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A Rising Consumer Understanding of Personal Care Active Ingredients Drives U.S. Product Development

The specialty actives market in the United States, reaching nearly $240 million in 2010, is expected to grow at an annual growth rate of 3.8% from 2010 to 2015, according to recently published study Specialty Actives in Personal Care 2011: U.S. Market Analysis and Opportunities by worldwide consulting and research firm Kline & Company. A rising consumer understanding of active ingredients in personal care products driven by extensive media coverage is pressurizing the active ingredients manufacturers to produce innovative products.

"The increasing average age of a U.S. citizen and desire to look younger has raised consumer expectations for efficacy of active ingredients resulting in functionality becoming increasingly important," comments Anna Ibbotson, Industry Manager at Chemicals & Materials practice at Kline. "Consumers want to see results, and this is reflected in the trend towards more effective finished personal care products."

She also adds that, for example, "In the natural products arena, the presence of plant-based ingredients in the formulation used to be enough to encourage personal care consumers to purchase the products. However, consumer awareness concerning product activity has increased, and the product's function and efficacy are regarded at least as important as the active ingredient source."

As the demand for natural concepts continues, this will sustain growth in the botanicals segment, which is currently the largest specialty actives category with 38% market share. The fastest growing category is biotechnology products with an estimated compound annual growth rate of 4.5% from 2010 to 2015. From the functionality perspective, the largest and the fastest growing group is anti-aging, which includes sub-functionalities such as anti-wrinkle, firming, moisturizing, skin radiance, or age spots, accounting for 56% of the market in 2010.

The specialty actives market is fragmented although recent mergers and acquisitions have created a more structured industry. Each category of specialty actives is dominated by a different group of companies. BASF, with its own active ingredients division BASF Beauty Care Solutions and its most recent acquisition of Cognis and Laboratoires Serobiologiques, has established itself as the market leader.

Competition in the market is centered around two key factors: combining efficacy with the natural trend, and distinction of the product due to a unique characteristic, such as patented molecules like ascorbic acid 2-glucoside (AA2G) or a unique extraction process. Kline's report suggests opportunities exist in these markets, given steady growth projections and the current diversity in supplier specialty.

Kline's fourth edition of Specialty Actives in Personal Care 2011: Multi-Regional Market Analysis and Opportunities provides a detailed analysis of the current and future business and competitive landscape for specialty actives in personal care in Europe and the United States. It covers estimated consumption and sales by major supplier for botanical actives, proteins and peptides, enzymes and coenzymes, and other types of active ingredients including marine- and biotechnology-based ingredients.

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