Cosmeceuticals not slowing
This article was originally published in The Rose Sheet
Executive Summary
While the general cosmetics market is likely to be down about 1.2% in 2009, cosmeceutical sales are expected to grow 7.7% for the year and break $4 bil. by 2011, "driven by America's obsession with anti-aging and wellness" and products' perceived health advantages based on consumer assumption that the ingredients are "expensive and uniquely manufactured," research firm IBISWorld says Oct. 6. In reality, administrative and marketing costs represent more than 20% of the expense associated with cosmeceuticals, versus 2% for R&D, firm says. "Because the profit margins are higher on cosmeceuticals, companies have more money to spend on marketing," says Senior Analyst Toon van Beeck. "Businesses must continually convince buyers of the product's benefits and break through competitive clutter to increase their sales." Even beyond 2011, the cosmeceutical segment will continue to grow in near double digits, IBISWorld predicts. Currently the market is valued at $3.5 bil