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The Key to Cosmeceuticals



Annual conference looks at top trends in this growing segment.



Published August 4, 2008
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The Key to Cosmeceuticals



Annual conference looks at top trends in this growing segment.



Melissa Meisel & Christine Esposito
Associate Editors



What do you get when you combine beauty products with active ingredients? The global cosmeceuticals market, one of the fastest growing segments of personal care valued at $55 billion, according to the ALM/Strategic Research Institute.
   
At the 5th Annual Cosmeceuticals conference on June 26 and 27 in New York City—hosted by the ALM/Strategic Research Institute—the latest developments in anti-aging skin care, natural ingredients and ethnic cosmetics were presented by expert speakers at the Marriott East Side hotel.
   
The event kicked off with the Chairperson’s Opening Remarks segment. Happi columnist Navin Geria, vice president, research and development, Spadermaceutical Products Group, offered a presentation on the global skin care market. According to Mr. Geria, more women today are demanding products that work. Furthermore, consumer concerns are rising about misinformation in product advertising. For example, a high price on prestige brands may offer a false promise of efficacy and quality.
   
In the marketplace, consumers are also increasingly clamoring to buy more eco-friendly, greener products. “This is not a passing trend, but a strong current reality,” said Mr. Geria.
   
The future of the cosmetic industry was also discussed in Mr. Geria’s presentation. Global “mega trends” in society and technology play a strong role in the changing market, as well as a boost in innovation.
   
Mr. Geria also discussed nutricosmetics later on at the seminar. As consumers desire to be beautiful inside and out, they are searching for alternatives to plastic surgery and botox. Breakthroughs in beauty science are showing that vitamins and supplements can produce the same results, according to Mr. Geria.
   
Actives and delivery mechanisms are also crucial to growth in the market, according to Gillian Morris, a director in the chemicals industry consulting practice at Kline & Company, who reported on innovations in the cosmeceuticals category as well at the conference.
   
Next on Thursday’s event roster was Dr. Andrew F. Alexis, director for the Skin of Color Center at St. Luke’s-Roosevelt Hospital, who provided “Insights Into the Development of Ethnic Cosmeceuticals.”
   
According to Dr. Alexis, the goal of his presentation was to highlight important issues in cosmeceuticals for the ethnic consumer. In fact, African-Americans, Hispanics and Asian-Americans have an annual purchasing power of $1.9 trillion.
   
These consumers want products that even the skin tone, clear up blemishes and in some cases, lighten or brighten skin. There are also differences in needs for hair care, as ethnic tresses can be dry or brittle. Be on the lookout for hydroquinone, arbutin, kojic acid, retinols, licorice, niacinamide, AHA and vitamins C and E in the leading ethnic skin and hair care of the future.
   
Julia McNamara, vice president, consumer markets consulting for Datamonitor, delved into the topic of “Emerging and Future Cosmeceutical Trends in the U.S.,” and emphasized the importance of noting the needs in global markets. For example, more and more U.S. consumers are buying products due to “word of mouth”; therefore, marketers need to clarify the message in advertising products. Also, the development of more multifunctional products can be targeted toward time-pressed consumers.

Panelists Tackle Cosmetic Marketing Issues



Promotion also was the matter at hand at the final presentation of the day, “Hot Legal Issues in Cosmetic Marketing.” An expert panel consisting of Thomas A. Cohn, senior attorney, Federal Trade Commission (FTC), Northeast Region; Jennifer Fried, staff attorney, National Advertising Division of the Better Business Bureau; and  Andrew B. Lustigman of The Lustigman Firm looked at perspectives on regulatory, self-regulatory and private practice issues.
   
Topics examined by the panel included controversial claims in cosmetic marketing, FTC/Food and Drug Administration (FDA) dual jurisdiction and respective roles, enforcement priorities, the role of the self-regulatory process and strategies for marketing cosmetics in a compliant manner.
   
Opening the second day of the conference was Lauren Thaman, global director, P&G Beauty Science. According to Ms. Thaman, consumers aren’t looking for hope in a jar, “they want science in a bottle.”
   
She noted that the beauty market is calling for sophisticated products that deliver the unexpected and in which ingredients team up to provide expected results that are profitable.
   
To illustrate her point, Ms. Thaman cited an example from the candy industry: the ubiquitous peanut butter cup. For Reese’s, the unexpected pairing of peanut butter and chocolate proved to be a huge revenue generator.
   
In the beauty industry, the “unexpected and” is the combination of beauty and science. “If we are going to grow and expand, it is because of this unexpected and,” said Ms. Thaman. She discussed how quickly science has changed the beauty industry, noting advances such as in-vitro testing, genomics and other recent technologies that are allowing companies to sell more sophisticated products that deliver “meaningful, measurable results.”
   
Because skin care science has increased efficacy, the consumer has become comfortable spending more on skin care products. Along those lines, Ms. Thaman discussed a project in which P&G was testing a daily UV lotion 20 years ago with affluent female consumers. Ms. Thaman said the women liked the product, but said they wouldn’t spend $7 on a moisturizer. Today, the consumer mindset has changed; as women are spending considerably more for mass market skin care products.
   
According to Ms. Thaman, trends that will shape the future of the market include a growing interest in medical mimics, such as at-home microdermabrasion. These products, which offer alternatives to more costly, more invasive procedures, will help fuel steady growth in the cosmeceutical market. But with this growth comes responsibility, according to Ms. Thaman. The industry, she said, needs “to be held accountable to ourselves and to our consumer” to make sure that the claims being made are accurate. Ms. Thaman said cosmetic companies should keep in mind lessons learned by the herbal supplements market—an industry that experienced explosive growth only to have FDA step in when promises didn’t match results.
   
“Claims must be supported. We need to push ourselves to a higher standard,” said Ms. Thaman. “If we don’t, the credibility of our industry could be contaminated.”
   
Carrie M. Mellage, director, consumer products practice, Kline & Company, presented an update on the global skin care market. According to Kline & Company, the global personal care market was valued at $270 billion in 2007, with skin care sales accounting for $80 billion. The personal care market will reach $350 billion by 2012, with skin care growing approximately 7% over the next five years.
    
In her presentation, Ms. Mellage provided information on the top global facial treatment brands. In prestige, they are L’Oreal (all brands), P&G, Estée Lauder, Shiseido and Kao. In mass they are Olay, Avon, Mary Kay, Nivea and L’Oreal Paris, according to Kline & Company.

Help for Aging Skin



Following Ms. Mellage was Dr. Karen Burke, Dermatology and Dermatological Surgery, Department of Dermatology, The Mount Sinai Medical Center in New York. Her topic was “Emerging Developments Using Antioxidants and Trace Mineral for Treatment of Aging Skin.”
   
According to Dr. Burke, sunscreen does not offer skin enough protection from the onslaught of environmental effects. She discussed various findings on the role of antioxidants, such as topical vitamin C, ferulic acid and selenium in skin care.   
   
In “The Role of Stem Cells in Anti-Aging,” Dr. Gary S. Friedman, a medical consultant to Coty, Inc., presented an overview of stem cell sources (embryonic and adult or non-embryonic). According to Dr. Friedman, the by-products of stem cell research have included cell, cytokine and growth factor discoveries, which create myriad potential opportunities for the cosmetics, anti-aging and reconstructive surgery industries. The potential applications for stem-cell derived cytokines and growth factors in cosmetics and anti-aging include epidermal modification and regeneration; dermal modification and regeneration; hypodermal modification and regeneration and anti-aging therapeutics.

Success in an Open-Sell Environment



As a departure from the science of cosmeceuticals, Laura Filancia, director of training and development, Sephora University, presented “The Power of Packaging and Product Innovation in an Open Sell Environment.”
   
Ms. Filancia outlined the history of Sephora, which was born as a perfume shop in Limoges in 1969, and highlighted its top brands.
   
“In an open sell environment—for the shopper who doesn’t want help—your package has to be even more compelling,” said Ms. Filancia.  She suggested companies consider their packaging from many vantage points.
   
According to Ms. Filancia, practicality is a key issue for brands looking to market their wares. “People aren’t sure how to spend their money,” she said, and a great way to market to Sephora’s clientele is by offering a kit that presents a month’s worth of product or a sampling of key products.
   
Additional presentations on day two were made by suppliers to the cosmeceuticals market. These included: “Active Targeting Stress-induced Hyper Pigmentation,” by Carla Perez, personal care actives business manager, North America, Seppic, Inc;  “Natural Approaches for Today’s Cosmetic Materials,” by Kristen Potts, marketing director, Active Concepts Company, and “Novel Ex-vivo Skin Models as an Alternative for Efficacy and Safety Testing,” by Paulo Pertile, chief executive officer of Cupech Company.


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