Kline even went a step further, dissected the data and came up with a $2.4 billion medicated topicals market that rose 3.5% in 2011. This faster-growing segment includes: Anti-itch products; corn, callus and wart removers; diaper rash; eye care; first aid; fungicidal preparations; hair regrowth; hemorrhoidal preparations; oral care products and topical analgesics.
Within this set, topical analgesics and hair regrowth formulas are the top performing categories, according to Laura Mahecha, industry manager, health care, Kline & Co., Fairfield, NJ.
“Hair regrowth formulas are growing 11% a year and in this industry, anything that hits double-digits is a star performer.”
What’s driving sales? A lousy economy.
“So many people are looking for jobs and more men, therefore, are paying more attention to their appearance. As prices have come down—store brands can cost 40% less than Rogaine—more consumers are considering using the products.”
At the same time, more people are reaching for a joint pain cream rather than running for the doctor. But for the cosmetics industry, one of the key focuses is on acne—which, unfortunately for sufferers, seems to impact a growing segment of the population.
Advances in Acne Treatment
Long the bane of teens everywhere, acne does not age-discriminate. The American Academy of Dermatology notes that adults in their 20s, 30s, 40s and even into their 50s can develop acne, which is caused by overproduction of oil by enlarged oil glands in the skin, blockage of the hair follicles that release oil and growth of bacteria (P. acnes) within the hair follicles. As a matter of fact, acne is the most common skin disorder in the US, affecting 40-50 million Americans. Nearly 85% of all people have acne at some point in their lives.
Clearly, there’s a market for these products, as data from SymphonyIRI, Chicago, can attest. Acne treatment sales approached $640 million in food, drug and mass merchandisers for the 52 weeks ended Dec. 30, 2012 (see chart below). Neutrogena led the way, accounting for more than 12% of sales, followed by private label acne treatments (8.63%) and Clearasil Ultra Rapid Action (5.25%).
With four of the top 10 acne treatment products sold in mass markets, it’s clear why Neutrogena, a division of Johnson & Johnson, calls itself the No. 1 dermatologist-recommended brand. But some dermatologists say they aren’t always pleased with what they see on store shelves.
“I have nothing against OTC products,” insisted Zein Obagi, founder, ZO Skin Health. “Consumers should go ahead and use them. But if they don’t improve in three weeks, they should call a dermatologist. We see a lot of patients who used over-the counter products that didn’t work and actually scarred their skin.”
According to Obagi, acne is not only treatable—it’s preventable. He noted that skin has no sebum until one turns 9 or 10 years old. At that time, children should be taught to cleanse their skin and use an exfoliator to keep pores from clogging and forming a cyst. By the time a cyst forms, the body is already inflamed.
“I don’t focus on the acne alone, I look at the whole skin,” explained Obagi. “We’re telling physicians that they have to look beyond Retin A and benzoyl peroxide. They must strengthen the skin to enable it to repair itself and prevent acne.”
One way to strengthen skin is by incorporating antioxidants into acne formulas, which help build skin’s barrier function. And in some cases, Obagi puts patients on 400mg of ibuprofen for 10 days to help clear their skin. The ibuprofen reduces inflammation that, in turn, reduces acne.
Acne may be a malady with young people, but rosacea is a rising problem for those 25-30 years old. Melasma is the biggest problem for those 30 and older, and by the time consumers reach their 40s, UV damage is the biggest concern of Obagi’s patients.
New Proactiv+ debuted earlier this year.
Suki Kramer, founder of Suki Clinically-Proven Natural Solutions Skin Care, insists that there is a more natural way to effectively treat acne. Her products contain herbs and plants with anti-inflammatory, antibacterial and antimicrobial properties. For example, licorice root contains glycyrrhizin, a triterpene saponin, at concentrations ranging from 7-10%. According to Kramer, it is converted to glycyrrehetic acid (GA) in the body and is said to inhibit inflammation and melanogenesis. Vitamin C has applications as a scar-inhibitor and salicylic acid (salix) obtained from the bark of the willow tree has widespread use as an acne treatment. These are just a few of the natural ingredients that Kramer insists are making consumers rethink natural ingredients.
“People want natural products but, most importantly, they want products that work,” explained Kramer. “We have an amazing purifying serum that contains white willow, golden seal and echinacea.”
Effective, natural formulas don’t come cheaply. Kramer uses rose petal concentrate rather than water in her formulas, which retail from $10 to $50, while the spa collection retails for $50 to $150. Still, her formulas have found an audience.
“Consumers are frustrated,” she told Happi. “They want something different and they want something healthy.”
To reach these discerning consumers, Kramer uses new marketing methods such as Birchbox and Beauty Tube, as well as more traditional venues like Fred Segal. New products are in the works based on a vitamin serum and, with hopes to expand into mass, Kramer says she may quadruple production in-house and even employ a contract manufacturer.
“We have a very loyal and vocal fan base,” she explained.
Roll with It
Another category that has performed better than the overall market is topical analgesics, according to Kline data. The rollout of roll-ons has provided a lift, and the delivery system is found in analgesics and cold sore medications, and may soon begin appearing in the acne treatment aisle. Leading the way is Sanofi-Aventis’ Chattem business, which offers stick applicators for some of its best-selling brands such as Icy Hot and Aspercreme. In fact, Icy Hot is now available in a variety of hands-free applications including patches, sleeves and Chill Stick. They’re all just one form of an evolution that is taking place in the OTC category these days.
“Consumers don’t want to touch their medications, so now there’s roll-ons, as well as foaming sprays and medicated patches for pain,” noted Mahecha.
Sometimes pain relief is as close as your freezer. Bengay’s newest incarnation is Zero Degrees, a muscle and joint pain reliever that can be stored in the freezer to deliver an icy-cold relief. Company officials hope Zero Degrees can put a freeze on Bengay’s falling sales. According to SymphonyIRI, sales of Bengay dropped nearly 13% last year (see chart below). Like other OTC brands owned by J&J, Bengay is feeling the heat for the company’s troubles at its Fort Washington, PA site, which was the headquarters of J&J’s McNeil Consumer & Specialty Pharmaceuticals business, which markets Tylenol and Motrin IB. J&J doesn’t manufacture its analgesic creams in Fort Washington, but all the attention from FDA has diverted J&J’s attention from its other OTC businesses, say observers. The Fort Washington is expected to return to business as usual later this year. But when J&J’s OTC business does return to full strength, it will find an increasing number of competitors who are carving out their own niches in the nearly $443 million topical analgesics space.
OTC Goes Natural
Products with a natural position are finding favor with consumers in every consumer category from hair care to skin care, so why not OTC pain relief? One of the more successful players in this space is Perfecta Products, a North Lima, OH-based company that began with one product more than 60 years ago to help cement workers with their dry, cracked hands and feet via its flagship product, Zim’s Crack Crème. Since then, the company has grown to include 28 OTC solutions for pain relief, skin care, lip care, diabetic living and first aid. Its Zim’s Max Freeze posted a sales gain of more than 8% last year to secure a spot among the top 10 analgesics in food, drug and mass channels, according to SymphonyIRI.
Zim’s Max-Freeze contains organic ilex, aloe and arnica, vitamin E, tea tree oil, capsaicin and menthol. On the other end of the sensorial spectrum is Zim’s Maximum Heat, which was introduced last year and contains all those ingredients as well. Nearly as important is what the Perfecta products don’t contain; things like parabens and sulfates. Combine that with an affordable price point and Perfecta can hold its own against big multinationals, says Perfecta President Scott Gorley.
“We give a lot of product for the price and it’s a high quality product,” said Gorley. “It’s a tremendous value.”
Zim’s Maximum Heat
“I’m cautiously optimistic this year,” proclaimed Gorley. “We make products that make a difference for the consumer and the retailer by improving their bottom line.”
Ateevia is one of the newest players in the pain-relief sector.
“There’s a real need for a product that is totally natural, yet can be applied like a moisturizing cream,” said Joseph Janowski, a company spokesperson. “There’s demand for a non-medicated, natural solution for pain. People are hesitant to use medication to alleviate pain.”
Ateevia Botanica is available online at www.ateevia.com, www.Amazon.com and www.Drugstore.com and can be found in a few independent pharmacies, with the goal of getting the $20 cream into national chains, according to Janowski, who said this is only the first in a series of pain treatments from the company. Plans are also in the works to develop cosmetic-related products skin care products with similar distribution.
Sore muscle treatments can be found up and down the OTC aisle, but what can be done for consumers who bruise easily? Smart Cover recently rolled out Anti-Bruise Cream, a product with a growing consumer base as Baby Boomers age, according to industry veteran Flori Roberts, a principal in Smart Cover.
“Older skin bruises so easily (because) aging makes the skin thinner,” explained Roberts, who noted that medication such as Coumadin causes bruising, as does anti-aging injections like Botox and Juviderm. Smart Cover Anti-Bruise Cream also helps calm post-laser redness—all of which should make it a favorite with youth-obsessed Baby Boomers.
How? Anti-Bruise Cream contains ingredients such as emu oil to moisturize, vitamin C to promote healing and green tea and arnica to soothe skin and speed the healing process by a week. Anti-Bruise Cream is available on the company’s website, www.smartcover.com, and retails for $19.95.
“Everybody is into anti-aging,” noted Roberts. “We have an interesting market out there. Some women get injections every six weeks. This product has a lot of potential.”
With more consumers avoiding potentially expensive trips to the doctor, there’s a lot of potential in the OTC aisles of your local pharmacy and food store.