Cracking open the 'beauty from within' market

Joysa Winter

May 24, 2010

13 Min Read
Cracking open the 'beauty from within' market

With only 3 per cent of the global market share, America remains a fertile — and frustrating — frontier for nutricosmetics. Joysa Winter surveys manufacturers, marketers and suppliers to help divine the future of beauty

Emerging out of the nutraceuticals movement, nutricosmetics first gained popularity in Japan and Europe, and are only now trickling into the US. Products fall into two categories: drinkables and oral ingestibles.

Shiseido Collagen Update (Shiseido)In Japan, the products are affordable and widely accepted. Key players include Shiseido, Lion and Kracie. In Europe, sales are concentrated in France, Italy, Germany, the UK and Spain. There, prices are a premium and key players include L'Oreal, Nestle, Ferrosan A/S and Oneobiol.

By comparison, the US market is in its infancy. "Americans are more sceptical of the beauty-from-within concept," said Carrie Mellage, director of consumer products at The Kline Group, a consulting firm. "There is a cultural emphasis on scientific investigation, and Americans also want instant results, which nutricosmetics don't provide."

These hurdles proved too much for two early entrants into the American nutricosmetics game: Olay and Avon. Both launched products in 2003 that have since been discontinued.

In 2008, The Kline Group valued the global nutricosmetics market at $1.5 billion. Europe accounted for 55 per cent of the market, followed by Japan at 41 per cent and the US at only three per cent.

In the US, sales remain slow. "Even though there is a growing interest in supplements and functional foods, the 'inner route' to beauty is yet to be discovered by the majority of US women," said Brenda McAnally, US area manager of Ferrosan A/S. "A reason that is often cited is that US customers are bombarded with messages promising immediate gratification from the leading brands of topicals. It will therefore take renewed efforts to educate consumers about the benefits of rebuilding and protecting the skin from within."

Imedeen (Ferrosan A/S)Ferrosan's front-line product, Imedeen, is sold in 70 countries, primarily in Europe. "Our biggest challenge in the US has been to build awareness of the Imedeen brand, as well as the value of oral beauty supplements," McAnally said.

A tough market
The recession may also be taking a toll.

A February 2010 nutricosmetics report by Mintel Beauty Innovation found that new product activity worldwide doubled between 2008 and 2009, with 300 new products launched in 2009. But in the US, the trend was reversed. Whereas 64 ingestibles with a beauty-enhancing claim were launched in the US in 2008, only 44 were launched in 2009. As of mid-April, four products had been launched in 2010.

"Because of the economy, beauty manufacturers are less likely to try something new," said Taya Tomasello, senior beauty analyst at Mintel. "Instead, they're sticking with what they know works. I know many manufacturers are still looking into nutricosmetics, but launches are being put on hold until they know more about how these products will appeal to consumers, at least in the US."

Data from Euromonitor suggest that only certain types of nutricosmetics have taken a dip.

"Sales of food and drinks with co-Q10 are falling particularly strongly in Japan, which impacts the global sales," said Ewa Hudson, head of health and wellness research at Euromonitor. "However, the financial crisis might not necessarily be the reason. Lack of consumer confidence in the efficacy of food with co-Q10 may have a stronger impact. On the other hand, food and drinks with collagen are doing much better and the sales are rising, supported by new product launches."

In 2009, Ferrosan's Imedeen sales globally fell by seven per cent, compared to a global drop of premium skincare sales estimated at 15 per cent. Demand was especially affected in the US, Mexico, France and the Middle East. Still, four of the five largest markets showed year-on-year growth, with double-digit growth in the UK and Brazil. "This year, signs are that demand is increasing faster than expected," McAnally said.

BORBA, a cosmeceutical company popular in Hollywood, does not release its sales data, but founder and CEO Scott-Vincent Borba suggested that the recession hasn ot been all that bad on his company's sales — even if new product launches nationwide are down.

"I would say that people have been spending more on nutricosmetics," Borba said. "In bad times, people stick with what makes them feel comfortable and secure."

BORBA Skin Balance Clarifying WaterBORBA entered the nutricosmetics market at its inception, in 1994, with the launch of BORBA Skin Balance Waters, formulated for different skin types, as well as BORBA Skin Balance Crystalline. It unveiled BORBA Gummi Bear Boosters in 2007 and updated its formulas in 2008.

Fortitech, a leader in customised nutrient premixes, also has seen an upsurge in interest among product developers — although that has yet to morph into concrete sales. "We have seen a real interest in nutricosmetics, with lots of sample requests, and questions about product development utilising ingredients like collagen, aloe vera and omega-3 fatty acids," said Richard Schleif, director of marketing. "For the most part, they have come from manufacturers in Europe and Asia, but Brazilian companies have also contacted us."

Improvements in taste masking in the past five years have been a particular boon to the nutricosmetics segment.

"Advances in encapsulation and nanotechnology are allowing us to do so much in terms of taste masking, making nutrients like amino acids viable for product formulation," Schleif said. "This means product developers really can consider ingredients that used to be considered problematic."

Marketing the message
When it comes to selling nutricosmetics, consumers' growing awareness of a diet-beauty connection is both a strength and a weakness.

In a 2009 consumer survey in the UK, Mintel Beauty Innovation found that four in 10 women believe there is no need for nutricosmetics if they have a healthy diet. Some 37 per cent of women who use nutricosmetics say you can't see benefits right away, and only 19 per cent think they really work.

These data point to the importance of scientific research and the active publicising of research results. "The results should be included in the packaging or product literature," Mellage of The Kline Group said. "Before-and-after photos can also help win consumer confidence, as would the use of testimonials, particularly by celebrities."

Consumer surveys done by The Benchmarking Co suggest American consumers would be receptive to this kind of messaging. "When women were asked which types of nutricosmetics they were willing to try, 74 per cent said they were willing to try a product that could be consumed 'on the go,'" said Alisa Marie Beyer, founder and creative director of The Benchmarking Co. "Because they are used to taking supplements, 72 per cent indicated they were open to a pill or capsule."

Sixty-five per cent felt comfortable with a consumable product, and 53 per cent were open to a product they licked or dissolved on the tongue. The least popular format was a beverage or drink made from a powder, at 48 per cent.

Suppliers step up
So just what is inside these beauty-touting pills? It depends. The ingredients are usually selected for their antioxidant or anti-inflammatory properties, as seen in a random product sampling collected by Functional Ingredients (see Table 1). In a review of all global product launches in 2007-2009, Mintel Beauty Innovation found that the vast majority made anti-ageing claims, followed by antioxidant, anticellulite, anti-hair loss, whitening and anti-acne.

There is room for more innovation, however. The Mintel study cites the potential benefit of emerging health care actives, such as griffonia, rhodiola, astaxanthin, N-acetyl glucosamine and MSM.

The Kline Group points to the benefits of artichoke leaf (Cynara scolymus), which contains flavonoids, caffeoylquinic acids and polyphenols; as well as turmeric (Curcuma longa), whose active compounds, the curcuminoids, function as photo-protectants, antioxidants and anti-inflammatories.

Natural Health Science has done more than 25 studies on the oral and topical benefits of its ingredient Pycnogenol, a pine-bark extract. The ingredient is used widely in beauty products across Asia and Europe as well as the US. Studies show that when orally ingested, the ingredient helps protect collagen and elastin in the skin from enzymatic degradation. It improves skin elasticity and the micro-circulation of blood, as well as offers a photo-protective effect against UV damage. Pycnogenol is also a strong antioxidant.

LycoRed markets its Lyc-O-Mato lycopene complex in ingestible applications by touting its photo-protective and antioxidant benefits. Several studies have shown that lycopene taken orally protects against UV-induced skin redness and other skin reactions — a protection not seen in synthetic lycopene. Lyc-O-Mato's antioxidant properties have been shown to significantly increase skin density, thickness and smoothness.

"Lycopene is more scientifically backed than any other nutricosmetic ingredient," said Udi Alroy, vice president of global marketing and sales. "Lyc-O-Mato is being used in more than 50 nutricosmetic products."

DSM sells 14 ingredients that it markets for beauty. They include vitamins B5, B6, C, E and K1, as well as Teavigo (EGCG), Bonistein (genistein), Hidrox (hydroxytyrosol), and Lafti (probiotics).

Ingredients supplier Sabinsa has been selling for the market since its inception, and its combined nutricosmetic/cosmeceutical sales now account for roughly 35 per cent of its total business. It is, the company says, one of its fastest-growing divisions.

"Cosmetic applications were on the radar of Dr. Muhammad Majeed (Sabinsa's founder) from the very beginning, as herbal extracts have had skincare uses in Ayurveda for several thousand years; but he had to wait for the market to catch up with him," said Shaheen Majeed, Sabinsa's marketing director.

Among Sabinsa's offerings are Boswellin CG, for anti-inflammatory and anti-aging; Cococin for moisture, healthy cell growth, skin and hair care; and OxyResvenox for UVB protection.

Two of its ingredients have been extensively studied — saberry and ellagic acid. Solid research coupled with smart product development may be the secret to launching the American nutricosmetics market.

"Having research-backed ingredients makes it easier when dealing with companies that look for marketing angles," Majeed said.

About the Author(s)

Joysa Winter

Joysa has been reporting on the healthy foods and dietary supplements industry for more than a decade. She is a graduate of the University of Missouri-Columbia School of Journalism and has a master's degree in Hebrew Letters.

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