Barclays analysts identified German industrial and consumer conglomerate Henkel as an overlooked growth opportunity in the global haircare market, noting that resilient self-care spending and recent acquisitions like Olaplex position its hair division for acceleration through 2028.
Haircare Outpaces Legacy Laundry Brands
- Barclays raised growth forecasts for Henkel’s haircare portfolio, predicting further acceleration from the third quarter of 2027 onward.
- The company completed a $1.4 billion acquisition of premium haircare brand Olaplex in July and acquired Not Your Mother’s in April.
- Hair and laundry care each account for 40% of the company’s Consumer Brands sales, but analysts argue hair is becoming the true centrepiece due to higher profitability.
Barclays Highlights Undervalued Growth Potential
Investors are overlooking the expansion potential within Henkel’s burgeoning haircare business as cautious shoppers continue to prioritize personal maintenance routines, according to a research note from Barclays. Analysts noted that the company is operating with greater speed and urgency, executing bolder portfolio decisions that move beyond historical strongholds in hair coloration and styling into the wider $70.4 billion global haircare market.
The market primarily views Henkel’s consumer division through the lens of its more mature Laundry operations. Yet, Barclays emphasised that haircare has become the largest and most attractive segment within the category. The division benefits from lower raw-material intensity compared to household and laundry care, yielding superior long-term profitability. The global haircare sector expanded by more than 4% annually between 2022 and 2025, driven by premiumisation and sophisticated consumer routines.
Acquisition Strategy Targets Global Expansion
Henkel has systematically expanded its footprint through targeted acquisitions over recent years. Beyond the July purchase of Olaplex and the April integration of Not Your Mother’s, the company has added Vidal Sassoon and the Asia-Pacific operations of Shiseido Hair Professional to its portfolio. These additions help diversify the company’s revenue streams away from traditional retail dyes into high-margin premium segments.
According to the Barclays note, the success of this strategy now hinges on execution. Henkel must demonstrate that its expanded brand portfolio and local innovation infrastructure can translate into sustained market share gains across key geographic regions. Analysts pointed to the United States, China, and Mexico as primary arenas for future volume expansion.
| Strategic Asset / Metric | Details |
|---|---|
| Olaplex Acquisition | Completed in July for $1.4 billion |
| Not Your Mother’s Acquisition | Closed in April |
| Consumer Brands Sales Breakdown | Hair care (40%) and Laundry care (40%) |
| Global Haircare Market Value | Approximately 63 billion euros ($70.4 billion) |
Resilience Amid Economic Pressures
Consumer spending on personal grooming has defied broader economic headwinds, particularly in Europe. Barclays observed little evidence of the trading-down and private-label substitution seen in other household categories. This resilience reflects the “lipstick effect,” where shoppers facing challenging financial conditions continue to allocate funds to affordable luxuries and self-care items.
Demand in this segment remains decoupled from broader consumer confidence indicators because of its exposure to ongoing wellness trends. If Henkel successfully integrates its recent purchases and maintains its momentum, the market may eventually reprice the stock to reflect haircare’s status as a primary growth engine.
Disclaimer: The information provided in this article is for educational and informational purposes only and does not constitute financial advice.
