Wikipedia gives the history of the human beauty contest:
In May 1920 promoter C.E. Barfield of Galveston organized a new event known as "Splash Day" on the island. The event featured a "Bathing Girl Revue" competition as the centerpiece of its attractions. The event was the kick-off of the summer tourist season in the city and was carried forward annually. The event quickly became known outside of Texas and, beginning in 1926, the world's first international contest was added, known as the "International Pageant of Pulchritude." This contest is said to have served as a model for modern pageants.
Circus and freak show promoter P.T. Barnum apparently tried to hold a human beauty pageant in 1854, but his beauty contest was closed down by public protest and he substituted dogs instead.
"Fitter Family" beauty contests were started at the 1920 Kansas State Fair, and grew out of a confluence of the dog show world and the eugenic movement, as I note in The Eugenics Man and the Kennel Club.
A formal system of beauty pageants started shortly after that.