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    Features

    Nutricosmetics: Confined to Underdog Status or Opportunity to Outshine?

    Growing awareness that beauty is a byproduct of a healthy lifestyle is compelling more consumers to exercise and maintain a balanced diet.

    Nutricosmetics: Confined to Underdog Status or Opportunity to Outshine?
    Consumers increasingly seek natural ways to address specific health and beauty concerns.
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    Nicholas Micallef, Euromonitor International09.01.15
    The growing prominence of the nutricosmetics sector mirrors the consolidating bond between health and beauty. However, while various scientific studies shed positive light on nutricosmetics, thus suggesting good prospects for revenue generation, there are challenges that could impede this sector from thriving, potentially destining it to underdog status both within the wider beauty industry as well as nutraceuticals. 

    Nutricosmetics Face Fierce Competition from Wider FMCG
    There are a variety of categories in the fast moving consumer goods (FMCG) industry that compete with nutricosmetics, to a greater or lesser extent, such as food and beverages, cosmetics and nutraceuticals. A number of products touch on the health aspect, claiming to benefit consumers’ personal health and wellness. Seemingly, skin health is a byproduct of consuming products that actively promote sound health, which raises the question of why should consumers add an expense with beauty-positioned supplements—which also tend to come at an elevated price tag—when other products may provide comparable or even superior benefits?

    This is in addition to topical beauty solutions, including those positioned for the skin, nails and hair and scalp, where benefits tend to be more visible and better “felt.” On the other hand, nutricosmetics rely on the premise that the equivalent benefits occur by regular consumption of a specific product over a time period, thus any effects would be less immediately apparent.
     
    Furthermore, regular consumption of dietary supplements, such as multivitamins positioned for general health, some of which now come with added ingredients such as collagen and probiotics (but not necessarily explicitly beauty-positioned), cannibalizes sales of beauty-positioned brands. Why take a relatively high-priced beauty ingestible when rival options with broader well-being claims are available?    

    The U.S. and Canada remain among the most challenging markets for nutricosmetics, especially for food and beverages, with availability remaining limited and sales negligible. Regulatory scrutiny on ingredients and product claims, and low consumer acceptance suggest beauty ingestibles persist as a niche category that lacks an element of exclusivity due to the skepticism that shrouds it. This limits its potential to transform into a larger scale revenue opportunity. Beauty-positioned supplements in North America only constituted less than 1% of total dietary supplements in 2014, compared to 8% globally, 13% in Asia-Pacific, and 9% in Western Europe.


    The Quest for Instant Benefits Fuels Consumer Cynicism
    Another factor compounding the distrust in nutricosmetics is consumers’ pursuit of proof of a product’s benefits. This is reinforced by regulatory authorities and some healthcare professionals, such as dermatologists, having reservations about the claims of nutricosmetics. Changing consumer perceptions is the largest hurdle, and research evidence needs to be clearly conveyed and spelled out to consumers to justify high prices.

    For example, one of the latest fads in nutricosmetics is the wave of collagen-containing functional foods claiming to replace the collagen that is lost with aging. However, there are questions as to whether the collagen is actually absorbed by the body and reaches the skin to perform its function. Dermatologists’ opinions are mixed, and any unfavorable comments tend to cast doubt on the efficacy of collagen-based nutricosmetics.

    Moreover, recent negative publicity concerning excessive supplement intake, especially those positioned for weight loss, could be a setback, as the consumption of supplements could be perceived as a health risk, fuelling antagonistic beliefs about what are perceived as “artificial” methods to improve one’s self-image. This, in turn, could negatively impact the performance of beauty-positioned ingestibles.

    Preference for ‘Natural’ Overtaking ‘Artificial’
    Consumers increasingly seek natural ways to address specific health and beauty concerns, such as skin care and weight management. This is also reflected in growing demand for naturally formulated cosmetics. More importantly, consumers are becoming cognizant of the fact that beauty is a byproduct of a healthy lifestyle, encouraging engagement in physical exercise and a more balanced diet. 

    Another notable trend is the idea of “ageless beauty,” which is gaining prominence among British consumers, in particular, who increasingly express a preference for looking good for their age. Concerns about anti-aging are waning as Brits embrace the natural look, while the artificial is frowned upon. The focus is shifting to achieving healthy and radiant skin. 

    Extending Benefits Beyond Beauty Lifts Nutricosmetics Outlook
    The growing recognition that beauty is a byproduct of a healthy lifestyle suggests that beauty-from-within products hold better odds if they are conjoint with lateral health benefits such as joint health. For example, Jusuru International’s Liquid Biocell Life, Skin and Sport collection steers away from placing too much emphasis on beauty, and instead combines the benefits of joint health, younger-looking skin and stronger hair and nails, among others, in a holistic manner. Resveratrol, one of the ingredients in the formulation, is not only underlined for its anti-aging properties but also for cardiovascular health benefits.

    However, manufacturers need to provide convincing evidence of their claims, such as the biological actions of nutricosmetics. It is not sufficient to tell consumers that the collagen in the product helps rejuvenate the skin. Consumers require supplementary information on the processes behind the scenes, such as how the collagen and other key nutrients are absorbed by the body and leave the desired results on hair, skin and nails. This would stress the natural process and help avert perceptions of just another product that fails to deliver what it promises. 

    A Natural Addition to Topical Cosmetics
    Topical beauty brands with an active health positioning, such as Eucerin and Vichy, could profit from the emergence of the nutricosmetics sector. In view of the equity and reputation these brands enjoy, they are more likely to succeed with nutricosmetics line extensions, as they possess a heritage that consumers can judge—a competitive advantage that nutricosmetics brands often lack. 

    The failure of Innéov—L’Oréal’s and Nestlé’s joint project—might have resulted in part from its lack of heritage. While ample R&D resources were poured into it, consumers were unable to justify relatively high spends on supplements positioned for solutions such as hair loss, anti-aging and sun sensitiveness. The Innéov flop was also aggravated by the European Food Safety Authority’s rejection of the claim that it significantly ameliorates skin dryness.

    As such, pure nutricosmetics brands may require an alternative means to operate. One of these is the product format. Beverage and confectionery formats could be more successful than supplements as consumers not only find ingesting pills less thrilling but they are also more likely to opt for nutricosmetics if they are substitutes for regular confectionery and beverages, realizing that such a switch is healthier and comes with added benefits. 

    Opportunities Reflected in Country-Specific Beauty Trends
    Globally, beauty-positioned food and beverages are set to remain a tiny category, with sales accounting for only 0.04% of total health and wellness by 2019. Western Europe is the most promising region both in terms of overall size, and CAGR over 2014-2019 at 4.7%.

    Nevertheless, country- and region-specific beauty trends ought not to be overlooked. Brazil, for example, in 2014 had the highest per capita expenditure on conditioners at $18.2, well ahead of the runner-up Japan at $13.8, and significantly higher than the global average of $2.3. This shows Brazilians’ dedication to hair nourishment as evidenced by the widespread availability of near-customizable shampoos and conditioners on the market. These prospects can be replicated with nutricosmetics targeting hair and scalp health.

    Likewise, East Asia, where skin care is a ritual that commences from a young age, is a region where nutricosmetics could thrive. Japanese consumers are firm believers that nutrition and skin health are interlinked and thus, beauty can only be the result of a balanced diet. Food solutions from old traditions also play a key role, as with Kikkoman’s soybean-based cosmetic food supplements. Skin care brand owners can build on their equity with nutricosmetics, leveraging ingredients used in their topical solutions to launch nutricosmetic options with multifunctional benefits such as anti-aging and skin brightening—two highly sought-after skin care features in Asia. Multiple price points and segmentation would be crucial in preventing sales cannibalization within the product range.


    Competitive Subtleties Can Make all the Difference
    While the outlook for nutricosmetics remains mixed, research in the field is relatively recent and evolving, and this will strengthen as more industry players explore the revenue opportunities in the sector. As adjacent categories emerge, such as dermocosmetics, synergetic competencies could facilitate innovation with more credible products that further merge beauty with health, and which are likely to outcompete those with less robust scientific backing. For example, AFC Japan Tsubaki Collagen DX, a collagen-based drink, is claimed to be formulated with collagen molecules 60 times smaller than normal collagen, which enhances absorption by the body, a feature that imparts a more credible and genuine offer to the discerning consumer. 

    Nutritionists and dermatologists will inevitably play a greater role in product development, not least as powerful marketing “media” and product endorsers. Similar to the development of doctor brands in skin care cosmetics, nutricosmetics hold the potential to evolve in a similar fashion.

    Taste will remain a key attribute for consumers to substitute regular food and beverages (without explicit health-positioning), with functional options. Consumers use nutraceuticals to support their health and well-being rather than for curative ends. Some players are also launching products that “reward” consumers for their “guilty pleasures” such as Suntory’s Precious, which is the first beer formulated with collagen.


    Nicholas Micallef is a beauty and personal care analyst at Euromonitor International. For more information: www.euromonitor.com.
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