Cosmeceuticals help beautify segment’s bottom line
Serving as yet another indication that beauty shoppers are hungry for products that promise to turn back the hands of time is a recent report by IBISWorld, a provider of industry and market research, that found that the niche market of cosmeceuticals is a growth opportunity in a mature industry.
“The development of new product categories, like cosmeceuticals and dermacosmetics, has grown considerably in the last five years, driven by America’s obsession with antiaging and wellness,” stated Toon van Beeck, senior analyst with IBISWorld. “Companies are taking the opportunity to manufacture more of these high-market products, which typically generate profits greater than the industry average of 10%.”
According to IBISWorld, while the $60.37 billion cosmetics industry is on track to decline 1.2% in 2009, the niche market of cosmeceuticals is expected to increase 7.7%. Now accounting for $3.5 billion in revenue, cosmeceuticals have become a prospective growth area for businesses operating in the mature cosmetics industry, the firm noted.
By 2011, IBISWorld predicted the industry will surpass $4 billion, and will continue to grow at nearly double-digit rates for quite some time. Fueling the growth will be the perceived health advantages of cosmeceuticals, as well as the traditional cosmetic benefits.
Retailers, from department stores to big-box retailers, have taken notice, increasingly shelving such products as antiwrinkle creams, bleaching agents and medication lotions. For example, available at CVS’ high-end Beauty360 concept is the Bioelements line of professional skin care that includes Power Peptide, Lutein indoor protective day cream and Oxygen Cocktail. Prices range from about $27 to $62.
IBISWorld noted that cosmeceuticals command a premium price because consumers perceive the ingredients as being expensive and uniquely manufactured, with research and development accounting for the majority of costs. However, R&D represents about 2% of the industry’s cost structure, while the selling, general and administrative costs represent 21%.
“Manufacturers and retailers will continue to fuel demand for cosmeceuticals by developing and marketing a steady stream of new products,” van Beeck stated. “New products in the pipeline present solid opportunities to bolster bottom lines and build customer loyalty, reinventing the mature cosmetics industry.”
Delicious Brands signs Western Creative
Beauty company Delicious Brands, whose brands include the Skin Below the Chin body care line, has signed advertising agency Western Creative as its agency of record.
Western Creative will look to further build the company?s product distribution at national retail chains. Western Creative has developed print ads for the beauty company, which are being placed in national publications such as Allure and Marie Claire.
Delicious Brands’ portfolio includes beauty, bath, skin, spa, hair and aromatics. Many of the product lines can be found at retailers nationwide such as Walmart, Walgreen, Rite Aid and Kroger.
Delicious Brands’ most recent product line launch, Skin Below the Chin, offers consumers the ingredients typically found in facial products in a body care line; a line that pampers the rest of your body. This particular line of products has just been picked up at Walmart.
Triumph Pharmaceuticals names ad agency
REDFORD, Mich. Triumph Pharmaceuticals, the makers of SmartMouth mouthwash, has selected Detroit-based agency Western Creative as its agency of record.
Western Creative will be developing multiple 30-second commercials to educate consumers on SmartMouth mouthwash. These commercials will be used to drive consumers to SmartMouth’s range of national and regional retailers including Walmart, Target and Walgreens. Western Creative will also be developing a new Web site for the campaign and Internet-based initiatives to support retail sales.
SmartMouth’s unique claim is their brand statement: Clinically proven to provide fresh breath for 12 hours. SmartMouth uses patented zinc ion technology and a dual delivery system to provide users with lasting fresh breath. The dual delivery system means that the SmartMouth ingredients are not activated until use of the product, the company stated.