With the development of innovative, science-driven new products, the boundary between cosmetics and medicine is getting thinner every day. At the same time, the controversy surrounding the term cosmeceutical-which stands squarely between COSMEtic and pharmaCEUTICAL-is still very vibrant.
Across the globe, cosmeceuticals are still largely confined to the skin care sector, and within this sector the anti-aging market is the dominant market position. The cosmeceuticals category hosts an extensive and ever-expanding range of biologically active ingredients, each promising drug-like benefits and a dramatic, rejuvenating effect on the skin.
The category itself can be divided into several major groups based on active ingredients. Antioxidants represent the largest category, followed by peptides (small proteins that stimulate the production of collagen and thicken the skin) and growth factors (compounds that act as chemical messengers between cells and play a role in cell division, new cell and blood vessel growth, and the production and distribution of collagen and elastin). The fourth group includes combination products such as: multiple antioxidants, retinol plus antioxidants, growth factors plus vitamin C and other unique combinations that are now being mass marketed. Consumers tend to favor combination products, embracing the philosophy that if one ingredient is good, then two must be better.
The Global Anti-Aging Market
The global market for anti-aging products and services was worth $162 billion in 2008, according to BCC Research. This will increase to $274.5 billion in 2013, for a compound annual growth rate (CAGR) of 11%.
The market is broken down into segments for disease, appearance and fitness. The disease treatment segment currently maintains the largest share of the market, worth $66 billion in 2008. This should increase at a CAGR of 12.5% to reach $119 billion in 2013. It consists of preventive and reactive healthcare for all the diseases of aging such as joint and bone health, Alzheimer's, sexual dysfunction, metabolic disorders, and eye and cardiovascular diseases (BCC Research, 2009).
The appearance segment possesses the second largest share of the market, worth more than $64 billion in 2008; it is expected to generate more than $105 billion by 2013, representing a CAGR of 10%. Facial rejuvenation, skin rejuvenation, hair care and body shaping products are the main components of this market (Datamonitor, 2009).
The fitness segment has the third largest market share and was worth almost $32 billion in 2008. The fitness market consists of bioregenerative, gym, spa and massage services, and is expected to reach nearly $50 billion in 2013, for a CAGR of almost 10% (Datamonitor, 2009).
There is some overlap, however. For example, some products cover more than two segments, such as facial care, skin care, hair care, drugs, supplements, nutraceuticals, complementary and alternative medicine therapies, and cosmetic and fitness equipment.
The services sector makes up a major portion of the global anti-aging market, accounting for more than 54% in 2008; its share will increase to 56% in 2013, for a CAGR of almost 12%. The products market will increase from $73 billion in 2008 to almost $200 billion in 2013, for a CAGR of more than 10% (Datamonitor, 2009).
It is estimated that the European cosmeceuticals market will be worth more than $4 billion in 2009, up 5% from 2008. In Europe, France and Germany follow behind the U.S. in their demand for drug-based beauty products, with sales turnover of nourishers/anti-aging products in 2007 at $1.2 billion and $1.1 billion, respectively (Kline Group, 2009).
In the U.S., the cosmeceutical market was worth $16 billion in 2007 and forecasts for 2012 put the market at $21 billion (Packaged Facts, 2009).
Meanwhile, Brazil, with its cultural emphasis on looks, has also experienced strong demand for anti-aging products, with annual sales of $927 million in 2007, up from $302 million in 2002 (Euromonitor International, 2009).
Although Japan maintains the largest skin care market globally, contrary to the rest of the world, spending on anti-aging products remains low, at less than 10%. This is compared to around 30% in the U.K. and U.S. In Japan and much of the Asia-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.
Some of today's popular ingredients include retinoids, which speed up the skin renewal process, and alpha hydroxy acids, which are used in chemical peels. The rise of the cosmeceutical is proof 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 have been moving toward transdermal products containing collagen and even stem cell technology. Cosmeceuticals backed by expensive scientific research are ideally situated in the premium end of the market.
Five out of 10 of the leading global anti-aging brands are prestige labels. Some of the major players include Estée Lauder, Lancome and Shiseido. Estée Lauder's Re-Nutriv brand retails for around $90 for a 1.7-oz. jar, while products like Re-Creation Day Cream and Creme de la Mer can cost in excess of $200 for a 50-ml jar.
To avoid losing the mass customer base, the multinationals have, as always, been quick to adapt, producing lower-cost alternatives, giving rise to what has been dubbed the "masstige" product. For example, Procter & Gamble's Olay Regenerist and Definity brands, retailing for around $50, are extremely popular, offering the same premium image and claims of rejuvenation at a more attainable price point.
The move toward masstige products ensures consumers with less disposable income, both in mature Western markets (which are currently suffering from a weak economic climate) and emerging Asian markets that they can buy into the trend and keep sales buoyant. According to Euromonitor International, the facial anti-aging sector should grow by almost 8% a year from 2007 to 2012, which is more than double the predicted growth of the cosmetics sector as a whole.
What's Driving Consumer Perception?
In a recent European survey, consumers were asked whether they trust nutritional claims made by food and drink companies. In most cases, the answer was "no." The percentage answering "no" was highest in Sweden (62%) and lowest in the Netherlands (39%). The reality is consumers are becoming more skeptical of exaggerated claims made by manufacturers.
At the same time, there is a decided preference for natural ingredients, which offers many opportunities for known botanicals as well as newly discovered natural ingredients, resulting in a synergistic growth effect for herbal cosmeceuticals. Indeed, consumer demand is high for cosmeceuticals containing "natural" or "organic" ingredients.
There is a common notion (i.e., misconception) that these ingredients are safer than synthetic ingredients. In actuality, there is no human clinical data to support the idea that natural or organic ingredients-derived from the root, stem, leaves, flowers and fruit of plants-are safer or even more effective than their synthetic counterparts. From a product development point of view, most compounds as they exist in their natural state cannot be easily formulated into skin care products. They must be chemically altered in some way before they can be incorporated into cosmetics. For instance, compounds such as retinol, vitamin C and soy are among those that require chemical alteration-after which they are referred to as enhanced natural ingredients.
Enhanced natural ingredients tend to be more stable and have better bioavailability and more long-lasting effects on the skin compared to unaltered plant extracts. This is why most cosmeceuticals contain chemically altered ingredients.
There are several cosmeceutical ingredients such as collagen-boosting peptides and forms of vitamin A that are completely synthetic. These compounds are among the most potent anti-aging ingredients and have been used extensively by dermatologists. So, it's important for consumers to understand that synthetic ingredients are not necessarily bad. In fact, skin care products containing these ingredients are probably among the most effective in the marketplace.
In contrast to the under-substantiation of products, a surplus of scientific claims and proof seems to be off-putting for beauty consumers, particularly in Europe. Too many scientific buzzwords in the marketing of cosmetics seem to confuse consumers about what works and what doesn't.
An example of over-substantiation includes Ethos Rejuvion, produced by Norwegian manufacturer Ethos World. The product, a topical anti-aging formulation containing ignotine (INCI name: carnosine), is claimed to rejuvenate cells and extend their lifecycle via its antioxidant properties; it also helps stabilize collagen. According to Norwegian Health Authorities, ignotine does all this so effectively that it feels Ethos Rejuvion should be classified as a prescription drug rather than as a cosmetic. As a result, the product is likely to be banned from the European market as an OTC product.
Product Innovation & Targeted Delivery
In the cosmetics area, in the anti-aging category in particular, as well as in the pharmaceutical arena, nanotechnology has played an important role in delivering active ingredients to the skin in both patch delivery and timed-release application. The latest trend is to combine clinically proven ingredients with patented delivery systems, such as nanoparticles or nanospheres. The cosmetic industry ranks high among nanotechnology patent holders in the U.S. In fact, L'Oréal, which devotes about $600 million of its annual $17 billion revenues to research, is the industry leader in nanopatents.
Another giant, Dow Corning, offers a series of customized delivery systems, such as microencapsulation technologies and phospholipid-based liposomes. They stabilize, protect and enhance cosmetic actives into and onto the skin surface. Silicone elastomers can also absorb, entrap and release bioactives. In addition, they can fill skin imperfections by forming small, soft microparticles. This reduces the visual impact of skin wrinkles. Unique antioxidants, anti-inflammatory agents, immunostimulants and enhancers of molecular and cellular detoxification could also enter the panoply of new cosmeceuticals that can help consumers avoid age spots, dark circles, wrinkles and other clinical aspects of skin aging.
Promising Anti-Aging Products
While the overall growth of the skin care market is flat in the U.S., anti-aging products continue to offer great potential. Industry leaders such as Estée Lauder and Dermophisiologique, among others, are rolling out new products in the cosmeceutical arena and having much success.
Estée Lauder, for example, recently introduced a new product line for wrinkles called Time Zone that incorporates Sirtuin EX1 technology, which has been lauded for supporting the skin's natural stimulation of proteins. The main ingredient is a patented hydrolyzed rice extract. In addition, Re-Nutriv Ultimate Youth Crčme was also launched containing Estée Lauder's patent-pending "Youth Molecule," which is based on Resveratrate.
Over in Italy, Dermophisiologique has developed Maschera al Ferro (Iron Mask) with iron microspheres, omega 3s and ceramides. Iron microspheres simulate magnets to draw impurities out of the skin.
Cosmeceuticals that carry the "natural" label are creating new opportunities as well as challenges because these products are not regulated by FDA. Due to the lack of regulatory oversight, "natural" skin care products in some cases are not as well tested and scrutinized compared to synthetic products and pharmaceuticals. Moreover, as product ingredients get stronger, with the recent introduction of stem cell technology for example, claims could become more exaggerated. As a result, cosmeceuticals are at risk of finding themselves under greater scrutiny from regulatory bodies.
Despite a favorable consumer outlook, the inevitable emergence of legislation will no doubt shape the industry in the years to come. Global regulators are still uncertain about cosmeceuticals and how to classify them. New European Union (EU) legislation proposed in June 2007 on the use of chemicals has called for restrictions on some active cosmetic ingredients, a move that is projected to be anti-innovative for industry. And if future regulations are introduced on a piecemeal regional basis, the lack of any global consistency may prompt companies, particularly multinationals, to be wary of investing in the development of new products they can't market globally.
Another future challenge is that products found to cause physiological changes to the skin may be placed under the definition of medicine and may eventually be reclassified as drugs. While the regulations regarding cosmetics are largely the same across developed countries worldwide, there are major variations in drug regulation. The reclassification of cosmeceuticals would again impose a tremendous barrier to manufacturers looking to capture a share of the global cosmetics and toiletries market. This change would undoubtedly slow product development and innovation-smaller companies would effectively be phased out by the escalating costs of development and testing, while multinationals might be put off by the possibility of a product they cannot market globally.
What the Future Holds
More companies continue to invest money in research and product development pertaining to anti-aging and cosmeceuticals. Most recently, a team of Purdue University scientists in collaboration with Utah-based NuSkin identified an age-related enzyme, arNOX, which is linked to typical skin damage experienced in old age, such as discoloration or decreased elasticity; this type of damage also seems to generate free radicals, which increases as the body ages. Discoveries such as these are expected to trigger future developments, resulting in new cosmeceutical applications.
On the innovation side, there are several ingredients seeking to alleviate the signs of skin aging by increasing energy production in cells, which in turn increases cells' production rate of essential proteins such as collagen and keratin, and also increases cells' rate of repair and protection. One such ingredient is a synthetic tripeptide that is claimed to increase ATP (adenosine triphospate) levels in vitro by as much as 150%. Other examples include Silab's SMS Energy and Provital Group's Energen, which are both geared toward the male cosmetics market.
Clinical research combined with innovative development of new actives will keep the cosmeceutical segment of the cosmetics market interesting and exciting, while consumer education removes uncertainties and keeps the segment growing. The interactions between cosmeceuticals and skin are inevitable and thus careful preclinical or clinical evaluation of efficacy and safety is a prerequisite for the development of a specific product.
Lastly, increased regulation does not have to be so ominous. In the end, strengthened regulations for ingredients may serve to reassure consumers of safety, while regulations surrounding advertising may further build the market by reassuring customers of product claims.