Top 10 Functional Cosmetics Companies, Worldwide 2024

The Functional Cosmetics Companies Quadrant is a comprehensive industry analysis that provides valuable insights into the global market for Functional Cosmetics. This quadrant offers a detailed evaluation of key market players, technological advancements, product innovations, and emerging trends shaping the industry. MarketsandMarkets 360 Quadrants evaluated over 60 companies of which the Top 10 Functional Cosmetics Companies were categorized and recognized as the quadrant leaders.

Functional Cosmetics are active cosmetic ingredients that help whiten the skin, decrease wrinkles, protect from Ultraviolet (UV) rays, change hair color, nourish hair, correct dryness, cracking or peeling skin. Based on functionality, It includes active ingredients such as anti-ageing agents, UV agents, anti-acne agents, exfoliators, and conditioning agents.

The 360 Quadrant maps the Functional Cosmetics Companies based on criteria such as revenue, geographic presence, growth strategies, investments, and sales strategies for the market presence of the Functional Cosmetics’ quadrant. While the top criteria for product footprint evaluation included Functionality (Conditioning Agents, UV Filters, Anti-Ageing Agents, Skin Lightening Agents, Others), Application (Skin Care, Hair Care).

Key trends highlighted in 360 Quadrant’s study include:

• The functional cosmetics market is projected to experience a value growth, increasing from USD 3.3 billion in 2022 to USD 4.6 billion by 2028, with a CAGR of 5.4%. This growth is driven by global population expansion and a heightened demand for cosmetics. The rising awareness regarding aging skin concerns and the desire for an even skin tone are significant factors contributing to the widespread use of functional cosmetics. Additionally, fluctuating temperatures and increasing heat levels are influencing the rising demand for sun care functional cosmetic products.
• The functional cosmetics market is highly competitive, and the functional cosmetics companies are constantly trying to capture higher market shares. BASF, Nouryon, Evonik, Clariant, and Ashland have been identified as the top functional cosmetics companies, together capturing nearly 40% market share.
• Another prominent reason supporting the rapid growth of the functional cosmetics companies is the increasing demand for men's grooming products is also a significant driver for functional cosmetics, as the male population seeks products tailored to their specific skin needs, typically characterized by oily skin requiring adequate moisture.
• The functional cosmetics market is categorized by application into skin care and hair care, with the skin care segment taking the lead. This dominance is primarily attributed to the rising consumer awareness about the benefits of anti-aging agents, skin-lightening agents, and sunscreens. Some of the notable Functional Cosmetics Companies in this segment include BASF, Nouryon, Evonik, Clariant, Ashland, Stepan Company, Croda, Air Liquide and others.
• In terms of regional analysis, Europe was observed to be the largest market for functional cosmetics in 2022, followed by Asia Pacific and North America. The growth in the European region can be attributed to the surge in employment opportunities which has become the primary factor fueling the heightened demand for active ingredients in cosmetics. The increasing employment rate is expected to elevate the standard of living, prompting the population to seek products that cater to their skincare and haircare needs.
• Key functional cosmetics companies like BASF SE (Germany), Evonik Industries AG (Germany), and Clariant AG (Germany) are strategically expanding their functional cosmetics ventures in Europe, recognizing it as the most lucrative market. In 2022, the Asia Pacific region emerged as the second-largest market, with China leading among the countries in this region.
• Functional Cosmetics Companies are adopting various strategies such as geographic expansions, new product launches, partnerships, and acquisitions to accelerate their position in the market. The key players have been trying to strengthen their product & service portfolios and cater to the untapped markets. For instance, in October 2023, BASF invested in the production of emollient specialties at its Düsseldorf site, aimed at skin and sun protection products. The addition of a new reactor and the upgrade of distillation units allowed for an expansion of production capacity to address the growing demand for these specialty products.