Lipotec executive predicts cosmetics clean up

By Guy Montague-Jones

- Last updated on GMT

Related tags Cosmetics

Economic storms will clear the dead wood from an increasingly crowded active ingredients market, says Lipotec executive.

Roman Pérez, chief sales officer for the Spanish producer of cosmetic actives, said the market has become saturated in recent years and the recession in the EU and the US could deliver a clean up.

Actives market became saturated

Pérez told “In the last two to three years the personal care market has witnessed a saturation of materials promoted as actives while most of them were released by non-specialised and/or recently founded companies.

“It is my strong belief that it will be very hard for most of these recently launched products to remain on the market because, step by step, customers will evaluate very carefully the quality of what they are going to homologate as a new active.”

Personal care has traditionally held up well in recessions but recent financial results from leading manufacturers such as Beiersdorf, Estee Lauder and Elizabeth Arden have hinted, more or less strongly, at a slowdown in demand towards the tail end of 2008.

Quality suppliers are best placed

Pérez said that lower consumer demand may well filter through to the actives market but that high quality suppliers with strong brands were best placed to survive and thrive in a shrinking marketplace.

He said: “Mature markets like the EU and the US might show some signs of a slowdown in demand for certain actives. At the same time, I think it is now when high quality actives with strong brands are most likely to evolve positively.”

Lipotec is currently pursuing sales growth in overseas markets having opened subsidiaries abroad and signed distribution agreements in emerging markets over the past year. Most recently, the company opened a representative office in Singapore last week.

Pérez said the company was looking to exploit the growth potential of emerging cosmetic markets. Regarding the opening of the Singapore office, he said: “In order to be able to achieve significant growth figures in the region in the medium-long term, we were convinced that having a Lipotec qualified member operating from the region was more than necessary.”

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