Cosmeceuticals Blur the Boundaries Between Cosmetics & Medicine

One of the defining trends of the cosmetics and toiletries industry and, more specifically, the skin care sector, is the rise of cosmeceuticals. The skin care sector, despite being a mature market worth $60 billion in 2006, is estimated to grow to $74 billion by 2011, a global increase of 24.3 percent, according to Euromonitor International figures. It is testament to the innovation of products, such as cosmeceuticals, that a developed and overcrowded marketplace can sustain this level of growth.

Cosmeceuticals are non-pregascription products that are marketed as cosmetics and include active ingredients with medicinal properties. They blur the boundaries between cosmetics and medicine and sell themselves on the basis of science, while tapping into the global preoccupation in the pursuit of youth. Across the globe, cosmeceuticals are still largely confined to the skin care sector and, within that sector, the anti-aging market, although there have been inroads made into other sectors.

The products offer an extensive and ever-expanding range of biologically active ingredients, each promising drug-like benefits and a dramatic rejuvenating effect on the skin. Some of the more popular ingredients include retinoids, to speed up the skin renewal process; and alpha hydroxy acids used in chemical peels. The rise of the cosmeceutical is evidence that most cosmetic-savvy women now recognize these scientific-sounding terms as beneficial in skin care, even if they were not sure of their exact proposed benefits. More recently, cosmeceuticals are moving towards transdermal products containing collagen and even stem cell technology.

Advances Around the World

Mostly developed in the affluent, mature markets of the Western world, and strongest in the United States, where sales of nourishers and anti-aging products were estimated at $2.2 billion in 2007 (up from $1.3 billion in 2002), world sales figures confirm the cosmeceuticals trend is well and truly a global phenomenon.

France and Germany follow behind the United States in their demand for drug-based beauty products, with value sales of nourishers/anti-aging products in 2007 at $1.2 billion and $1.1 billion respectively. Meanwhile, Brazil, with its cultural emphasis on looks, has also experienced a strong demand for anti-aging products. Cosmeceutical sales were $927 million in 2007, up from $302 million in 2002, according to Euromonitor International figures.

Russia and Eastern European countries have also shown considerable growth in sales in this sector, with sales in Russia rising from $89 million in 2002 to $430 million in 2007. Although total sales in Russia are still relatively low, it is rapidly developing markets like this that offer the most room for growth as expenditure and exposure to Western cultures increases.

Although Japan is the largest skin care market in the world, standing at $13.1 billion, contrary to the rest of the world, spend on anti-aging products remains low, at less than 10 percent, compared to around 30 percent in the United Kingdom and the United States. In Japan and much of the Asian Pacific market, cosmeceuticals are making inroads largely in the form of skin whitening and de-pigmentation products and powerful sunscreens. Japan’s lead in innovation and product development may suggest the evolving future of cosmeceuticals. For example, Japanese consumers have already embraced the concept of the ‘skinceutical’, where beauty-enhancing products are added to food, such as Shiseido’s Pure White skin whitening drink.

A Product to Suit All Purses

Cosmeceuticals have breathed new life into the skin care market around the world; to sustain this growth, the sector has been quick to diversify. Requiring expensive scientific research and backing, the cosmeceuticals trend is ideally situated in the premium end of the market. Estée Lauder, Lancome and Shiseido are all major players in anti-aging. and five out of 10 of the leading global anti-aging brands are prestige labels. Estée Lauder’s Re-Nutriv brand retails at $90 for a 1.7-oz. Re-Creation Day Cream, and Creme de la Mer can cost in excess of $200 for a 50-ml pot. As this premium pricing alienates many consumers, the multinationals have, as always, been quick to adapt, producing lower-cost alternatives, which blur the divide between premium and mass brands, giving rise to what has been dubbed the “masstige” product.

Procter and Gamble’s Olay Regenerist and Definity brands, retailing around $50, are extremely popular, offering the same premium image and claims of rejuvenation at a more attainable price point. Indication of cosmeceuticals becoming a big player in the mass market was evident in the surprise success story of 2007 when U.K. high street store Boots’ own brand No7 Protect & Perfect Beauty Serum, retailing at $33 for 40 ml, received scientific endorsement on a television show, and a sales stampede ensued. A year’s worth of product was sold in two weeks, and the brand has now been repacked as No7 Restore and Renew Beauty Serum for sale in the United States.

The move toward masstige products ensures consumers with less disposable income, both in the mature Western markets, currently suffering from a weak economic climate, and the new emerging markets can buy into the trend and keep sales buoyant. According to Euromonitor International predictions, the facial anti-aging sector should grow by almost 8 percent a year from 2007 to 2012, more than double the predicted growth of the cosmetics sector as a whole.

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