Nutricosmetics - Decoding the Convergence of ... - Kline & Company

NUTRICOSMETICS 

Decoding the Convergence of Beauty and Healthcare 

A Presentation at: 

April 16, 2008 

www.KlineGroup.com 

© 2008 Kline & Company

Contents 

Nutricosmetics Defined 

Evolution of Nutricosmetics 

Market Dynamics 

Ingredient Trends 

Product Examples 

Kline Outlook and Insights 

© 2008 Kline & Company 

2

Contents 








3

What are Nutricosmetics? 

• Ingestible products that are 

formulated and marketed 

specifically for beauty 

purposes 

• Typical forms: pill, tablet, 

liquid, food 


4

Nutricosmetics is the intersection between personal care and nutrition 

Personal care 

Nutricosmetics 

Cosmeceuticals 

Nutrition 

Pharmaceuticals 

Nutraceuticals 


5

Nutricosmetics should not be confused with the other hybrids: 

• Cosmeceuticals 

− Intersection between cosmetics and healthcare 

− 

Topical cosmetic products that claim to have medicinal or druglike/pharmaceutical 

benefits 

• Nutraceuticals 

− Intersection between healthcare and nutrition 

− 

− 

A food or beverage that provides medical or health benefits, 

including the prevention and/or treatment of a disease in a fashion 

similar to pharmaceutical agents 

Also called “Functional Foods” 


6

Contents 








7

Cosmeceuticals is considered to be the first wave of fusion products 




• Intersection between cosmetics and pharmaceuticals 

• Concept created in 1961 by Raymond Reed, a founding member of the U.S. 

Society of Cosmetic Chemists 

• Term cosmeceutical coined in 1980 by Dr. Albert Kligman 

• Products that have drug-like benefits and perform some transformative 

change to humans 

• Examples: anti-aging products, skin whiteners/brighteners, acne aids, 

whitening toothpastes, tooth-whitening systems, anti-cellulite, antiperspirants 

• Kline values the global cosmeceutical market at $55 billion in 2007 


8

Examples of cosmeceuticals today 


9

Nutraceuticals followed decades later 




• Term coined in 1989 by Dr. Stephen 

DeFelice, founder and chairman of the 

Foundation for Innovation in Medicine 

• Was major focus of food and pharma 

companies in 1990s 

• Examples: cholesterol-lowering, 

diabetes management, tartar control, 

digestive aid, energizing 


10

Examples of nutraceuticals today 


11

Nutricosmetics is the last official “wave” 




• Emerged as a segment of 

nutraceuticals 

• First gained popularity in Japan 

and Europe 

• Now trickling into U.S. 

• Dominated by beauty firms 

− Few pharma and food 

entrants 


12

Contents 








13

The global skin care market reached nearly $80 billion at the retail 

level in 2007 

100 

CAGR: CAGR: +6.2% +6.2% 

$ Billion retail 

75 

50 

25 

0 

2003 2004 2005 2006 2007 


Asia is the largest region for skin care 

Asia, 39% 

All other, 2% 

Latin America, 8% 

Europe, 32% 

North America, 19% 


Kline values the nutricosmetics market at $1.5 billion, with Europe as 

the largest region 

Europe, 55% 

Japan, 41% 

United States, 3% 

Total: $1.5 Billion 


16

Nutricosmetics is tiny in comparison to other personal care markets 

125 

100 


75 

50 

25 

0 

Europe U.S. Japan 

Total personal care Skin care Nutricosmetics 


But is growing significantly faster 


Skin care 

Personal care 

0 5 10 

Change, %, 2007 


A variety of factors are driving sales of nutricosmetics 

Aging population 

Shift toward less invasive procedures 

Environmental factors 

GROWTH IN 

NUTRICOSMETICS 

Increasing consumer awareness 

Societal factors (multi-tasking) 

Rise of the Spa Culture 


19

Nutricosmetics generally address three specific areas: 

Skin Hair Nails 

• Repair and prevention 

• Sun protection 

• Firmness 

• Pigmentation 

• Whitening 

• Slimming 

• Retention and growth 

• Restoration 

• Nourishment 

• Volumizing 

• Strengthening 


20

Europe facts 

• Largely concentrated in France, Italy, 

Germany, the UK, and Spain 

• Driving by anti-aging concerns 

• Fairly developed and growing nicely 

in pharmacy channel 

− Pharmacist is trusted 

intermediary 

• Legal framework exists under both 

food and medicinal law, but decisions 

as to which applies to nutricosmetics 

varies by country 

• Tend to be rather expensive (€20.00- 

€40.00 is the norm) 


21

Key players in Europe include 

L’Oréal + Nestlé Ferrosan A/S Oneobiol 


22

Japan facts 

• Most mature market for nutricosmetics 

• First country to take them mainstream 

• Widely accepted among Japanese 

consumers 

• Vast range of innovative and frequently 

updated products 

• Tendency towards holistic treatments 

• Japanese constantly in search of 

innovative and novel products 

• Generally focus on skin care, or to support 

“total beauty” with no specific claim 

• Much less expensive that European 

brands (¥100-¥300) 


23

Key players in Japan include 

Shiseido Lion Kracie (formerly 

Kanebo Products) 


24

U.S. facts 

• Nutricosmetics still in infancy 

• Unique set of challenges 

• Americans more skeptical of the “beautyfrom-within” 

concept 

• Cultural emphasis on scientific 

investigation 

• Americans want instant results, which 

nutricosmetics don’t provide 

• No channels make a great fit 

• Olay and Avon both exited 

nutricosmetics business 


25

Key players in the U.S. include 

N.V. Perricone 

Murad 

Borba 


26

Contents 








27

Nutricosmetic ingredients . . . 

• Are safe, ingestible 

• Are often derived from food 

• Generally offer at least one the following 

functions: 

− Antioxidant 

− Anti-inflammatory 

− Slimming agent 


Artichoke leaf (Cynara scolymus) 

• What: Long, deeply serrated basal leaves of 

the artichoke plant that have a high 

concentration of biologically active compounds 

• Contains: Active compounds (flavonoids, 

caffeoylquinic acids), polyphenols, chlorogenic 

acid, cynarin, luteolin, scolymoside, 

cynaroside 

• Function: Antioxidant, cardio protectant, 

detoxifying agent 


Collagen 

• What: A fibrous protein that makes up 

connective tissue 

• Contains: Protein 

• Function: Provides strength and 

resilience to skin 


Coffee bean (coffia arabica) 

• What: An xanthine alkaloid obtained from 

coffee beans (also called guarine, mateine, 

and theine when found in different items) 

• Contains: Caffeine (xanthine alkaloid) 

• Function: Slimming agent. Caffeine acts as a 

metabolic stimulant and ergogenic acide; 

generates feelings of alertness and wellbeing 


Tumeric (Curcuma longa) 

• What: Modified stem of a South Asian herb 

• Contains: Transcription factor modifier that 

possesses curcumin and 

tetrahydrocurcuminoids 

• Function: Photo-protectant (sunblock and 

skin lightener), antioxidant, anti-inflammatory, 

cardio-protectant, prevents wrinkles and signs 

of aging, reduces internal inflammation 


Grapes (Vitis vinifera) 

• What: Fibrous component of the fruit 

• Contains: Oligomeric proanthocyanidins 

(OPCs) are made of 2-3 monomer units called 

flavanols 

• Function: Antioxidant, cardio protectant, 

detoxifying agent 


Contents 








34

Shiseido Collagen Update 

Brand: 

Company: 

Geography: 

Key benefit: 

Form: 

Description: 

Key 

Ingredients: 

Packaging: 

Shiseido Collagen Update 

Shiseido 

Japan 

Eases stress; provides a 

youthful appearance 

Liquid 

For those who feel stressed, 

lack sleep and wants to be 

young looking 

Low molecular mass fish 

collagen, Chinese herbal 

extract, Korean ginseng, 

Japanese tochu leaf extract, 

hyaluronic acid, ceramide, 

royal jelly, vitamin C 

Glass bottle, 50 ml 


35

Fuwarinka – “Fragrance from within” 

Brand: 


Geography: 

Form: 

Description: 

Key 

Ingredients: 

Fuwarinka 

Kracie (formerly Kanebo 

Products) 

Japan 

Candies 

Fragrances your body with 

soft candy (rose and lemon 

varieties) 

Contains hyaluronic acid, 

vitamin C, hikatsu extract 

Packaging: Plastic pouch containing 

candies 32g each 

Price: 

JPY 207 per package 


36

Jintan no Kaoru Bitoku – “Fragrance from within” 

Brand: 


Geography: 

Key benefit: 

Form: 

Description: 

Key 

Ingredients: 

Packaging: 

Jintan no Kaoru Bitoku 

Morishita Jintan 

Japan 

Fragrance 

Capsules 

Two-layer capsule dissolves 

during digestion to emit a rose 

fragrance 

Edible oil and fats, gelatin, 

flavoring, sorbitol, emulsifier, 

glycerin, thickener (pectin), 

food coloring 

Clear blister pack 

Price: JPY 399 


37

Asahi Gyugyutto Shimikomu Collagen Water 

Brand: 


Geography: 

Key benefit: 

Form: 

Description: 

Key 

Ingredients: 

Asahi Gyugyutto Shimikomu 

Collagen Water 

Asahi 

Japan 

Skin supplement 

Beverage 

Skin care supplement drink 

contains approximately 2,000 

mg of collagen, which 

exceeds the amount broken 

down by the body each day 

Collagen, niacin 

Packaging: 


Plastic bottle 900 ml 


38

Imedeen Time Perfection – “Age minimizer” 

Brand: 


Geography: 

Key benefit: 

Form: 

Description: 

Imedeen 

Ferrosan A/S 

More than 70 countries, primarily 

in Europe 

Reduces fine lines and wrinkles 

Capsules 

Claims to improve skin elasticity, 

hydration, and texture 

Key Ingredients: 

Proteins; polysaccharides isolated 

from a deep-sea fish; complex 

based on natural lycopene, grape 

seed extract, and vitamin C 

Price: £38.50 

for 60 tablets (one month supply) 


39

Shiseido Pure White – “For People Who Want Pure Whiteness” 

Brand: 


Geography: 

Form: 

Description: 

Key 

Ingredients: 

Packaging: 

Shiseido Pure White 

Shiseido 

Japan 

Liquid 

“For people who want pure 

whiteness” 

Vitamins B12, B6, C, E 

30 ml glass bottle 


40

Fracora Collagen Bar 

Brand: 


Geography: 

Form: 

Description: 

Key 

Ingredients: 

Fracora 

Kyowa Group 

Japan 

Solid bar (also comes in 

liquid) 

Supplement including 

collagen 

Fish collagen, silk peptides, 

star fruit leaf extract 

Packaging: 

Foil wrapper 



41

Hanami Green Tea Collagen 

Brand: 


Geography: 

Form: 

Description: 

Hanami Green Tea Collagen 

Hanami 

Japan 

Powder 

“For Health and Beauty” 

Key 

Ingredients: 

Packaging: 

Price: 

70% collagen (animal 

sourced) and 30% organic 

green tea 

Plastic box containing foil 

wrapped tea pouches, 1.5 g 

each 

JPY 1050 for 30 doses 


42

Doctor.Gi – “Total Beauty Support” 

Brand: 


Geography: 

Form: 

Description: 

Key 

Ingredients: 

Packaging: 

Doctor.Gi 

Atlas 

Japan 

Liquid 

“Total beauty support” Vitamin 

B6 creates energy from 

protein to maintain healthy 

skin and eyes 

Hyaluronic acid, vitamin C, 

collagen, coenzyme Q10, 

hikatsu extract 

Glass bottle of 30 ml 


43

“Belly Reducing Midnight Yogurt” 

Brand: 


Geography: 

Form: 

Description: 

Key 

Ingredients: 

Midnight Yogurt 

Nippon Luna 

Japan 

Yogurt 

For “good sleep and beauty 

support”; sold only at night 

at convenient stores 

Collagen (750 mg) and 

theanine (50 mg) 

Packaging: 


Plastic carton with foil lid 


44

Collagen Marshmallow 

Brand: 


Geography: 

Form: 

Description: 

Ex Marshmallow 

Cranes Child 

Japan 

Marshmallow! 

Marshmallow with collagen 

Key 

Ingredients: 

Black sesame polyphenol + 

Collagen 4500mg 

Packaging: 


Box containing individually 

wrapped marshmallows 


45

Kyupurun – for “soft and supple skin” 

Brand: 


Geography: 

Form: 

Description: 

Kyupurun 

Lion 

Japan 

Liquid 

“A beauty drink for soft and 

supple skin” (grape flavor) 

Key 

Ingredients: 

Packaging: 

Collagen peptide, hyaluronic 

acid, glucosamine, vitamins 

C, B2, and B6, elastin, 

flavangenol 

Glass bottle 



46

Medish – “for oral health” 

Brand: 


Geography: 

Form: 

Description: 

Key 

Ingredients: 

Medish 

Lion 

Japan 

Tablets 

Supports the maintenance of 

a healthy oral environment 

Multifunctional protein 

“lactoferrin”; xylitol 

Packaging: 

Plastic bottle 


47

Innēov – “Hair energizer” 

Brand: 


Geography: 

Form: 

Description: 

Key 

Ingredients: 

Innēov Hair Mass 

L’Oréal + Nestlé 

Europe 

Tablets 

Said to be the first nutritional 

supplement designed to 

“energize” hair 

Taurine, zinc and catechins 

Packaging: 

Price: EUR 30.00 

Box containing bubble pack 

tablets 


48

Contents 








49

Kline projects that the nutricosmetics market will reach $2.5 billion 

by 2012 

3 

CAGR: CAGR: +11.2% +11.2% 


2 

1 

0 

2007 2012 


The nutricosmetics market has developed as three independent silos 

and must be tackled differently 

• Differing cultures 

• Different legislation 

• Different commercial climates 

Europe Japan U.S. 

Most common form: Tablets Liquids Tablets 

Prices: High Low Medium 

Channels: Pharmacies Mass mainstream Specialty 

Brands: Unique to Europe Unique to Japan Unique to U.S. 

Key benefits: Skin, hair Beauty support, skin Skin 

Product claims: Specific Vague Between specific and 

vague 


51

It will be very difficult for the U.S. market to reach the same level of 

penetration as Japan and Europe 

• Top brands, Olay and Avon, have already 

attempted and exited after minimal success 

• Could be a nice add on for professional skin 

care brands, but is predicted to remain a 

niche opportunity 

• American consumers are less patient, and 

generally less health conscience than their 

European and Japanese counterparts 

• Lacks good channel fit 

− Pharmacies do not have same influence 

in U.S. as they do in Europe 


Validation is key (at least in Europe and U.S.) 

• Clearly documented and independent 

scientific research findings should be 

publicized 

− 

Feature on product literature and/or 

packaging 

• “Before” and “after” photos could also 

help as well 

• Helps to win consumer confidence 

• Awards 

• Testimonials (especially by celebrities) 


53

Innovation is critical for success 

• True novelty 

− E.g., Imedeen Time Perfection 

contains a powerful antioxidant 

• Active ingredients 

− E.g., Lacto-lycopene in Innēov 

Fermeté 

• Delivery systems 

− E.g., Lipocap employed in Imedeen 

Tan Optimizer offers optimum 

encapsulation and protection of the 

active ingredients 


Simplicity is important 

• Products that do not require an extra step 

− Changing consumer habits too much of a hurdle 

− Fit in with existing behavior 

• Water Beauty water 

• Typical supplements multivitamin that 

includes beauty benefits 


Nutricosmetics offer an opportunity for food, beverage, and 

supplement manufacturers (more so than cosmetic firms) 

• Many consumers don’t want to buy 

ingestible products from cosmetics 

brands, especially in the U.S. 

• Companies that have established 

credibility in nutritional products 

could be successful 

• Danone’s Essensis could be a good 

example 

• Danone experienced tremendous 

success with Activa, which was 

backed with clinical trial validation 


56

Other firms will try to tackle the market 

• L’Oréal and CocaCola have partnered to 

launch a health-and-beauty beverage in 

2008 

• Currently called Lumaé 

• Trademarked as a tea-based ready-todrink 

beverage by Coca-Cola's 

Beverage Partners Worldwide division 

• Expected to address skin care needs 


CHALLENGES 

OPPORTUNITIES 

• Small market 

• Geographic silos 

• Consumer skepticism 

• Results take too long 

• High growth 

• Untapped geographies 

• Food and pharma companies 

• Innovation 


Kline is a worldwide consulting and research firm dedicated 

to providing the kind of insight and knowledge that helps 

companies find a clear path to success. The firm has served 

the management consulting and market research needs of 

organizations in the chemicals, materials, energy, life 

sciences, and consumer products industries for nearly 50 

years. For more information, visit www.KlineGroup.com. 

If you require additional information about the contents of this document or the 

services that Kline provides, please contact: 

Carrie Mellage 

Director, Consumer Products 

Phone: +1-973-435-3412 

E-mail: Carrie_Mellage@KlineGroup.com 

Americas 

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Middle East 

Kline Global Headquarters 

Kline & Company, Inc. 

Overlook at Great Notch 

150 Clove Road 

Little Falls, NJ 07424-0410 

Phone: +1-973-435-6262 

Fax: +1-973-435-6291 

www.KlineGroup.com

Nutricosmetics - Decoding the Convergence of ... - Kline & Company

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