L'Oréal has been crowned the most future-ready beauty company in 2025.
The French beauty giant claimed the top spot in business school IMD’s Future Readiness report, which ranks businesses on their adaptability in the current economic climate.
IMD’s analysis, which covers the finance, automotive and consumer packaged goods (CPG) industries, also assesses product innovation and technological prowess.
L'Oréal was given a score of 100, placing it at the top of the CPG category’s ranking for the second year in a row.
“The standout companies are not necessarily the largest by revenue, but they excel at anticipating trends, innovating and adapting ahead of peers,” IMD wrote in the report.
“The 2025 leaders also show how consistent investment in innovation, data and talent turns uncertainty into advantage.”
L’Oréal’s focus on technological innovation was highlighted as one of the main reasons behind its score.
The company has developed AI-powered tools, including virtual try-on apps and skin diagnostics, which IMD said are “enhancing customer engagement and personalisation”.
L’Oréal’s campaign ‘By Garnier, Naturally’ was cited as a strong example of aligning with consumer values through natural ingredients and eco-friendly packaging.
The business’ diversity was also praised for its “breadth within beauty”, with strong mass market, luxury and active cosmetics offerings.
“It also boasts a globally diverse market presence, with strong growth in Asia (notably China) complementing stable sales in Europe and North America,” IMD said.
L’Oréal has also recently been heavily investing in R&D, which accounts for an estimated 3.5% of sales.
The French beauty giant claims it invests more than €1bn annually in research and innovation.
In January 2024, L’Oréal acquired the outstanding shares of startup Gjosa to scale its water reduction technology.
Other ingredient deals by L’Oréal include fossil fuel-alternative supplier Geno and fermentation specialists Evola.
IMD said: “L’Oréal’s success underscores that even a company over 100 years old can reinvent itself with a data-driven strategy – a model of future readiness in CPG.”
L’Oréal is not the only beauty business to be ranked on the list, with consumer goods giant Unilever placing third in the list of CPG companies.
Procter & Gamble was ranked as the fourth most future-ready, with Colgate-Palmolive and Beiersdorf coming in sixth and seventh.
Colgate-Palmolive, which owns skin care brands Sanex and Laboratoires Filorga, saw a particular improvement compared with 2024.
IMD said the conglomerate's financial performance and innovation, as well as investments in sustainable oral care products, were behind its improved rating this year.
Colgate-Palmolive recently raised its annual forecast for 2025 after a boost in sales during its first quarter of trading, which saw total organic sales increase by 1.4%.
Estée Lauder Companies (ELC), which ranked as the tenth most future-ready company in 2024, has dropped out of the top ten list to thirteenth place.
Beauty giant Coty’s position, meanwhile, has remained unchanged from last year.
“Companies that lag in future readiness tend to follow older playbooks,” IMD said.
“They might rely too much on cost-cutting, or have slower innovation cycles or a narrow product focus.”
IMD concluded in its report that the CPG sector will likely see a “greater convergence with technology and deeper personalisation of products” over the coming years.
This also includes more emphasis on sustainability and social value.
IMD wrote: “Future readiness is not a one-time achievement but a continuous imperative.
“The leaders of 2025 show how consistent investment in innovation, data, and talent turns uncertainty into advantage.
“The data and trends underscore a clear message: future-ready firms turn uncertainty into opportunity.
“Those who keep that momentum will thrive; those who pause will be overtaken.”