Exporting anti-ageing extracts to Europe

As the share of elderly people in populations across Europe continues to grow, so does the demand for anti-ageing cosmetics. This offers opportunities to producers of natural extracts with anti-aging properties, considering that younger-age consumers also use anti-aging products. Exporters to the European cosmetics market, however, need to prove that their extracts have anti-ageing properties. Cosmetic manufacturers are particularly interested in extracts that combine efficacy with traditional use.

1. Product description

Botanical extracts are produced with solvent extraction from a wide range of plant parts, including leaves, stems, bark, fruits and roots. This study focuses on those extracts that are used in cosmetics for their anti-ageing properties.

Anti-aging is a broad category which often overlaps with other cosmetic claims. It can be subdivided in specific anti-aging properties. Formulators use these to develop formulations which target specific signs of ageing or suitable for specific skin types related to age, area of application or skin colour.

There are various sources of new ingredients for anti-ageing extracts. For example, exotic ingredients such as Kigelia africana extract, which is traditionally used in cosmetics to firm and enhance skin tissue. Extracts with high antioxidant activities also continue to be very popular as anti-ageing extracts. Examples of such include fruit-based extracts such as açai and camu-camu from the Amazon rainforest, which benefit from a ‘superfruit’ status as ingredients in both cosmetics and food products. For a more extensive list of plant extracts known for their anti-ageing claims, check Rahn Cosmetics or Lipoid Kosmetik.

Anti-ageing properties include:

• skin brightening or lightening, reducing age spots
• skin cell renewal and skin stimulation
• skin plumping and filling expression lines
• filmforming, causing the illusion of a smoother skin while also trapping moisture
• The chemical composition of extracts determines if they can be used as anti-ageing extracts and what effects they will have. Most extracts commonly used as anti-ageing extracts have a high level of antioxidant activities.

Table 1: Classification for examples of anti-ageing extracts

Source: European Chemicals Agency, CosIng  

2. What makes Europe an interesting market for anti-ageing extracts?

Anti-ageing cosmetics remains fast growing segment

Anti-ageing remains one of the fastest-growing product categories within cosmetics. There are more than 2,500 anti-ageing agents listed on the ingredients database of in-cosmetics, the main global trade fair for cosmetic  ingredients. Other categories of ingredients listed on the in-cosmetics database, which can be used to achieve particular anti-ageing effects as well include:

• anti-inflammatories (2,418 ingredients)
• anti-wrinkle agents (1,008 ingredients) 
• conditioning agents (3,285 ingredients)
• moisturizing agents (3,930 ingredients)
• regenerating and revitalizing agents (1,057 ingredients)

The growth of the anti-ageing segment is likely to continue as European consumers give more attention to products that market effects such as feeling good and ‘looking radiant’. For example, Cosmetics Design Europe reported that a survey in the United States showed that women over 40 are concerned about their ageing look of their hands. These female consumers look out for products that may improve the appearance of their hands.

To fit this consumer demand, cosmetic brands are changing the way they market anti-ageing products into more positive language. For example, manufacturers market products which claim to ‘capture youth’, ‘preserve youth’, or which may help consumers to ‘age well’. Marketing materials use terms such as ‘beautiful ageing’, ‘radiant skin’, ‘rejuvenating’ and ‘returning skin to a balanced, healthy state’.

The ageing European population drives the demand for anti-ageing cosmetics, especially when combined with the perceived consumer demand for products that may help them feel and look healthy and young. Cosmetic brands are also including younger consumers in the marketing of their products, for example developing product lines for 20 or 30-year-olds. These are commonly marketed as preventing signs of ageing.

Innovation in anti-ageing products

Innovation is a key factor in cosmetics, especially in a competitive segment such as anti-ageing. At the same time, consumers and cosmetic producers look for ingredients that have been scientifically proven to be safe and effective. As anti-ageing products offer benefits that are highly important to users, both consumers and, therefore, buyers require strong proof of safety and efficacy.

Industry sources indicate that their performance extracts are either based on clinical studies or technical literature that provides solid grounds for making safety and efficacy claims. Documentation and stories around traditional use provide a good indication of efficacy but need to be backed up with efficacy testing.

Efficacy testing can be done at different levels, ranging from basic sample testing to clinical trials and in vitro testing. See the session on Market entry barriers for more information.

Anti-ageing extracts with a traditional use include extracts that were used to reduce blemishes, to firm skin or increase elasticity and to provide a smooth feeling of the skin. Traditional use can be the first step to determining if a specific extract is effective and interesting for further scientific testing. If it is well documented, you can also add it in your product documentation or as a basis for your marketing story.

Growing developing country supplies of extracts to Europe

Anti-ageing extracts are included in the trade data on botanical extracts. Only liquorice extract, used for its skin brightening and whitening properties has its own code in trade data (see HS codes under the section ‘product description’).

Volume of European imports of botanical extracts, excluding liquorice, opium and hops, grew by 11% from 2013 to 2017 (both in volume and value). In 2017, European imports amounted to 58,000 tonnes valued at € 803 million. Developing countries accounted for 27% of these imports in 2017.

The value of imports from developing countries showed the strongest growth over the last five years, at +18% annually, while volume grew by 7% annually. This means that, on average, the import price of extracts from developing countries is growing faster than that of extracts from European suppliers.

Figure 1 lists the leading European importers of botanical extracts from developing countries. These countries’ imports of botanical extracts from developing countries increased more than the European average in the 2013–2017 period. Demand from Italy and Lithuania grew strongest, by +30% and +26% annually from 2013 to 2017. However, imports from Lithuania could represent an anomaly in the data, as different data sources do not share this trend.

Germany, Italy and Spain are the main importers of botanical extracts, as these countries have strong processing industries. France by comparison imports a relatively small share of botanical extracts directly from developing countries (6% of its 2017 total), in spite of also having a strong processing industry. It is assumed, however, that a large portion of French imports of botanical extracts is destined for cosmetics.

Other European countries with current smaller import volumes of botanical extracts offer growing opportunities for developing country exporters as well. The countries with the strongest growth in the volume of botanical extract imports from developing countries include:

• Poland (+26% annually from 2013-2017)
• Belgium (+30%)
• Denmark (+56%)

Natural cosmetics market continues to grow

According to the Kline group, the natural cosmetics market amounted to $ 33 billion globally in 2015 (€ 29 billion). That figure is 13% of the total cosmetics market (Brands with a Conscience, Ind & Horlings, 2016). This market is predicted to grow to $ 50 billion (€ 44 billion) in 2019. Mordor Intelligence expects that natural products will experience the highest growth rate in anti-ageing skin care.

Industry sources indicate that there is a growing demand for all natural products that use natural processes and processing. For example, some extract producers are moving from solvent extraction to CO2 extraction. In this process, there is no trace left of the solvent used, which fits the natural trend even better. However, this depends on the type of solvent used. Water and other solvents are commonly known and their safety in use is well known. CO2 extraction is expensive and as such not common.

International cosmetic producers are taking up the trend for natural cosmetics. L’Oréal recently acquired a German natural cosmetics brand in its drive to increase market share in the natural cosmetics market.

3. Which requirements must anti-ageing extracts comply with to be allowed on the European market?

Requirements for cosmetic ingredients

You can only export your anti-ageing extracts to the European cosmetics market if you comply with the legal requirements for natural ingredients for cosmetics. These requirements include:

• relevant European cosmetics legislation (Regulation (EC) 1223/2009), which includes criteria for the substantiation of claims;
• well-structured product and company documentation to supply to your buyers;
• Registration, Evaluation and Authorisation of Chemicals (REACH). This does not directly affect exporters, as European companies need to ensure their ingredients comply with REACH. However, for new and unusual ingredients, importers will need safety data. They will also use this to determine if REACH applies or not. Exporters can also create a European entity to register ingredients under REACH on their behalf;
• Classification, Labelling and Packaging of chemicals (CLP). You can also discuss this requirement with the freight forwarder or transport company, who will usually be happy to advise you.

Access and Benefit-Sharing (ABS) and Convention on International Trade in Endangered Species of wild fauna and flora (CITES)

You also need to comply with requirements derived from international treaties on using and trading plant resources.

The Nagoya Protocol provides guidelines for accessing and utilising genetic resources and traditional knowledge and the fair and equitable sharing of the benefits, called Access and Benefit-Sharing (ABS). European companies are legally required to ensure that the ABS legislation, where the activities fall within scope of the legislation, has been followed in the country of origin and downstream to their business.

You also need to comply with requirements on trading plant resources as agreed internationally under CITES. CITES aims to protect endangered plants and plant products by regulating their trade. It provides a list of plant species that you cannot export or import, where export and import are restricted and where you’ll need export and import trade permits.

The European Union has translated guidelines on ABS and CITES into European law. Most likely, these are also part of your national law.

Additional buyer requirements

Many European buyers have additional requirements that can go beyond legislation and standards. These elements are established in buyer specifications and include the following requirements:

• Deliver a good and reliable level of quality by following basic practices such as Hazard Analysis and Critical Control Points, or Good Manufacturing Practices of the European Federation for Cosmetic Ingredients if you want to do more;
• Make sure you are a sustainable supplier, in order to guarantee the future availability of your ingredients. Avoid overharvesting of wild plants, provide living wages to your collectors and ensure that you can deliver stable quality and quantities of extracts. Certification of these sustainable practices is only a requirement for niche markets;
• Show good Corporate Social Responsibility (CSR) practices such as developing a code of conduct and improving your performance in key areas (for example, banning child labour and limiting damage to the environment).

Voluntary standards and certifications

Standards for cosmetic ingredients include:

• Natural cosmetics: the largest and most important niche market — NaTrue and Cosmos;
• Organic cosmetics: Soil Association (the United Kingdom) and Ecocert (France) also certify according to the Cosmos standard for natural and organic cosmetics. BDiH (Germany) also has its own standard;
• You can also use the ISO 16128 standard part I and part II as an alternative minimum self-certifiable standard for natural and organic cosmetic ingredients and products. This is especially interesting for smaller producers, if certification according to a private standard is too expensive or not required;
• Fair production: a small niche market in terms of certified cosmetic ingredients — Fairtrade and FairWild (for wild-collected ingredients).

Quality requirements

In Europe, anti-ageing extracts must be pure and without additives in order to be of optimum quality. Moreover, standardisation is increasingly important. This procedure refers to the situation when the content of the active components with anti-ageing properties is standardised.

In most cases, cosmetics buyers prefer odourless and colourless extracts in liquid or spray-dried form. Anti-ageing extracts must effectively combat the signs of ageing. Scent results are better achieved by applying specific fragrance ingredients.

Labelling and documentation requirements

You need to comply with the following European requirements when labelling your anti-ageing extracts:

• Set up a registration system to identify and trace individual batches of your anti-ageing extracts, whether they are blends or not, and mark them accordingly to ensure traceability.
• Label your products in English, unless your buyer wants you to use a different language.

Your labels must include:

• product name and International Nomenclature Cosmetic Ingredient (INCI) name
• batch code
• place of origin
• name and address of exporter
• date of manufacture
• best-before date
• net weight
• recommended storage conditions

For organic extracts, include the name and code of the inspection body and the certification number.

You also need to provide your buyer with the following documentation:

• Technical Data Sheet (TDS) — check this example of green tea extract)
• certificates of analysis, to support the claims in your product specifications — check this example of pomegranate extract powder
• Safety Data Sheet (SDS)
• Genetically Modified Organism (GMO) certificate, if requested
• certificate of origin
• product information sheet
• 100% composition of the extract

Some anti-ageing extracts can be classified as hazardous, such as liquorice extract. For these extracts, you need to include relevant hazard symbols (see Figure 2) in order to indicate that the extract is hazardous to the environment, flammable or harmful. You also need to include relevant risk and safety phrases, depending on the precise classification of your extract.

Figure 2: Hazard labels for extracts

Packaging requirements for anti-ageing extracts

Packaging requirements differ per buyer and per extract. However, there are some general requirements that you have to take into account in order to preserve the quality of the product. See the tips below.

4. What competition do I face on the European market for anti-ageing extracts?

Market entry barriers

Barriers to enter the market come from volume requirements, processing and supply chain management, accessing importers and providing efficacy data.

It may be difficult to enter established and competitive markets. For example, if you want to sell squalene, liquorice and green tea extract you need to make sure your products are competitively priced.

Markets for new extracts will be small initially, as it takes time to develop these markets. You need to make sure that you have a variety of good selling products in your company portfolio to reduce risks and avoid dependency on one or two products. Otherwise it is unlikely that your company can be viable.

Processing and supply chain management

Processing can also be a market entry barrier, especially for extracts. You may need to make significant investments in extraction installations, depending on the raw material you use and the wishes of your buyers. You will also need specific technical expertise to ensure good, standardised product quality and product safety. For example, different solvents and extraction times can lead to variations in extract compositions.

You need to determine which extraction methods result in a product with good and stable quality, while you also need to find out what your buyer expects from you. This information will help to determine which investments and expertise you need.

You need to show good practices in terms of the supply chain:

• processing and safety
• handling of raw materials and extracts
• availability
• traceability

You need to document these processes in order to show your buyers how you manage risks on all of the above points. Ideally, you would certify some of these processes.

According to industry sources, balancing supply and demand can be a barrier for performance extracts, such as anti-ageing extracts. For these products, development and formulation processes take a long time, while you need to plan thoroughly as supplies are often seasonal. Therefore, be aware that when you start to develop a new anti-ageing extract, it can be difficult to avoid under or over supply.

Efficacy data

Anti-ageing extracts require thorough testing to proof an anti-ageing effect. Formulators will require you to provide evidence of an ingredient’s efficacy, although they do not always require you to supply full efficacy data, which can be difficult and expensive to provide. You need to show the results of efficacy tests in your marketing campaign. Testing covers two main steps:

1. Testing the efficacy in terms of the suggested effect before and after treatment. For example, often in the case of anti-wrinkle effects, the length and depth of wrinkles are observed.
2. Assessing the overall cosmetic quality and efficacy of the product by participants in the study. 

High marketing costs

If you produce new extracts, you will encounter high marketing costs.

You will need to build trust and partnerships with your potential buyers, which can be a long process.

Product competition

Cosmetics manufacturers are not keen to change ingredients in existing formulations. They would have high costs of reformulating and testing the product and creating new Product Information Files. As anti-ageing extracts are often key ingredients in a product’s formulation and story, manufacturers frequently invest large sums in product development and marketing. When it comes to new products, manufacturers will change the ingredients more readily if they have not already heavily marketed the original ingredient in a product line.

Anti-ageing extracts face competition from a wide range of ingredients. These ingredients include:

• Synthetic alternatives — These are the main sources of product competition. Several well-established ingredients with proven low effectiveness are on the market. They have been standardised for easy application in different types of formulations. Some of these alternatives are cheap because there is strong competition, for example, from China. Examples include silicones, peptides, collagen, coenzyme Q10, synthetic alpha-hydroxy acids, kinetin and synthetic vitamin E.
• High-tech biotechnology ingredients based on microorganisms and plant stem cells.
• Plant-based squalene — Olives provide the largest source, but squalene from wheat germs, rice bran and amaranth seeds is also on the market.
• Natural extracts such as tea and grape seed extracts — These two are important competitors due to the scale of production. Tea is cultivated on a large scale in Asia and East Africa and grape seeds are waste products of the substantial grape juice and wine production in countries such as France, Italy, Spain and South Africa.

You have several options to stand out from the competition with your anti-ageing extract, such as:

• developing an extract with popular properties related to relevant market trends;
• developing extracts with a strong, documented efficacy based on a standardised extract;
• developing interesting marketing stories based on the extract’s origin and marketing appeal;
• certifying your extracts, especially organic;
• excelling in Corporate Social Responsibility (CSR) — buyers expect you to have basic CSR strategies in place and will not pay more if you excel and need to justify a higher price;
• improving access to resources and resource use sustainability;
• producing an extract at competitive prices.

You can also stand out from the competition by developing proprietary extracts: extracts that are protected by intellectual property rights. Provided that your extract proves to be safe at the recommended levels of use in a end-product, it becomes more attractive to cosmetics manufacturers as you progress further along the efficacy chain, which covers the following steps:

1. analysis of theory
2. standardisation of the extract to ensure consistent results
3. chemical analysis of the extract and its components
4. testing for safety and efficacy of the extract
5. testing extract in cosmetic formulations

Significant financial investment in extensive research is however necessary to develop proprietary extracts for specific anti-ageing properties.

Table 2: Example of product substitution for anti-ageing ingredients

Source: Andrew Jones, CBI sector expert Natural Ingredients for Cosmetics, Fair Venture

Company competition

Unless you develop a new ingredient, other suppliers can deliver the same product as you. To differentiate your anti-ageing extracts from rivals on the market, you need to find your unique selling point. You can find more information on the section Product competition above.

You also need to build your company reputation to stand out from your rivals. Industry stakeholders indicate that companies increasingly use their reputation to stand out from the competition, instead of focusing on the individual products they produce. Having a strong company reputation based on trust may make it easier to stand out from the competition and will improve your negotiation position.

European companies are strong competitors for your natural extracts. In 2017, European countries accounted for 63% of the total natural extract supplies to the European market. European competitors use their technical expertise and close contacts with cosmetics buyers to produce high-quality, innovative and often proprietary natural extracts that closely match customer expectations. In general, while the number of serious competitors in the area of natural extracts is limited, their quality and professionalism is high.

Developing countries supplied almost 16,000 tonnes of extracts to the European market in 2017. The main suppliers from developing countries are China, Mexico, Brazil and India. Together, they accounted for 74% of the supply volume from developing countries to the European natural extracts market in 2017.

China, the leading supplier of natural extracts to European countries at 14% of the total import value, can be a tough competitor in this market. France, the United States and Germany trail China, which produces a wide range of botanical extracts, including from species that have been introduced to China and are also grown in other developing countries. The leader China also imports raw materials from countries in Asia and Africa to process into extracts and can compete with extractors from those countries.

Because extracts are produced in a wide range of growing conditions, supplies of extracts from developing countries are very fragmented. Some cultivated species grow exceptionally well in certain climates, while others only occur in the wild within specific regions. Various extracts benefit from the availability of skilled or cheap labour in specific areas, such as the extraction industry in India. This industry processes a wide range of plant materials from neighbouring countries.

Commonly used anti-ageing extracts include green tea from Asia and East Africa and grape seed extracts, for example from Southern Europe and South Africa, which are cultivated on a large scale. Additionally, extracts that have high levels of antioxidants, such as pomegranate and rosemary, are commonly used in anti-ageing cosmetics.

5. Through which channels can you get anti-ageing extracts on the European market?

Which market segments to target?

In order to determine which market segment you should target with your anti-ageing extracts, you need to answer the following questions.

1. What does your extract do? 

You need to determine what are the anti-ageing properties of your extract. You can use the chemical composition of your extract as a basis for these properties, but you will often need more proof. For many extracts, you can find existing information on databases such as CosIng, describing their various properties and uses, including:

• antioxidant
• film forming
• smoothing
• skin protecting

In addition, extracts with conditioning properties are also used as anti-ageing extracts. These properties include skin conditioning, soothing, humectant and moisturising.

Cosmetic manufacturers use various ways to market anti-ageing ingredients of products, including describing their properties as being able to:

• Restore the appearance of the skin or radiance
• Line correcting
• Help skin tone and firmness
• Calm the skin
• Restore and soften the skin
• Smooth wrinkles
• Form a protective barrier to prevent further skin damage

Make sure that you support your product with relevant efficacy and safety data to prove these properties, either from your own research or by referring to publicly available data.

2. For which industry segment is your extract useful?

Anti-ageing extracts are mostly used in leave-on cosmetics products, especially in skin care products. Skin care products that contain anti-ageing extracts include face cream, body lotions and aftershave cream.

In these products, anti-ageing ingredients are most effective. Moreover, consumers tend to be more willing to pay a higher price for skin care products. This means that the relatively high prices of truly effective anti-ageing extracts are less of an issue.

In determining the relevant industry segment for your extract, you need to segment this category further. Determine if your extract is useful in products such as serums, eye creams, night cream, face mask, hand cream, or specific anti-wrinkle creams.

Cosmetic brands also segment anti-ageing products based on age. For example, L’Oréal markets specific products for 20+ (anti-imperfections), 30+ (anti-fine lines) and 40+ (anti-ageing).

Other ways to segment anti-ageing products are based on skin type, such as dry or oily skin.

Anti-ageing extracts only find limited use in hair care and toiletries. They are not used in fragrance and decorative cosmetics.

3. What kind of market player would be interested in your extract? 

The strongest demand for natural anti-ageing ingredients comes from the natural cosmetics sector. Conventional cosmetics producers will rarely consider natural extracts to introduce this property in their products, as there are cheaper, highly effective synthetic options available on the market. Even natural cosmetics manufacturers might choose synthetic options.

If you can ensure stable quantities and quality, large cosmetic brands offer good opportunities. High-end cosmetics manufacturers may use highly technical extracts that may have a natural origin, but this origin is not used in the product’s marketing. 

4. What is your product’s unique selling point? 

The unique selling point of your anti-ageing extract can be based on its marketing appeal or its performance. You need to find out how your product stands out from the competition. What makes it different or special? For example:

• Does your extract include compounds that have been proven to have smoothing or skin brightening properties? Does it have high levels of antioxidant activities?
• Can you offer a highly effective extract based on efficacy data?
• Do you offer an extract with an interesting marketing story? Is it traditionally used in beauty rituals to age well?

Through which market channels can you get anti-ageing extracts on the European market?

Anti-ageing extracts are produced both in developing countries and in Europe. The optimum production location depends on the origin of the plant materials, their shelf life and vulnerability, the complexity of the extraction process and the costs of processing and transporting the product to the market.

Plant extracts are often processed further before they are effective in cosmetic products for skin brightening, stimulation, smoothing, renewal or any other anti-ageing benefit. These processes include isolation of active principles or chemical processing. For example, the compound glabridin is isolated from liquorice extract for its skin brightening effects.

European distributors are your most important entry point into the market. They will supply the extract to processors or directly to cosmetic manufacturers for certain products. Cosmetic manufacturers commonly use relatively low volumes of extracts and prefer to purchase from reputable distributors that can reduce risks. Moreover, distributors or agents can help you create demand for new extracts.

It is very rare for small exporters from developing countries to supply European processors and manufacturers directly. It can be difficult for small exporters to provide sufficient volumes and quality at short delivery times. Moreover, processors and manufacturers commonly do not want to buy ingredients from a high number of suppliers.

Whether you can process raw materials yourself or should work with an extraction company nearby or in Europe depends on:

• the origin of the raw plant materials;
• the shelf life and vulnerability of the raw materials;
• the complexity of the extraction process;
• the processing costs and the identification of the quality requirements for your chosen customer, depending on their position in the value chain;
• the transport costs to export the product to Europe.

If you want to develop proprietary extracts, you need to work on joint product development with distributors or processors of ingredients in Europe. These companies know the market, the buyer requirements and the decision makers within their client companies.

6. What are the end-market prices?

Prices for anti-ageing extracts depend on:

• properties, efficacy and proof thereof — an extract with popular or special properties and proven efficacy could sell for a higher price;
• intellectual property – the further you progress in the so-called efficacy chain, the more valuable your product becomes (see the section Product competition for more specific information);
• raw material prices and processing costs — these costs can increase prices, for example, considering energy inputs, yields, equipment and process management costs;
• exclusivity and novelty versus availability — popular extracts with a limited availability can sell for a higher price; 
• certification — certified extracts could sell for a higher price, as long as you are able to find customers willing to pay for the certificate.

Industry sources identified a price range of € 15 per kg for widely available, mass-produced extracts.

The active ingredient squalene, for example, produced from rice bran, wheat germ or olives, is priced at € 55–€ 70, depending on the volume offered. At the top of the price range, prices can rise to hundreds of euros for specialised extracts and even higher prices for isolated active ingredients. Of course, such extracts are used in low levels in finished products.

In general, natural extracts are more expensive to produce and are offered at higher prices than synthetic anti-ageing ingredients. For example, when used for their anti-ageing properties, natural vitamin E antioxidants cost € 80 ($ 90) per kg, whereas their synthetic counterparts are priced at around € 27 ($ 30) per kg.

Quality also affects price, but it is a subjective factor. You need to comply with legal requirements as a minimum quality standard. Beyond that aspect, your buyers will decide how they define high quality, for example, in terms of the composition or properties they are looking for. You need to find a buyer who values what you can offer and who is willing to pay more than other importers.

Please review our market information disclaimer.