"Biotechnology actives are derived from natural sources, using bioprocesses that make them more effective for skin and hair care applications," explains Kunal Mahajan, the project's manager. "Their high efficacy is a key market driver for biotechnology products. Furthermore, another advantage is that these products can be customized according to the customer's requirements."
The specialty actives market in the four regions analyzed by Kline—Brazil, China, Europe, and the United States—is estimated at about USD 1.1 billion and expected to grow at a compound annual growth rate (CAGR) of over 6% during 2016-2021. Botanicals, biotechnology actives, and proteins and peptides are the largest categories, together accounting for almost 85% of the total market. Anti-aging remains the largest application, holding 55% of the total market.
New extraction technologies and claims, such as anti-pollution, blue light pollution, and infrared pollution, are among the recent technological advancements that will drive the market. Originating in Asia, the anti-pollution trend is now moving to Europe and the United States and is expected to be the industry's focus in the coming years, particularly for biotechnology and synthetic actives, as well as marine ingredients.
New product technologies like probiotics and the encapsulation of different ingredients, which helps combine non-compatible ingredients, making it easy to formulate and increase efficacy, will drive this market in the future.
Among the key challenges restraining growth is sustainability of raw materials, increase in the cost of in-vitro, in-vivo, clinical tests, as well as strict regulations regarding claims made for a particular active. Additionally, attaining global approval for new actives has turned into a more complex matter, mainly due to the regulations in China, that do not allow the use of new ingredients which are not registered with the local FDA. This restricts innovation as formulators want to use the same actives globally. As a result, suppliers focus on resubstantiation rather than on the development of new actives.
China is expected to be the fastest growing market. The Brazilian economy, which has been under recession for the past few years, is going to adversely impact growth in all the industries, including personal care, also regressing growth in the consumption of specialty actives. Due to their mature nature, Europe and the United States are forecast to increase at slower rates of 3.6% and 3.5%, respectively. However, driven by particular trends and categories, such as biotechnology products, marine ingredients and proteins and peptides will show impressive growth in the next five years in these two markets.
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