- Ingestible and topical combination products are proving more palatable to consumers who are skeptical about nutricosmetics.
- Growth in nutricosmetics is being generated by men and young women, two consumer segments that have not previosuly been target nutricosmetic consumers.
- Even products in formats that are traditionally associated with healthy eating may still fail if consumers remain skeptical about their added health benefits.
- In order for nutricosmetics to continue to grow, sales really need to take off in countries where the economies are more resilient to the global recession—in particular, the BRIC nations.
Nutricosmetics and nutriceuticals have been hailed as the next big thing in the beauty industry, and many industry watchers have forecast the segment to boom in the next few years, but there are large disparities in the way the market is developing around the world. Further, sales are currently largely concentrated in several key regions. While sales in Japan, where 16% of all dietary supplements in 2008 had a beauty positioning, and Western Europe continue to thrive and products become increasingly sophisticated, consumers elsewhere in the world have been slower to react to the new nutricosmetics products cropping up on the shelves of health and beauty retailers.
Topical/Ingestible Combo Products the New Trend in Developed Markets
In 2009, the Israeli ingredients company Frutarom announced the development of a new range of ingredients called Nature’s Essence for Skin Care, designed to target skin issues both from the inside and outside. The products are designed to treat problems such as acne, sun-damaged skin, oily or inflamed skin, and to work in conjunction with topical treatments for these conditions in order to speed up recovery. Nivea’s Goodbye Cellulite range, launched in 2008, is also notable for its claims in tackling the orange peel appearance caused by cellulite through the use of both a nutricosmetics pill and a cream. The Goodbye Cellulite capsules and gel both contain L-carnitine, reputed to aid in dissolving fat. These kinds of products seem to be proving more palatable to consumers who are skeptical about nutricosmetics because they combine the topically applied products that women are already accustomed to using with less familiar methods.
The advantage of this combined approach is that it often gives a more immediately visible benefit until the pills begin to have an effect, and one of the major sticking points for consumers regarding nutricosmetics/nutriceuticals has been the time delay, often by approximately a month, before they can expect visible results. This requires a leap of faith that can be too great for many potential consumers.
New Consumer Groups Willing to Try Nutricosmetics
Growth in nutricosmetics is being generated by two consumer segments that have not previously been target nutricosmetic consumers: men and young women. Until recently, women 30–60 years of age were the prime consumer target group for nutricosmetics manufacturers. However, men have also begun to catch on to the trend. In April 2009, a new brand of hair-thinning supplements, Viviscal and Viviscal for Men, was launched in the U.S. market. Already popular in other markets, the entry to the U.S. market, through the Duane Reade pharmacy chain, signified an important milestone in the acceptance of nutricosmetics among notoriously results-driven U.S. consumers. The range of combination products includes supplements, treatment shampoo and scalp lotion. The capsules contain proteins to nourish thinning hair and encourage hair growth and flax seed, claimed to help slow the thinning of hair. Similarly in the U.K., Wellman has recently launched Tricologic, a supplement also targeting male consumers who are concerned about hair loss. This segment is likely to see further growth as remedies for hair loss are far more limited than those available for antiaging, for example.
Younger women in Western markets are also trying nutricosmetics at an increasingly early age, and it is now not uncommon for women in their 20s and late teens to be taking nutricosmetics, primarily as a measure to stave off the signs of aging. Perfectil, a skin hair and nails supplement sold in the U.K., is one such product attracting younger consumers, as the product is also recommended for acne use.
Some Formats Harder to Swallow
While beauty pill formats are gaining acceptance from consumers, it seems that others, such as certain beauty foods, are finding it harder to win over consumers. The much hyped Dove Vitalize (dark chocolate enriched with B vitamins) and Dove Beautiful (which includes vitamins C and E, biotin and zinc) chocolate ranges were launched by packaged foods giant Mars in the U.S. in February 2008. Industry insiders feted the advent of beauty chocolate as something that consumers would pick up on. Despite significant investment in product promotion, including association with New York Fashion Week in 2008, and the ample backing of the parent company, the high hopes largely failed to materialize, and the product was withdrawn at the end of the 2008. U.S. consumers did not buy in because, in general, they doubt the health benefits of the chocolate—viewing it primarily as an indulgence food, and one that should be limited in order to maintain a healthy diet.
Undeterred by the fate of Dove, Borba unleashed the DeLuscious Vitamin Enhanced cookies in the U.S. market in 2009. It remains to be seen whether consumers will find beauty enhancing cookies, the Borba range is designed to improve the appearance of the skin, more convincing than beauty chocolate.
Marketers of Beauty Foods Find it Hard to Win Over Consumers
Even beauty yogurts, which have been one of the favored options for beauty food manufacturers, are not entirely safe from a lack of consumer belief. The failure of Danone’s Essensis in early 2009 was proof that even products in formats that are traditionally associated with healthy eating may still fail if consumers remain sceptical about their added health benefits.
One of most difficult challenges in convincing consumers to purchase beauty-positioned Essensis yogurt was that it was sold alongside many other yogurts all claiming health benefits but priced at a much lower price point. In the French market, Essensis faced competition from products such as Activia, which, despite being more expensive than standard yogurts, managed to become one of the best-selling on the market. The key difference in the success of Activia as compared to Essensis was that Activia’s advertising focused on exactly how the product would work, rather than focusing on the ingredients—as Essensis had done.
Beauty foods manufacturers are having to walk a tightrope when selling their goods. The first option is to retail through mainstream outlets such as supermarkets, which are thriving during the recession but which are risks because consumers are able to compare nutricosmetics prices unfavorably with standard product counterparts, as in the case of Essensis. The second outlet is high-end doors such as department stores, where brand image is far easier to maintain but which are currently facing greatly reduced foot traffic. Value sales through department stores declined in the key Japanese and U.S. markets by 3% and 2%, respectively, 2007–2008.
Nestlé evidently learned from Danone’s mistakes, and opted for high-end distribution when it launched its beauty drink Glowelle in the U.S. Retailing at approximately $7 per bottle, it is available only in department stores, which wisely avoids the possibility of comparison with standard drinks. The fact that the product remains on sale in the U.S. suggests that selective retailing is the way forward.
Emerging Regions Hold Key to Long-term Growth
In the Japanese market, the use of nutriceuticals is widespread, and the country accounts for the vast majority of global beauty supplement sales— $923 million in 2008, or 16% of all dietary supplements sold. The problem is that in order for the segment to continue to grow, sales really need to take off in countries where the economies are more resilient to the global recession—in particular, the BRIC nations. In the comparatively still booming Brazilian market, the market for beauty supplements is currently negligible. China is a more positive story, with beauty ingestibles accounting for 13% of the supplements market. However, its overall spend on supplements is woefully lacking compared to neighboring Japan, with an average spend of just $4 per person in 2008 compared to $45 per person in Japan. India’s spend on dietary supplements is even lower, at under $0.5 per person, and there are no supplements currently positioned as beauty enhancing. If the nutricosmetics segment is really going to move forward from a global perspective, it will have to focus its attention on building use among consumers in these key markets.
Carrie Lennard is a research analyst at Euromonitor International.