Ms. Hässig, the German economy shrank again in 2024. How is this weak economic environment affecting the business of IKW members?

Gabriele Hässig: Mirroring the general economic trend, the consumer climate has not come out of the cellar either. In addition to the recession, observers blame this in particular on higher prices and fears about the future. In this situation, our sector is once again proving resilient. We are maintaining our growth trajectory. This is thanks to the enduring popularity of the products of our two divisions, Beauty Care and Home Care. They reliably ensure strong retail sales.

Mr. Held, what trends do you see in sales development?

Georg Held: A well-groomed appearance plays a major role in helping people to feel comfortable and confident in social situations. Products that meet this need were particularly popular in 2024. The desire for beautiful hair, in particular, led to sigificant growth in the relevant product category, followed by skin and facial care, and decorative cosmetics. Consumers also spent significantly more money on washing, care, and cleaning products. Together, these two sectors achieved a 7 per cent sales increase in Germany.

How are you countering the symptoms of the crisis, including recession, inflation and political instability, both at home and abroad?

Gabriele Hässig: Our particular strength pays off, especially when there is a general reluctance to buy. Companies recognise and fulfil consumer wishes very precisely. They do this with passion and ingenuity. It's not just about satisfying basic needs. In uncertain times, it is particularly important to offer products that improve quality of life and foster optimism.

What pressures are IKW companies facing?

Georg Held: The majority of our member companies confirm that they are currently under strong, or even very strong, economic pressure. The main causes are high costs and excessive regulation. In particular, the out-of-control bureaucracy in Germany and the European Union is a major concern for many in our industry. It is a serious obstacle to economic development. For many of our medium-sized companies in particular, notification and reporting obligations tie up personnel capacities that are then lacking elsewhere, for example in innovation, which is essential for our industry.

How are current economic conditions affecting the focus on sustainability?

Gabriele Hässig: IKW companies do not view sustainable management as a short-term option, but rather as a fundamental responsibility towards future generations. We are doing our part to protect the environment and the climate by constantly working on processes and products, for example by reducing climate-damaging emissions. IKW has been involved in various cross-company sustainability initiatives in Germany and Europe for many years, and regularly reports on progress.

Do you also support the European Green Deal?

Georg Held: Our industry is committed to the sustainability goals of the Green Deal. However, we insist on science and fairness when it comes to implementing legal regulations. Here are two current examples: Firstly, we are supporting Cosmetics Europe's appeal to the European Court of Justice against the planned amendment to the Urban Waste Water Directive. Currently, the cosmetics and pharmaceutical industries would bear most of the financial burden of new wastewater treatment plants. Nevertheless, a scientific analysis shows that the ingredients in cosmetics only contribute around one percent to the total pollution of wastewater with trace substances.

A planned ban on the proven ingredient ethanol - i.e. alcohol - from our products would also have serious economic consequences with no benefits. The underlying assessment as “carcinogenic” and “fruit-damaging” relates to oral intake, i.e. drinking. However, alcohol in aftershave or glass cleaner is denatured and therefore not drinkable.

What are the prospects for 2025?

Gabriele Hässig: It is difficult to predict where the economy is heading this year. The turbulent developments on the international markets, triggered by the USA's customs policy and the ongoing global conflicts, are bad news for Germany as an export nation. On a more positive note, there are the planned government investments in security, infrastructure and climate protection. In the long term, these investments could stimulate economic growth. However, the consumer climate is unlikely to improve in the short term. Overall, the outlook for our industry remains positive: we are building on our strengths and expect growth this year thanks to the high level of consumer acceptance.