Nutraceuticals find a niche in beauty market

In the hot zone

03 November 2009 09:11  [Source: ICB]

With the health and wellness trend well underway, consumers take nutraceutical consumption a step further toward beauty

NUTRACEUTICALS IS still a hot market with considerable growth potential, bolstered by growing use for beauty enhancement and preservation among a broad-based demographic, most notably female consumers.

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The nutraceuticals market is wide-ranging and spans different areas of the fast-moving consumer goods industry, according to UK based consultancy Euromonitor, which points out that, in addition to health and wellness, beauty is a major driving factor for the nutraceuticals market.

"The movement 'from treatment to prevention' stimulates demand for nutraceuticals as they offer additional health benefits beyond basic nutrition," says Ewa Hudson, head of health & wellness research at Euromonitor.

A 2008 nutraceuticals market report by US-based market research firm BCC Research states that the global market for nutraceuticals is expected to increase at a compound annual growth rate (CAGR) of 7.4%, reaching $176.7bn (€117.53bn) in 2013 from $117.3bn in 2007.

BCC breaks down the nutraceuticals market into the foods, beverages and supplements categories, with nutraceutical foods being the largest market segmentation, worth $39.9bn in 2007. This category is expected to grow to $56.7bn in 2013 at a 6.9% CAGR.

Nutraceutical supplements hold the second-largest market share with sales of $39bn in 2007. This segment is forecast to reach $48.8bn in 2013 at a 3.8% CAGR. Meanwhile, nutraceutical beverages is the fastest-growing segment. It is expected to have the largest market share by 2013, growing at 10.8% CAGR from $38.4bn in 2007 to $71.3bn in 2013, according to BCC.

"The global nutraceutical market is defined as aggregate sales of functional food, beverage and supplements fortified with bioactive ingredients, including fiber, probiotics, protein, peptides, omega, phytochemicals, and vitamins and minerals," BCC says.

Foods, beverages and supplements each contribute 33% to the global nutraceuticals market.

new beauty
Beverages are currently a popular and fast-growing vehicle for delivering nutraceuticals. In autumn 2008, Nestlé launched a drink called Glowelle into the US beverage market. The drink contains antioxidants, vitamins and botanical and fruit extracts for enhancing natural beauty.

Yogurt drinks, another popular format for beauty foods, are also continuously evolving. In Russia in 2007, Wimm-Bill-Dann

"The key trends include... beauty from within" Ewa Hudson, head of Health & Wellness Research, Euromonitor

Foods introduced NEO Beauty, a dairy drink containing aloe vera, antioxidants, minerals and vitamins. Wimm-Bill-Dann is a leading producer of healthy food products in Russia.

"It is hardly surprising that yogurt and chocolate are frequently used in beauty foods as the target audience for nutraceuticals is overwhelmingly female, and typically aged between 25 and 50," Euromonitor states in its April 2009 trend watch report on nutraceuticals.

Back in 2005, US skin care company Borba launched its Borba Skin Balance water line, a portfolio of "drinkable" skincare products.

Another highly lucrative area for nutraceuticals is in beauty supplements. One such product is Imedeen, a beauty supplement from Ferrosan, a Denmark-based consumer health care company. Imedeen is marketed as helping to stave off the aging process. It is a line of skin nutrition tablets and capsules that claims to improve basic skin quality and appearance by, for example, reducing wrinkles and fine lines.

Another beauty supplement product on the market is Perfectil from Vitabiotics, a UK nutrient technology-based health care products company. Perfectil is a leading supplement in the UK, specially developed for skin, hair and nails.

Meanwhile, global majors L'Oréal and Nestlé have also waded into the beauty supplements industry with their joint venture product Innéov, a skin and hair supplement.

Other products that have not proven so successful include US consumer health and wellness major Procter & Gamble'sOlay vitamins, a cross-category brand extension that was withdrawn from the market in 2006. By comparison, German skin and beauty care major Nivea'sGood-bye Cellulite beauty supplement proved to be a more successful cross-category endeavor, Euromonitor says. Good-bye Cellulite is designed to be used in conjunction with an anti-cellulite cream of the same name.

expanding the horizon
Some up-and-coming nutraceutical ingredients are Tonalin conjugated linoleic acid (CLA), by Germany-based Cognis, probiotics and lycopene, which are experiencing growing demand as marketers raise the level of awareness about these ingredients.

"The key trends include digestive health, where probiotics are the star ingredient, weight management, with CLA being an alternative to other weight loss products, and beauty from within, where lycopene is a key ingredient in beauty supplements (it protects skin from damaging UV radiation). People want to feel healthy and look good," Euromonitor's Hudson says.

Probiotics open up 'digestive wellness' as a marketing platform. Some new formats are being developed to incorporate probiotics. One area is dry food. There is also demand for mouth, throat and upper respiratory probiotics.

Global sales of probiotic supplements, yogurt and juice totaled more than $20bn in 2008. To compare, the global value of organic food and beverages was $24bn that year, according to Euromonitor.

Tonalin CLA's claim to fame lies in its inhibition of fat deposit in the body, which makes it an alternative option to other weight-loss products. CLA is derived from safflower oil and inhibits lipoprotein lipase, an enzyme that breaks down fat from the diet, says Cognis.

"The consumer market potential is very high" Sharrann Simmons, senior marketing manager, Cognis Nutrition & Health

Fat that is normally broken down is stored in the body, but by suppressing the enzyme that does this, CLA helps reduce the amount of fat that gets broken down. Hence, there is less fat deposited and stored in the body, according to Cognis.

As for lycopene's renewed popularity, it is now being viewed as a beauty enhancer. It is well known for its antioxidant property, which has been marketed for anti-aging, heart disease, cancer, Type 2 diabetes and osteoporosis. A newer application for lycopene is in beauty pills, Hudson says.

nice niche potential
A swelling potential for nutraceuticals lies in the fast-growing niche market of nutricosmetics.

"Nutricosmetics, a category within the overall nutraceuticals umbrella, are ingestible ingredients that are particularly targeted at a female audience with either anti-ageing or skin care benefits," says Sharrann Simmons, senior marketing manager, Cognis Nutrition & Health.

Driving this growth is the fact that younger generations of females, not just baby boomers, are getting into these products, Simmons points out.

"Whereas in the past, it had been predominantly baby boomers consuming these types of products, these days there is an equal amount of interest from women in their 20s. The younger audience wants to prevent skin damage and maintain their young skin, whereas that older audience wants to repair damage and prevent further damage, or aging, or oxidation of their skin," she says.

"Consequently, the consumer market potential is very high, and I think that's why you see American companies so interested in this 'beauty from within' wellness trend They see a large target audience out there," she adds.

Nutricosmetics are only now emerging in the US, but they are an ongoing trend in Asia, particularly in Japan, where the beauty beverage/nutricosmetic market began, Simmons says.

In Japan the popular format for nutricosmetics is in beverages, and in Europe the main format is in dietary supplements and functional foods.

"We are seeing an interesting shift towards natural-based nutraceutical ingredients based on consumer demand for natural sourcing," she adds.

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By: Feliza Mirasol
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