High demand has allowed operators to charge a premium, even during the recession
Los Angeles, CA (PRWEB) January 29, 2013
The Cosmeceutical Skincare Production industry is not a new one, but it has grown strongly for over a decade. Led by ongoing scientific research that leads to product developments and enhancements, industry operators are expected to enjoy average annual revenue growth of 11.0% in the five years to 2013. Even during the recession, when consumer incomes declined and demand for most discretionary products weakened, the industry experienced growth of 6.7% and 7.0% in 2008 and 2009, respectively. The expanding pool of Americans aged 50 and over has also supported growth, as this age group represents the industry's primary market. As per capita disposable income continues to rebound in 2013, IBISWorld expects industry revenue to jump another 10.2% to $5.0 billion.
Profit margins (i.e. earnings before interest and tax) for the average industry participant are high. Cosmeceuticals are functional products that carry a price premium, and consumers are willing to pay the premium in return for enhanced results. Over the five years to 2013, profit margins have grown slightly as industry operators have improved production efficiencies. The next five years, however, are threatening to limit this growth. Internal and external competition is anticipated to intensify as companies continue to enter the industry and import penetration increases. The industry will likely near its saturation point, curbing growth opportunities for existing players. The Cosmeceutical Skincare Production industry is dominated by several large consumer products companies, including Proctor and Gamble, Unilever and L’Oreal SA. IBISWorld estimates that the industry has a high level of concentration. In spite of the dominance posed by major players, the majority of firms in this industry are relatively small players that specialize in a small number of product lines to serve niche markets. These products are typically sold in specialty shops, as opposed to the national brands, which dominate the shelves of drug stores and grocery markets. IBISWorld expects that the major players will continue to gain market share, given their massive marketing budgets and mass-market appeal.
Still, revenue growth is projected to remain strong over the five years to 2018. Rebounding per capita disposable income will support growth in consumer demand, while new product introductions will tap into a younger market base seeking preventative measures. At the same time, however, imports are forecast to outpace revenue growth. Therefore, domestic demand will increasingly be satisfied by foreign-made goods, limiting the domestic industry's growth prospects. For more information, visit IBISWorld’s Cosmeceutical Skincare Production in the US industry report page.
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IBISWorld industry Report Key Topics
Companies in this industry manufacture cosmeceuticals, which are cosmetics with pharmaceutical capabilities. Some of the most popular products include wrinkle-reducing moisturizers and creams that even skin tone. This industry does not include doctor-prescribed or administered cosmetic enhancements (e.g. wrinkle-reducing injections).
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalization & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
About IBISWorld Inc.
Recognized as the nation’s most trusted independent source of industry and market research, IBISWorld offers a comprehensive database of unique information and analysis on every US industry. With an extensive online portfolio, valued for its depth and scope, the company equips clients with the insight necessary to make better business decisions. Headquartered in Los Angeles, IBISWorld serves a range of business, professional service and government organizations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.com or call 1-800-330-3772.