LAS VEGAS—Cosmeceuticals and nutricosmetics may still be a small industry, but it’s about to get a lot bigger. In 2009, nutracosmetics earned $2.1 billion, nutraceuticals garnered $6.5 billion, and cosmeceuticals came in at $11 billion, according to Young-Li Qian in her SupplySide West presentation on hot nutricosmetic ingredients. Quian, research analyst at Frost & Sullivan, said these industries are still small compared to cosmetics, which came in at $250 billion in 2209, but the market research firm predicts a 17.8-percent compounded annual growth rate (CAGR) for these industries from 2009 to 2015.
Key ingredients that will help drive this growth include vitamins, carotenoids, fruit and vegetable extracts, green tea, CoQ10, phytosterols and collagen. Consumers are more aware and interested in ingesting them or applying these ingredients topically to improve beauty, but the onus is on companies to substantiate their products, as consumers still question efficacy.
Besides for increased awareness, other market drivers include the aging population and increasing demand for natural and organic ingredients. However the market is being restrained by efficacy doubts, lack of information regarding consumer need and lack of consumer knowledge of product benefits.
Qian said companies in this industry can catch on to growth opportunities related to the aging concerns of the population, consumer desire to use fewer prescribed drugs, increased awareness in regions such as Russia and North America, and hair and nail applications (currently 80 percent of the market is dominated by skin care products).
Consumers accept taking their beauty products in pill forms and well as certain food applications, such as beverages, snacks, confectionary and dairy, Qian noted.
Top successful strategies in this market, according to Qian, include investing in marketing and education, focusing on core product offerings, exploiting consumer feedback, establishing solid relationships with suppliers to ensure availability, investing in service differentiation strategies and using proven ingredients.