The European market for personal care delivery systems is valued at EUR 81 million, up by a strong 7% from 2007 according to Kline’s recent research Delivery Systems in Personal Care 2011: Europe Market Analysis. The fate of this market has been and continues to be closely connected with that of specialty actives. With the European market for actives expected to grow at a healthy annual rate of 4.6% for the interval 2011-2015, delivery systems promise to offer a fertile land of opportunity over the next five years.
The growth in specialty actives and the demand for sophisticated delivery systems has been driven by increased consumer demand for product effectiveness. Regardless of whether these products are sold in mass outlets or luxury stores, consumers are looking for tangible results from their personal care products and these products rely on increasingly sophisticated delivery systems which put active ingredients exactly where they are most effective.
Not so long ago, higher-end actives were reserved for products with high formulation costs and therefore high price-tags sold predominantly through the luxury channel. Products such as La Prairie Cellular Cream Platinum Rare, marketed as a cocktail of actives including vitamins, peptides, and antioxidants plus an advanced delivery system, could carry a price tag as high as EUR 700. Nowadays, the price for such a product can range from EUR 1,000 to well below EUR 100. For instance, Lumene, an anti-aging product that contains a botanical active which protects skin stem cells and is sold through the masstige channel, is priced at EUR 40, or Oriflame’s Ecollagen 3D+Anti-Wrinkle Day Cream, which includes an active mix of peptides and hyaluronic acid, is offered through the direct sales channel at a the low price of EUR 20.
Admittedly, the concentration of specialty actives tends to differ in high-end and low-end products, but usage even in lower concentrations in an increased number of finished products bodes well for specialty active manufacturers. The outlook for delivery systems is closely tied to specialty actives. Although the two are sometimes developed and marketed in tandem, more often it is the active that gets blockbuster attention, while the delivery system gets the job done.
Thus, for manufacturers of delivery systems, there is a reason to rejoice. Mounting pressure for increased efficacy of the specialty actives usually achieved with adding functionality from a delivery system has spurred a wave of innovative delivery system products. Historically, delivery systems have been used primarily to stabilize the actives, but in more recent years they’ve greatly expanded their role to provide improved and enhanced penetration, improved efficacy, faster response time, timed and targeted release, and even the capability to devise formulae with ingredients that would be otherwise incompatible. And the potential for innovation is far from exhausted. In light of these developments, the European delivery systems market is expected to grow at an annual rate higher than the actives, on average about 6% annually over the next five years.
For the major market players, such as BASF, Arch Chemicals, and Lipotec, working on both sides of the supply chain can prove advantageous because they possess the in-house knowledge to develop the highly technical delivery systems to help their actives get the job done. For those who work in only actives or delivery systems, the outlook for the market may prompt consideration of a partnership with a well-entrenched player on the other side to offer formulators and packaged brands the full-spectrum service and ingredient supply to make for a more efficient—and economical—go-to-market process.
For marketers looking to capitalize on the opportunities available in this market, it is essential to understand which active and delivery categories are growing fastest, and why. For example, in light of the natural craze, it should come as no surprise that in 2010, botanical actives and biotechnology products are two of the largest and fastest growing categories, holding about three quarters of the market share. Regarding the largest growth area for actives in terms of functionality, anti-aging keeps rocking the charts. It is no secret that Europe has an aging population. With an average of 9.83 births per 1,000 inhabitants, the median age in Europe has increased from 37.7 in 2007 to 40 in 2010, and is predicted to grow further to reach 52.3 years by 2050. With this in mind, it is no wonder that anti-aging actives and the delivery systems associated with them, particularly liposomes, have recorded the highest sales values. Anti-aging actives account for 66% of the market, while liposomes and other phospholipid delivery systems hold over 50% of the market.
The attraction of the delivery systems market is reflected in a series of moves by major cosmetic raw-material suppliers that have already begun to beef up expertise in delivery systems through product development and acquisition. For example, BASF Beauty Care Solutions, in the last couple of years, has benefited from the acquisition of Ciba Specialty Chemicals with its Tinoderm® Nanotopes and Cognis with the Primacare® line.
To learn more about the current business opportunities in the specialty actives and delivery systems in personal care, please refer to Kline’s report series that includes in-depth analyses of the European, U.S., Japanese, Chinese, and Brazilian markets.