A frank and deep-dive discussion about the costs of an expensive hobby and the economics behind high end items... and the story of the squirrel apocalypse.
We're at a tipping point in the fude market. Luxury brushes are all the rage right now. Handmade animal hair brushes have entered the consciousness of the mainstream beauty market and both makers and consumers want in on the action but what's responsible for driving the upward prices?
It's a new year and I'm busy with work so haven't been posting fude reviews as frequently as I had originally planned to. Currently, I have seven unfinished drafts in my folder with a few ready to be published but somehow, it just doesn't feel 'right' to publish some of them in this economic climate. I've always been a financially conservative person but over the past year, I've become increasingly aware of how quickly economic fortunes could change.
I consider myself a pretty avid consumer of fude-related content and I typically enjoy reading posts or watching videos featuring new releases. If you're active on Instagram, YouTube or Reddit and there's a new release or a conversation about a particular brand, then we've likely bumped into each other. I don't know about you but lately I've been experiencing a bit of review fatigue. Sometimes I groan when I hear there's a new release or when I see that someone has posted a new review online. I turn up my nose and say, "well they got it for free in PR" but in an ironic turn of overwhelming hypocrisy, I remember my post. Then in the most patronising tone, I ask, "who's buying anything in this economic climate?" I checked my outgoing expenditure and from January to December of 2020 it turns out that I spent a whopping AUD$2740 (or approximately USD$2135) on brush acquisitions. So just who was buying during the global economic apocalypse? Me, apparently.
Aside from the horrific human cost the Covid-19 pandemic has ravaged, the economic devastation around the world has been brutal. Unemployment rose to an all-time high with some countries such as the USA experiencing a larger job losses than during the Global Financial Crisis (GFC). As the name of this blog would suggest, I'm a millennial which means that I graduated into a market of rising unemployment during the GFC. I know how tough it can get. There was a time in my life where I worked two jobs and had a side hustle.
Currently, I'm self-employed in a white collar profession. I work very long hours but overall, it's reasonably cushy and I earn more than the average full-time worker in Australia. Once Covid hit, we entered a period of lockdown but I'm very fortunate that my revenue stream was largely kept in tact. I saw a 23% drop year-on-year in my income between February to May 2020. My experience was echoed all around the world with sharp drops in the number of hours worked. It wasn't anywhere close to financial armageddon for me since the money I had earmarked to travel internationally was put back into the kitty and I have savings upon savings but it was enough to get me to tighten the belt a bit. Travel was axed and outside entertainment was cut back to nothing for many months. Many economists refer to the unemployment figures but you can't really gauge a nation's financial situation until you factor in the number of those under-employed.
Now how does all this apply to fude? The fude community has expanded rapidly in the past few years. What used to be a niche subculture is now in the mainstream thanks to the explosive power of social media which reaches millions. Artisan brushes weren't easily available to everyday consumers outside of Japan. Other than encountering brushes at makeup trade shows, one typically needed to travel internationally to access them. International travel didn't become an affordable venture until the early 2000s after budget airlines popped up. There were a few limited ways of purchasing brushes online but the websites often looked super-dodgy.
I was first introduced to fude through Hakuhodo as a teenager. One of my aunts had lived in Japan in her youth. She continued to make yearly returns afterwards to visit her close friends. Throughout my adolescence, I would look forward to care packages from her which would always include Hakuhodo brushes and tubes of Shiseido's Perfect Whip Cleasner. I'm still very loyal to both products to this day.
Fast forward to the social media age and the explosion of the beauty-sphere, particularly on YouTube and Instagram. Now it's much easier to access information and purchase items online. While fude has always been a somewhat expensive investment, we've now reached a point where there's more competition for finite resources with a growing consumer base. There's a rising middle class in Asia as well and scarcity is becoming a factor in pricing. More and more brush makers are appearing in a growing market and everyone is now competing for the same dwindling resources. Fude is increasingly becoming a hobby for the rich. I don't want to sound like I'm gatekeeping here. My aim is to highlight how dramatic changes to the way the fude market operates is beginning to drive prices up. I can hear you now: "You've gotta accept it. That's just how capitalism works. Supply and demand," you say.
"Hakuhodo is planning to increase the price of certain items due to the recent increase in the prices of the raw materials. Most of our products will be affected by a price increase ranging from 10% to 40%. Items containing squirrel hair and long horse hair be the most significantly impacted."
Chikuhodo raised their retail prices in June 2018 and again in October 2019. Hakuhodo increased the price of their brushes between 10 to 40% in February of 2019 citing the uptick in the price of their raw materials.
I would point to the great squirrel apocalypse of 2018 as an example of raw material shortages. I know it sounds like a joke, but I'm serious. The Squirrelpocalypse first started in the New England region in the USA. It had been predicted by some since there had been a steady increase in grey squirrel numbers in 2016-2017 due to high acorn and nut production which allowed more of them to survive the winter. The US state of New Hampshire issued squirrel-hunting licences for the months between September to January, allowing a licensed hunter to cull a maximum of five grey squirrels per day. Other states also allowed their citizens to hunt the squirrels using BB guns and as Japanese fude-makers are reliant on imports of animal hairs, they were able to keep up with their increasing demand. All was well in the fude world for new consumers and the brush makers. At the time, the Fish and Game Deparment had said that exploding population numbers often were followed by periods of huge decline due to competition for the flowers and berries which they consume. They were right. This fierce competition was compounded by a drought in the spring after 2017 resulting in the squirrel-pocalypse. The story gets worse though. The lack of food forced the grey squirrels into populated areas where they became roadkill. Witnesses reported spotting up to 100 squished squirrels or more in one outing. It got to the point where the New Hampshire Department of Transportation and their other state counterparts were forced to admit that they simply couldn't clear them off the roads due to their sheer numbers. The general plan was to wait until it snowed enough to use the snowploughs to deal with the squirrel roadkill problem. A parody Twitter account in the Dead Squirrels of Maine was even created to morbidly but humorously document the adventures of the dead jaywalkers. This is when the party stopped. The grey squirrel hair supply dried up overnight and the principles of supply and demand kicked in. This only explains the grey and red squirrel supply problem. Goat hair decline is a whole other issue that I won't write about in this already lengthy blog post.
Alongside Chikuhodo and Hakuhodo, Koyudo followed suit in raising their brush prices in December 2019 although they first lifted their prices a few years prior in 2015. Bisyodo also raised their retail prices in July 2020 and I expect other companies to do so in the coming months.
So let's recap the situation so far because my ambitions of writing a hard-hitting journalistic masterpiece have been dashed due to my economic forecast graphs morphing into a story about roadkill. Firstly, there are more consumers in the fude market now thanks to globalism. Secondly, there are more companies making animal-fibre brushes now competing for the same resources. Thirdly, there are fewer raw materials to go around due to environmental reasons. The prices we consumers pay are trending upwards as the result.
There is one other reason for the prices to go up or go down. I've named them 'The Cake Effect' and 'The No-Frills Approach'. We might see the fude market go one of two ways: the first is that price increases will end up creating an exclusive market where only those with high levels of disposable income buy into fude and the second is that prevalence of budget-friendly brands will rise.
We're already beginning to see some products with eyewatering prices tagged 'limited edition' pop up with more frequency compared to what I can remember from just a few years ago. Bunshindou is a recent entrant to the fude market with prices for one brush starting at ¥60 500.
I'm personally disappointed that brands like Koyudo have discontinued many of their more affordable options such as the BP Line in favour of extremely high end premium products.
Perhaps it's just a sign of the times we're in. There's a kind of cynicism coming from companies that says, "it's an expensive product but people will buy it anyway."
Beautylish recently released their own line of fude under their home brand Beautylish Presents in the Yano Series face and eyeshadow brushes. I initially thought they would take the opportunity to enter the market with low prices since they literally cut out the middle man. I was wrong. Beautylish is a distributor for Chikuhodo, Koyudo, Rae Morris and the sole distributor for Sonia G and Wayne Goss. The retailer purchases these brushes at a wholesale price and then sells them on to consumers with a Business-to-Consumer (B2C) model so it boggles me why they wouldn't price their home-brand brushes lower than the name brand ones or at least try to be competitive. The Beautylish Yano five piece face brush set retails for USD$475 and the five eyeshadow brushes for USD$180. Seriously? No thanks.
For a total of USD$175 you could buy two face brushes and four eyeshadow brushes all made from blue squirrel in the Wayne Goss line on the Beautylish website. I don't know how pricing and marketing discussions went down at Beautylish but I think they totally missed the mark with the Yano Series. To consumers, I think it's a clear no-brainer which set is more appealling. Sure, they're not dupes for the new release but it's squirrel so the differences are minor when it comes to a material so soft and floppy.
There are two schools of economic thought that applies to the consumer market following a recession. Typically, consumers set stricter priorities (as I have) and reduce their spending. As sales begin to drop, companies cut costs, reduce prices and postpone new investments. We saw droves of budget items pop up after the Global Financial Crisis in 2007. Every supermarket suddenly offered a no-frills, limited packaging, low price equivalent for everything from pasta to soft-drink and department stores came out with budget appliances. We'll get to that later. The more controversial option is the one that I sometimes get negative feedback on. It's the 'OMG, this costs so much money, do you even know how many weeks of groceries I could buy with that?' reaction. I hear this mostly from makeup users who haven't been introduced to fude before. It's a sentiment I've been repeatedly reading on social media about content creators coming off as tone-deaf given the high rates of unemployment and economic hardship. Some economists call it 'Shoptivism' where the wealthy take an optimistic view of the market and continue buying luxury goods. I'm calling it 'The Cake Effect'.
I formerly worked in public relations for the luxury market. People who work in this field will tell you that 'it's not all champagne and oysters' but the operative word here is 'all' because a lot of it is. See the attached picture. In my defense, I'm drinking a sauvignon blanc here... but I probably also did drink champagne. Anyone who knows me understands that I spend most of my time at these kinds of events chasing down the hors d'oeuvres because no one serves you a proper meal all night long. A luxury marketing event is where they basically starve everyone and liquor them up into buying something. Many cars have been sold off this way and that's after raffling the one on display. You starve but there's an open bar and a goody bag at the end of the night.
The high end market will celebrate and indulge no matter which way the economic tides are turning. During the last recession, we saw a "let them eat cake" approach from the luxury brands which to my just out of university living-on-toast-and-ramen eyes seemed insane and insensitive, but the marketing approach worked. The target consumers for high end items will mostly remain unaffected by economic downturns. You may have read a myriad of news articles about how the world's wealthiest became even wealthier during the pandemic. Now, buying one expensive brush doesn't a Marie Antoinette make but at the same time, it's kind of removed from the lives of the starving peasants, no?
Now, if you're buying just one nice thing, you may subscribe to 'The Lipstick Effect'. It's a financial and psychological theory that posits that consumers will buy a less costly luxury item during an economic downturn. The reason behind it is that buyers may be more conservative with their money or that income might be reduced but people still want to have something nice. It's a fancy way of saying, "I deserve this. I just want to treat myself" so instead of buying a new Gucci handbag, one might settle for a Gucci lipstick instead.
The beauty and luxury markets are booming right now. We're seeing this correlate in the share prices for beauty companies too which are currently at a five year high. Profits fell off a cliff in March 2020 as Covid-19 became a global pandemic but just take a look at where they're at now. LVMH Moët Hennessy Louis Vuitton is trading at €568 a share in March 2021 which equates to USD$680 or AUD$868. Put that into context. Five years ago, LVMH was trading at €152. I know this company has bigger brand name recognition in the Moët champagne, the Hennessy brandy and the Louis Vuitton fashion house, but LVMH is really the powerhouse of money. LVMH is the parent company of Sephora, Dior, Fenty Beauty, Bite Beauty, Benefit Cosmetics and Marc Jacobs Beauty. That's just in the makeup world. LVMH epitomises luxury because they own BVLGARI, Tiffany & Co as well as the majority of the champagne producers. When people think of French champage they think of Dom Pérignon, Moët & Chandon and Veuve Clicquot. All three are owned by LVMH. The only one I can think of that's not under their umbrella is Bollinger. If you were to imagine LVMH as a person, you'd have to picture an extremely wealthy woman dressed in clothes from the high fashion houses, carrying a mega Sephora haul in a LV travel trunk but being weighed down by the diamonds she's wearing and the champage she's consumed.
Good old Estee Lauder is doing pretty well too. They've recently acquired The Ordinary in case anyone missed out on that information. If you think that Estee Lauder is a boring makeup brand, then remember that they own Tom Ford, La Mer and Jo Malone to name a few subsidiaries. The luxury market, particularly in beauty, is well and truly booming right now. We're going to see the same thing in the makeup brush world.
On the opposite side of the "let them eat cake" approach, economic recessions allow for the pop-up of budget-friendly items. You got supermarket home branded foods and also more affordable makeup items but what about the in-between? The middle ground disappears. What happened to the makeup brands MAC and Estee Lauder? They faded away while Tom Ford surged ahead and drugstore became super popular in the late 2000s.
I wonder what the fude equivalent of the supermarket no-frills products will be. Right now we're seeing a reshuffling in the order of entry level to high end but so far there are no obvious contenders. No one is settling themselves as clear affordable fude brand and there's no distinctly luxury brand. This is a market opportunity ready for someone to step into but clear boundaries need to be established first for entry, mid and high end commodities. This distinction would be made more evident if better marketing was used or a public relations company was engaged. I'm not opposed to the high price tags and if you can afford it and want it, go for it, but I think if a company is going to sell a $500 brush, the whole experience needs to be more upmarket. Currently, a potential customer needs to jump through numerous hoops and that's on top of being already motivated to acquire a product. Luxury is supposed to be easy.
That being said, there are still products and companies out there which offer more affordable brushes with their entry level lines. Hakuhodo still offers their bread-and-butter J Series and B Series brushes which are made of standard black handles and nickle-plated brass ferrules. Added to this, there are many new competitors in the market. More and more OEM brands are popping up touting Japanese artisan brushes by Western companies. Rephr is a new Canadian brand also offering a streamlined selection of offerings with good sales and deep discounts which makes their products far more enticing to newcomers or those on a budget. Alongside this, Chinese companies are also starting to gain more traction with their lower prices.
Earlier, I wrote about the strategy of targeting cashed up consumers with big ticket items but taking a more economical route is the other direction the fude market could go in. If these companies really put some thought and investment into their public relations and marketing strategies, then I think they'd be able to refine their brand value. Some companies will probably need to pivot in order to stay alive and relevant. I'm starting a running 'If I was in charge' series on the blog featuring each brand and the changes I would make if I headed the company. In these posts I pontificate about what I'd do if I was let loose on their manufacturing and marketing. Stay tuned.
What do you think? Where do you see the fude market heading? And are you still buying brushes or are you tightening the belt?