Favorable demographics are helping to drive strong growth in the US cosmetics and toiletry industry, with the needs of the graying baby boomer generation, males and different ethnic groups leading to a growth in demand for both natural and active ingredients.
According to the latest report from the Freedonia Group, entitled Cosmetics & Toiletry Chemicals, new products being launched to cater for the personal care needs of these specific groups is set to boost future growth, estimated to hit 5.4 per cent per year until 2010 to give a projected market value of $7.6bn.
But over and above this level of growth those key demographic groups are expected to exceed this level as key niche categories defines themselves as categories in their own right.
US demographics have distinct characteristics that are helping to drive the cosmetics and toiletries market. These include an aging population, growing ethnic populations - especially Hispanic - as well as a rising birth rate.
In turn these demographic characteristics are helping to drive growth in products aimed at older consumers, including anti-aging treatments and make-up products designed for older skin.
For the ethnic market product launches have concentrated on hair and cosmetic products, whereas a big increase in products aimed at toddlers and pre-teens has met with a flood of products aimed at younger consumer's requirements.
All of these categories are expected to maintain growth rates at current rates, ensuring that there are still plenty of opportunities for cosmetic and toiletry manufacturers in the coming years.
On the formulation front, the growth of increasingly targeted products has led to a rise in the number of active ingredients being incorporated into products.
According to Freedonia, this means that enzymes, amino acids, and peptides will be driven by continued gains in cosmeceutical skin care products and high value innovations such as nanotechnology.
But alongside the increasingly innovative formulations, there is a parallel demand for simple, natural formulations, giving way to consumer fears over harsh chemicals. This means botanical extracts, soy protein and natural fats and oils are all expected to achieve significant growth rates in the coming years.
However, this trend towards more natural ingredients will also hit more traditional ingredients such as refined pertroleum products and surfactants, which are expected to achieve limited gains, primarily due to the popularity of water-based formulations in skin and hair care products.
Looking at specific products, the growth in men's grooming is expected to give way to high-end shaving products and hair care preparations, as well as a plethora of dedicated facial cleansers and skin care items.
Ethnic product launches will also continue to proliferate, with most products concentrating on dedicated products for skin care, cosmetics and hair care.
Likewise, the continued growth of the graying baby boomer generation will lead to even more anti-aging products creeping on to the market, with growth expected to continue at well into double figures for the foreseeable future.
This means retail shelves will become even more crowded with products catering to graying hair and aging skin, which in turn will bode particularly well for producers of active ingredients and delivery systems.