Emergence Of Nutricosmetics, Cosmeceuticals And Nutraceuticals In The Australian Market

Preferences for Nutricosmetics, Cosmeceuticals and Nutraceuticals

It has been noted that over the few decades, the nutritional, personal care and pharmaceutical industries have all come together so as to address the growing demands in the wellness, health and beauty market. The coming together has culminated to the creation of new industrial segments such as Nutricosmetics, Cosmeceuticals and Nutraceuticals.

Fig 1: Emergence of new industry segments.

• Cosmeceuticals: topical cosmetic products that have medicinal or drug-like benefits (creams and fortified syrups).
• Nutricosmetics: supplementation of nutrients that are formulated for beauty care (both oral and topical).
• Nutraceuticals: products derived from food sources that provide extra health benefits, in addition to the basic nutritional value found in food (dietary supplements and functional food).

The three segments are majorly driven by the ever increasing awareness and the desire to have preventive measures, anti-aging products as well as the natural therapies. It is approximated that the annual growth of the new segments could hit between 4%-8%. Major regions where noticeable dominance has been recorded are Japan and China which account for about 90% of the world sales. USA on the other hand has been noted to dominate the Nutraceutical industry with approximately 45%.

The main aim of this paper was to analyze the emergence of the three segments in the Australian market using an end-user survey that had been conducted. Two different business intelligence analytic tools were employed to analyze the data. The two tools are;

• SAP Lumira
• Excel PowerPivot

Participants in the survey were asked on which of the product type they would be most interested in. Majority (40.8%, n = 147) of the respondents were most interested with Nutricosmetic products while Cosmeceuticals has the least proportion (26.4%, n = 95) of people who are most interested in it. 32.8% (n = 118) of the respondents were most interested in Nutraceutical products.

Table 1: product most interested in

Row Labels	Count of Product Type	Percent
Cosmeceuticals	95	26.4%
Nutraceuticals	118	32.8%
Nutricosmetics	147	40.8%
Grand Total	360	100.0%

Table 2: Preference of the products based on regions

Count of Product Type	Column Labels
Row Labels	Cosmeceuticals	Nutraceuticals	Nutricosmetics	Grand Total
New South Wales	12%	62%	27%	100%
Queensland	48%	7%	45%	100%
Western Australia	5%	47%	48%	100%
South Australia	37%	20%	43%	100%
Tasmania	28%	37%	35%	100%
Victoria	28%	25%	47%	100%
Grand Total	26%	33%	41%	100%

In New South Wales state, most respondents (62%, n = 37) from this state said to prefer Nutraceutical products. Cosmeceutical products was the least preferred (12%, n = 7) among the respondents from this state. 27% (n = 16) said to prefer Nutricosmetic products the most.

Unlike in New South Wales state, most respondents (48%, n = 29) from Queensland said to prefer Cosmeceutical products. Nutraceutical products was the least preferred (7%, n = 4) among the respondents from this state. 45% (n = 27) said to prefer Nutricosmetic products the most.

In the Western Australia state, most respondents (48%, n = 29) said to prefer Nutricosmetic products. Cosmeceutical products was the least preferred (5%, n = 3) among the respondents from this state. 48% (n = 28) said to prefer Nutraceutical products the most.

Preferences Based on Region, Gender, Age, and Income

Just like in Western Australia, most respondents (43%, n = 26) said to prefer Nutricosmetic products. Cosmeceutical products had the second highest proportion of people who prefer it most (37%) while Nutraceutical products had the least proportion of people who prefer it most (20%).

In Western Australia, most respondents (37%) said to prefer Nutraceutical products followed by 35% who said to prefer Nutricosmetic products most while 28% said to prefer Cosmeceutical products.

Just like in South Australia, most respondents (47%, n = 28) said to prefer Nutricosmetic products. Cosmeceutical products had the second highest proportion of people who prefer it most (28%) while Nutraceutical products had the least proportion of people who prefer it most (25%).

As can be seen in figure 1 below, there is no significant difference between male and females in terms of product preference. The preference proportion of the products is almost the same for both the groups (males and females).

Figure 1: Gender versus product type

Figure 2 below gives the product preference based on age band. As can be seen, majority of age bands preferred Nutricosmetic products. However, those aged between 40-50 as well as 60-70 majority of them said to prefer Nutraceutical products (39% and 55% respectively).

Figure 2: Age band versus product type

Respondents were asked to state the form in which they would prefer to consume the products. Results are given in the table below;

Table 3: Form most preferred to consume the product

Row Labels	Count of Form
beverage	117	32.5%
food	127	35.3%
pills	116	32.2%
Grand Total	360	100.0%

As can be seen, majority (35.3%, n = 127) would prefer to consume the products as food, 32.5% (n = 117) would prefer to consume it as beverage while the remaining 32.2% (n = 116) would prefer to consume it as pills.

Social media is the most preferred channel of contacting the consumers (41%, n = 147), followed by email (36%, n = 130) while post was the least preferred (23%, n = 83). It is important to note that the channel preference for both males and females was not significantly different.

Table 4: Channel preference

Count of Channel	Column Labels
Row Labels	F	M	Grand Total
Email	19%	17%	36%
Post	11%	12%	23%
Social Media	23%	18%	41%
Grand Total	53%	47%	100%

Majority (63.3%) of the respondents said to be willing to spend between 50-100 dollars on the products every month. 9.4% (n = 34) of the respondents are willing to spend more than 100 dollars while 27.2% (n = 98) are willing to spend less than 50 dollars a month.

Table 5: Amount in dollars respondents willing to spend in a month

Confidence and Recommendation Scores

Row Labels	Count of Monthly  ($)	Percent
<50	98	27.2%
50-100	228	63.3%
>100	34	9.4%
Grand Total	360	100.0%

Table 6 provides the income levels of the respondents versus the product preference. As can be seen, majority (41.6%) of those who earn less than $50,000 would prefer Nutracutical products the most. See table 6 for more results.

Table 6: Income level versus product preference

Count of Product Type	Column Labels
Row Labels	Cosmeceuticals	Nutraceuticals	Nutricosmetics	Grand Total
< 50,000	26.0%	41.6%	32.5%	100.0%
50,000-70,000	27.2%	31.1%	41.7%	100.0%
70,000-90,000	23.8%	29.4%	46.9%	100.0%
> 100,000	35.1%	32.4%	32.4%	100.0%
Grand Total	26.4%	32.8%	40.8%	100.0%

Even though Nutricosmetics was most preferred product among the respondents across all the states, the confidence scores received were still lower than the confidence scores given for Cosmeceutical which was the second among the most preferred products. Respondents were asked how confident they were of the results from using the products. They were required to rate between 1 and 5 with 1 representing least confident while 5 representing most confident.

Cosmeceutical products ranked highest in terms of the confidence scores followed by Nutricosmetics while Nutraceutical products came distant third. Of interest to note was that none of the products got a score of 4 and above.

Females rated the Cosmeceutical products and Nutraceutical products highly as compared to the male respondents who only gave a higher rating for Nutricosmetics.

Figure 3: Confidence rating of the product types by gender

Respondents were also asked to score on how confident they are to recommend the products to their friends. The scores were between 1 and 10 with 1 being least confident and 10 being most confident. The average scores were worrying. The average recommendation score for all the products was merely 5.39 out of 10. Cosmeceutical products had the highest recommendation score (5.6) while Nutraceuticals had the least score. In overall, female respondents had higher recommendation scores for all the products as compared to the male respondents. The average score for the males rating for all the products was on average lower than 5 while females rating was slightly above 6. In fact a Net Promoter Score (NPS) of  -45% was obtained which means that majority were detractors (62.78%) while promoters were only 17.78%.

Figure 4: Recommendation score rating of the product type by gender

Conclusion

This study sought to analyze the emergence of three new product segments (Cosmeceuticals,  Nutricosmetics and Nutraceuticals) in the Australian market using an end-user survey that had been conducted. Results showed that majority (40.8%) of the respondents interviewed would prefer Nutricosmetics the most while the cosmeceutical products had the least proportion (26.4%) in terms of preference from the customers. Nutraceutical products were most preferred in New South Wales and Tasmania, Cosmeceutical products were most preferred in Queensland while Nutricosmetic products were highly preferred in Western Australia, South Australia and Victoria. No major differences in terms of product preferences for the different sex groups

I this present times, where the new generation of people  are greatly concerned with their beauty as well as health and well-being a number of manufacturing companies have no otherwise to work extra hard to provide results that are convincing to meet the consumer needs.

Australia has not yet reached the level in which countries such as China, Japan and USA have reached in terms of the three segments studied in this paper. Australia is however on the right path towards adopting the new segments in the Australian market. However, for this to be achieved, a number of measures need to be looked. The following are the recommendations based on the study;

• The producers should focus more of their campaigns in the social media as it proved to be the most preferred channel of communication
• The management should work on building the confidence of the consumers, the confidence levels for the products are still very low
• The pricing of the products should be between 50 to 100 dollars
• The customer referral is a very important aspect of marketing a product. When a client calls a friend of theirs or a counterpart at another company and refers them to buy your goods or use your service, it reminds them why they like to do business with you. Results of this study revealed that the recommendation scores for the products is quite low, the management needs to find out why this is the case and attempt to see on areas of improvement. The management could possibly come up with a reward system for any referral made. This will see them reach many people as possible.
• The form in which consumers would like to consume the products is very important to note. It is advisable that the producers have a mix of the different forms of consumption. It is important to note that there was no significant difference in terms of the forms in which the customers would want to consume the products. It would therefore prudent to bring all the three forms of consumption into the market.
• As observed from analysis, majority of the women in the aged below 30 years old have more interest on Nutricosmetics and Cosmeceutical products as a sign of beauty care. The new companies coming up should bring in products that focus on them since they represent a significant population group in Australia.
• The confidence levels of the new products are still very low as seen from the analysis, any potential client intending to enter these new industry segments in Australia or even the existing ones should put more emphasis on their campaign of sensitizing the consumer about the new product segment about the benefits of the product and arraign any fears that may cause low confidence levels among the consumers.

References

Epstein , H., 2009. Cosmeceutical vehicles. Clinical Dermatol, 27(5), p. 453–60.

Kenneth , R., Feingold, M. D. & Debra , C., 2010. Elizabeth M. Zettersten, MD, Ruby Ghadially, MOptimal ratios of topical stratum corneum lipids improve barrier recovery in chronologically aged skin.

Zhou , C., Jin , Y. S. & Yeon , K. K., 2005. Heat Modulation of Tropoelastin, Fibrillin-1, and MatrixMetalloproteinase-12 in Human Skin. Volume 124, p. 70–78.