Ingredients industry heading for ‘full recovery’ in 2011 – 2012
“Looking forward, many in the industry believe the US and EU markets will experience a full recovery in 2011-2012,” said Gillian Morris, director of the chemicals and materials consulting division for the Kline Group.
“We believe that innovation will provide a stimulus to recovery, especially for the US market. This will benefit existing and potential suppliers of ingredients and technology to the personal care market,” she said.
It's been bad, but even worse for other industries
Ingredients and fine chemicals companies have been hard hit during the economic downturn, although those companies serving multiple industries have invariably discovered that their personal care operations have faired better than other industries.
However, with clear signs of recovery showing in recent financial results of both ingredients players and personal care finished goods businesses, visibility for future planning is looking better, a factor that is likely to see more companies willing to develop new products.
Morris particularly underlines the leave-on skin care segment, which she believes will be driven by players making new product launches in both the mass market and luxury categories.
Mass and luxury marketers taking different approaches
Morris points out that increased innovation is likely to be triggered by different reasons, with mass marketers focusing on trying to maintain brand loyalty and prevent customers trading back up to luxury brands, while luxury marketers will be trying to lure back customers that traded down to mass brands before or during the recession.
Likewise, natural cosmetics and personal care looks set to trigger further innovation which is likely to lead to an increase in the already significant pressure on ingredients players to develop more sustainable solutions.
“There is speculation that natural and/or sustainable personal care could be the next growth platform for the industry and the cornerstone on which the recovery will be built,” Morris said.
