High demand has allowed operators to charge a premium, even during the recession
New York, NY (PRWEB) October 22, 2014
The Cosmeceutical Skincare Production industry is not a new one, but it has grown strongly for more than 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 2014. Even in the wake of the recession, when per capita disposable income remained low and demand for most discretionary products was soft, the industry experienced double-digit growth throughout 2010 and 2011. The expanding pool of Americans aged 50 and older has also supported growth, as this age group represents the industry's primary market. As per capita disposable income increases an additional 1.6% in 2014, IBISWorld expects Cosmeceutical Skincare Production industry revenue to grow another 6.7% to $5.5 billion.
Profit margins (i.e. earnings before interest and taxes) are high for the average industry operator, accounting for 18.5% of revenue in 2014. According to IBISWorld Industry Analyst Jocelyn Phillips, “Cosmeceuticals are functional products that carry a price premium, but consumers are willing to pay the premium in return for enhanced results.” Over the past five years, 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.
Still, revenue growth is projected to remain strong in the five years to 2019. “Steadily rising per capita disposable income will support growth in consumer demand, while new product introductions will tap into a younger market base seeking preventative measures,” says Phillips. At the same time, however, imports are forecast to outpace revenue growth. Therefore, foreign-made goods will satisfy domestic demand, limiting the domestic industry's growth prospects.
For more information, visit IBISWorld’s Cosmeceutical Skincare Production in the US industry report page.
Follow IBISWorld on Twitter: https://twitter.com/#!/IBISWorld
Friend IBISWorld on Facebook: http://www.facebook.com/pages/IBISWorld/121347533189
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.