate and curate brands, for our accelerator acquisitions, we look for early-stage brands that need the kind of support we can provide to reach their full potential.”

Playa Beauty is FORMA’s most recent acquisition, representing the company’s first entry into the haircare space. FORMA operates two eCommerce sites: Morphe for more general sales and a subset of Morphe, Morphe 2, which is aimed directly at Gen Zers.

“We will continue to drive awareness and engagement of Morphe and Morphe 2 through our influencer network and across all social media channels,” Cowell noted. “Our influencer network is one of the most powerful networks in beauty, and now consists of thousands of global creators with a combined reach of over 500 million.”

McCormick noted that FORMA is not trying to compete to buy $100 million brands, but is instead looking for smaller founder- and influencer-led brands that will resonate with its target audience. For example, Morphe 2 was created in July to address the cosmetics preferences of Gen Z consumers: lighter makeup, hints and tints, and multi-purpose products.

As part of the company’s incubator strategy, FORMA has also announced the fall 2020 launch of wellness brand Such Good Everything. The brand offers vegan gummy vitamin supplements to promote sleep, hair, skin and gut health as well as other wellness categories. Such Good Everything is the second incubator brand to join the portfolio following the launch of Morphe 2. The company plans to introduce additional brands by the end of the year.