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I. History of Skin Care
Skin care is very ancient; it goes back to the prehistoric times where cave women and cave men deployed all their efforts to survive the severe weather conditions as they did not have any of the comfortable solution we benefit from today. Their skin structure was different from our skin, as it was rough enough to defend itself from sun rays and weather conditions. Even though their skin was enabled originally to fight those conditions, the prehistoric human was aware of certain skin care needs.
Skincare & the Ancient Civilizations
Skin care for the prehistoric human was mainly associated with the relief of pain caused by severe weather conditions and sun exposure. The kind food they were eating was also one of the key causes of skin disease, as they were consuming fatty food that causes acne and skin inflammation.
Human body has an impressive natural resistance and skin is considered very elastic having several layers.
Human skin is greatly affected by environmental conditions; one can develop a layer of hard skin and get a tan but this process actually weaken skin barriers and decline its condition. The skin the largest organ in the human body and the most exposed to external conditions, as when it changes due to bad conditions it looses its elasticity and develop wrinkles, acne, spots and other symptoms. This is the reason why skin care is very ancient.
The history of skin care in the ancient ages, show that the development of skin care remedies is related to the protection required during work performed by mankind. For example the farmers and fishermen have used skin care frequently in their history. Apparently the kind of job they were performing was inevitably exposing their skin to severe weather conditions. It was essential for these workers to preserve their skin against the environmental conditions. So the skin care products were invented to support the daily work life.
Actually, it is very difficult to identify the precise time or year of skin care history. But scientist and researchers do have some information that let them determine that skincare dates back thousands of years.
When we think about skin care, we generally think about the past fifty years. However, skin care has been around for thousands of years, dating back to the Ancient Egyptians. Skin care has been viewed throughout history as a compliment to beauty and hygiene.
The human interest for beauty and appearance has been studied for thousands of years. The ancient Egyptians constitute one of the first civilizations to develop advanced skincare remedies. Researchers found that the first anti-aging methods that approached the skin from a beautifying and well being angle rather than just protection and maintenance were created in Cleopatra's age. Cleopatra is famous for her skin care routine, including sour milk baths and Lactic acid for skin exfoliation. Egyptians accorded a great deal of awareness to beauty and body care and they created treatments to maintain their skin health and beauty.
In Ancient Greece
Beauty was identified by nudity. Greek athletes took regularly olive oil baths and powdered their bodies with sand to balance body's temperature with the heat and also to protect their bodies from the sun (to prevent it from aging). Women as well as men moisturize their bodies with honey and olive oil to improve their skin health and appearance.
Hair removal was common not only for women but also among roman men. The Romans developed new methods of shaving. Beauty for them was strictly related to skin cleanness. The Romans lived in a water-rich area and took lots of baths to cleanse the skin, removing dirt and oil, and leaving it smooth. Scented oils that they extracted from plants and flowers were then applied to the skin. Bathing was the most important beauty routine for the Romans who related skin health and well being to cleanness.
Beauty & Hygiene Evolution
Beauty and hygiene finished products began to emerge in the late nineteenth century, beginning with antiperspirants and deodorants. From the 1910s to the 1950s, a more regimented program was developed and women began exercise, diet, along with the use of cosmetics, makeup, hair, and body products.
During the World War I, women learned to become independent both socially and economically. Women became part of the working class and were able to purchase more and more beauty products. During this time, Hollywood stars' looks became desirable and women began to copy the looks of their favourite actresses. In the 1950s when TV became available in almost every home, advertisements were created. Sponsors of major corporations began to support TV shows and the radio. Today, the beauty industry is increasing sales significantly each year.
Although ancient civilisations didn't have our technology at their fingertips, they were able to create clever, though sometimes dangerous, beauty concoctions. Nail polish originated in China around 3,000 B.C. The Chinese painted their nails with a polish made of gum arabic, egg whites, gelatin and beeswax. Ancient Egyptians made soap, soaked in milk baths to soften their skin, exfoliated with a mixture of crushed pumice stones and water and moisturized with olive oil.
During this time, Egyptians also experimented with dramatic eye makeup. They smeared colorful malachite and galena over their faces and rimmed their eyes in kohl. Kohl was a paste of soot, animal fat and lead.
Lead was used in cosmetics for hundreds of years. Ancient Greeks slathered lead all over their faces to whiten skin and clear blemishes. Centuries passed before people learned that lead is a dangerous ingredient with devastating side effects. Documented complications ranged from scarring to infertility to madness.
The American Medical Association published “Three Cases of Lead Palsy from the Use of a Cosmetic Called Laird's Bloom of Youth.'” This case study paved the way for the formation of the Food and Drug Administration (FDA) in 1906.
Three decades later, Ruth DeForest Lamb, the FDA's chief education officer, published a book that documented the serious complications from beauty products. This prompted the passing of the Food, Drug and Cosmetics Act in 1938, putting cosmetics and medical devices under the FDA's control.
Beauty pioneers, 1907 to 1950s
At the turn of the century, the beauty industry boomed. Many of the popular companies and best-selling products of today first launched during these years.
- 1907: French chemist Eugene Schueller creates the first safe commercial hair dye and forms L'Oreal.
- 1909: Max Factor, often called the father of modern makeup, opens his first store in the theatre district in Los Angeles.
- 1910: Elizabeth Arden Salon opens on Fifth Avenue in New York City. In co-creating her signature face cream with a chemist, Elizabeth Arden (whose real name is Florence Nightingale Graham) revolutionizes the beauty industry. Science-based skincare becomes the standard, and the modern day spa is introduced.
- 1914: Max Factor perfects the first type of makeup for film — a “thinner greasepaint in cream form, packaged in a jar and created in 12 precisely graduated shades,” according to Procter & Gamble.
- 1917: Maybelline founder T.L. Williams launches the first modern mascara after getting the idea from his sister Maybel.
- 1920s: Eyebrow pencils become popular, thanks to Hollywood star Greta Garbo. The new ingredient, hydrogenated cottonseed oil, helps the pencil glide on more easily.
- 1932: Brothers Charles and Joseph Revlon and chemist Charles Lachman create Revlon and launch a new kind of nail enamel.
- 1936: L'Oreal's founder Schueller invents sunscreen.
- 1944: Miami pharmacist Benjamin Green develops sunscreen for soldiers fighting in World War II. The formula becomes Coppertone Suntan Cream.
- 1950s: Max Factor introduces the modern-day mascara with a tube and wand applicator. Hazel Bishop creates the first long-lasting lipstick.
Moving into the era of Anti-aging has begun with the Baby Boomer's generation who are concerned with preventing the aging process. This trend has become so popular, both men and women begun to give a lot of attention to their looks and begun to look for solutions to stop the aging clock. Plastic Surgery, the most sought after solution for both women and men, has become the biggest industry in anti-aging. Even the Plastic surgery industry is changing by moving away from more invasive procedures, such as face lifts and moving to less invasive treatments, such as injectable fillers. Because these “non-invasive” treatments are available, more and more men and women beginning with the Baby boomers into the Generations X and Y are heading into Plastic surgeons offices to look and feel younger. Laser treatments, Botox, Dysport, huyoluranic acid, restalyne that are injectable fillers are becoming the newest and greatest treatments available among billions of men and women from the 20s and up.
Baby Boomers created this trend and the twenty-somethings are beginning to catch on and follow in their footsteps by preventing aging before it even begins. Physicians have been involved in creating some of the most innovative skin care solutions in the last ten years.
As we move into the era of Anti-aging, Men and women are concerned with aging and their appearance. More people are looking for advanced skin care solutions. Skin care products with breakthrough ingredients are being sought after. Skin care products are developed to help prevent and heal and protect the skin from sun damage, pigmentation, fine lines, and wrinkles. If we look back throughout history we see that our ancestors have used skincare products on their faces and bodies in their purest forms. Nevertheless newer skin care products are being developed with breakthrough formulas and have very strong claims for preventing and correcting sings of aging.
Today, we use some of the same skin care regimens as our ancient ancestors once did, meanwhile technology and scientific research introduced a new era of beauty.
Some skincare products still use available fruits, vegetables, dairy products and fats that have been ancient secrets of hygiene, sun protection and anti-aging for thousands of centuries. Even looking back at our mothers and grandmothers skin care regimen was so simple but made a difference in our skin's appearance. Egg whites in the hair and cucumbers on the eyes - these ingredients appeared in skin care creams, lotions and cleansers for aging skin care programs. Skin care has been used throughout history to help achieve beauty, hygiene and maintain an attractive appearance.
II. Current and Future Analyses
Cosmetic & Toiletries Market Background
In the last decade, the cosmetics market has established a very good position and received a lot of attention around the world. The market targets consumers that are spending more and more on their appearances and skin health. The global Cosmetic & Toiletries industry is currently worth $190bn, according to Euromonitor's 2008 ‘Cosmetic and Toiletries World' Report.
This Market can be divided into five segments depending on the product's use:
- SKINCARE: Including ‘Hand & Body Care': Lotions and mosturizers and ‘Facial care': Moisturizers, cleaners, toners, Anti-aging products, etc...
- MAKE-UP: lipsticks, lip glosses, mascaras, foundations, eye shadows etc.
- HYGIENE: Soaps Shower gels, deodorant, etc...
Federal Food, Drug, and Cosmetic FDA defines cosmetics as articles intended to be applied to the human body for cleansing, beautifying, promoting attractiveness, or altering the appearance without affecting the body's structure or functions. This definition includes skin-care creams, lotions, powders, sprays, perfumes, lipsticks, fingernail polishes, eye and facial makeup, permanent waves, hair colors, deodorants, baby products, bath oils, bubble baths and mouthwashes, as well as any material intended for use as a component of a cosmetic product.
The global cosmetics industry has a comprehensive structural growth than that of other consumer products. It aims to meet two needs: 1-the essentials (the basic hygiene) and 2-the superfluous (makeup, skincare, perfumes ...). However, it is characterized by a constant rise in innovation, a promotional rate increased by signs and a continuous recruitment and consumers volatile.
The Top 10 Groups in Cosmetics & Toiletries Sales:
The L'Oréal Group headquartered in Paris, is the world's largest cosmetics and beauty company. L'Oréal has developed activities in the field of cosmetics, concentrating on hair color, skin care, sun protection, make-up, perfumes and hair care. L'oreal has five divisions: Consumer's Division, Luxury Division, Professional Division, Active Cosmetics and The Body Shop. L'oreal is very is active in the luxury segment with brands such as Lancôme International, Biôtherme and Helena Rubinstein. L'Oréal is also active in the dermatological and pharmaceutical fields with brands like Vichy and Inneov.
Turnover: 17.063 Billion €
PROCTER & GAMBLE: P&G U.S.A
P&G is number two in the cosmetics industry
The Procter & Gamble Company manufactures and sells various consumer products worldwide. The company offers cosmetics, deodorants, feminine care, fine fragrances, hair care, personal cleansing, and skin care products.
P&G is present in several areas besides cosmetics.
The Perfumes and Cosmetics Division consists of mainly mass market brands like Olay's
and some prestige brands like DDF (Doctor's Dermatologic Formula) and SKII.
Turnover: 13.566 billion €
UNILIVER: Europe U.S.A
Uniliver depends on mass market sales and mainly hygiene products like the Dove brand.
Turnover: 8.736 billion € with a presence in several areas besides cosmetics.
ESTEE LAUDER: U.S.A
The Estee Lauder Companies, engages in the manufacture, marketing, and sale of skin care, makeup, fragrance, and hair care products.
Estée Lauder is ranked the fourth group in cosmetic sales worldwide. The Estée Lauder Inc includes other brand names such as Bumble & Bumble, Clinique, Donna Karan, Aveda, Jo Malone, La Mer, MAC cosmetics and others.
Turnover: 5.459 billion €
Avon is a leading global beauty company, as the world's largest direct seller, Avon markets to women in well over 100 countries through over five million independent Avon Sales Representatives. Avon's product line includes beauty products, fashion jewelry and apparel.
Turnover: 5.065 Billion € in cosmetics which represent 70% of the group sales activity.
Its luxury brands: Carita, Decleor, Beauty Prestige International (Issey Miyake, Jean Paul Gautier).
CA: 4.289 Billion €
with main Brands Nivea, Labello
Number Seven on the global cosmetic market and works on diverse markets include: toiletries and hygiene and health (BSN Medical).
Turnover: 4.284 Billion €
With brands such as Bioré and Jhon Frieda.
Number eight on the global cosmetic market and works on diverse markets but 50% of the global turnover of the group is due to its cosmetic activity.
Turnover: 3.979 Billion €
JHONSON & JHONSON: U.S.A
Johnson & Johnson engages in the manufacture and sale of various products in the health care field worldwide. Its Consumer segment offers products used in the baby and kids care, skin care, oral care, wound care, and women's health care fields.
Turnover: 3.677 Billion € and that is only 8% of the global turnover.
Henkel has diverse activities, mainly in laundry & homecare, in beauty & personal care and in adhesive & sealants.
Beauty care brands such as Schwarzkopf for hair care and Diadermine for skincare.
Turnover: 2.972 Billion€
Top 20 Groups on the Cosmetic & Toiletries Market in 2008
U.S. Beauty Industry
Having a year of recession in the US, the beauty market witnessed a decline in all its categories. According to research from NPD Group, Total US prestige beauty sales fell by 8% to 2.9bn in 2009 (January Through May) versus the same period in 2008.
The Prestige beauty sales were the most affected by the current climate with 3.3 drop in sales in 2008. This decline is the first one posted by the research Group since 1997. Prestige Make-up and skincare sales were each down by 7% in this period. Even the skincare category that was showing a stable growth showed an important change with the crisis. This decline id the premium-priced skincare sales, affected the growth of the prestige market that has been significantly impacted and witnessed the first year of decline.
Meanwhile private label's shares of the Cosmetic & Toiletries market grew from 2% in 2007 to 3% in 2008 according to Euromonitor. This growth was driven primarily by the appeal of lower priced products, since private label products are usually priced at least 20% lower than prestige brands.
Growth was also driven by retailers, especially drug stores chains, which are introducing higher quality products with more affordable prices.
The luxury brands took action to change their strategies in order to fit to the current climate and make better sales. These brands have been highlighting the value approach above everything else; since consumers need to know that they are receiving real value for their spending has been more critical than ever.
The actions conducted by beauty companies were not necessarily related to discounting. They have been re-evaluating the whole concept of the total value including the quality of the product, the packaging and the total shopping experience. With the new customers scientism it was essential for brands to raise their products values. The Strategies adopted to provide a better value for customers were concentrated on higher quality products, better services, pampering and a providing the consumers with a real understanding of the benefits they are offering.
One of the obvious changed was seen also in the communications strategies of beauty brands, as they have reduced their advertising budgets in traditional media in favour of online campaigns. A rise in internet beauty sales has prompted this shift. P&G for example, cut overall US media spending by 18% in the first quarter of 2008 according to TNS Media Intelligence data group, reducing its TV advertising budget by around 30%. On the other hand spending on the internet ads was tripled representing 4% of the group's total advertising budget. In this context social networking sites such as Twitter have taken a new importance, as for example MAC began using Twitter to send updates on backstage New York's Fashion Week. Other strategies include reaching out to beauty bloggers that are gaining more and more consumers trust and are representing a big buying influence.
Evidently, C&T sales in the US are unlikely to show growth as previous years. Euromonitor predicts a decline of 3% inconstant value sales between 2008 and 2013. However US consumers are preparing to spending more on beauty purchases that give them a real value for their money. The economy will recover soon, and beauty brands must set up new strategies to regain their positions in the beauty market.
U.S. C&T Sales in 2008
By Category $bn
While most of C&T categories showed a decline, skincare was the only category that sustained a growth with +1.1% comparing to 2008.
Skincare constitute the largest category in term of the US beauty sales. With 26.4%, of the overall US beauty sales, the skincare category has a promising future with the increasing importance consumers are according to their skin health.
Europe Beauty Industry
Due to the current economic Climate, 2008 has been a difficult year for the European beauty market. The European Cosmetic Association released the 2008 figures last May. The report data was consolidated by Euromonitor international and cover all 27 EU member stated.
The western European market maintained its leading position in 2008, followed by Asia-Pacific and North America. Brazil had the biggest growth followed by Eastern Europe. Total sales for EU plus Switzerland and Norway reached €70bn ($103bn). The absence of growth is attributed to the drop in sales in the fourth quarter. Overall the decrease in Western European countries was compensated by the increase in Eastern EU countries especially Russia, Bulgaria and Romania.
European C&T Market Annual Growth
In term of Volume, the top 5 are the same as 2007: Germany 17.9%, France 14.8%, UK 13%, Italy 12.9% and Sapin 11.1 accounting for 70% of the market.
Germany is still the most lucrative market, with sales close to €13bn and 2% growth. Makeup segments grew the most, with a special success of natural products especially mineral based. German consumers tend to pay a lot of attention to ingredients.
In France, the market only grew by 0.5%. Private labels contributed to keep a stable consumption.
The UK market showed a great resilience to the current economic crisis. Sales of fragrances went up 11% and makeup up 9%.
In Italy, the growth was 1%. Makeup was the best category at +3%. In term of chanels Italian consumers tend to favour chemists and direct sellers.
In Spain, sales went down by 1.1% as a result of the crisis. Private Labels showed the best performance.
Consumers spending show a different top 5: with 235 euros/per capita, Norway is still the number one market, followed by Switzerland 222, Denmark 187, Spain 171 and Austria 168. The European average stayed at 124 euros.
European C&T Market 2008 Sales by Country
All Categories Dropped
All five C&T categories recorded a sharp slowdown in their growth in comparison with 2007:
Fragrances plunged from + 4.8% to +0.4%, Make-up down from +6.7% to +2.3%,
Skincare was the most affected by the crisis and dropped from +5.1% to -0.7%
Hair care also went from +1.5% to -0.9%, Toiletries plunged from +4% to +0.5%.
With the average total Europe fell from +3.8% to +0.1%
Colipa cites the good sales in Romania, Bulgaria, Denmark and Spain, which compensated for the weaker figures in western countries such as the UK, France and Germany. Skincare remained the leading category representing 25.8% of the total sales.
Toiletries came second with 24.4%, followed by haircare 22.2%, fragrances 15.3% and makeup 12.4%.
Change in European Markets by Product Category (%08/07)
Skincare Market Structure
Skin care is a dynamic, rapidly evolving fragmented market with well established players, some good marketers, old companies, and new ventures. Consumers are well informed and demanding new products which offer more than just the functional benefits. Sensory and emotional features also play a very important role in the total product package.
Baby boomers are still the core consumers, but the next generation in their 40's and beauty obsessed youth are also great potential customers for skin care industry. Product innovation is the driving force and the differentiation between mass market and premium category is becoming vague. Besides traditional retailer market - supermarket, drug store and mass merchandise, skin care products are now also sold through professional channels like spas, dermatologist's office, and plastic surgery clinics.
According to Federal Food, Drug, and Cosmetic (FD&C) Act, cosmetics and their ingredients are not required to undergo approval before they are sold to the public.
Skin care product sales by mass marketers are increasing especially with the development of new products that claim to have same benefits of premium products with affordable prices. Department stores account are losing market share to other retailers such as drug stores, and professional circuits where sales of skin care products are significantly increasing.
The Skincare Industry Segments
Natural: there is no actual definition of natural. All ingredients are chemicals by definition. "Derived" ingredients are unnatural both according to the original substance and the method of derivation.
Organic certified: an independent party guarantee of an organic claim. Certified organic products must contain a minimum of 95% organic ingredients excluding water and salt/minerals, with a small allowance for natural, non-organic ingredients that must comply with very rigorous processing criteria.
Professional skin care brands: dermatological and clinical brands sold in outlets such as spas, dermatologists' offices, plastic surgery clinics, and other professional channels.
Cosmeceuticals & Nutraceuticals: The term “cosmeceutical” was introduced for the first time by the dermatological professor Albert Kligman in the late 70s, to describe agent that are applied to the skin that are more active than cosmetics but not so active that they have uncomfortable or harmful side effects. Cosmeceuticals are the hybrids products between cosmetics and drugs, for topical application S. Cosmeceutical products are formulated with biologically active ingredients claiming to have medical or drug-like benefits. This market was initialised in the United States by dermatological doctors like Dr. Perricone and Dr. Murad who declinated their formulas through their own brands.
At present the term has no regulatory standing, and the FDA does not recognize it, therefore these products do not need any form of additional regulatory. It is used more in a marketing context to highlight formulations or ingredients that claim to have perceptible effects on the skin's structure and appearance.
“Nutraceuticals” is emerging in the form of nutraceuticals-products taken internally in order to obtain an external skin care benefit.
Because the skin is such an efficient barrier, and its upper layer has no blood supply, it's difficult to get nutrients and other vital materials from the skin's surface down into the deeper layer of the epidermis, where the cells are nourished. That is why nutraceuticals are vital to complete the role of topical application as they nourish the skin from within.
The Skincare Market Metrics
The global skin care market constitutes that largest category in the Cosmetic and Toiletries industry and is predicted to show 7% annual growth according to data from Euromonitor International. This market is driven by an aging population, growing consumer prosperity and the increasing importance of the emerging markets, according to a report by Global Industry Analysts.
Skin care market shows a significant growth, mainly due to growth of anti aging products. Currently anti-aging products are the first category in sales and Hand & body is expected to be second largest after that.
Europe and U.S. represent the largest regions in global skincare market. Asia pacific is an important market for skin care. Japan has a large and affluent market, with beauty routines involving 5 or more steps in comparison to North American or European women who use a 3 step regimen. China is the second largest market in the region.
Skin care is the largest category in the global C&T market and it maintains a stable growth rates with a fluctuation due to the economic crisis. With sales up 6.8% in the overall market, facial skin care is the most profitable, but we are also seeing manufacturers such as L'Oreal and P&G extending their facial brands to other parts of the body as the hand and body care is stating an important growth. Firming/anti-cellulite body care enjoyed growth of approximately 9.5% in 2008, making it the world's most dynamic skin care sector and pinpointing to a growing consumer obsession with body-focused skin care. Other factors fueling skin care's growth in 2008 are the continued obsession with anti-aging products and Men's skin care.
Skin care continues to be a core category. Skin care industry market retailing is confronted with changes in product segment, market segmentation, consumer preference and taste changes etc. Research and development are driving the creation of new generation of high-tech, innovative products.
New technology, especially Internet, is providing new marketing tools for promotion and sale of skin care products.
The Anti Aging Segment
On a worldwide dynamic skincare market we do notice in spite of the dynamism that there is an erratic growth depending on the market segment.
We notice that the anti aging category represents one of the highest growth rates in the beauty industry. The anti-aging segment is characterized typically into boomers and the youth anti-aging market. These markets vary in terms of products and service, market structure, and positioning. The global population of 200 million boomers is growing at 38%, in comparison with to the population, which is showing a 13% growth. This significant growth is making the boomer population more appealing for anti-aging business. Anti-aging groups are adjusting their strategies while targeting the boomer market, which differs with race, sex, income level, family status, young and old boomers, insurance status, and distribution channels; we see that companies interests in this market is making a big shift in products offers in term of innovation and high technologies that allow them to offer right, proper and effective products for this particular segment.