The cosmetic ingredient market – current status/future trends

Published: 18-Dec-2006

It’s a useful exercise to use Dr. Patel’s quote as a starting point in a discussion of materials and markets for color cosmetics and personal care products. Dr. Patel, who is both an academic and a businessman, has, in this case, come down on the side of application, of practicality; laboratory curiosities, which might be of technical interest, are, to him, less important than materials that can succeed in the marketplace. We need to understand products, but more, we need to understand how to sell them.

It’s a useful exercise to use Dr. Patel’s quote as a starting point in a discussion of materials and markets for color cosmetics and personal care products. Dr. Patel, who is both an academic and a businessman, has, in this case, come down on the side of application, of practicality; laboratory curiosities, which might be of technical interest, are, to him, less important than materials that can succeed in the marketplace. We need to understand products, but more, we need to understand how to sell them.

In this article, we’ll examine several aspects of the decorative cosmetics/personal care market, looking at recent developments in both chemistries and marketing approaches, from the early ’90s to the present day. We’ll end by considering some future directions and will discuss the needs, growth, and changes which may occur in these market segments, focusing primarily on color cosmetics and closely-related market segments.

A look at the changes in color cosmetics in the recent past (from about 1990 – date) can be revealing. While it’s obvious to note the changes in the desired looks or shades, which vary normally from year to year, it’s even more interesting to examine the thinking behind the marketing of these products, in an evolving cultural context. Some of the marketing themes noted in the early ’90’s are still prominent, including:

  • Environmental awareness;
  • Desire for ‘natural’ products;
  • Technological/raw material improvements;
  • Multifunctional products.

In trying to understand the marketing of these types of products, it’s often difficult to quantify the signficance of each of these aspects. In 1990, Phyllis Klein, then vice- president of public relations at Max Factor, described the growing interest in bronzers and products with SPF ratings; she noted that there were more products coming to the market with SPF ingredients, due to improvements in technology which minimized the irritation often caused by sunscreens (1). A trend-setting step toward reducing such irritation was realized with the marketing of properly encapsulated UV filters: the well-established UV filter ethylhexyl methoxycinnamate was safely entrapped in silica, giving Eusolex® UV Pearls OMC (Rona/EMD Chemicals Inc) and contact of the UV filter with the skin was practically eliminated.

The 1990s saw a gradual increase in interest in SPF in lip products and face and body makeup. This was to prove an early indicator of a more general trend toward the current state of the color cosmetics market in which functionality, as well as purely cosmetic factors such as high color intensity and superior texture, are demanded of products.

It was in this period that we saw the rise of mineral makeup. While the science behind many of these products may remain questionable, the marketing still touches a nerve in the minds of many consumers. Dianne Ranger, founder of Colorscience Mineral Makeup, described, in 2000, the effects of light-reflective (interference) pigments, which “help the skin look younger. Skincare efficacy now comes from the color itself…the result is that color can now offer instant gratification as well as long-term benefits (3).”

In 2001 – 2003, the addition of interference gold and/or copper pigments to body lotions was quite popular; these were claimed to give a noticeable brightening and/or shine to the skin, though manufacturers were careful not to claim much more than that. (‘Radiance’ remains a popular description for this effect.) But while pigments, and especially special-effect pigments, have shown tremendous technological growth in the last five years (eg, multi-layer interference pigments (4), color-travel behavior (5), new substrates (6), etc), it is rare that the colorant itself can add much more than color and/or special effects (sparkle, shine, color-travel, light-diffusion, etc) to the overall benefit of the cosmetic.

Which brings us to the current state of the market, and what can be expected from it in the next few years. Pigments are designed primarily to add color, and newer effects are always being sought, but this by itself is not enough for today’s market. What we’ve slowly moved towards is the merging of the color cosmetics and personal care markets. The demands of this now-single market are not only that their products make us look good, but also that they help us feel good; they must also provide rapid, noticeable benefits to a fickle, moneyed, worldwide populace.

As noted above, environmental consciousness is a strong positive in the minds of many consumers; however, it can take many forms. For example, the use of the word ‘natural’ is prized when writing advertising copy, but there is an ongoing discussion regarding technical guidelines for the proper use of that term (7a – 7c). Durlin, the multinational nail polish manufacturer, once used the phrase, “The Nail Polish of the Planet Earth” in its advertising (8). Croda, the specialty chemical manufacturer, developed a project at its facility in the Amazon rainforest of which it said,

“The Crodamazon project was first pioneered in 2001 at the company’s plant in Manaus, a facility that is located in the heart of the Brazilian rainforest. The company says that the aim of the project was to research and develop uses for products derived from native plants, whilst at the same time pursuing a policy of preserving natural resources and promoting the socio-economic development of the region (9).”

Many people, including this writer, would salute Croda for creating such a project, in which the popular but rarely understood or acted-upon catchphrase of ‘saving the rain forest’ is tied to a realistic business model. If this project is even moderately successful, Croda should congratulate itself for creating a ‘win/win’ situation, both by introducing new raw materials and supporting a rich, but endangered, ecological system.

Dianne Sweeney, Marketing Manager for Rona, the Cosmetic Business Unit of EMD Chemicals Inc, uses the term ‘ECO’ as a shorthand description for the gamut of organic, natural, and ‘ecologically responsible’ ideas and products, to distinguish them from so-called ‘High Tech Nature’ products.

“…(T)here are two seemingly contrary trends emerging that can actually work synergistically. ‘ECO’ is one; ‘High Tech Nature’ is the other. ECO has already started – we see ads for all natural fiber clothing, jewelry from recycled/repurposed items, hybrid cars and mineral make-ups – they all play off ECO.

“The possibility of oil shortages in the long term, and the short term supply problems of chemicals caused by the Gulf coast hurricanes will probably heighten most people’s awareness of conservation, and of alternative sources of energy and chemicals. That is one spoke of the ‘ECO’ wheel, that will lead people into considering these issues in other aspects of their lives. It’s also true that this is an area where the U.S. and Europe retain a lead over China….

“My interpretation of ‘High Tech Nature’ is that it refers to materials that are ideally, but not necessarily, derived from natural sources to be ‘better than nature’: peptide delivery systems, and nanoparticles, seem to me to fall into this category…the spray on tanning craze is another – tans that are safer than UV exposure, and make one look more attractive…any sort of cosmetic enhancement procedure is another example.

“I think we will see, and are seeing, color cosmetics morphing into functional cosmetics, and they in turn will evolve into ‘colored cosmeceuticals’. ‘Cosmeceuticals’ will have to compete more and more with invasive cosmetic enhancement procedures (we see this already.) Traditional color cosmetics will only exist for special occasions, not everyday wear, colored cosmeceuticals will be for everyday wear.” (10)

These concepts are expanded on by Nathalie Schlemer, Director of Product Development, New Beauty, of the Guthy-Renker Corporation.

“Marketers are searching for the next ‘hot’ ingredient that will make their products superior, and more and more of them are turning to nature to find it. The overall natural grooming market is expected to reach $5.9 billion at retail by 2008, according to the U.S. Market for Natural Personal Care Products report by Packaged Facts, a publishing division of MarketResearch.com. This record level is expected to be achieved by gains of approximately 8-9% during the 2003-2008 period.

“‘Natural ingredients are growing at almost 8% per year, while natural products themselves are seeing growth at double-digit rates,’ confirmed Darrin C. Duber-Smith, president of Green Marketing Inc., Nederland, CO.

“The organic segment in particular has soared. Non-food organic product sales, such as personal care products, nutritional supplements, household cleaners and pet food, grew nearly 20% to $440 million, according to a 2004 manufacturer survey by Greenfield, MA-based Organic Trade Association (OTA) and NBJ.

“This July, Coty Inc. introduced Organics, a new natural products collection from The Healing Garden. Launching an organic line for mass-market shoppers is a clear indication of what the future holds in terms of consumer demand for natural products.

“Demand has increased dramatically for organic certified botanical products, and we are just seeing the beginning of serious interest on the part of manufacturers of personal care products for the mass and specialty markets.

“Educated consumers are taking a more active role in their choice of personal care products, and many prefer to use natural products that offer biologically active components with clinically proven health benefits and safety profiles as opposed to the sometimes harsh synthetic ingredients used in the past.

“Though this trend has been in place for a long time, natural products have become much more commonplace, and consumers are realizing the value that natural and effective products – even those used externally – have on one’s overall health. Even though natural products have been on the market for years, they have become much more commonplace and consumers are responding with the demand for more”. (11)

It’s difficult to look at the market today and fail to be impressed, even overwhelmed, by the range, chemical type, and claimed performance of ‘natural’, ‘naturally-derived’, or ‘nature-identical’ ingredients now available to the cosmetic formulator. Examples include materials derived from the oceans, such as Secma Biotechnologies Marines’ Codaivelane and Seve Marine, for moisturizing and hydration (12), and ‘compatible solutes’, a class of natural bio-molecules that enable extremophilic organisms such as the bacterium H. elongate to survive in highly-stressed environments. Research has shown the ability of compatible solutes such as Ectoin (Rona/EMD Chemicals, Inc) to offer sophisticated skin protection (13). There are plant derivatives that have only rarely been used for cosmetic purposes (lutein, for example, from dark green leafy vegetables such as spinach) (14), and there are plants which have long histories of use in particular cultures, but are only now being recognized more widely as powerful cosmetic ingredients. Examples include African rooibos, for which both antioxidant and antimutagenic capabilities have been claimed in vitro (15), and Emblica™, from the Indian gooseberry fruit. This material is well known as a major Ayuredic herb, and has recently been shown to have great cosmetic potential, not only as an antioxidant but also as a powerful skin brightener (16a – 16c).

Among the factors which determine the success or failure of a given product include its technological advantages, its place (as perceived) in the natural/ecological framework, and, crucially, its ability to provide noticeable benefits beyond that of simply imparting color. Some observers look at this market and suggest a future that is radically different. Their views present a disturbing picture to those who work in the field. George Majewski, Director of Sales and Marketing for Resources of Nature, Inc, paints a chilling prospect for the very near future.

“The state of skin care and ‘treatment’ is under assault from plastic surgeons, skin treatment clinics, laser peels, dermabrasion....A consumer can walk in, get a treatment, and wake up the next morning with a visible result.

“This has changed the game for cosmetic companies. They need to offer products with one ‘timevisible’ [his word] use claims. That is why you see products which mimic aggressive clinical, spa, dermatologist-type treatments. Estée Lauder launched Micro D-thermal micro derma abrasion…what is important is that many have followed; Neutrogena licensed a mechanical scrubber with their dermabrasion kit. L’Oreal [has a similar product], and so on.

“Sensory is in: hot, cold, tingling instant lip plumping....consumers want instant results from their cosmetics or they will go to their neighborhood clinics for an injection and skin resurfacing....with one doctor at a clinic many technicians can actually perform a treatment.

“Without disclosing confidential projects, I can say that cosmetic companies are even trying to make a laser treatment in a bottle...the image of product associated with doctors, is on the rise. I guess this is what they call ‘cosmeceuticals’.

“What I can say in terms of skin care is that ‘cosmeceuticals’ do not exist… only cosmetics and drugs exist...the FDA will eventually come after those making drug claims without drug approvals.” (17)

Mr. Majewski offers a vision of a segment of the market which though small now, in his opinion, and that of others, will certainly grow. Color will certainly continue to be in demand, and the desire for color plus function will no doubt grow; but changes are imminent, and they represent a significantly different way of looking at what we currently understand as successful cosmetic products, as well as the consumer desires that make them successful.

The focus, then, is on the immediacy of visible results. A product can no longer expect the customer to wait weeks for noticeable changes to appear; they must be seen within hours, or even minutes. Our attention span keeps shrinking, and with it, our judgment of that product’s performance. As noted in a recent blog,

“(t)he tagline for Avon’s Beyond Color collection is ‘Makeup Enriched With The Advantage Of Skin Care’. The theory here is that these makeup products will not only give you a glowing, colorful new look, but they will shrink your pores, smooth your skin, and take years off your age.” (18)

Proponents of lip plumping makeup, such as CITY Cosmetics, claim that “(o)ne-of-a-kind ingredients amplify natural collagen production, quickly increasing volume, erasing wrinkles, to create fuller, softer, youthful lips.” (19) Collagen injections are used for the same purpose (20). Laser resurfacing, along with many other types of cosmetic plastic surgeries are becoming more widespread; these are covered in depth in a very useful site, which takes care to delineate the various risks involved in each procedure (21). And the classic story in this context that may yet serve as a model for new products to come, is, of course, Botox, which was approved by the FDA in 2002 to “soften frown lines”. Its popularity remains very high, and that again points to an upcoming market very close to that described by Mr. Majewski (22).

Perhaps the most extreme step toward the improvement of beauty (for, after all, that is what a cosmetic is designed to do) is represented by permanent cosmetics (also known as micropigmentation or cosmetic tattooing). In this procedure, colored pigments in tattoo ink are deposited into the dermal layer of the skin to create the desired look. While the FDA has, to date, chosen not to regulate tattoo inks and tattooing in general, it does state that, while some color additives have been approved for cosmetic use, none of them is approved for injection into the skin. The FDA’s current position is that it is studying this issue, but no decisions are expected in the near future (23).

To summarize, the color cosmetics market is still healthy, in spite of the upcoming changes which, to some, appear inevitable. The large multinationals are overwhelmingly in command, but there are enough market niches for entrepreneurs with energy and ideas continue to bring new life to the market. The aging baby-boomer market is a theme that will be repeated ad infinitum over the next ten years. Products with ‘natural’ or ‘ecological’ connotations or claims are almost a pre-requisite at this point, as is multifunctionality; but the biggest change will be in the increasing demand of this market for products that give immediate (or near-immediate) visible benefits to the skin, the face, the eyes, the lips, and the body. Most of the products that make these claims seem to be stronger in marketing intelligence than in more rigorous claim substantiation, but consumer demands (many of them fed by marketing promises, in a somewhat vicious circle), will force the industry to create products that will meet these ever-more-difficult, ever-more-immediate desires.

Acknowledgements

The author would like to thank the following colleagues who provided both interesting and stimulating comments and suggestions toward the writing of this article: Ioannis Constantinides (Procter & Gamble) Amy Fu (Alberto-Culver), Nancy Jeffries (GCI Magazine), George Majewski (Resources of Nature), Perry Romanowski (Alberto-Culver), Nathalie Schlemer (Guthy-Renker), and Dianne Sweeney (Rona Business Unit, EMD Chemicals, Inc.)

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