Source: The Freedonia Group
Cosmeceuticals gain ground
Although the Federal Food, Drug, and Cosmetic Act does not recognize the term cosmeceutical, the cosmetic industry uses this word to refer to cosmetic products that have medicinal or drug-like benefits. Wendy Marley, an industry analyst with The Freedonia Group, Cleveland, says this segment is growing at twice the rate of the overall cosmetic and toiletry chemicals market.
According to Cosmetic & Toiletry Chemicals, a new study by The Freedonia Group, cosmeceutical product demand will increase 7.6 percent annually to $4.3 billion in 2005. "Growth will be driven by a stream of new and innovative products in response to demands of an aging populace for more effective appearance-enhancing and age-defying preparations," says Marley. The company predicts the value of chemicals used in cosmeceuticals will reach $1 billion in 2005.
Skin care will continue to dominate cosmeceutical product demand, accounting for 60 percent of the total in 2005, reports The Freedonia Group study. Top buyers are expected to be the relatively affluent baby-boomer generation seeking age-defying and sun-protection products. New chemicals projected to record double-digit growth through 2005 as a result of "their novel or improved performance" include coenzyme Q10, which combines antioxidant and exfoliant action; poly hydroxy acid, which offers reduced risk of skin irritation; eflornithine hydrochloride, a hair-growth retardant; and finasteride, a hair-growth stimulant, Marley says.
Well-oiled ingredients
Essential oils represent the largest and most expensive of the chemical ingredients used in finished cosmetic and toiletry products. U.S. manufacturer sales of these oils should reach between $700 million and $1.2 billion by 2005, according to research from The Freedonia Group and Norwalk, Conn.-based Business Communications Co. (BCC). "Increases will be spurred by customer preferences for natural ingredients in food, beverage and personal care products," reports The Freedonia Group study, Flavors & Fragrances to 2005.
According to the BCC study, Chemicals for Cosmetics and Toiletries, annual growth of essential oils will be low through 2005, "primarily because of slow growth of the principal use for essential oils [perfumes] and the trend toward fragrance-free finished products for allergy sufferers."
Volatility in the supply and pricing of some essential oils "is pushing end users to develop substitutes for these products," adds The Freedonia Group's Marley. "As synthetic alternatives come to more closely resemble the composition of natural essential oils, it will be harder to justify the higher cost of essential oils," she says.
Polymers take hold
Because polymers can be tailored for specific formulations, they are valuable cosmetic ingredients.
"Polymers are expected to record growth approaching 8 percent per annum through 2006 [second only to the pace of growth for natural products]," says Marley of The Freedonia Group.
According to the BCC study, polymer sales in this market will top $1 billion by 2005. Analysts say sales will be propelled by the use of polymers in new, sophisticated delivery systems for active ingredients; by the use of natural polymers (proteins and polysaccharides) that act as replacement therapies for skin and hair; and by the use of polymers in sunscreen and in post-exposure products.
Cleaning market declines
Total retail sales of household cleaning products will rise 9 percent from 2000 to 2005, according to Mintel Consumer Intelligence's (Chicago) 2001 report, "Household Cleaning Products Market." However, this sales increase is actually equivalent to a 4 percent decline in real terms.
Although this is considered a mature market, demographic changes ," more women in the workforce and an increase in one-person households ," hamper sales growth. "With many homes empty during the workday, people do not need to clean as frequently," cites the Mintel study.
The steady soaps and detergents market is not immune to this trend. Shipments are projected to increase only 2.8 percent per year to $15.2 billion in 2005, according to the Freedonia Group's Flavors & Fragrances to 2005. Gains in the soaps market will be "stimulated by the increasing popularity of moisturizing body washes and other liquid formulations, introduction of reformulated bar soap products containing natural or therapeutic ingredients, and increased consumer interest in soap and detergents with value-added antimicrobial properties."
