Botox and other cosmetic injection sales may stay robust in recessions

Despite a decline in demand for the final six months of 2022, according to AbbVie, which sells Botox and Juvederm fillers, sales increased 17% in 2017.

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Notwithstanding the recession, a large number of Americans who pay hundreds of dollars every few months for Botox want to continue their cosmetic injection spending.

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Not exactly recession-proof, Botox. Even though it reported double-digit revenue growth the previous year, Botox and Juvederm filler manufacturer AbbVie ABBV, 1.04%, said demand slowed throughout the final half of 2022.

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According to Carrie Strom, president of Global Allergan Aesthetics at AbbVie, "the patient base is heavily consisting of continuing or existing patients, but there might be some short-term constraints on perhaps new patients entering the category. They have various perspectives. They perceive it as "part of my routine,"

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According to the American Association for Aesthetic Plastic Surgery, there were around 3.6 million cases of people receiving a botulinum toxin injection for cosmetic reasons in 2021, a 40% increase from 2020. Clients, most of whom are female, pay an average of $450 for each shot in cash.

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Although a recession is still a possibility, there are still ongoing layoffs in the internet and media industries, and there have been months of record inflation, there is little reason to believe that bottles of Botox, Xeomin, or Dysport will soon become obsolete. For many of their consumers, these things have a type of tenacity that makes them more like a spending habit essential than a choice item.

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According to Dana Berkowitz, associate professor of sociology and women's, gender, and sexuality studies at Louisiana State University and author of Botox Nation: Transforming the Face of America, "it becomes psychologically addicting in that you become used to viewing your face in a completely different way." "It's also envisioned as this investment in oneself, like a graduate degree or a gym membership."

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A history of financial crises

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In 2002, the Food and Drug Administration granted Botox its initial cosmetic usage approval. It has evolved into a catch-all phrase in culture during the past 20 years for any injections. Notwithstanding management' warnings to investors about a slowdown in aesthetic operations that began in the second quarter of last year, AbbVie's cosmetic Botox business produced $2.6 billion in sales in 2022—an increase of 17% over 2021. Since then, a number of rivals have entered the market, most recently Daxxify, a toxin with a longer half-life created by Revance Pharmaceuticals RVNC, 1.67% that obtained FDA approval in September, and Jeuveau from Evolus in 2019.

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During the recession a decade ago, sales of Botox fell, but by about 2010, they soared. Late last year, the consulting company McKinsey & Co. conducted a study of 1,500 American adults to see whether they would alter their expenditure on medical aesthetics if a recession occurred. Eighty percent of the respondents have annual incomes between $25,000 and $200,000. According to Olivier Leclerc, a senior partner at McKinsey, what the firm discovered was a certain "stickiness": 60% of those questioned claimed they would reduce expenditure by roughly 10%. According to the survey, 48% of respondents stated they would stick with their current brand, 30% would switch to a less expensive brand, and 16% would test out a less reliable alternative like lasers. 6% only indicated they would no longer use medical aesthetics.

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Leclerc remarked that it was difficult for someone to decide all of a sudden, "OK, I'm going to quit using and look older over the next six months." There is a component of that, which is probably what makes people resilient.

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A distinct cultural environment

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There has also been a change in culture. For Botox a decade ago, the majority of patients visited a dermatologist or plastic surgeon. Currently, medical spas advertising Botox price-per-unit and venture-backed Botox bars like Peachy Studios are common in big cities like New York and Los Angeles. Together with a teeth cleaning, your dentist might even be able to (temporarily) correct your 11's—those persistent wrinkles between your eyebrows.

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In addition, TikTok and the "Zoom Boom," which had some people running for cosmetic procedures as soon as the economy started to recover, as well as Instagram's transformation from a social network for sharing filtered photos from a fun weekend into an ad-heavy platform filled with celebrities and influencers sharing details about their own aesthetic choices, are all contributing factors to the normalization of medical aesthetics. (AbbVie's Strom commented that the pandemic gave people a chance to experiment with Botox while working from home.)The typical consumer was in their early 50s ten years ago. Today, they are more likely to be in their early 40s and the consumer mix overall is more diverse. Injections of toxin are being used by more millennials and Gen Zers than ever before, and AbbVie has made efforts to encourage use among men ("Brotox") and nonbinary people.

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Female users of Botox and dermal fillers in their 20s were recently interviewed by Berkowitz. Their familiarity with injectables and the notion that the face you are born with is not the face you must have, she added, "really struck me." "Each and every one of them blamed Instagram. I'll say it again: "I blame Kim Kardashian."

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The typical consumer was in their early 50s ten years ago. Today, they are more likely to be in their early 40s and the consumer mix overall is more diverse. Injections of toxin are being used by more millennials and Gen Zers than ever before, and AbbVie has made efforts to encourage use among men ("Brotox") and nonbinary people.

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Female users of Botox and dermal fillers in their 20s were recently interviewed by Berkowitz. Their familiarity with injectables and the notion that the face you are born with is not the face you must have, she added, "really struck me." "Each and every one of them blamed Instagram. I'll say it again: "I blame Kim Kardashian."

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She went on to say that "one of the reasons we don't see these numbers go down in terms of an economic downturn is undoubtedly the normalization of Botox and fillers—injectables in general.

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A new index of lipsticks?

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Every time there is a recession, the lipstick index makes headlines. This economic theory contends that women continue to spend money on or increase their expenditure on inexpensive cosmetics like lipstick rather than more expensive things. It is unknown whether the concept still holds true, although the phrase is said to have been developed by Leonard Lauder, who is currently chair emeritus of Estée Lauder EL, 0.59%, during the early 2000s recession.

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Investors were recently informed by AbbVie that consumers are becoming less interested in more expensive, one-time operations like body sculpting and fillers. Juvederm sales dropped 25.4% in the last three months of 2022. Yet, Botox sales increased 2.6% in the same quarter.

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Are wrinkle-reducing injections a more contemporary version of the lipstick index in the midst of the so-called "richcession"?

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No, according to Ekaterina Netchaeva, an assistant professor of management and human resources at the business school HEC Paris who has written about the lipstick effect in her research. "Part of the reason women turn to makeup during difficult economic times has to do with how reasonably priced these cosmetic products are," she wrote in an email. Even during the recession, women may still purchase them, which might help them look more professional and win better jobs.