Cosmeceuticals — The Billion
Dollar Industry

Although the term “cosmeceutical” may not be officially recognized by the Food, Drug and Cosmetic Act, this niche beauty market is expected to increase its already $3.5 billion revenue by 7.7 percent, according to IBISWorld.

Cosmeceuticals are big players in the mature beauty industry. The term refers to cosmetic products that have the added benefits of pharmaceutical substances. Moisturizers and anti-aging products are commonly categorized under the cosmeceutical umbrella.

“Because the profit margins are higher on cosmeceuticals, companies have more money to spend on marketing,” says Toon van Beeck, a senior analyst with IBISWorld. With our obsession to turn back the clock and reduce the signs of aging, consumers are prepared to fork out massive sums on these products, and retailers ranging from department stores to big box stores are more than happy to accommodate their needs.

“Companies are taking the opportunity to manufacture more of these high-margin products which typically generate profits greater than the industry average of 10 percent,” adds van Beeck.

IBISWorld predicts a growth spurt in excess of $4 billion by the year 2011. Furthermore they don’t expect the double-digit rates to decline any time soon after that. The key, however, to keeping the figures up, will revolve primarily around the perceived health benefits these products are able to offer.