The Products

• Cosmeceutical Market Parameters
• Two Product Categories: Skincare and Hair Growth
• Skincare Cosmeceuticals
• Hair-Growth Cosmeceuticals
• Three Product Classes: Mass-Market, Alternative, and Prestige
• Types of Alpha-Hydroxy Acids

The Market

• Retail Sales Estimated at $760 Million in 1997
• Table 1-1: US Retail Sales of Cosmeceutical Products by Class, 1993—2002 (dollars): Mass, Alternative, Prestige
• Mass-Market Hair-Growth Products Explode on Cosmeceutical Scene
• Factors Affecting Market Growth
• The Impact of an Aging Population
• Working Women Drive Cosmeceutical Market
• Rogaine: An Example of a Successful OTC Switch
• New Ingredients
• Marketers Increase Advertising Support
• FDA Approves Renova
• More Shelf Space for Cosmeceuticals

The Marketers

• Three Classes of Cosmeceutical Marketers
• Two Companies Dominate Mass Market
• Figure 1-1: Marketer Shares of Mass-Market Cosmeceutical Sales, 1996 (percent): Top Six Marketers, Private Label, and Others
• The Competitive Situation
• Marketing Trends
• Existing Lines Extended to Include Cosmeceuticals
• Mass Marketers Using More Class
• Marketers Use Clinical Studies to Buttress Claims
• New Product Trends
• Focus Is on Anti-Aging
• AHAs Still Hot
• BHAs Attract Attention as Less-Irritating Ingredient
• Retinols Thrive
• Minoxidil's OTC Switch Spawns Hair-Growth Market
• Cosmeceutical Advertising Exceeds $134 Million

Distribution and Retail

• Leading Marketers Use Direct Distribution
• Strong Sales Continue Across All Classes of Trade
• Mass Market Constitutes 59% of Sales
• Markup and Price Vary by Type of Retailer
• Private Label a Growing Factor

Cosmeceutical Users

• Comparison with Heavy Users of Facial Moisturizers
• Over One-Quarter of Women Are Heavy Users
• Factors Favoring Use
• Use of Facial Moisturizers: By Brand
• Four Million Adults Use Hair Thinning/Loss Products
• Use Highest During Middle Age
• Factors Favoring Rogaine Use: Gender, Age, and Race

Scope and Methodology

• Products Covered
• Report Methodology

II THE PRODUCTS

Description of the Skin

• Skin: The Body's Largest Organ
• The Skin's Structure
• Skin Renews Itself
• Chronological Aging of the Skin
• Photoaging of the Skin
• Cellulite
• Thinning Hair

A Brief History of Cosmeceutical Products

• Science and Modern Skincare
• Quest for Miracle Ingredients in 1970s
• Biological Concepts Emerge in Early 1980s
• Retin-A: The Miracle Acne Product
• Retinoids Usher in the Cosmeceutical Age in 1986
• Rogaine Debuts in 1988
• Alpha-Hydroxy Acids Arrive in 1992
• Ethocyn and Beta-Hydroxy Acid Vie to Unseat AHAs
• High-Tech Skincare Treatments Flourish

Product Classifications

• Cosmeceutical Market Parameters
• Two Product Categories: Skincare and Hair Growth
• Three Product Classes: Mass-Market, Alternative, and Prestige
• Wide Variety of Forms
• Types and Sizes of Product Packaging

Product Ingredients

• Types of Alpha-Hydroxy Acids
• The Effects of AHAs
• Beta-Hydroxy Acids
• Retinoids
• Soothing Ingredients
• Antioxidants
• Vitamins
• Other Anti-Aging Product Ingredients
• Moisturizing Ingredients
• Anti-Cellulite Ingredients
• Minoxidil

Regulatory Milieu

• Skincare Products Fall Under FDA Jurisdiction
• FDA Classifies Drugs and Cosmetics
• Table 2-1a: FDA Requirements of Drug Marketers
• Table 2-1b: FDA Requirements of Cosmetics Marketers
• Product Claims Watched Closely
• FDA Monitors AHA Safety and Claims
• Clinical Findings on AHAs
• FDA Approves Renova as a Prescription Drug
• Minoxidil Granted Over-the-Counter Status

III THE MARKET

• Figure 3-1: Estimated US Retail Sales of Cosmeceuticals, 1993-1997 (dollars)

Market Size and Growth

• Difficulty in Arriving at Sales Estimates
• Packaged Facts' Methodology
• Retail Sales Estimated at $760 Million in 1997
• Table 3-1: Estimated US Retail Sales of Cosmeceuticals, 1993-1997 (dollars)
• Mass-Market Hair-Growth Products Explode on Cosmeceutical Scene
• Table 3-2: Mass-Market Shares of US Cosmeceutical Sales by Product Category, 1995 vs 1996 (percent): Skincare Cosmeceuticals, Hair-Growth Cosmeceuticals
• Skincare Products Still Dominate Mass-Market Sales
• Mass-Market Sales Up 600% Between 1993 and 1997
• Table 3-3: US Retail Sales of Cosmeceuticals by Channel of Distribution, 1993-1997 (dollars): Mass, Alternative, Prestige

Market Composition

• Mass-Market Claims 59% of Cosmeceutical Sales
• Figure 3-2: Share of Cosmeceutical Retail Sales by Distribution Channel, 1993 vs 1997 (percent): Mass, Alternative, Prestige Mass-Market Products Account for 63% of Total Growth
• Table 3-4: Percentage of Cosmeceutical Product Growth by Channel of Distribution, 1993-1997 (dollars and percent): Mass, Alternative, Prestige

Factors Affecting Market Growth

• The Impact of an Aging Population
• Table 3-5: US Population Projections, 1995 vs 2005 (number and percent): Age 18 to 65 and Older
• Baby Boomer Attitudes
• Working Women Drive Cosmeceutical Market
• Rogaine: An Example of a Successful OTC Switch
• Heightened Consumer Awareness of Proper Skincare
• Savvy Shoppers Demand Products That Work
• An Emphasis on Prevention
• New Ingredients
• Niche Marketing Generates New Entries
• Natural Products
• Marketers Increase Advertising Support
• FDA Approves Renova
• Marketers Extend Popular Lines to Include Cosmeceuticals
• Mass Market Meets Prestige Market Head-On
• More Shelf Space for Cosmeceuticals
• Society's Attitudes about Beauty Shift
• Figure 3-3: Projected US Retail Sales of Cosmeceuticals, 1997-2002 (dollars)

Projected Market Growth

• Cosmeceutical Sales to Reach $16 Billion by 2002
• Table 3-6: Projected US Retail Sales of Cosmeceuticals, 1997-2002 (dollars): Mass, Alternative, Prestige

IV THE MARKETERS

The Marketers

• Three Classes of Cosmeceutical Marketers
• Diverse Companies Market Cosmeceuticals
• Marketers Target Ethnic Groups, Men, and Teens
• Marketers of Botanical Products
• Table 4-1: US Cosmeceutical Products: Selected Marketers and Brands (95 Marketers and Their Brands)

Marketer and Brand Shares

• Overstatement of Purchases from Mass Retail Outlets
• Two Companies Dominate Mass Market
• Table 4-2: Marketer Shares of Mass-Market Cosmeceutical Sales, 1995 vs 1996 (percent): 12 Marketers and Their Brands
• Cosmeceutical Share-of-Market Figures to Change Drastically in Coming Years
• Pharmacia & Upjohn Debuts in First Place
• Cosmair's Rapid Rise to Second Place
• Unilever in Third Place
• Scott's Liquid Gold Slips to Fourth
• Beiersdorf Places Fifth
• Johnson & Johnson Debuts in Sixth Place
• Five Marketers Earn 1%-3% Share
• Procter & Gamble's Weak Showing
• Estée Lauder and Cosmair Are Top Prestige Contenders
• Avon Controls in Direct Sales

Competitive Situation

• Everyone Wants a Piece of the Cosmeceutical Action
• Distinctions Between Mass and Prestige Products Blur
• Extensions and New Entries Fuel Competition
• Smaller and Alternative Companies Compete through Niche Marketing
• Prestige-Level Competition Intensifies
• High-Performance Products Appeal to Well-Informed Consumers

Competitive Profile: Pharmacia & Upjohn, Inc

• A Pharmaceutical Heavyweight
• Rogaine Is Number-One Hair-Growth Cosmeceutical
• Extra Strength Rogaine Debuts

Competitive Profile: Cosmair, Inc

• Cosmair Competes with Mass L'Oréal and Prestige Lancôme
• Plénitude Alters Mass Market
• Plénitude Excell-A3 Launches a "Triple Assault" on Aging
• Revitalift: Plénitude's Anti-Wrinkle and Firming Product
• Futur-e Targets Younger Consumers
• Primordiale Competes as Prestige Anti-Aging Line
• Bienfait Total
• Lancôme Gets On Thigh Bandwagon

Competitive Profile: Unilever

• Unilever Has Strong Entries in Both Mass and Prestige Markets
• Pond's Age Defying Complex
• Pond's Prevent & Correct Regimen
• Pond's Promotional Strategies
• Vaseline Intensive Care Cosmeceutical Entry
• Elizabeth Arden Is Core of Unilever's Prestige Activity
• Elizabeth Arden's Modern SkinCare Debuts

Competitive Profile: Scott's Liquid Gold, Inc

• Relative Newcomer to Skincare
• Neoteric Was First to Mass Market
• Alpha Hydrox Line
• Alpha Hydrox for Men
• Alpha Hydrox FootCare Collection

Competitive Profile: Beiersdorf, Inc

• Beiersdorf Competes with its Nivea Visage, Eucerin Plus, and La Prairie Brands
• Beiersdorf to Increase Advertising Expenditure
• Eucerin Plus: Early Entry in Cosmeceutical Market
• Nivea Visage
• Infomercial Line Under Development
• Basis Simplifies Skincare
• La Prairie
• La Prairie's Major New Entry

Competitive Profile: Johnson & Johnson

• Major Player in Consumer Healthcare
• Neutrogena Acquisition Strengthens Johnson & Johnson
• Neutrogena Enters Cosmeceutical Arena
• FDA Approval of Renova a Coup for Johnson & Johnson

Competitive Profile: Chantal Pharmaceutical Corp

• Fast-Growing Newcomer
• Clinical Proof Buttresses Ethocyn's Claims Promotions

Competitive Profile: Revlon, Inc

• Revlon Shows Muscle Mainly on Mass Level
• Almay Demands Time-Off
• Almay's Time-Off Bridges Mass and Prestige Classes
• Two New Ultima II Skincare Series

Competitive Profile: University Medical Products/USA, Inc

• Fast-Growing Newcomer
• Face Lift: A Five-Item Cell Regeneration Regimen
• Other Cosmeceutical Offerings

Competitive Profile: Procter & Gamble Co

• Procter & Gamble—A Leading Mass Skincare Marketer
• Oil of Olay Suspends Production of First Cosmeceutical in 1995
• Oil of Olay Age Defying Series

Competitive Profile: Estée Lauder Companies, Inc

• Estée Lauder Dominates Prestige Segment
• Clinique Is Leading Department Store Brand
• New Clinique Products Target Oily and Problem Skin
• Fruition: The Most Successful Launch in Lauder History
• Firming Skin with Re-Nutriv and Resilience
• Vérité Arrives in 1996
• ThighZone Competes with Dior's Svelte
• Origins: One of the First to Have Prestige AHA Products
• Aramis Targets Men with AHA Product Called Lift Off
• Lab Series for Men

Competitive Profile: Avon Products, Inc

• A Major Force in Direct Sales
• Anew: Avon's Big Seller
• Additions to the Anew Franchise
• New Ad Campaign Attempts to Redefine Perceptions of Avon

Competitive Profiles: Selected Other Marketers

• Alberto-Culver Company (St Ives)
• Andrew Jergens Company (Kao Corp)
• Bausch & Lomb, Inc
• BeautiControl Cosmetics, Inc
• CCA Industries, Inc
• Chanel
• Christian Dior
• Clarins USA, Inc
• Del Laboratories, Inc
• Freeman Cosmetic Company Warner-Lambert Company

Marketing Trends

• Existing Lines Extended to Include Cosmeceutical Entries
• Mass Marketers Using More Class
• Marketers Use Clinical Studies to Buttress Claims
• Cosmeceutical Marketers Go Interactive
• One-Step vs Multi-Step Skincare Regimens
• New Role for Dermatologists

New Product Trends

• Focus Is on Anti-Aging
• AHAs Are Still Hot
• BHAs Attract Attention as Less-Irritating Ingredient
• Retinols Thrive
• Minoxidil's OTC Switch Spawns Hair-Growth Market
• Natural Products
• Cosmeceutical Products Becoming More Multi-Functional
• New Cosmeceuticals Target Various Parts of the Body
• Eyecare Products
• Anti-Cellulite Products Continue to Emerge
• Facial Masks on the Rise
• Firming Products
• Marketers Target Consumers with Sensitive or Problem Skin
• Table 4-3: US Cosmeceutical Market: Selected New Product Introductions and Line Extensions, 1996-1997

Consumer Advertising Expenditures

• Cosmeceutical Advertising Exceeds $134 Million
• Four Major Marketers Account for More Than Two-Thirds of Advertising
• Five Companies Spend $3-$8 Million
• Advertising Expenditures Between $1 and $3 Million

Consumer Advertising Positioning

• Women Targeted by Mass and Prestige Advertising
• Visuals Very Important
• Product Efficacy Emphasized
• The Appeal of Unique Ingredients
• Anti-Aging Benefits Touted
• Cosmeceutical Ads Make Treatment Claims
• Examples of Ads

Consumer Promotions

• Promotions Are Extremely Important
• Mass-Market Promotions: Coupons and Trial Sizes
• Mass-Marketers Rely Increasingly on Education
• Prestige Promotions: Education, PWPs, and GWPs
• Online and Telephone Promotions

Trade Advertising and Promotion

• Promotions Are Standard
• In-Store Display Materials Are Standard Promotion
• Prestige Marketers Rely Heavily on In-Store Promotions
• Mass Marketers Increase Support for Retailers
• Co-Op Ads and Invoice Discounting
• Trade Shows and Trade Advertising
• Examples of Trade Advertising

V DISTRIBUTION AND RETAIL

Distribution

• Leading Mass and Prestige Marketers Use Direct Distribution
• Smaller Marketers Rely on Service Merchandisers
• Diverters Move Prestige Products Through Mass Outlets
• Cosmeceutical Sales Substantial for Direct Marketers

At the Retail Level

• Strong Sales Continue Across All Classes of Trade
• Mass Market Constitutes 59% of Sales
• Table 5-1: Share of US Cosmeceutical Retail Sales by Outlet Type, 1997 (dollars and percent): Drugstores, Alternative, Discount Stores, Prestige, Supermarket
• Alternative Channels Comprise the Second Biggest Distribution Method
• Prestige Places Last Among Three Key Distribution Channels
• Markup and Price Vary by Type of Retailer
• Private Label a Growing Factor

At the Retail Level: Drugstores

• Drugstores Account for More Than Half of All Mass-Market Sales
• Chain Drugstores Respond to Heightened Competition
• Drugstores Win Big with Hair-Growth Products
• Cosmeceutical Location in Drugstores
• Selection and Pricing
• Drugstore Cosmeceutical Promotions

At the Retail Level: Discount Stores

• Discounters Compete on Price
• Merchandising of Cosmeceutical Products in Discount Stores Selection and Pricing

At the Retail Level: Supermarkets

• Supermarket Cosmeceutical Sales
• Traditional Supermarkets Expand Skincare Offerings
• Brands Available
• Supermarket Merchandising

At the Retail Level: Department Stores

• Department Stores Are Major Prestige Outlet
• Displaying Prestige Products
• A Variety of Lines Featured
• Promotions Often Marketer-Sponsored
• Beauty Consultations and Clinics Boost Sales
• Department Stores Compete Against Other Retailers Pricing

At the Retail Level: Alternative Outlets
Alternative Marketers Vary Widely