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Health and Beauty We examine the trends underlying the growth of the global marketplace in health, beauty and hygiene. Our analysts will point the way forward by highlighting critical innovations and behaviours that are driving industry evolution.

The Broadening Meaning of ‘Green’ Beauty Opens New Growth Platforms

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A host of technological, environmental and economic changes enhance the demand for more naturally derived ingredients in beauty products as well as adding multiple new angles to this still undefined category of ‘natural’ beauty, encompassing all aspects of green living. Consumers are enabled by digital and social developments to get more informed and engaged not just with the health impact of all ingredients but also with their origin, processing and environmental and social footprint. This broadening trend of changing consumer attitude for overall green living opens a range of growth opportunities for new product formulations, benefits and positioning.

The multiple angles of Green Beauty:

Ingredients’ health aspect remains a priority

Despite all the emerging new aspects of ‘green’ beauty preference for naturally derived ingredients remains a priority over all other environmental or ethical credentials.

Source: Euromonitor International Beauty Survey 2016

At the same time, what ‘healthy beauty’ means for consumers is also a broadening concept. Beyond naturally derived, minimally processed ingredients there is also a rising interest in beauty products to become part of an overall healthy lifestyle, which encompasses appearance, physical and mental wellbeing. A new generation of brands are capitalising on extending their ranges beyond beautyroutines into consumers’ fitness and relaxation activities, such as Mio Skincare Workout Wonder Invigorating Muscle Gel with its purely naturally derived active ingredients. Or Yuni beauty products, which were created for yoga practitioners before, during and after a session to enhance the benefits of the yoga experience, which includes items such as Body Balance Aroma Concentrates and shower sheets with entirely naturally derived ingredients.

Clean beauty concepts gain traction

In addition to beauty product compositions there is also a growing focus on ingredients that are left out. Another food and beverages-inspired initiative, clean labelling, is gaining consumers’ attention in beauty. Products with ‘free-from’ claims are not new to the beauty market but some of the latest launches are going beyond the exclusion of one or few particular ingredients (ie paraben-free ofsilicon-free) and adopt a more back to basics approach. These products claim to simplify compositions with fewer and purely natural ingredients. One of the labels at the forefront of this trend is Drunk Elephant, trading with the positioning of non-toxic skin care system, focusing on leaving out everything that is not effective in skin care, most importantly fragrances. Juice Beautyand Tata Harper are also key brands propagating clean beauty and gaining growing attention from consumers concerned about synthetic or harsh chemical ingredients in their beauty products. Largest markets for food and drink products with clean labelling are the US, UK and China, which gives a strong indication to where a significant consumer base for such products in beauty is likely to form.

The greater scrutiny for ingredients in beauty is also fuelling trends concerning product usage in line with religious values, such as halal. Demand for halal-certified beauty products has steadily been growing in recent years in markets such as Indonesia, the Middle East and Western markets with large, affluent Muslim communities. Halal-certified brands, primarily appealing to consumers with religious values, also benefitting from the positioning of naturally and sustainably derived ingredients attracting consumers not just for religious but for health and environmental considerations.

Getting more specific with anti-pollution claims

Consumers’ awareness of the damaging impact of environmental pollution on skin and hair is rising and a new growth platform for products with anti-pollution claims is opening up. However, given there is no definition or standardised measurement to what anti-pollution products should achieve beauty players are facing significant challenges to tap into this opportunity. The evaluation of theefficacy of anti-pollution cosmetics is becoming crucial for companies to support their claims. It is widely accepted that pollutants are causing a wide range of skin concerns from aging, dark spots, acne or inflammation but there is no agreement on which bio-marker are best to assess the efficacy of anti-pollution products.

As consumers have started to require more information and scientific proof from brands to purchase products with anti-pollution claims beauty players will need to decide on their pollution protection strategy and develop specific claims, such as anti-PM2.5 effects, antioxidants, skin barrier, etc. They will also have to establish and communicate their testing methodology to substantiate product efficacy.

Tapping into emerging trends early

Beyond ingredients considerations the demand for environmental and social credentials of beautyproducts is growing and these are transitioning from niche to standard features. This involves a broad spectrum of trends from sustainability to animal welfare and more recently to water efficient products, both in terms of usage and production. As water scarcity increases across developing regions, manufacturers of rinse-off beauty and personal care products will face challenges in these regions where most of the potential growth in sales in the future is expected. A key priority to gain competitive advantage in these regions is therefore to develop affordable alternative ingredients designed to be used in water-scarce conditions. Companies could emulate what, for example, laundry care companies have done by developing water-efficient products specially designed for water-stressed countries. Already existing innovations include products claiming at reducing the amount of rinse water. Henkel provides Right Guard Muscle Relax and Fa Shower + Lotion with lower concentration of surfactants that need less rinse-off water while delivering the same cleaning performance. Kao Corp markets Merit shampoo in Japan which has a component that needs 20% less water than its predecessor. However, there is a long way to go across all beauty categories to make products significantly more water efficient.

Still challenges ahead

The growing demand for green beauty products remains steady and its boundaries continue to expand in line with the rise of a more conscious consumer base. Beauty players targeting the green arena still face significant challenges, which include balancing cost and benefit ratios and managing consumers’ willingness, or lack of, for paying more for greener beauty. The competition from derma-positioned brands is also intensifying as they use strong scientific endorsements to trade on higher efficacy claims, which remains a high priority for consumers. Although there is a growing preference for green beauty consumers are not trading off efficacy for natural ingredients if they don’t deliver high performance.

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