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The Nutricosmetics Market: A Global Health & Wellness Megatrend Presented at NutriCosmetics Summit 2011 Yong-Li Q McFarland Frost & Sullivan June 23, 2011
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The Nutricosmetics Market: A Global Health & Wellness Megatrend
Presented at NutriCosmetics Summit 2011
Yong-Li Q McFarland
Frost & Sullivan
June 23, 2011
2
Agenda
• Megatrends Introduction
• The Nutricosmetics Market
• Market Drivers
• Market Challenges
• Growth Opportunities
• Q&A
3
Key Megatrends Impacting Chemicals & Materials Companies
Globalization
Health &Wellness
Low CarbonEconomy
Smart Functionality and Performance
What are Megatrends?
Megatrends are global, sustained and macroeconomic forces of development that impact business, economy, society, cultures, and personal lives thereby defining our future world.
Chemicals
Urbanization
Energy
Infrastructure
4
Due to rising costs of healthcare, future spending will move away from
treatment
Health and Wellness Shift in Healthcare Trends: From Treatment to Prevention
Healthcare Spending by Type of Activity
Healthcare Spending Per Capita (2007, 2050)
In most countries worldwide, per capita healthcare spending is rising faster than per
capita income which is unsustainable
If current trends hold - by 2050, healthcare spending will double, claiming
20-30% of GDP for some economies
Prevention trends result in greater demand for areas such as weight management and functional foods and beverages
5
Health & WellnessTowards Better Health and Disease Prevention (Functional Foods)
Over the next 10 years, weight management, heart health, and digestive health will continue to be the high growth sectors
The need for prevention and better general health has driven the demand for
functional F&B products and consequently the market for specific functional
ingredients
Source: Frost & Sullivan
7500
13900
0
3000
6000
9000
12000
15000
2008 2015
Reve
nues
in $
Mn
Global Weight Management Ingredients
CAGR 2008-2015: 9.2%
563
2171
0
500
1000
1500
2000
2500
2008 2015
Reve
nues
in $
Mn
CAGR 2008-2015: 21.3%
Reve
nues
in $
Mn
CAGR 2007-2015: 25.6%
US Digestive Health Ingredients Market US Heart Health Ingredients Market
244
1310
0
350
700
1050
1400
2008 2015
6
Health and Wellness “Feel Good Factor”: Going Beyond General Health
203
330
0
50
100
150
200
250
300
350
2008 2014
CAGR 2008-2014: 7.2%
326
1066
0
200
400
600
800
1000
1200
2008 2015
CAGR 2008-2015: 18.5%
Chinese Personal Care Active Ingredients Market
Indian Personal Care Inactive Ingredients Market
Skin Care, 26%
Hair Care, 25%
Make-Up, 14%
Fragrances, 11%
Oral Care, 9%
Other Toiletri
es, 15%
The global personal care market in 2009 was estimated to be around
$250 Billion and expected to grow at a CAGR of approximately 5-6% to
2015
The increasing focus on personal care not only drives the market for active and inactive ingredients in personal care products but also the market for
nutricosmetics
Others , 50%
Omega 3 , 4%
Vitamins , 23%
Carotenoids , 23%
229
528
0
100
200
300
400
500
600
2008 2015
CAGR 2008-2015: ~15%
US Nutricosmetic Ingredients Market
Nutricosmetics are products when ingested have an effect (preventive or reactive) on skin, nails and hair. The ingestion of nutricosmetics is mainly through food fortification / supplements
Reve
nues
in $
Mn
Reve
nues
in $
Mn
INCREASING FOCUS ON
PERSONAL CARE
2008
7
Ou
tsid
e th
e B
od
y
Nutricosmetics Digestible Supplements that
offer beautification and/or personal hygiene benefits
$ 2.4 Billion
Cosmetics and Toiletries
Products that offer beautification and/or personal
care/hygiene benefits
$ 260 Billion
Insi
de
the
Bo
dy
Inside the Body Outside the Body
Dietary Supplements or Nutraceuticals
Digestible Supplements that offer nutritional and/or
health benefits
$ 70 Billion
Cosmeceuticals Cosmetic products that offer
nutritional and/or health benefits
$ 12 Billion
Active Ingredient Delivery Format
Co
nsu
mer
Ben
efit
Market Overview
Total 2010 Global Personal Care Product Market: $344 BillionCAGR
2010-2015: 18%
Source: Frost & Sullivan.
8
Nutricosmetic Ingredients Market: Revenues by Product Type (EU & NA), 2010 Others represent the largest market
segment in the nutricosmetics ingredients market with 54% market share. This category includes a large number of ingredients such as fruit extracts, green tea extracts, CoQ10, phytosterols, and collagen.
Vitamins A, C and E hold the third largest market share representing 23% of the market revenues. Vitamin A palmitate and vitamin A acetate (retinyl acetate) are the principal forms used as nutritional supplements.
These ingredients go into different product applications, with anti-aging and anti-microbial with the greatest focus followed by UV filtering, exfoliating, and moisturizing based on the number patent applications in 2010.
23%
23%
54%
Carotenoids Vitamins Others
While the global nutricosmetic product market for 2010 was $2.4 billion, the market for nutricosmetic ingredients was over $250 million in North America and Europe.
Nutricosmetic Ingredients
Source: Frost & Sullivan.
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Nutricosmetic Ingredients: Vitamins, Carotenoids, and Omega 3
Natural vitamins are in great demand with increase in consumers knowledge on its health benefits and consumers skepticism over engineered food.
Vitamin C is widely used in nutricosmetics products for its antioxidant properties and its role in collagen production. It also helps reduce the effect of UV radiation on skin.
The largest manufacturers of vitamins are DSM, BASF and Roquette.
Vitamins
Source: Frost & Sullivan
Carotenoids are the best known antioxidants and the major types are beta carotene, lycopene, lutein, zeaxanthin, astaxanthin, phytoene and phytofluene.
Carotenoid supplements have proven to boost skin softness and suppleness and are one of the major ingredient in nutricosmetics supplement tablets.
Beta carotene is the major ingredient that is used in beverages, fruit based drinks and dairy products for food coloring.
Carotenoids
Omega 3 and 6 are major types of polyunsaturated fatty acids that are widely used in nutricosmetics applications with beneficial effects mainly for skin health.
Many companies are looking to invest R&D in omegas as this ingredient has a great potential in functional food and beverage applications
The largest manufacturers of omega-3 fatty acids are Cargill, Cognis and Lonza. For example, ANTI AGE 40+ and Radiance Formula from functionalab has omega-
3 fatty acids EPA & DHA and is positioned for skin health.
Omega-3
fatty acids
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Nutricosmetic Ingredients: CoQ10, Collagen, and Polyphenols
Coenzyme
Q10 (CoQ10)
CoQ10 is primarily used in dietary supplements with the potential to rejuvenate body cells, fight diseases, slow down ageing process, maintaining and protecting restoration systems, preserving elasticity, and softening the skin.
There is a growing demand for CoQ10 in nutricosmetics food and beverage applications for its anti-aging properties.
Collagen is a structural protein with emerging skin health applications in several nutricosmetics food and beverage s due to their effectiveness when ingested.
For example, Protein M+ from Copalis is a collagen and polysaccharide based ingredient that has been positioned for anti-aging. And in Asia, Nestle launched Nescafe Body Partner coffee with collagen to promote a healthy lifestyle.
Collagen
Source: Frost & Sullivan.
The major polyphenols include anthocyanins, anthocyanidins, resveratrol, ellagic acid, carnosic acid, rosemarinic acid, flavonoids, tannins and procyanidins.
Polyphenols are water soluble antioxidants that thwart oxygen free radicals, stabilize the renewal effect of elastin and collagen, reduce inflammation, boosts immunity and stimulates enzyme action.
Polyphenols provide better health and beauty benefits on ingestion more than topical applications.
For example, French brand Skeen+ has a Youth Reanimator, a resveratrol enriched drink positioned as solution to reanimate and perfect the skin for men.
Polyphenols
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Edible Personal Care IngredientsE
ye C
are
Cucumber Eye Mask and Potato Eye Mask
Lavender Tea Bag To Soothe Puffy Eyes
Lutein & Bilberry - Natural Eye Care Supplement (botanical extracts)
Eye care cream using cocoa
Fac
e C
are
Adzuki Bean And Rice Flour Paste Scrub
Brown Rice Flour & Lemon Juice Mask
Corn Flour for Oily Skin
Egg White Face Mask to Tighten Pores
Honey Avocado & Oatmeal Nourishing
Exfoliating Mask
Hai
r &
Bo
dy
Ca
re
Lemon Skin & Hair Softener in Hard Water Area
Yogurt Bath & Soak Spa
Moisturizing milk
Shampoo & body wash made from tea & mint
Source: Frost & Sullivan
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Key Market Drivers
“Beauty from within” is the Best Approach
“Beauty from within” is the Best Approach
Growing supporting information and scientific evidence is showing the positive effect of such ingredients and bringing support for “Beauty from within”
This approach is more attractive because of the combined effect on nutrition and beauty with single ingestible food fortification and supplement.
Aging PopulationAging Population
The major driver for the nutricosmetics market is the growing aging population wanting to look young and stay healthy.
Concerns over beauty are increasing among the aged population which leads to the use of ingredients in supplements and food fortification.
Increasing Beauty Concern
Increasing Beauty Concern
There is a general trend towards healthier lifestyles and growing concern for personal health and beauty among consumers.
As products are developed, consumers are looking for convenient solutions in different formats outside of lotions, pills, and sprays.
Parallel Demand for Natural Ingredients
Parallel Demand for Natural Ingredients
There is an increasing demand for proactive natural preventive measures such as supplements and food fortified products over the reactive alternatives.
Many natural and organic ingredients overlap with nutricosmetic ingredients with the main difference in providing an edible format for that functional ingredient.
Source: Frost & Sullivan.
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Key Market Challenges
Skepticism on Product Claims
Skepticism on Product Claims
Consumers are unsure of product efficacy as there is still little proof provided by manufacturers on the products claiming beauty health benefits.
Derived from consumer’s skepticism in cosmetic products, there are also growing concerns in supplements and nutricosmetic products.
Lack of Consumer Awareness
Lack of Consumer Awareness
There are nutricosmetics products available in the market but consumers are confused about differences from other product categories and why they should purchase these items.
This lack of consumer’s knowledge about the ingredients and benefits make consumers reluctant to try and accept nutricosmetics products.
Lack of Regulatory Guidance on Formulation
Lack of Regulatory Guidance on Formulation
At the interception of food and cosmetic market, nutricosmetics products lack clear regulations for production, promotion, and categorization.
Difficulty remains in innovating an edible cosmetic that has good taste sensations, product benefits, and stability.
Promoting Consumer Benefits that are not Immediate
Promoting Consumer Benefits that are not Immediate
Consumers, especially in the US, look for products that provide them with effective results and instant gratification. However, that is not the case with nutricosmetics products where results are not instant.
The difficulty lies in portraying an affective product story that would lead consumers to continue a nutricosmetics regime where they have to believe the results will occur.
Source: Frost & Sullivan.
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Top Trends and its Impact – A Snap shot
Technology
Naturalingredients
Introduction of more green chemistry based products for efficient processing and formulation of ingredients
Bioprospecting for new ingredients
Emergence of nutrigenomics based products
Implementation of technologies for controlled release of ingredients
Factors 202020152010
Production of natural ingredients that are manufactured using white biotechnology
Modification of existing technologies to match several applications
Emergence of preventive nutricosmetics products
Emergence of products that are multi functional for many target groups
Product development for problems like anti-aging, skin lightening, and others.
Inside-out approach
Trends
Increased availability of products with approved claims
Agencies streamlining guidelines to improve definition and accelerate approval of new novel ingredients
There is no well defined legislation for nutricosmetics products
Legislation
Increased consumer demand for permanent solution
Increased interest iningredients & scientific Evidence for their efficacy
Moderate awareness, consumers expect instant gratification and focus on packaging
Consumer awareness
Source: Frost & Sullivan
Well-maintained balance between beauty and food
Crops produced under the banner of ‘organic’
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New Geographies – NA, Brazil, China, India, Russia
Aging Population
Natural and Organic Ingredient Innovation
Growth Opportunities
Target Markets: Men, Children, Prenatal, Pets
Partnerships: Supplement, Food & Cosmetics Companies
Growth Opportunities
Source: Frost & Sullivan.
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Our Global Perspective: Frost & Sullivan Locations
Yong-Li Q McFarlandResearch Analyst
Certified Growth ConsultantChemicals, Materials & Foods
