Beyond Beauty: Spas Raise the Bar

November 22, 2005

More than just a place for pamering, today's spa focuses on results-oriented treatments and products.

Once considered a sanctuary from stress, spas are now offering more than just a temporary escape from every day life, and consumers are recognizing the physical benefits that can be derived from spa treatments and products. Going above and beyond bubble baths and scented soaps, spas offer consumers an opportunity to educate themselves about what skin care products are available, which ingredients are best for their individual needs, and proper home-use of products.

Product education is essential, according to Nancy Griffin, founder of SpaTrade.com and president of The Wellness Resource, a marketing and trends analysis firm. “Spas must have therapists recommending products to compete with mass-marketed lines,” said Ms. Griffin. “There is an abundance of good products on the market. People need education and a consistent regimen to get maximum benefits. This is where spas have an opportunity to make a difference.”

Retail products have always been a good source of cash flow for the spa industry. The U.S. Professional Skin Care Market 2003 study done by The Kline Group reported that total high-end skin care product sales generated approximately $200 million from retail sales in day spa, cosmetic surgery, dermatology and medical spa facilities in 2003. Products used for professional treatments represented approximately 19.3% of total 2003 sales, with home-use (retail) sales representing the remaining 80.7%. Estimates from Kline indicate that professional skin care product sales rose at a compound annual growth rate of 11.1%, whereas the traditional cosmetic and toiletry market expanded by approximately 5.4% during the same period. In a recent study released by the International Spa Association, the U.S. spa industry generated an estimated $11.2 billion in overall revenue in 2003.

According to Caroline Rushworth, national educator for Paris-based professional skin care company Sothys, customers expect more from their treatments and products than just pampering. “These days, clients want results-oriented treatments,” said Ms. Rushworth. “They want luxury and relaxation, but they also want performance-based treatments, not fluffy ones. Our treatments are incredibly relaxing, but each treatment has a specific purpose.”

The Search for Eternal Youth
It seems you can’t turn on the television or pick up a magazine these days without learning about extreme makeovers and plastic surgery success stories. For consumers who want to fight the signs of aging without resorting to drastic measures, there are countless professional anti-aging products on the market to meet every need.

SpaTrade’s report, “Professional Skincare Trends in the United States: Past and Future” states that while the overall skin care market grew at a relatively stable 7% in 2003, anti-aging product sales rose 11%. And with the aging baby boomer generation, that number will most likely continue to rise.

Skin care companies are in fierce competition trying to discover the latest, most advanced ingredients to help in the fight against aging. Paul Cain, president and chief executive officer for North American Operations of Babor, a German skin care company with a U.S. institute in Palm Beach, FL, noted that consumers are becoming savvier when it comes to choosing a product. “Consumers are more educated, particularly the baby boomer generation, when it comes to products, ingredients and gimmicks.”

Babor’s SeaCreation line includes ingredients harvested from ocean depths of 7,500 feet.

Babor literally went to new depths for its latest anti-aging discovery. The key ingredient in Babor’s new SeaCreation line is thermophilus, an organism that was discovered in water, living 7,500 feet below the Pacific Rim coast. Thermophile microorganisms dwell in volcanic rifts in the Guaymas Bay under conditions of extreme heat and pressure, which they are able to endure due to their thermoactive function and anti-oxidative properties. Because of these properties, thermophilus acts like a high-energy catalyst to shield skin cells from harm while ridding the skin of stress and free radicals, Mr. Cain explained.

The line consists of two products: SeaCreation cream, which is recommended for use in the morning and evening on the face, neck and décolleté and SeaCreation concentrate, an active fluid with highly concentrated ingredients that complements the cream. Products are available in spas and select Nordstrom stores.

Babor also offers the SeaCreation facial, available at high-end spas such as Takashimaya in New York City. Incorporating both the cream and concentrate, the treatment includes the use of fresh shells placed on different chakra points of the body during a revitalizing facial massage.

In spite of the hefty price tag (the cream retails for $400 per 1.75-oz. jar and the concentrate retails for $250 per 1-oz. jar), SeaCreation has been the most successful launch in Babor’s history, according to Mr. Cain. “This is breakthrough technology,” he said. “There is no product like it on the market and customers are realizing that. It truly represents the world’s first smart formula because it is triggered by the activity of free radicals.”

Instead of going underwater to make a splash in the anti-aging forum, Topix Pharmaceuticals, North Amityville, NY, chose a more biological approach. The key ingredient in Citrix Cell Rejuvenation serum (CRS) is the human growth factor TGF-Beta-1, combined with vitamin C. TGF-Beta-1 targets mainly the underlying dermal layer of the skin and specifically helps repopulate the underlying dermal tissue with new cells, explained company executives. These new cells (collagen) are said to help hydrate and regenerate the dermal structure, which in turn decreases the appearance of fine lines and wrinkles.

In an investigative trial performed by Topix, executives reported a 50% reduction in the appearance of wrinkles and a 30% increase in new collagen formation in patients who used the product for 60 days.

Citrix products are available at select medical spas and medical practices.

Going beyond basic cream, Elemis offers Skin Bliss capsules to fight aging.

The anti-aging realm of skin care stretches beyond the basic scope of creams, gels and concentrates. British spa brand Elemis introduced Cellular Recovery Skin Bliss capsules in August, available in spas and salons. Created for use in conjunction with Pro-Collagen Marine cream, which launched in 2003, the capsules contain Moringa oil, an ingredient Elemis executives said has antioxidant properties clinically proven to be 1,700% percent more powerful than other cosmetic oils. Extracted from the Tanzanian tree, Moringa oil contains seven times more vitamin C than oranges, four times more calcium than milk, four times more iron than spinach and three times more potassium than bananas.

Preventative Measures
One undeniable way to prevent signs of aging is by protecting the skin against the harmful effects of the sun. Exposure to UVA and UVB rays is one of the leading causes of photo-aging, and many skin care companies are recognizing the consumer’s need for products that offer year-round total sun protection.

Earlier this year, Yonkers, NY-based skin care line DDF introduced three new Sun kits designed to protect the skin from sun exposure. In addition to preventing future damage, all DDF sun products contain 11 antioxidants to minimize free radical damage and help the skin repair past sun damage, according to company executives. The Matte Sun kit contains Matte Finish Photo-Age Protection SPF 30, a matte formula that is quickly absorbed to keep skin shine-free while minimizing free radical sun damage caused by exposure to UVA and UVB rays. The Moisturizing kit includes Moisturizing Photo-Age Protection SPF 30, a lightweight, fragrance- and oil-free moisturizing formula, and the Organic Sun kit contains Organic sunblock SPF 30, a sunblock formulated specifically for sensitive skin that acts as a physical barrier to UVA and UVB rays as opposed to actually being absorbed by the skin. All three kits include Glossy Lip therapy SPF 15 and After Sun Security, a moisturizer that soothes skin and helps reduce redness. The DDF line of products is available in spas, boutiques and upscale retail stores including Bergdorf Goodman, Nordstrom and Sephora.

“All of the anti-aging products on the market combined do not have the power of a sunscreen when it comes to keeping skin looking young and healthy,” said Elaine Linker, co-founder of DDF. “The single most important thing one can do to visibly slow down the aging process is to use a broad spectrum UVA/UVB protection sunscreen when skin will be exposed to the sun for even a few minutes.”

Soins Soleil Cellu-Guard, a new luxury sun care line from Sothys, debuts next month.

In January 2005, Sothys will launch Soins Soleil Cellu-Guard, a luxury sun care collection that is said to reinforce the skin’s cellular defenses to help battle the damaging and aging effects of the sun. The technological cornerstone of the system is what Sothys calls the Cellu-Guard complex—a blend of fruit polyphenols and highly purified calophyllum oil that is said to protect the membranes and the DNA structure of the skin’s cells and preserve the skin’s cytoplasmic proteins.

The line will include a pre-sun exposure formula for the face and body, self tanning cream for the face, self-tanning spray for the body, extreme protection SPF 30 for customers with sensitive skin, high-protection tanning lotion with SPF 20, age-defying cream with SPF 10 for the face, protecting tanning lotion with SPF 10 for the body, age defying post-sun repair cream for the face and after-sun soothing veil for the body. Sothys products are available at spas and salons.

Back to Nature
While many consumers are reaping the benefits of the latest technological advances and ingredients, there will always be those who prefer the natural approach when it comes to skin care. This is a lesson learned long ago by environmentalist Horst Rechelbacher, who started Aveda in 1978. Acquired by Estée Lauder in 1997, Aveda’s line of plant-based hair and skin care products is currently sold in 10,000 salons, spas and stores worldwide.

This past October, Aveda introduced Caribbean Therapy. The line includes three professional-use only products and two products that are available for
retail—Caribbean Therapy bath soak and Caribbean Therapy body crème. Created in collaboration with a local plant therapist from Martinique, Aveda incorporated ingredients derived from local plants such as mango and cocoa to moisturize and aloe vera to soothe, along with a variety of Caribbean essential oils such as amyris, bay,
lime and vetiver. The two products are meant to recreate the calming, restorative energy that is generated during Caribbean Therapy professional spa treatments at home.

Bath Petals’ new Bath & Shower gel is made with only natural ingredients.

Due to customer demand, Bath Petals, Los Angeles, CA, launched an all-natural Bath & Shower gel in August. The SLS-free gel is a mild, liquid castile soap that was originally introduced as a retail product. Spa professionals liked it so much that it is now being sold by the gallon for use during treatments. “With today’s increase in stress and stress-related disorders, customers are looking to spas for holistic, natural treatments and products that support their well-being,” said Julie Warnock, president of Bath Petals.

Launched in 2000, Bath Petals manufactures a range of all natural bath and body products which are available in spas, boutiques, hotels and resorts.

Essencia, Shreveport, LA, offers a collection of handmade soaps, lotions, creams, balms, oils, scrubs and bath milks containing only the most beneficial, natural ingredients available. The company recently introduced the Oatmeal & Honey Facial bar, which offers spa-goers a way to experience the sensation of a facial at home. The all- natural facial bar soap is full of ingredients that benefit the skin including oatmeal to gently exfoliate, honey to attract and retain moisture, essential oils of lavender to soothe and heal and peppermint to cool and rejuvenate. Essencia products are available in spas and boutiques.

Manufacturers are recognizing the power
of the male consumer.

Equal Opportunity Products
Women aren’t the only ones who want to look and feel their best. The spa industry is taking full advantage of every opportunity to tap into new markets with treatments, programs and products specific to age and gender.

Teenagers are ideal spa clients because of their disposable incomes and changing skin care needs. “The spa industry is well aware of teen spending habits and knows that this thirty million strong and growing demographic is a great market to pursue,” commented Heather A. Lee, president of SpaKid International, Boulder, CO, a company that offers Wellness Workshops for teens. “By reaching out to teens, the industry can truly be part of preventative medicine. For example, teaching teens about skin care and sun protection helps them prevent skin damage and premature aging.”

The Cleen4Teen line from Laguna Hills, CA-based Epicuren offers the YouthTeen kit. The kit includes All-Natural Antioxidant Herbal cleanser, Antioxidant Serum moisturizer, Non-Greasy sunscreen with SPF 30 and Orange lip balm with SPF 20. All products are formulated to prevent skin problems that often affect teens such as oily skin, dry patches and acne. Epicuren products are available through professional skin care outlets.

When it comes to the male market, not only have most major spa companies introduced men’s product lines, but new brands are also sprouting up to meet the growing demand for male grooming products. Launched in November, Billy Jealousy, Dallas, TX, is said to be a scientifically formulated line of products for men that was created to provide greater quality and sophistication in product choices.

“The internet, the proliferation of male-oriented magazines and the success of shows like Queer Eye for the Straight Guy have all contributed to educating today’s males in terms of product brands, benefits and daily regimen strategies,” said Pat Parsi, president of Billy Jealousy. “As their demands and needs grow, men are seeking products that not only cleanse and protect their skin but also products that contain active ingredients that will improve the health of their skin.”

The seven-product line, which is available at spas and select department stores, includes Bar None face wash, Ocean Front body wash, Hot Towel pre-shave treatment, Hydroplane shave cream, Shaved Ice after-shave balm, Combat Lines moisturizer and Hair Raiser follicle restorer. Eventually, the company plans to expand the line to include hair products, tanning cream, toothpaste, mouthwash, lip balm and muscle gel.

Founded in 1965, Beverly Hills-based Baxter of California was one of the first companies to seriously address men’s grooming needs. Almost 40 years later, the company is still expanding its product line—which is sold in spas, salons and specialty stores—to meet the needs of consumers.

Earlier this year, Baxter of California introduced Herbal Mint toner, an alcohol-free astringent designed to balance the skin’s pH, reduce shine and remove excess oil without drying the skin. Also new to the line is Oil Free moisturizer, which contains antioxidants, vitamins A, D and E and herbal extracts to help defend the skin against cell damage and free radicals.

The Road Ahead
According to the International Spa Association’s (ISPA) 2004 industry study, there are an estimated 12,100 spas throughout the U.S. The number of spa locations continued to grow between ISPA’s 2002 and 2004 studies at an average annual rate of 12%. Between 2002 and 2004, the medical spa segment expanded faster than any other segment, with the number of medical spas growing 109%. This increase will most likely spur the launch of more physician-formulated product lines and anti-aging products, according to industry experts.

As niche markets, such as men and teens, continue to grow and new ingredients and advanced technology continue to emerge, there will always be room on spa shelves for innovative products. Many major manufacturers are currently developing new product lines to keep up with the growing needs of consumers. According to Ms. Rushworth, it takes Sothys usually between two and four years to create a new product. Already slated for 2005 is the introduction in February of Total Cohesion—a skin care line containing Mamaku extract to protect and reinforce the skin’s cellular structure, helping to prevent further signs of aging.

“It takes time to create products that really work,” said Ms. Rushworth. “You need to always be on the cutting edge and looking out for the best formulas that will create the ultimate results for the customer.”

Related End-User Markets: