Functional Cosmetics Market by Functionality (Conditioning Agents, UV Filters, Anti-Ageing Agents Skin-Lightening Agents), Application (Skin Care, Hair Care), and Region(Europe, Asia Pacific, North America) - Global Forecast to 2028
In terms of value, the functional cosmetics market is estimated to grow from USD 3.3 billion in 2022 to USD 4.6 billion by 2028, at a CAGR of 5.4%. The market is triggered by population growth across the globe and rising demand for cosmetics. The increasing concerns about aging skin and the need for an even skin tone are contributing to the high use of functional cosmetics. Temperature variations and rising heat levels are influencing the demand growth of sun care functional cosmetic products. BASF SE (Germany), Nouryon (Netherlands), Ashland Inc. (US), Clariant AG (Germany), Evonik Industries AG (Germany), are the major service providers of functional cosmetics. These players mainly focus on expansion and new product launches to increase their geographic reach , garner new projects, strengthen their product and service portfolio and cater to the untapped markets.
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Market Dynamics
Driver: Accelerating demand for anti-aging, skin-whitening, and sun protection products
On average, 65% of the population falls under the age group of 16-64 years worldwide, according to the Population Reference Bureau (PRB) statistics 2022. There is a trend of using anti-aging products due to environmental effects and the desire to get youthful skin. Thus, increasing awareness of cosmetics and the desire to look younger are boosting the demand for anti-aging products across the globe. The desire for even toned and light-colored skin is the major factor driving the demand for skin whitening/lightening products. Organic products are gaining importance in North America, Europe, and majorly in Asia Pacific, with India, China, and Japan leading the market. The rising standard of living of the middle-class population, strong economic growth, and increased per capita spending on organic beauty products are the key parameters, increasing the global demand for these products.
Restraints: Consumer skepticism
Consumer skepticism is a psychological phenomenon in which customers question the reliability, authenticity, or dependability of marketing promises, products, or services. In a functional cosmetics market, diverse items and services are tailored to meet certain consumer requirements and desires. Competition, innovation, and a steady flow of information characterize these markets. However, the quantity of options and information can also lead to customer misunderstanding and skepticism. This skepticism can be attributed to a variety of variables, including previous experiences, information overload, and the influence of social networks.
Opportunities: Personalization and Customization
Some functional cosmetic brands allow customers to select the specific ingredients that they want to include in their products. Some functional cosmetic brands offer products that are custom blended for the individual customer. This is done by combining different ingredients in specific ratios to create a product that is tailored to the customer's specific needs.
Challenges: High product cost
Functional cosmetics often require more marketing than traditional cosmetics. This is because companies need to educate consumers about the benefits of functional cosmetics and to convince them to pay a premium for these products. The cost of marketing can also be a significant factor in the overall cost of a functional cosmetic product. All these factors conclude that the increasing demand for natural and organic products drives the functional cosmetics market. All these factors conclude that the high product cost is challenges to the functional cosmetics market.
Functional Cosmetics Market Ecosystem
The functional cosmetics ecosystem includes companies manufacturing functional cosmetics, such as BASF SE, Nouryon, Evonik Industries AG, Clariant AG, Ashland Inc., Stepan Company, Gattefosse, Lucas Meyer Cosmetics, Croda International Plc, and Air Liquide S.A.
Based on functionality , conditioning agents was the largest segment for functional cosmetics market, in terms of value, in 2022.
The functional cosmetics market is classified into conditioning agents, UV filters, anti-aging agents, skin-lightening agents, and others based on functionality. The others category includes cleansing agents, soothing agents, self-tanning agents, anti-acne, anti-oxidants, and emollients. The conditioning agent segment accounted for the maximum share of the market in 2022. The low cost and benefits of conditioning agents make them more suitable for skin care and hair care products. The high per capita spending and increased consumer inclination to use cosmetic products in their day-to-day life is driving the demand for cosmetics products. Asia Pacific is projected to witness the highest CAGR between 2023 and 2028, mainly due to the rising population in the region.
Based on application, skin care was the largest segment for functional cosmetics market, in terms of value, in 2022.
Functional cosmetics are used in skin care and hair care products to deliver the proposed benefits. The skin care application accounted for the larger market share in terms of value, of the global functional cosmetics market in 2022. It is estimated to have high demand due to growing aspirations to have younger skin and even skin tone, and aging population growth. The increasing impact of global warming, with a rise in excess heat levels, is surging the demand for sun protection and moisturizing agents.
“Europe accounted for the largest market share for functional cosmetics market, in terms of value, in 2022”
The European personal care industry has already started focusing on VOC-free, alkyl phenyl ethoxylates (APE)-free, and easily biodegradable eco-friendly surfactant products using renewable raw materials. The trend toward natural products is estimated to continue during the forecast period to keep up with the environmental regulations for manufacturers. The presence of major premium personal care products & cosmetics manufacturers in the region, such as L'Oréal (France), Beiersdorf (Germany), and Clarins (France), is another factor driving the demand for functional cosmetics. The demand for premium skin care products, cosmetics, and perfumes is rising in European countries. This has led to increased production, thereby driving the functional cosmetics market.
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Key Market Players
The key players profiled in the report include BASF SE (Germany), Nouryon (Netherlands), Ashland Inc. (US), Clariant AG (Germany), Evonik Industries AG (Germany), Gattefosse (France), Stepan Company (US), Lucas Meyer Cosmetics (Canada), Croda International Plc (UK), and Air Liquide S.A. (France), among others, these are the key manufacturers that secured major market share in the last few years.
Please visit 360Quadrants to see the vendor listing of Top 20 Personal Care Ingredients Companies, Worldwide 2023
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Report Metric |
Details |
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Years considered for the study |
2017–2028 |
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Base year considered
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2022 |
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Forecast period |
2023–2028 |
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Units considered |
Value (USD Million/Billion) |
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Segments covered |
Functionality, Application, and Region |
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Regions covered |
Asia Pacific, North America, Europe, Middle East & Africa, and Central & South America |
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Companies profiled |
The key players profiled in the report include BASF SE (Germany), Nouryon (Netherlands), Ashland Inc. (US), Clariant AG (Germany), Evonik Industries AG (Germany), Gattefosse (France), Stepan Company (US), Lucas Meyer Cosmetics (Canada), Croda International Plc (UK), and Air Liquide S.A. (France) among others. |
This report categorizes the global functional cosmetics market based on functionality, application and region.
On the basis of functionality, the Functional cosmetics market has been segmented as follows:
- Conditioning Agents
- UV Filters
- Anti-Ageing Agents
- Skin-Lightening Agents
- Others
On the basis of Application , the Functional cosmetics market has been segmented as follows:
- Skin Care
- Hair Care
On the basis of region, the Functional cosmetics market has been segmented as follows:
- Asia Pacific
- North America
- Europe
- Middle East & Arica
- Central & South America
Recent Developments
- In April 2022, Nouryon introduced a natural polymer for sunscreen formulation. SolAmaze Natural is compatible with organic and synthetic sunscreen formulations. The product is bio-based and biodegradable.
- In October 2021, Evonik acquired Botanica to expand its active cosmetic ingredients market. It will enhance its entire product portfolio by opening new markets, accelerating growth, and creating significant value.
- In August 2021, Clariant AG acquired the remaining 70% of Brazilian personal care specialty company Beraca and took over full control. This acquisition will strengthen its functional cosmetics business, assuming full operational ownership of Beraca's broad portfolio of natural ingredients.
- In June 2021, Evonik Industries AG boosted its nutrition & care segment’s portfolio with the acquisition of the cosmetic delivery company Infinitec Activos. It will help company to provide best customer services.
- In August 2020, BASF SE has announced the launch of a new functional cosmetic product Lamesoft. It is a naturally derived and biodegradable product. It can be used to stabilize products in skin and hair cleansing formulas. It can be used to stabilize surfactant-based and wax-based opacifiers.
Frequently Asked Questions (FAQ):
Which are the major players in Functional cosmetics market?
The key players profiled in the report include BASF SE (Germany), Nouryon (Netherlands), Ashland Inc. (US), Clariant AG (Germany), Evonik Industries AG (Germany), Gattefosse (France), Stepan Company (US), Lucas Meyer Cosmetics (Canada), Croda International Plc (UK), and Air Liquide S.A. (France).
Who are the top 5 players in the market?
BASF SE (Germany), Nouryon (Netherlands), Ashland Inc. (US), Clariant AG (Germany), Evonik Industries AG (Germany)are the major service providers of functional cosmetics market.
What are the drives and opportunities for the functional cosmetics market?
The market is triggered by population growth across the globe and rising demand for cosmetics. The increasing concerns about aging skin and the need for an even skin tone are contributing to the high use of functional cosmetics. Temperature variations and rising heat levels are influencing the demand growth of sun care functional cosmetic products.
What are the various strategies key players are focusing within Functional cosmetics market?
New acquisitions, expansion and partnership are some of the strategies atoped by key players to expand their global presence.
What are the major factors restraining Functional cosmetics market growth during the forecast period?
The major factor restraining the growth of the functional cosmetics market is the high cost associated with shifting to products from natural or organic origin. The higher feedstock cost is pulling back the ingredient manufacturers to choose organic-based products in the cosmetic formulation. Consumers' preference for natural/organic cosmetic products to synthetic cosmetics is further restraining the functional cosmetics market. .
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11 COMPANY PROFILES (Page No. - 144)
The study involved four major activities in estimating the market size for functional cosmetics. Exhaustive secondary research was done to collect information on the market, the peer market, and the parent market. The next step was to validate these findings, assumptions, and sizing with industry experts across the value chain through primary research. Both top-down and bottom-up approaches were employed to estimate the complete market size. Post that, the market breakdown and data triangulation procedures were used to estimate the market size of the segments and subsegments.
Secondary Research
Secondary sources used in this study included annual reports, press releases, and investor presentations of companies; white papers; certified publications; articles from recognized authors; and gold standard & silver standard websites such as Factiva, ICIS, Bloomberg, and others. The findings of this study were verified through primary research by conducting extensive interviews with key officials such as CEOs, VPs, directors, and other executives. The breakdown of profiles of the primary interviewees is illustrated in the figure below:
Primary Research
The Functional cosmetics market comprises several stakeholders, such as raw material suppliers, end-product manufacturers, and regulatory organizations in the supply chain. The demand side of this market is characterized by the automotive, medical, electronics, and others. The supply side is characterized by advancements in technology and diverse application industries. Various primary sources from both the supply and demand sides of the market were interviewed to obtain qualitative and quantitative information.
Breakdown of Primary Participants
Note: Tier 1, Tier 2, and Tier 3 companies are classified based on their market revenue in 2022 available in the public domain, product portfolios, and geographical presence.
Other designations include consultants and sales, marketing, and procurement managers.
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COMPANY NAME |
DESIGNATION |
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BASF SE |
Director of Marketing |
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Nouryon |
Manager- Sales & Marketing |
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Evonik Industries AG |
Sales Manager |
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Clariant AG |
Production Manager |
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Ashland Inc. |
Sales Manager |
Market Size Estimation
Both top-down and bottom-up approaches were used to estimate and validate the total size of the Functional cosmetics market. These methods were also used extensively to estimate the size of various subsegments in the market. The research methodology used to estimate the market size includes the following:
- The key players in the industry have been identified through extensive secondary research.
- The supply chain of the industry has been determined through primary and secondary research.
- All percentage shares, splits, and breakdowns have been determined using secondary sources and verified through primary sources.
- All possible parameters that affect the markets covered in this research study have been accounted for, viewed in extensive detail, verified through primary research, and analyzed to obtain the final quantitative and qualitative data.
Functional Cosmetics Market: Bottom-Up Approach
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Functional Cosmetics Market: Top-Down Approach
Data Triangulation
After arriving at the overall market size—using the market size estimation processes as explained above—the market was split into several segments and subsegments. To complete the overall market engineering process and arrive at the exact statistics of each market segment and subsegment, the data triangulation, and market breakdown procedures were employed, wherever applicable. The data was triangulated by studying various factors and trends from both the demand and supply sides in the functional cosmetics industry.
Market Definition
According to BIORIUS, functional cosmetics are cosmetic ingredients that help whiten the skin, decrease wrinkles, protect from ultraviolet (UV) rays, change hair color, remove hair or nourish hair, and correct dryness, cracking, or peeling skin.
Key Stakeholders
- Functional cosmetics manufacturers
- Functional cosmetics distributors
- Functional cosmetics suppliers
- Government and research organizations
- Investment banks and private equity firms Venture capital firms
- Wastewater treatment equipment manufacturers, dealers, and suppliers
- Water testing and packaging vendors
Report Objectives
- To define, describe, and forecast the functional cosmetics market in terms of value
- To provide detailed information regarding the drivers, opportunities, restraints, and challenges influencing market growth
- To estimate and forecast the market size by functionality, application, and region
- To forecast the size of the market for five main regions: Europe, North America, Asia Pacific, Central South America, and the Middle East & Africa, along with their key countries
- To strategically analyze micromarkets1 with respect to their growth trends, prospects, and contribution to the overall market
- To analyze opportunities in the market for stakeholders and provide a competitive landscape for market leaders
- To analyze competitive developments, such as deals and expansions, in the market
- To analyze the impact of the recession on the market
- To strategically profile key players and comprehensively analyze their growth strategies
Available Customizations
Along with the given market data, MarketsandMarkets offers customizations according to the company’s specific needs. The following customization options are available for the report:
Regional Analysis
- Further breakdown of a region with respect to a particular country or additional application type
Company Information
- Detailed analysis and profiles of additional market players (up to five)
Generating Response ...
Growth opportunities and latent adjacency in Functional Cosmetics Market