As ageing baby boomers seek to live long, healthy lives, they are looking for 'balance' and more holistic solutions, said the report.
Manufacturers have picked up on the trend, introducing new products that offer benefits beyond beauty, and even complete 'wellness systems' that enhance health from the inside, such as vitamin supplements.
According to the report, dermatologists Dr NV Perricone and Dr Howard Murad started the trend by launching skin care and dietary supplement lines. The idea was then picked up by Avon and Procter & Gamble's Olay brand, which now offers vitamin supplements to "help consumers become beautiful from the inside out."
Estée Lauder has merged skin care, aromatherapy and food, last year launching its Cocoa Therapy Collection. The line includes body care products with skin-benefiaical components of cocoa, as well as edible chocolate bars with aromatherapeutic mood-enhancing properties. The company also signed an agreement with Dr Andrew Weil, a pioneer in integrative medicine, to co-develop a line of wellness products.
Another company offering 'beauty chocolates' is cosmetics company Ecco Bella, which developed a Health by Chocolate organic bar infused with cranberry seed oil, blueberry extract, lutein, lycopene and fiber, all of which are supposed to be good for the skin.
Food companies are also looking to join the health and wellness arena. For example, natural foods retailer Whole Foods Market is looking to "establish itself as an authority on natural and organic cosmetics and toiletries products" , said the report. One of the company's New York stores has a large cosmetics department staffed with beauty advisors.
Along with the increasing health trend, consumers are also opting for 'natural' ingredients in cosmetics products, according to the report.
Demand for natural products has risen since 1999 as consumers seek "comfort and escape from a fast-paced, 24/7 high-tech world. Natural products hold an appeal of simplicity and a back-to-basics approach," said Euromonitor.
"Natural product ingredients such as plant extracts, herbs, vitamins and food ingredients are more easily recognised by consumers than the abstract names of extracted essential elements, and are regarded as 'safe,'" it added.
According to the report, Estée Lauder has been successful with the natural positioning of its Origins and Aveda brands.
Origins, which contains 'natural' ingredients such as ginger, vitamins and aromatherapy oils, is targeted at consumers looking for a 'wellness' solution by aiming for their mind and spirit.
Aveda, which also highlights its natural ingredients, pioneered much of the consumer interest in its natural products, and retains a loyal consumer following as a result, said the report.