Chemicals for Cosmetics and Toileteries

Report Highlights

• The estimated 2000 value of U.S. manufacturers’ sales of chemicals used in finished cosmetic and toiletry products is $4.3 billion. Growing at an average annual rate (AAGR) of 3.5%, this market is expected to exceed $5.1 billion in 2005.
• With 2000 sales estimated at $1.1 billion, essential oils represent the largest segment and the most expensive of the chemical ingredients.
• Average annual growth should not exceed 2.5% through the period.
• Polymers advanced to become the second largest segment, with 2000 sales estimated at $811 million. Due to their specific and tailorable properties, growth at an AAGR of 5.8% to more than $1 billion in 2005 is expected.
• Purified petroleum products represent the third-largest segment, with 2000 sales of about $745 million. Growth should hover around an AAGR of 2.6% through 2005.

INTRODUCTION

REASONS FOR DOING THIS STUDY

This industry research/technical market study was prepared as an in-depth analysis to forecast and track significant production and marketing changes in chemicals used in finished cosmetic and toiletry products in the U.S. While the basic types of these finished products have largely remained the same, many of the chemicals used as fillers, solvents and active ingredients have changed because of recent developments in biochemical processing methods. Despite the maturity of the cosmetic and toiletries market, a dynamic of change in chemical formulation continues to evolve from advances made in specialty chemicals. Chemical producers must constantly accommodate for this greater diversity found in all finished cosmetic and toiletry products.

HISTORY OF THE MARKET

Throughout the ages, people have used cosmetics and toiletries to enhance their personal appeal. Egyptian tombs reveal men and women with eyelids darkened with black and green pigments. The women also rouged their lips and cheeks and stained their hair with henna. Cold cream originated in Roman times, reportedly circa 200 AD. Both ladies and gentlemen of 17th and 18th century Europe used cosmetics lavishly.

Today, the ancient impulse to improve one's appearance with cosmetics is getting help from modern specialty chemicals and science. Cosmetics are becoming a highly technical , with the growth of products that supposedly mimic pharmaceuticals, thus spawning the term "cosmeceuticals." This growth has revolutionized the and enhanced the demand for certain natural chemicals, e.g., alpha hydroxy, hyaluronic and amino acids, and proteins such as collagen. The high growth rate of sales of sunscreen products or cosmetics containing them also continues to effect change.

SCOPE OF THIS REPORT

This BCC study evaluates the contribution of specialty chemicals to the finished cosmetic and toiletry products industry. In turn, it offers a comprehensive review of basic developments in the cosmetics industry and any resulting effects on the markets for cosmetic chemicals. Although the focus of this report is U.S. manufacturers' sales of cosmetic chemical ingredients, recent international patents that could affect U.S. markets also are mentioned. This is because of the global nature of both the finished cosmetic products and cosmetic chemical ingredients markets. Besides an overview, this report also includes an in-depth evaluation of the structure of the cosmetic chemicals industry and its competitive aspects.

Significant space and discussion are given to the five major finished cosmetic and toiletry product categories. Current manufacturers' sales of these items are discussed, along with each category's respective growth rates, market values and the value of the chemicals for each product. The section will link changes in the demand for finished cosmetic and toiletry products with resulting changes in demand for the chemical ingredients from which they are formulated.

The final section reviews major types of chemical ingredients. The present and likely future markets for these ingredients are analyzed, along with their application to cosmetic formulations as well as trends affecting demand for particular types of chemicals. Estimates are given for significant usage trends and growth rates. These estimates take into account economics, consumer preferences, demographic trends, product properties, competition and government regulations.

METHODOLOGY

Much of the information for this technical/marketing report was gathered from telephone interviews with industry participants, including producers of both cosmetic chemicals and finished cosmetic and toiletry products. The balance of the information came from data obtained from available government, trade and technical publications, as well as an evaluation of company activities and patents.

The value of U.S. manufacturers' sales for finished cosmetic and toiletry products and cosmetic ingredients are projected for the 2000 to 2005 time period. The projections are given in 2000 constant dollars and cover the U.S. geographic area. Average annual growth rates conform to the convention for significant figures. Where precise information was not forthcoming, a consensus was developed using a formulation of reasonable assumptions and estimates based on a baseline obtained from historical data.

VALUE OF THIS REPORT

This comprehensive technical/marketing report will be of value to technical personnel involved in the research and development of cosmetic chemical ingredients and manufacturers of finished cosmetic and toiletry products. Senior marketing, venture and planning executives who must conform to federal purity standards also will benefit from this report.