Against a backdrop of consumers looking to improve their general wellness and appearance, the beauty industry is gradually transforming to become more health orientated, according to a Euromonitor International Analyst Insight from Nicholas Micallef, beauty and personal care analyst. As a result, cosmetics companies are increasingly focusing their innovation efforts in this direction.
In responding to these demands, new product development is steadily becoming ever more concentrated on the capability of addressing topical health conditions. This requires sophisticated efficacious technology that combines beauty with therapeutic solutions—i.e. cosmeceuticals.
Dermocosmetics: The New “Derma” Approach
Companies are developing products that take a more preventative and nourishing approach. Hair care is undergoing rapid formulation development. For example, in the area of scalp health, companies have developed stronger products with anti-dandruff positioning formulated with pharmaceutical-style ingredients such as tar and ketoconazole aimed at treating itchy and flaky scalp.
Moreover, the growing awareness of scalp health has prompted the industry to supply more sophisticated products that offer targeted solutions by using traditional skin care ingredients like keratin, aloe vera and avocado oil. Unilever’s TRESemmé 7 Day Keratin Smooth and Renewal Hair & Scalp are both positioned as treatments for scalp health and strong hair. Similarly, Johnson & Johnson’s Neutrogena portfolio spans across medicated shampoos with the T/Gel range, as well as more cosmetic hair treatments such as the Triple Moisture Deep Recovery Hair Mask designed to moisturize and nourish the hair.
Hair loss is undergoing a similar development in product formulations with the use of FDA-approved Minoxidil, and traditional cosmetic shampoos are being extended, such as Procter & Gamble’s Pantene brand extension Pantene Expert Collection Minoxidil Topical Solution USP 2% Hair Regrowth Treatment for Women. Others addressing hair loss include L’Oréal Paris Elvive Fibrology, launched in early 2014, formulated with the patented ingredient Filloxane, claimed to thicken hair, thus increasing hair volume over time.
In skin care, the use of salicylic acid, a staple ingredient that treats blemishes, is rising in order to treat acne-prone skin. According to Euromonitor International data, volume consumption of salicylic acid tripled 2007–2012. Likewise, skin care players like Unilever advancing established brands by offering targeted solutions for skin problems, as with the recent launch of DermaSeries. DermaSeries was driven by consumer insight, with users demanding effective treatments for extremely dry skin, which, nevertheless, were cosmetic and contained a beauty element rather than being solely pharmaceutical. Thus, dermocosmetics are bridging the gap between cosmetics and pharmaceuticals and allowing beauty companies to strengthen brand credibility and expand their portfolio.
Naturally, suppliers are also adapting to this trend. Evonik has developed the new active Sphingony, claimed to prevent hair loss and address scalp health. Likewise, Sederma developed Sebuless, a multifunctional ingredient designed to mattify and equalize the skin tone of acne-prone skin.
Potential Future Developments
Inspiration from different ingredients and categories is creating crossovers that drive innovation. Such was the case with BB creams combining SPF, color cosmetics, hydration and spot correction.
Among the challenges cosmeceuticals face is the need to differentiate them from pure pharmaceuticals while promoting their intent of preventing and controlling hair and skin conditions. This also pushes the need to gain further expertise and develop new technologies. One path is through merger and acquisition activity, enabling beauty companies to move into niche areas.
Skin care is one particular opportunity, which, according to Euromonitor International, is projected to achieve a 2013–2018 global CAGR of almost 4% in value terms at constant 2013 prices. Businesses must think outside of their existing knowledge base and evaluate what synergies could be achieved by diversifying into adjacent categories where there is consumer demand and, hence, research that is worth investing in. This is exemplified by Allergan, a healthcare company, acquiring skin cosmeceutical brand SkinMedica in 2012. In 2013, L’Oréal acquired India’s Cheryl’s Cosmeceuticals, which enabled it to gain access to the professional skin care market.
Beauty companies are progressively playing a specialized role in hair and skin care. Potentially, this will evolve into product combinations that stretch further beyond the current choices, conceivably including deodorants with antifungal treatments or topical body moisturizers also positioned as circulatory aids for varicose veins, as examples. High-tech innovations will enable advanced “near-medical” claims with the ultimate aim being of health-based beauty. While cosmeceuticals are an intersection point between cosmetics and healthcare, the lines of delineation are still somewhat blurred. Nevertheless, as health benefits become more prevalent, the beauty industry will continue to embrace cosmeceuticals as competitive points of difference.