‘Beauty from within’ and the economic climate discussed

In general the personal care and cosmetics market has fared better than other markets. The “Beauty and Wellbeing from Within” concept has proved to be the most resilient, assisting all the way the growth and consolidation of the nutricosmetics market globally. The top five major trends in the personal care and cosmetics industry are illustrated in Figure 1. The “Power Customer” represents the most influential market trend impacting the personal care industry and the companies active in it in a multifaceted way. One of the top market trends in the personal care industry is “Beauty and Wellbeing from Within”, which is expected to further promote in the coming years the integration of the food and cosmetics industries. The utilisation of food ingredients as cosmetic products is not a new idea. The classical approach to beauty dates back to the ancient Egyptians and Greeks. Various natural foods have been used to cure acne, rashes and various other dermatological and beauty related problems. Even today, cucumber slices are placed upon tired eyes to rejuvenate the skin around them and reduce dark circles. Nutricosmetics is based upon the theory that the key to a beautiful face is a healthy body. The idea of capitalising on active nutritional ingredients first arose in the 1980s. However it is a relatively new growth defined product market that is attracting growing research and development, marketing activities and brand exposure. On the other hand there is also an increasing utilisation of cosmetic active ingredients in food products. The result of course of this joint relationship can be seen; the growing integration of product lines between the two industries – food and cosmetics – and the companies active in them, something that is happening already. The question is which side is going to benefit the most. Nutricosmetics promote the concept of beauty through a healthy body. These products are taken orally, either as pills or liquids. Nutricosmetic products have active ingredients, which offer a vital link between the health and cosmetic properties of nutritional ingredients. When ingested the products have an effect, preventive or reactive, on skin, nails and hair. Nutricosmetics is one of the three hybrid markets under the umbrella of personal care and cosmetics. The global personal care and cosmetics market was valued around $328 billion in 2009. The market growth varies by country and product category, but in general the market is exhibiting a healthy 5% to 6% annual growth rate. The nutricosmetics and cosmeceuticals segments are growing at a faster rate than nutraceuticals and general cosmetics & toiletries, suggesting an increasing overlap and synergy between the two market sectors that include the word “cosmetics”. The total market for nutricosmetics in 2009 was valued at $2.10 billion and is expected to grow to $5.62 billion in 2015 with a compound annual growth rate (CAGR) of 17.8%. The “Beauty and Wellbeing from Within” concept is gaining traction because of the hybrid effect of both nutrition and cosmetics in a single, ingestible food fortification or supplement. As a result, the nutricosmetics market could very well realise its potential if it harnesses the opportunities in the baby boomer group. The ageing population could be persuaded to switch from cosmetics to nutricosmetics if manufacturers provide them with scientific data about the properties of their products. Manufacturers have begun to respond to market demand by providing ample proof of the benefits of nutricosmetics ingredients. End-user trials have evolved and a lot of these scientific trials show the positive effects of different nutricosmetics on skin, nails, and hair.

Economic recession is not the only market challenge

The massive growth potential of the North American (NA) market has not been unlocked yet. At present the NA nutricosmetics market represents only 5% of the global market following far behind Japan and Europe in third position. The “Beauty and Wellbeing from Within” concept is catching up rapidly in NA, presenting growth opportunities to established companies and new entrants. The simplification of Council Directive 76/768/EEC relating to cosmetic products represents another key challenge for the market participants. The Commission proposal for a “Cosmetics Regulation” was adopted on 5 February 2008 with the primary aim to remove legal uncertainties and inconsistencies as highlighted by the large number of amendments (55 to date) and the complete absence of any set of definitions. In addition, the aim of the simplification is to avoid divergences in the incorporation of the provisions of the European Union (EU) directive into a member state’s domestic law ensuring the product safety and avoiding additional regulatory burden and administrative costs. It also aims to ensure that these products can move freely within the community market. Finally, the role of the Cosmetics Directive is to ensure that cosmetic products placed on the EU market are safe, and that public health is protected by laying down rules on the composition, labelling and packaging of cosmetic products. It also introduces a ban on animal testing and on the marketing of products that have been tested on animals. The REACH legislative framework, which came into power in June 2007 with the aim to change the responsibility from public authorities to industry in demonstrating the safe manufacture and use of chemicals, was met with mixed reactions. The additional cost that REACH entails is estimated at e300,000 per chemical ingredient. In addition, part of the industry believes that REACH could result in stifled innovation and render the European chemicals industry non-competitive against its American counterpart. This can also have a tangible impact on the personal care, cosmetics and nutricosmetics industries.