1 September 2017

The growth opportunity in personal care will come from bioactive ingredients

The global shift in demand from synthetic to natural active ingredients due to the belief that they are more benign to human health and the environment is drawing considerable investments to the personal care active ingredients market, says research firm Frost & Sullivan.

Source: Frost & Sullivan. Generic personal care dispensers.
Source: Frost & Sullivan. Generic personal care dispensers.
Natural active ingredients take up 25% to 30% of the total market today but is expected to double in proportion by 2023, triggering a series of innovations aimed at countering the inherent instability of biological ingredients.

"The preference for natural ingredients is particularly strong among consumers from India and China, who have been exposed to traditional Ayurvedic and Chinese medicines," said Frost & Sullivan Visionary Science Principal Analyst Raghu Tantry. "Although personal care companies such as Natura Cosméticos and the L'Oréal Group offering natural products have reported a significant increase in sales, companies need to be prudent when making claims on the labels as they are closely watched by regulators."

Manufacturers are to tap growth opportunities in personal care through diversification and offer of multifunctional ingredients, says Frost & Sullivan’s Visionary Science team. Natural ingredients' susceptibility to microbial contamination and incompatibility with other ingredients compel manufacturers to employ technologies such as encapsulation. Controlled release technologies are also popular since they enhance the effectiveness of natural ingredients and widen margins by using highly effective, specialised active ingredients rather than commodities, Frost explains.

Active ingredients application in personal care is expanding beyond moisturising and sun protection in body care to antipollutant and antioxidant protection in haircare. Furthermore, ethnically diverse regions are presenting new opportunities to active ingredients and cosmetic manufacturers; for example, there is a huge market for halal beauty products in the Middle East and skin whitening ingredients in Asia-Pacific, Frost notes.

"The market is witnessing the rise of several regional players; however, most of them are looking to compete against the majors on price rather than innovation," observed Tantry. "To stay afloat in such a competitive market, active ingredient manufacturers have to focus on research and development (R&D), establish effective distribution channels, and collaborate with personal care product manufacturers to better understand their pipeline of new products."

As price pressures are high, participants need to arrive at the optimum mix of cost leadership, innovation and diversification in their business strategies. Lastly, they have to support their customers with credible research and track consumer markets to make the most of the abundant opportunities in the global market.


Global Personal Care Active Ingredients Market, Forecast to 2023 (K187-39) is part of Frost & Sullivan's Future of Health, Beauty and Packaging Growth Partnership Subscription. The study covers ingredients for moisturising, ultraviolet (UV) filters, anti-ageing, exfoliating, conditioning, antimicrobial, and others. Get complimentary access to more information on this analysis and to register for a Growth Strategy Dialogue, a free interactive briefing with Frost & Sullivan's thought leaders.