Imogen Matthews checked out the ever popular trends presentations at this year's in-cosmetics, tracking everything from naturals to cosmeceuticals
In today’s difficult economic climate, keeping up to date with current trends and issues in the global cosmetics and toiletries markets has never been more important. So it was no surprise that attendance levels at this year’s in-cosmetics marketing trends sessions were high with visitors intent on gaining insight from market research agencies, consultancies and brands.
BEYOND NATURAL
The importance of the natural/organic beauty trend was underlined by a complete day of presentations on the subject. Project manager with Kline, Deidre McNulty pointed out that the ingredients used in cosmetics today have come full circle and are now moving back to a more natural approach.
Kline makes the distinction between naturally positioned and truly natural cosmetics, based on whether a product contains chemicals associated with many mainstream brands. In the US and Europe, the naturally inspired sector accounts for around two out of three purchases in the natural/organic category valued at $5bn. “In the face of economic downturn, the market grew by 15.8% in 2008 due to increased consumer demand and distribution,” explained McNulty, who also cited the desire for a healthy lifestyle as one of the key market drivers. “The fallout from the economic downturn did not have a major impact in 2008, but growth will slow in the short-term,” she maintained. In retail, the biggest opportunities will come from speciality, health/natural foodstores and supermarkets in the US, while in Europe pharmacy and drug chains will play an increasingly important role.
The difficulties of defining naturals and organics were highlighted by Amarjit Sahota, director, Organic Monitor. While organic cosmetics are easier to classify – they must contain certified organic ingredients or have certification from a recognised organisation – natural cosmetics must contain a natural component or contain low/minimal amounts of synthetic chemicals. Organic Monitor excludes The Body Shop and L’Occitane from its definition for this reason.
“The natural market is becoming increasingly crowded, so natural/organic doesn’t mean that much,” maintained Sahota. “We are seeing a rise in ethical consumerism with an increasing demand for chemically clean products.” He predicts that there will be growing scrutiny of product origins and that companies will need to respond to rising expectations of consumers concerned with sustainability. “Market pioneers are integrating sustainability into their businesses as the market evolves,” he said. On fair trade Sahota said this was something that would become more prevalent, although there are currently no formal standards for cosmetics. Examples of brands carrying the fair trade logo include Léa Nature in France and Dr Bronner’s Magic Soap in the US.
Sustainability is is at the heart of the Santaverde brand, founded by md Sabine Beer in 1986. Discovering she had skin problems that did not improve when using existing products, she bought a finca in Andalucia, Spain where she established production of aloe vera plants for use in her own line of skin care products. The plants are organically grown and freshly processed, unlike most other aloe vera-based brands which are derived from powder. “We didn’t think of sustainability at the time, but by using manual labour and no additives we produced 100% pure aloe vera gel that you can’t buy anywhere,” stated Beer. The skin care formulas do not contain water, only aloe vera juice enriched with pure plant oils and plant extracts.
In 2007, she transferred her skills in organic cultivation to a new project in the north east of Brazil, where she revived an old cashew plantation and now uses the freshly processed fruit under the rules of organic processing. The result is a new 100% organic premium skin care line.
“People don’t have an understanding of what natural is,” said Barbara Olioso, green chemist and founder of Organatural, who spelled out the technical challenges of producing natural cosmetics. Considerations include a shorter shelf life, different sensorial performance and microbial content. “There is a lot of adulteration going on with essential oils,” she affirmed.
“The number one ethical challenge is air miles,” she added. “There are a lot of ingredients available from Third World countries, such as palm oil, where plantations in Southeast Asia are linked to deforestation and the extinction of the orang-utan.” Another consideration is whether to use glass or plastic packaging. “Metal foil makes recycling impossible,” she pointed out.
As far as the consumer is concerned, it is difficult to spot the fake natural from the original, especially given the wide number of certification bodies. “They give credibility and reassurance to consumers, but actually restrict the use of ingredients and the performance.” According to Olioso, certification can be costly, so it might be better for a brand to define their own version of natural and devise a raw ingredients policy based on organic, natural, nature identical, nature derived, semi-natural etc.
MATERIALS TO WATCH
The number of ingredients in cosmetics is overwhelming, standing at over 15,000 according to INCI listings. Of these 4000 are botanical extracts. Nica Lewis, Mintel’s head consultant for beauty innovation, highlighted three new active natural ingredients which are starting to appear in cosmetic formulations.
Yuzu, which Mintel first identified for its potential in 2006, is a citrus ingredient found in food and beverages in Japan. It is also used as part of the winter bathing ritual and is said to ward off flu and colds. “We are starting to see it appear in beauty products as a claim,” explained Lewis. “Yuzu is used as a scent in fragrance and bath. The beauty business is now squeezing more out of the ingredient which is shifting into western brands. It is following the path of other zingy flavours, such as ginger and lemongrass, and crossing over into beauty”.
Amla is the Hindi word for Indian Gooseberry and this has high levels of antioxidants and is rich in tannins and gallic acid. “Amla oil is one of the world’s oldest natural hair conditioners, used predominantly in Indian beauty products,” explained Lewis. In 2008, Mintel picked up 46 hair care, 45 skin care, eight colour cosmetic and two soap/bath launches containing Amla.
Maca Root from Peru is used for its nutritious and energising properties in health products and is now crossing over into beauty. It is also said to help with stress, weight loss and balance out hormonal changes. “Maca Root first emerged in 2002 in hair care but is now appearing in facial care products where its energising benefits have been highlighted,” said Lewis, who predicted that more natural ingredients in the area of health, food and beauty will become available in beauty.
CREDIT CRUNCH COSMETICS
The need to adapt to the current economic downturn was highlighted by Irina Barbalova, industry manager, cosmetics & toiletries, Euromonitor. “We are seeing the term ‘recession chic’ being applied to beauty, with some designers using black as a reflection of practicality but also elegance,” she said.
According to Euromonitor, hair care, premium colour and fragrance are predicted to decline in 2009 on a global basis, although emerging markets including Latin America and China are expected to maintain growth. “Skin care is regarded as an essential, with anti-ageing projected to grow by 5% per annum on average,” explained Barbalova. “Anti-ageing is segmented by age and gender and brands are targeting young consumers as a preventative measure.” She provided statistics on the growing numbers of tweenagers in the US, predicted to reach 23 million by 2020. “This new target will continue to grow in the future and companies are rethinking strategies in order to target them.”
The main effect of the recession will be consumers trading down and seeking value, even amongst those who can afford to spend. “Consumers will spend if they can justify luxury as need,” suggested Barbalova. A spin-off from this trend will be for fashion designers to work with high street names, such as Karl Lagerfeld and Stella McCartney collaborating with fashion retailer H&M.
Barbalova covered a number of beauty related trends of growing significance, including beauty supplements, foods and beverages that claim to work from within. She also predicted more alternatives to surgery within the area of cosmeceuticals thanks to scientific advances such as stem cell technology. “But do these products deliver?” she asked. “Just being luxury is not enough.”
CLAIMS & DILEMMAS
“Nowhere is beauty advertising more heavily regulated than in the UK,” maintained Chris Gummer, director of Cider Solutions, the reason being that the Advertising Standards Authority (ASA) has tough guidelines which it believes protect the consumer. “British women believe it’s an insult,” said Gummer, adding that they are capable of making up their own minds when faced with claims related beauty advertising. “I know advertisers who take what is on TV in the UK (because the ASA has passed it) and take it around the world.”
Gummer showed ads for L’Oréal Skin Derma Genesis for the UK, where only soft claims for moisturisation were made. In France, where the product is known by dermatologists as a quasi-professional product, much bolder claims are made in the advertising. “You can imagine how frustrated L’Oréal scientists are after years of research and all they can say in the UK is that it plumps up skin and gives a healthy glow,” he said.
The answer, Gummer believes, is to produce better data and the use of well designed protocols to test methods. “You can’t argue for lower standards against the ASA. The quality of science has to be as good for cosmetics as for medicines,” he said. “We also have to educate regulators about the consumer’s beliefs, needs and the fact that she’s smarter than you think.”
Jack Ferguson, director of Skinnovation, also discussed beauty claims in advertising, pointing out the dilemma marketers have in not having sufficient scientific data to support the kind of cosmeceutical claims brands want to make. For example, the UK ad for L’Oréal Revitalift Deep Set Wrinkles gives the impression it’s a cosmeceutical, but the wording skirts around the claim, talking about wrinkles “appearing reduced”, because that’s all the ASA allows it to claim.
Although the EU now states that a cosmetic can have a physiological effect on the skin without having to be classified as a medicine, there is a mismatch between how the regulators and EU guidelines see products. “The old concepts of cosmeceuticals are dogmatically held by those who influence the regulators,” maintained Ferguson, who believes this can be challenged with good scientific data. “An ingredient story is a start but you need to show it works in vivo, not just in vitro.”
Protection is a key claim used increasingly in skin care products, according to Mintel’s Lewis. She attributes it to consumers’ paranoia over global warning, the economic recession, chemicals in beauty products etc. “We are turning into a risk averse society with a lot of regulation. The global scare of terrorism and governments cracking down on civil liberties is restructuring our behaviour and actions,” she maintained. In response to this “toto-phobia” trend, beauty companies are developing new niches, such as products for extreme weather, against pollution, the thinning ozone layer, hormonal changes and manmade factors such as artificial lighting, heavy metals, smoking and stress.
Science is also creating new product opportunities. For example, epigenetics is about genes and generations and works on the theory that our genes are affected by the lifestyles of previous generations. “We are in fact the guardians, not owners, of our genes,” pointed out Lewis, giving the example of Blooming Babe Pregnancy Survival Kit containing ethically based, chemical-free beauty products that donates to a UK educational children’s charity.
Leonidas Dokos, industry analyst with Frost & Sullivan, discussed the key drivers and challenges in the European markets. Amongst the major trends, he identified the emergence of the power consumer, who will have increasing access to chemicals information; biorenewables, ie natural products sourced renewably; and beauty from within led by the incorporation of food ingredients in cosmetic products and cosmetic actives in food products. “The beauty markets are more resilient to the current economic climate than other chemical industries with opportunities for natural green products, interaction with the food industry, acquisitions, ageing concerns in the population, e-commerce and by geographical region,” he said.
EMERGING MARKET GROWTH
According to Euromonitor, global industry growth in beauty is set to slow down in 2009 at below 4%, with commodity sectors likely to be affected by the recession over the next four to five years. The exceptions will be emerging markets, such as Latin America and Asia where large and growing populations combined with rising disposable incomes and developing retail infrastructures are proving fairly resilient.
Euromonitor’s Carrie Lennard identified “frontier” markets, including Venezuela, Argentina and Vietnam, as offering the biggest growth opportunities. “The recession has yet to be felt in Argentina which has shown a 20% average annual growth rate between 2003 and 2008,” she explained. “This is where premium brands perform strongly.”
Ukraine is another market to watch and is following a similar pattern to Russia. “Beauty sales were worth over $2bn in 2008 and we’ve seen a 19% average annual growth rate since 2003,” continued Lennard. Direct selling accounts for 25% of sales in Ukraine, much of which is sold at outdoor markets.
Argentina and the BRIC nations were confirmed by Anna Ibbotson, Kline industry manager, as the fastest growing regions, increasing by more than 10% per annum. She pointed out that the reason the $280bn personal care industry is so attractive is that it craves innovation. Over the past 15 years, this has come from areas such as pharmaceuticals, nutraceuticals and nutricosmetics, which has led to a blurring of demarcation with personal care. She described the wide number of enabling technologies that have led to innovation, especially in cosmeceuticals, including delivery systems, cosmetic actives, biopolymers, botanical actives and skin whitening. “Enabling technologies will come from a variety of sources in the future, including drug development, wound care and new extraction techniques impacting heavily on the botanical actives market,” she said. “Skin care is the one to watch. It is the largest sector in personal care, with all sectors represented and it is easy for the consumer to buy.”
COLOUR CREATIVITY
A novel approach to colour cosmetics forecasting was given by Antoinette van den Berg, founder of forecasting agency Future-Touch. Instead of just focusing on trends in the fashion industry, she also looks at raw material and ingredient trends to assess their practical application within the make-up market. “We help our clients interpret the trends and turn them into innovative products,” she explained.
Her multimedia presentation gave predictions for 2010 and beyond. She examined how street fashion can determine a woman’s own personal statement, showing how future trends might include innovative uses of make-up on the face, such as using bold colours on the brows, making them more of a feature, using colour over the whole eye area and having two different colours on the lips and nails. “The consumer wants to be unique,” said van den Berg. “ If consumers start to use products on different areas, this creates the opportunity for new product formats.”