1. Nutricosmetics market (Oral Beauty Products)

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EXECUTIVE SUMMARY Nutricosmetics market already represents $1,5bn* worldwide but it is still a small part of beauty industry.It is very dynamically growing, especially in US and Europe.The market is expected to double its size within next five years*.In Europe France is the biggest market while UK the most dynamically growing (by approx. 18%).Nutricosmetics market is a purely incremental business for beauty players targeted as a complementary category to traditional beauty segments.The category capitalizes upon growth of cosmeceuticals as well as consumers` more holistic approach to health and beauty.Consumers use skincare nutricosmetics to target or prevent specific beauty issues that need high efficacy solutions (wrinkles, cellulite, body shape).Women aged 35-64 y.o. who are the most health and beauty-aware is the core target.Market offer is growing with Inneov as the best known brand copied by industries and brands from mass and value price tiers.Results validation seems to be a key driver of success. 3. WHAT ARE NUTRICOSMETICS? Ingestible products that are formulated and marketed specifically for beauty purposes. Typical forms: pill, tablet, liquid, food. 4. NUTRICOSMETICS COME AS AN INTERSECTION BETWEEN PERSONAL CARE, PHARMACY AND NUTRITION 5. EVOLUTION OF NUTRICOSMETICS Intersection between cosmetics and pharmaceuticals. Concept created in 1961 by Raymond Reed, a member of the US Society of Cosmetic Chemists Term cosmeceuticals created in 1980 by Dr. Albert Kligman. Products that have drug-like benefits and perform some transformative change to human. Examples: anti-aging products, skin whiteners, acne aids, whitening toothpastes, anti-cellulite products, anti-perspirants Value $55bln in 2007 worldwide*. Source: *Kline & Company 6. EXAMPLES OF COSMECEUTICALS 7. EVOLUTION OF NUTRICOSMETICSTerm coined in 1989 by Dr. Stephen DeFelice, founder and chairman of the Foundation for Innovation in Medicine.A subject of great focus of the food and pharmaceutical companies in 1990s.Examples: cholesterol-lowering diabetes management, tartar control, digestive aid and energizing products. 8. EXAMPLES OF NUTRACEUTICALS 9. EVOLUTION OF NUTRICOSMETICSEmerged as a segment of nutraceuticals.First gained interest in Japan, then more and more popular in Europe. Right now trickled into US.Dominated by beauty and pharma firms.Only few entrants from food industry. 10. SIZE OF NUTRICOSMETICS MARKETThe nutricosmetics market amounts to $1,5bln worldwide with Europe as a largest region.Source: *Kline & Company 11. SIZE OF NUTRICOSMETICS MARKETThe nutricosmetics market is still relatively small vs Personal Care or Skin Care and perceived by a beauty companies as a niche to generate incremental sales.Source: *Kline & Company 12. GROWTH OF NUTRICOSMETICS MARKETThe nutricosmetics market is smaller than Personal Care or Skin Care but growing much faster.Source: *Kline & Company 13. SIZE OF NUTRICOSMETICS MARKET$2,5 bn$1,5 bnThe nutricosmetics market is expected to double its size by 2012.Source: Kline & Company 14. NUTRICOSMETICS MARKET IS A GROWING NICHE IN DEVELOPED MARKETSTotal nutricosmetics market value by country (USD$mm) The nutricosmetics market is dynamically growing especially in UK, US, Germany and France. France Inneov`s home market shows growth potential of new, incremental skincare category across Europe benefiting from more and more popular concept of beauty from within.Source: Datamonitor 15. MARKET OFFER IS GROWINGThe market is still very fragmented with growing number of brands in mass and value segments. 16. NUTRICOSMETICS FOCUS ON 3 KEY AREAS: FACE, BODY AND HAIRFACIAL SKIN CARESUN CAREHAIR CAREBODY CARE 17. NUTRICOSMETICS - EUROPELargely concentrated in France, Italy, Germany, UK and Spain.Strong growth across numerous markets with UK as the most dynamically growing.Driven by anti-aging and body care products.Pharmacy is a key selling channel, which is considered as the most trusted intermediary.Legal framework established under food and medicinal law, but decisions as to which applies to nutricosmetics varies by country.Price tier: premium (20-40 EUR). 18. NUTRICOSMETICS - EUROPEKey market players 19. MARKET LEADER - INNEOV FACIAL SKIN CAREFocuses on skin firmness, which heavily depends on firmness and density of deeper skin layers Targeted at women aged 40+ as this is a time when female skin starts loosing density and firmness due to hormonal changesRTB: Innovative formula incl. Lakto-Liponem active ingredients that reaches all body cells to stimulate their regeneration and protection of collagen, vit. C & soya isoflawons 83% of women noticed improvement of firmness of face and body skin Cells regeneration +79% Collagen production +64% After 3 months skin is significantly firmerRecommended as a supplement to a cream Recommended intake 2-3 pills/day for min. 3 months 20. SUCCESS OF THE INNEOV RESULTED IN COPYING THE CONCEPT BY OTHER INDUSTRIESFACIAL SKIN CARESUN CAREHAIR CARE 21. AND PRICE TIERS - MASSBeiersdorf entered the nutricosmetics industry launching the Nivea Good-Bye Cellulite Body Beauty Program that pairs Nivea Good-bye Cellulite GelCream and new dietary supplements to deliver firmer skin in 2 weeks and reduce the appearance of cellulite in 4 weeks.Supplement contains linoleic acid, Lcarnitine, gelatin, glycerol, mate leaf extract, soybean oil, vit. E and soy lecithin. 22. AND PRICE TIERS - VALUE 23. GROWTH OF NUTRICOSMETICS IS DRIVEN BY CONSUMERS` MORE HOLISTIC APPROACH TO HEALTHHealth became key purchase driver across many categories and countries.Datamonitor reports that 76% of Europeans and US consumers is conscious of health and wellness issues on a daily basis.2006 Health & Food Study by Eurobarometer revealed that 43% of EU25 citizens pointed better hydration as the fourth most important behavioral change to their lifestyle and dietary habits.Consumers perceive health and beauty as inter-related. 24. AND AGING OF THE BABY BOOMERS GENERATION AS WELL AS A FEAR TOWARDS CLINICAL PROCEDURES 25. ADDITIONALLY, OBP, AS A COMPLIMENTARY CATEGORY, CAPITALIZES UPON COSMECEUTICALS MARKET GROWTH Total cosmeceuticals market value by country (USD$`mm) Cosmeceuticals market will grow in both Europe and US. France and Spain will be the two fastest growing, European markets.Source: Datamonitor 26. TO TARGET SPECIFIC CONSUMER NEEDS Why do you use cosmeceuticals?Over 56% of consumers use cosmeceuticals to target specific skincare problem.Source: Datamonitor, Europe and US, July 2005 27. RELATED TO TOOTH WHITENING, BODY CARE AND ANTI-AGINGPopularity of cosmeceuticals product categoriesSource: Datamonitor, Europe and US, July 2005 28. WITH FACIAL MOISTURIZERS AS THE BIGGEST CATEGORY BENEFITING FROM A NEED FOR LOOKING YOUNG AS LONG AS POSSIBLE Cosmeceuticals penetration of the European skincare market by product category Facial moisturizers will remain the biggest category with a solid growth. Although body care is the second smallest category it will experience the fastest growth. Source: Datamonitor 29. CURRENT PRODUCTS DO NOT FULLY MEET THE NEEDDissatisfaction from the current product offer creates a potential for new, more sophisticated and of higher efficacy products, such as nutricosmetics.Source: Datamonitor 30. WOMEN AGED 35-64 CONSTITUTE A KEY TARGET GROUP % of consumers who are willing to buy cosmeceuticalsWomen aged 35-64 are the most health and beauty-aware. Among all age groups they spend the most time on personal care and have the lowest satisfaction with their appearance. Women aged 25-34 is the extended target group. Source: Datamonitor, Europe and US, July 2005 31. THEY BUY AND USE OBPs AND COSMECEUTICALS BECAUSE PREVENTATIVE AND CORRECTIVE REASONSYOUNGER CONSUMERS (25-34)ELDER CONSUMERS (50+)PREVENTTARGETBODY CAREFACIAL CAREBODY CAREBody modelingDry skin hydrationBody modelingBody shapingAnti-wrinkleBody shapingCelluliteSkin discolorationCelluliteAcneFACIAL CARE Deep lines and wrinkles Skin discoloration Eye shadows 32. RESULTS VALIDATION IS KEY DRIVER TO WIN IN NUTRICOSMETICSClearly documented and independent scientific research findings should be publicized.Endorsement of the products by doctors to increase credibility behind offer and fight consumer skepticism.Endorsement of the products by celebrities to encourage trial/usage.Key claims featured on product literature and/or product packaging (clinical and consumer).Before and after shots should be used in communication to visualize the results.Consumer product testimonials. 33. INNOVATION IS ALSO CRITICAL FOR SUCCESSTrue novelty e.g. Imedeen Time Perfection contains a powerful antioxidantActive ingredients e.g. Lacto-lycopene in Inneov FermeteNew delivery systems e.g. Lipocap employed in Imedeen Tan Optimizer offers max encapsulation and protection of the active ingredients 34. BUT KEEP IT SIMPLE FOR CONSUMERSProducts should not require an extra step/effort.Why? Changing of a consumer habits too much of a hurdle. Fit in current behavior to gain interest. 35. NUTRICOSMETICS OFFER A GREAT OPPORTUNITY NOT ONLY FOR BEAUTY BUT ALSO FOOD, BEVERAGE AND SUPPLEMENT MANUFACTURERSMany consumers will prefer to buy ingestible products from nutrition brands rather than cosmetics ones.Thus, companies with established credibility in nutrition category could be successful.Good examples of that is Inneov and Danone Essensis and Activa.To succeed companies from different industries will merge their competences e.g. L`Oreal and Coca-Cola partnership to launch health&beauty beverage called Lumae (2008). 36. Thank you www.starbrandsagency.com 37. NUTRICOSMETICS PRODUCT INNOVATIONMedish tablets for oral health 38. NUTRICOSMETICS PRODUCT INNOVATIONShiseido Collagen Update 39. NUTRICOSMETICS PRODUCT INNOVATIONImedeen Skin Age Minimizer 40. NUTRICOSMETICS PRODUCT INNOVATIONDoctor. Gi Total Beauty Support 41. NUTRICOSMETICS PRODUCT INNOVATIONKyupurun drink for soft and supple skin 42. NUTRICOSMETICS PRODUCT INNOVATIONBelly Reducing Midnight Yoghurt 43. NUTRICOSMETICS PRODUCT INNOVATIONAsashi Collagen Water 44. NUTRICOSMETICS PRODUCT INNOVATIONAsashi Collagen Water 45. Back-ups