Specialized ingredients lead cosmetics market
By Staff -- Purchasing, 1/13/2000
Consumer demand is moving the cosmetics industry in new directions and this affects the types of ingredients used by the industry.A wide array of chemicals is used in the manufacture of cosmetics and personal-care products. Key ingredients, such as emollients, cleansing agents, fragrances, fats and oils, surfactants, and mineral oils and waxes make up the bulk of the market, according to a study on the cosmetics and personal-care markets, conducted by the Freedonia Group, a market analysis firm located in Cleveland, Ohio.
Smaller-volume, more specialized ingredients will grow the fastest in terms of demand. These specialized ingredients, which typically are more expensive, include botanical extracts and enzymes.
Pricing for most high-volume chemicals in cosmetics and personal-care markets tends to be relatively stable. Naturally derived products, however, face some volatility as their production is subject to variations in weather. Also, there are limited numbers of suppliers.
Flavors and fragrances together comprise the largest category of cosmetics chemicals, making up about 23% of demand. According to the Freedonia study, demand for these products is expected to grow at an annual rate of 6.2% through 2003, at which point demand will represent almost 25% of market. Demand increases in this segment will be led by price increases and the growing use of essential oils and botanical extracts, according to the study.
Fastest growth in raw materials will be found in specialty additives, including active ingredients such as plant acids, enzymes, polymers, proteins, vitamins, and botanical extracts. The study estimates that demand for these products will grow 6.5%/yr, representing more than 20% of the total market for cosmetics chemicals by 2003. Freedonia points to the higher market value given to these "natural" products. In the same turn, this market trend will also fuel demand for herbal extracts and vitamins.
Demand for other market segments will also show favorable growth. Freedonia forecasts that cleansers and foamers will grow 4.7%/yr through 2003, comprising 19% of the total market at $1.1 billion. Demand for emollients and moisturizers is forecast to grow 4.1%/yr, also comprising 19% of market by 2003, according to Freedonia.
Slowest growth is predicted in use of processing aids (3.9%/yr to make up 17% of total market by 2003).
The study says manufacturers in the U.S. cosmetics and personal-care markets increasingly are targeting minorities, hoping to tap into different ethnic groups. In some cases, this involves reformulation of standard products or formulation of new ones. In addition, the aging population presents cosmetics manufacturers with opportunities to formulate and market products including milder formulations, more sensitive products and softer colors for aging skin.
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