The NutriCosmetics Market: A Global Health & Wellness Megatrend

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A presentation delivered by consultant Yong-Li McFarland at the NutriCosmetics Summit 2011.

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The NutriCosmetics Market: A Global Health & Wellness Megatrend

  1. 1. The Nutricosmetics Market: A Global Health & Wellness Megatrend<br />Presented at NutriCosmetics Summit 2011<br />Yong-Li Q McFarland<br />Frost & Sullivan<br />June 23, 2011<br />
  2. 2. Agenda<br />Megatrends Introduction<br />The Nutricosmetics Market<br />Market Drivers <br />Market Challenges<br />Growth Opportunities <br />Q&A<br />
  3. 3. Key Megatrends Impacting Chemicals & Materials Companies<br />Globalization<br />Low CarbonEconomy<br />Health &Wellness<br />Smart Functionality and Performance<br />Urbanization<br />Infrastructure<br />Chemicals<br />Energy <br />What are Megatrends?<br />Megatrends are global, sustained and macroeconomic forces of development that impact business, economy, society, cultures, and personal lives thereby defining our future world.<br />
  4. 4. Prevention trends result in greater demand for areas such as weight management and functional foods and beverages <br />Health and Wellness Shift in Healthcare Trends: From Treatment to Prevention <br />If current trends hold - by 2050, healthcare spending will double, claiming 20-30% of GDP for some economies <br />In most countries worldwide, per capita healthcare spending is rising faster than per capita income which is unsustainable <br />Healthcare Spending Per Capita (2007, 2050)<br />Due to rising costs of healthcare, future spending will move away from treatment <br />Healthcare Spending by Type of Activity <br />
  5. 5. 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 <br />Health & Wellness<br />Towards Better Health and Disease Prevention (Functional Foods)<br />US Digestive Health Ingredients Market <br />US Heart Health Ingredients Market<br />Revenues in $ Mn <br />Revenues in $ Mn <br />CAGR 2007-2015: 25.6% <br />CAGR 2008-2015: 21.3% <br />Global Weight Management Ingredients<br />Over the next 10 years, weight management, heart health, and digestive health will continue to be the high growth sectors<br />Revenues in $ Mn <br />Source: Frost & Sullivan<br />CAGR 2008-2015: 9.2% <br />
  6. 6. 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 <br />Health and Wellness “Feel Good Factor”: Going Beyond General Health <br />US Nutricosmetic Ingredients Market <br />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 <br />INCREASING FOCUS ON <br />PERSONAL CARE <br />Revenues in $ Mn <br />CAGR 2008-2015: ~15% <br />2008<br />Chinese Personal Care Active Ingredients Market <br />Indian Personal Care Inactive Ingredients Market<br />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 <br />Revenues in $ Mn <br />CAGR 2008-2014: 7.2% <br />CAGR 2008-2015: 18.5% <br />
  7. 7. Total 2010 Global Personal Care Product Market: $344 Billion<br />CAGR 2010-2015: 18% <br />Nutricosmetics<br />Digestible Supplements that offer beautification and/or personal hygiene benefits<br />$ 2.4 Billion<br />Cosmetics and Toiletries<br />Products that offer beautification and/or personal care/hygiene benefits<br />$ 260 Billion<br />Outside the Body<br />Consumer Benefit<br />Cosmeceuticals<br />Cosmetic products that offer nutritional and/or health benefits<br />$ 12 Billion<br />Dietary Supplements or Nutraceuticals<br />Digestible Supplements that offer nutritional and/or health benefits<br />$ 70 Billion<br />Inside the Body<br />Inside the Body<br />Outside the Body<br />Active Ingredient Delivery Format<br />Market Overview<br />Source: Frost & Sullivan.<br />
  8. 8. 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. <br /><ul><li>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.
  9. 9. 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.
  10. 10. 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. </li></ul>Nutricosmetic Ingredients Market: Revenues by Product Type (EU & NA), 2010<br />Nutricosmetic Ingredients<br />Source: Frost & Sullivan.<br />
  11. 11. Nutricosmetic Ingredients: Vitamins, Carotenoids, and Omega 3<br />Vitamins<br /><ul><li>Natural vitamins are in great demand with increase in consumers knowledge on its health benefits and consumers skepticism over engineered food.
  12. 12. 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.
  13. 13. The largest manufacturers of vitamins are DSM, BASF and Roquette.
  14. 14. 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.
  15. 15. Many companies are looking to invest R&D in omegas as this ingredient has a great potential in functional food and beverage applications
  16. 16. The largest manufacturers of omega-3 fatty acids are Cargill, Cognis and Lonza.
  17. 17. For example, ANTI AGE 40+ and Radiance Formula from functionalab has omega-3 fatty acids EPA & DHA and is positioned for skin health.</li></ul>Omega-3 <br />fatty acids<br />Carotenoids<br /><ul><li>Carotenoids are the best known antioxidants and the major types are beta carotene, lycopene, lutein, zeaxanthin, astaxanthin, phytoene and phytofluene.
  18. 18. Carotenoid supplements have proven to boost skin softness and suppleness and are one of the major ingredient in nutricosmetics supplement tablets.
  19. 19. Beta carotene is the major ingredient that is used in beverages, fruit based drinks and dairy products for food coloring.</li></ul>Source: Frost & Sullivan<br />
  20. 20. Nutricosmetic Ingredients: CoQ10, Collagen, and Polyphenols<br />Polyphenols<br />Coenzyme <br />Q10 (CoQ10)<br /><ul><li>The major polyphenols include anthocyanins, anthocyanidins, resveratrol, ellagic acid, carnosic acid, rosemarinic acid, flavonoids, tannins and procyanidins.
  21. 21. 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.
  22. 22. Polyphenols provide better health and beauty benefits on ingestion more than topical applications.
  23. 23. For example, French brand Skeen+ has a Youth Reanimator, a resveratrol enriched drink positioned as solution to reanimate and perfect the skin for men.
  24. 24. CoQ10 is primarily used in dietary supplements withthe potential to rejuvenate body cells, fight diseases, slow down ageing process, maintaining and protecting restoration systems, preserving elasticity, and softening the skin.
  25. 25. There is a growing demand for CoQ10 in nutricosmetics food and beverage applications for its anti-aging properties.</li></ul>Collagen<br /><ul><li>Collagen is a structural protein with emerging skin health applications in several nutricosmetics food and beverage s due to their effectiveness when ingested.
  26. 26. For example, Protein M+ from Copalisis 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.</li></ul>Source: Frost & Sullivan.<br />
  27. 27. Edible Personal Care Ingredients<br />Eye Care<br />Lutein & Bilberry - Natural Eye Care Supplement (botanical extracts)<br />Eye care cream using cocoa<br />Lavender Tea Bag To Soothe Puffy Eyes<br />Cucumber Eye Mask and Potato Eye Mask<br />Face Care<br />Honey Avocado & Oatmeal Nourishing Exfoliating Mask<br />Egg White Face Mask to Tighten Pores<br />Corn Flour for Oily Skin<br />Brown Rice Flour & Lemon Juice Mask<br />Adzuki Bean And Rice Flour Paste Scrub<br />Hair & Body Care<br />Lemon Skin & Hair Softener in Hard Water Area<br />Yogurt Bath & Soak Spa<br />Moisturizing milk<br />Shampoo & body wash made from tea & mint<br />Source: Frost & Sullivan<br />
  28. 28. Key Market Drivers<br />“Beauty from within” is the Best Approach<br /><ul><li>Growing supporting information and scientific evidence is showing the positive effect of such ingredients and bringing support for “Beauty from within”
  29. 29. This approach is more attractive because of the combined effect on nutrition and beauty with single ingestible food fortification and supplement. </li></ul>Aging Population<br /><ul><li>The major driver for the nutricosmetics market is the growing aging population wanting to look young and stay healthy.
  30. 30. Concerns over beauty are increasing among the aged population which leads to the use of ingredients in supplements and food fortification.</li></ul>Increasing Beauty Concern<br /><ul><li>There is a general trend towards healthier lifestyles and growing concern for personal health and beauty among consumers.
  31. 31. As products are developed, consumers are looking for convenient solutions in different formats outside of lotions, pills, and sprays. </li></ul>Parallel Demand for Natural Ingredients <br /><ul><li>There is an increasing demand for proactive natural preventive measures such as supplements and food fortified products over the reactive alternatives.
  32. 32. Many natural and organic ingredients overlap with nutricosmetic ingredients with the main difference in providing an edible format for that functional ingredient. </li></ul>Source: Frost & Sullivan.<br />
  33. 33. Key Market Challenges<br />Skepticism on Product Claims<br /><ul><li>Consumers are unsure of product efficacy as there is still little proof provided by manufacturers on the products claiming beauty health benefits.
  34. 34. Derived from consumer’s skepticism in cosmetic products, there are also growing concerns in supplements and nutricosmetic products.
  35. 35. 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.
  36. 36. This lack of consumer’s knowledge about the ingredients and benefits make consumers reluctant to try and accept nutricosmetics products.</li></ul>Lack of Consumer <br />Awareness<br />Lack of Regulatory Guidance on Formulation<br /><ul><li>At the interception of food and cosmetic market, nutricosmetics products lack clear regulations for production, promotion, and categorization.
  37. 37. Difficulty remains in innovating an edible cosmetic that has good taste sensations, product benefits, and stability.</li></ul>Promoting Consumer Benefits that are not Immediate<br /><ul><li>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.
  38. 38. 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. </li></ul>Source: Frost & Sullivan.<br />
  39. 39. Top Trends and its Impact – A Snap shot<br />Trends<br />Factors<br />2020<br />2015<br />2010<br />Inside-out <br />approach<br />Product development<br /> for problems like anti-aging, skin lightening, and others. <br />Emergence of preventive nutricosmetics products<br />Emergence of products that are multi functional for many target groups<br />Well-maintained balance between beauty and food<br />Bioprospecting for new ingredients <br />Natural<br />ingredients<br />Introduction of more green chemistry based products for efficient processing and formulation of ingredients<br />Production of natural ingredients that are manufactured using white biotechnology<br />Crops produced under the banner of ‘organic’<br />Emergence of <br />nutrigenomics based <br />products<br />Technology<br />Implementation of technologies<br /> for controlled release of<br /> ingredients<br />Modification of <br />existing technologies<br /> to match several <br />applications<br />Legislation<br />Increased availability of <br />products with approved<br /> claims<br />Agencies streamlining guidelines to improve definition and accelerate approval of new novel ingredients <br />There is no well defined legislation for nutricosmetics products<br />Consumer <br />awareness<br />Moderate awareness, consumers expect instant gratification and focus on packaging<br />Increased interest in<br />ingredients & scientific <br />Evidence for their efficacy<br />Increased consumer <br />demand for <br />permanent solution<br />Source: Frost & Sullivan<br />
  40. 40. Growth Opportunities<br />Aging Population<br />New Geographies – NA, Brazil, China, India, Russia<br />Partnerships: Supplement, Food & Cosmetics Companies<br />Natural and Organic Ingredient Innovation<br />Target Markets: Men, Children, Prenatal, Pets<br />Growth Opportunities<br />Source: Frost & Sullivan.<br />
  41. 41. About Frost & Sullivan<br />
  42. 42. About Frost & Sullivan<br /><ul><li>Frost & Sullivan, the Growth Partnership Company, enables clients to accelerate growth and achieve best-in-class positions in growth, innovation and leadership.
  43. 43. The company's Growth Partnership Service provides the CEO and the CEO's Growth Team with disciplined research and best-practice models to drive the generation, evaluation, and implementation of powerful growth strategies.
  44. 44. Frost & Sullivan leverages over 45 years of experience in partnering with Global 1000 companies, emerging businesses and the investment community from over 40 offices on six continents. </li></ul>The Growth Partnership Company<br />
  45. 45. About Frost & Sullivan Continued<br /><ul><li>Request a proposal for or Growth Partnership Services or Growth Consulting Services to support you and your team to accelerate the growth of your company. (myfrost@frost.com) 1-877-GoFrost (1-877-463-7678)
  46. 46. Join us at our annual Growth, Innovation, and Leadership 2011: A Frost & Sullivan Global Congress on Corporate Growth (www.gil-global.com)
  47. 47. Register for the next Chairman’s Series on Growth: Developing a Visionary Perspective for the Future (December 7th)(http://www.frost.com/growth)
  48. 48. Register for Frost & Sullivan’s Growth Opportunity Newsletter and keepabreast of innovative growth opportunities(www.frost.com/news)</li></ul>http://twitter.com/frost_sullivan<br />
  49. 49. Our Global Perspective: Frost & Sullivan Locations<br />Yong-Li Q McFarland<br />Research Analyst<br />Certified Growth Consultant<br />Chemicals, Materials & Foods<br />210-477-8432<br />yong-li.mcfarland@frost.com<br />

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