CBI | Market Intelligence Product Factsheet Cloves in Germany | 1

CBI Product Factsheet:

Hair conditioning extracts in Europe

CBI | Market Intelligence Product Factsheet Hair conditioning extracts in Europe | 2

Introduction

Natural hair conditioning extracts are used by cosmetics companies to help their products stand out on the highly

competitive hair care market. The European market offers opportunities for extracts with proven performance and for

extracts with an interesting marketing story, for example based on the extract’s provenance (including its traditional use),

exotic origin, or sustainable production.

Product description

This factsheet focuses on botanical extracts that have hair conditioning properties.

Hair conditioning products are one of a wide range of hair treatment product types. This factsheet does not cover all hair

care treatment products, as some offer limited opportunities for natural extracts. The chemical properties of extracts

determine whether they can be used for hair conditioning, and if so how. The focus of this factsheet is on the following

conditioning properties: moisturising, volumising, shine and anti-frizzing. The table in Annex I summarises the typical

chemical compositions that give rise to these properties and some examples of the natural ingredients used to achieve

them.

Please note that most botanical extracts do not have a chemical composition that makes them suitable for hair

conditioning without further processing. Many botanical extracts for conditioning are proprietary products, developed by

cosmetics ingredients companies. They invest in the isolation of active compounds and the chemical processing of these

compounds to achieve the desired effect, as well as in the required efficacy and safety testing. Developing proprietary

extracts often requires cooperation with a European partner (see Market Channels below). Please note that a given

molecule or extract can have a range of hair conditioning effects.

Hair conditioning extracts are most commonly used as (1) “marketing extracts”, where manufacturers use small quantities

of extracts with proven effectiveness for their marketing appeal, often in combination with other cheaper and/or synthetic

conditioning ingredients. They can also be used as (2) “performance extracts”, where the extracts are used in sufficient

quantities to be effective as active ingredients. The latter group requires full scientific studies on efficacy, as the product

claim is based on that specific ingredient. As mentioned above, botanical extracts often cannot be used in hair care

directly, but need to be modified to give them the desired conditioning properties.

Along with extracts, vegetable oils are commonly used in hair conditioning products; these are covered in CBI Product

Factsheet on vegetable oils for hair conditioning. Several hair conditioning extracts are also used in skin care (see CBI

Product Factsheet on skin conditioning extracts). Skin conditioning is a more general product category than hair

conditioning, according to industry sources. Since hair conditioning is linked to specific functions such as wet or dry

combing, or shine, the ingredients used must have well-defined properties in order to be effective. Although good hair

conditioning extracts may also be useful in skin care, skin conditioning extracts are not necessarily beneficial in hair

conditioning.

Classification of hair conditioning extracts:

Harmonised System (HS): there is no specific HS code for hair conditioning extracts within the European Union (EU)

and the European Free Trade Association (EFTA)1. These extracts are generally classified under HS code 1302.1900 –

vegetable saps and extracts (excl. liquorice, hops and opium).

CosIng, the European Commission database of cosmetics substances and ingredients, lists cosmetics ingredients

under their INCI names and Chemical Abstract Service (CAS) numbers. Hair conditioning is listed as a specific

function in CosIng, being defined as a property that “leaves the hair easy to comb, supple, soft and shiny and/or

imparts volume, lightness, gloss, etc.”

Quality

Standardisation of the content of the active components in hair conditioning extracts is becoming increasingly

important. If the extract is spray-dried, test whether the conditioning properties are retained to a sufficient degree

after the spray-drying process is completed.

Cosmetics buyers usually prefer odourless and colourless extracts, whether in liquid or spray-dried form. Scent is

best achieved by applying specific fragrance ingredients.

The use of preservatives is often buyer-specific. Training and capacity building is often needed to ensure the quality,

cultivation, processing and logistics of the extract throughout the value chain.

Extraction may require significant investments in plant installations and may also require specific technical expertise

to ensure product quality, depending on the extraction method used and its complexity.

1 The Member States of EFTA are Iceland, Liechtenstein, Norway and Switzerland.

CBI | Market Intelligence Product Factsheet Hair conditioning extracts in Europe | 3

Labelling

Support the traceability of individual batches, whether or not they are produced by blending, with the aid of markings

and a registration system.

Labelling must be in English, unless your buyer has indicated otherwise.

Labels must include the following information:

o Product name and INCI name

o Batch code

o Place of origin

o Name and address of exporter

o Date of manufacture

o Best before date

o Net weight

o Recommended storage conditions

Specifically for organic products: add the name and code of the inspectorate and the certification number.

Ensure the buyer has access to the following documentation:

o Technical data sheet (TDS) or specification, including CAS number. See the example of a product specification

for Aloe vera. For more information, please refer to the CBI Natural Colours, Flavours and Thickeners guide to

make a TDS. For new extracts, exporters will need to apply for a CAS number.

o Safety Data Sheet (SDS), see the example for green tea extract

o Certificates of analysis, to support the claims of the specifications; see the above examples

o Certificate of origin

o Genetically Modified Organism (GMO) certificate (if requested by your buyer)

o Kosher and/or Halal certificate (if requested by your buyer)

o Product information sheet

Hazard labels

Tips:

Minimise the time between harvesting and extraction to prevent deterioration of the extract.

Prevent adulteration and contamination by foreign materials in order to maintain your reputation.

Buyers regularly check for adulterants.

Determine which values of the extraction parameters such as temperature, pressure and extraction

time are required to optimise the properties of your extract and to ensure that it meets your buyer’s

preferences and specifications.

Determine which investments you need to make. If significant investments are required, cooperate

with other extract producers to share the costs.

Do not use any additives in the extract unless specifically agreed upon with your buyer. Any use of

additives must be specified in the Technical Data Sheet (TDS).

Determine the chemical profile of your extract; this is a basic requirement. Include this information in

your product specifications (Technical Data Sheet and Specification, see Labelling below). Work

together with local universities or laboratories to determine the composition of your extract. Some

extracts are well known and sufficient data is already published on their safety profile and composition.

Include information on the shelf life and optimal storage conditions for your extract in your product

specifications.

Perform feasibility studies for new extracts to determine whether they have sufficient market potential

as concerns functionality, efficacy, safety and market opportunities (including market price in

comparison with other products, production costs and availability). The Schrader Institute gives

examples of efficacy testing in hair care. Efficacy testing of new hair conditioners generally entails two

elements. Firstly, the hair condition is measured before and after treatment. Secondly, testing panels

assess the qualitative efficacy of the product.

Always ensure that you can offer a standardised product with well-defined specifications or at least

within a defined range of parameters. Standardise your product’s quality by blending extracts from

different harvests and by closely monitoring cultivation and harvesting practices.

Visit the SpecialChem website to find other extracts used in hair care. This website includes a database

of cosmetics ingredients, their function and suppliers.

CBI | Market Intelligence Product Factsheet Hair conditioning extracts in Europe | 4

As hair conditioning extracts are produced using solvents, they can be classified as hazardous materials. Include the

relevant hazard symbols (as shown on the right) to indicate that the product is hazardous to the environment (N),

harmful (Xn) or flammable. Also include the relevant risk and safety phrases, depending on the UN hazard

identification number.

Refer to EU Directive 2001/59/EC for information on risk and safety phrases and on the codes for the hazard

categories listed above.

Refer to CBI Buyer Requirements for information on classification, labelling and packaging (CLP).

Packaging

Always consult your buyer for specific packaging requirements.

If the extract is hazardous and has a UN hazard identification number, use UN-approved packaging. For further

information and recommendations concerning the transportation of hazardous goods, refer to the guide published by

the United Nations’ Economic Commission for Europe (UNECE).

Ensure the quality of extracts is preserved by:

o Using containers made of a material (such as lacquered or lined steel, or aluminium) that does not react with

components of the extract.

o Cleaning and drying the containers before filling them with extract.

o Filling the headspace in the container with an inert gas such as nitrogen or carbon dioxide.

Ensure that packaging materials can be reused or recycled by, for example, using containers made of recyclable

material such as metal.

Store the containers in a dry, cool place to prevent deterioration of the extract.

Organic extracts must be physically separated from other extracts.

Refer to CBI Buyer Requirements for information on classification, labelling and packaging (CLP).

What is the demand for hair conditioning extracts in Europe?

NB No specific trade statistics are available for hair conditioning extracts. This section includes trade statistics on

“vegetable saps and extracts, excluding opium, liquorice and hops”, classified under HS code 1302.19.

Hair care market

Hair care is a mature market and overall growth is slowing down, especially in Western Europe. However, the market for

hair conditioners remains dynamic and consumers show continued interest in innovative products or those with new

ingredients:

There is some room for growth in the hair conditioners market segment. On average, 46% of European women use

hair conditioners, as compared with only 5% of men. Demand for hair conditioning ingredients is increasing.

There is also an increasing demand for innovative products, which include serums, masks and oils targeting specific

hair care issues.

The European market for hair care was valued at €15 billion in 2013 according to Cosmetics Europe. This represents a drop

of 1.1% compared with 2012. According to Euromonitor (Happi, 2014), shampoo products took up the largest part of this

market (around 30%), followed by conditioners (around 15%). Other categories include styling agents and hair colourants.

Imports

Europe is a stable importer of botanical extracts in volume terms, while import unit prices rose from 2010 to 2014. The

volume of extract imports fell by an annual average of 1% in this period, while import value rose by an average of 8% per

annum. European (EU + EFTA) imports amounted to 40 thousand tonnes, with a value of € 577 million, in 2014.

CBI | Market Intelligence Product Factsheet Hair conditioning extracts in Europe | 5

Figure 1: Leading European importers of botanical

extracts, in 1,000 tonnes

Figure 2: Leading European importers of botanical

extracts from developing countries, in 1,000

tonnes

Source: Eurostat, 2015 Source: Eurostat, 2015

The leading European importers of botanical extracts are shown in Figure 1, and the leading European importers of

botanical extracts from developing countries in Figure 2. It may be seen from Figure 1 that France and Spain experienced

the highest growth in total imports (an average of +12% annually) between 2010 and 2014, while the volume of UK

imports fell by an annual average of 19% in the same period.

Spain, Germany and the UK had the highest shares of imports from developing countries in 2014 (42%, 40% and 36%

of the total import volume respectively). The high level of imports by the UK in 2010 originated in Brazil, and were not

repeated in 2012 or 2014. Imports of botanical extracts from developing countries grew particularly strongly in Eastern

European countries: rising at average annual rates of between 18% and 163% in Lithuania, Bulgaria, Poland and the

Czech Republic.

Figure 3: Leading suppliers of botanical extracts, in 1,000 tonnes

Source: Eurostat, 2015

0 5 10

France

Germany

Italy

Spain

UK

Belgium

2014

2012

2010

0 2 4 6 8

Lithuania

France

UK

Italy

Germany

Spain

2014

2012

2010

0

5

10

15

20

25

30

35

40

45

50

2010 2012 2014

India

Mexico

China

Brazil

Other developing countries

Non-developing countries

Tips:

Consider focusing on France and Spain, as the market for botanical extracts is growing strongly in

these countries. France is of particular interest, as it uses a relatively high percentage of extracts in its

large cosmetics sector.

Other, smaller markets could also be of interest, but your approach here should be based on a

feasibility study. These markets can still offer substantial export opportunities to small and medium-

sized enterprises (SMEs). You could for example target smaller countries in Eastern Europe with a

rapidly growing market for botanical extracts such as Lithuania, Bulgaria, Poland and the Czech

Republic. Direct exports from developing countries are growing in most of these countries.

CBI | Market Intelligence Product Factsheet Hair conditioning extracts in Europe | 6

Botanical materials used for hair conditioning come from many parts of the world. For example, the much-used Aloe vera

is found in Asia, Africa and South America while Calendula grows in temperate regions throughout the world. Both these

species are cultivated extensively.

Developing countries play a small but, on the whole, growing role in total imports of botanical extracts, contributing

27% of the 2014 EU import volume. 2010 was an unusually good year for suppliers from developing countries, when they

accounted for 39% of total EU imports. This was largely due to very large imports from Brazil. Imports of extracts from

Brazil have amounted to between 2,000 and 5,000 tonnes in the past eight years, but this figure shot up to almost 12,000

tonnes in 2010. Imports from other developing countries rose by an average of 17% per annum from 2010 to 2014. Total

EU imports from developing countries reached almost 11,000 tonnes, with a value of € 130 million, in 2014.

As shown in Figure 3, the four main suppliers of botanical extracts from developing countries to the EU in 2014, accounting

for 21% of total imports, were Brazil, China, Mexico and India. However, many other developing countries supply smaller

quantities of such extracts to the EU. These include South Africa (1.2% of total 2014 imports), Morocco (0.7%), Serbia

(0.5%), Ukraine (0.3%) and Chile (0.2%). The reason for this fragmentation is that many extracts come from different

geographical areas; some grow exceptionally well in certain climates, some benefit from the availability of skilled or cheap

labour, while others are harvested in the wild only in specific regions.

The main suppliers of extracts to Europe are non-developing countries. These include European suppliers (Italy,

Germany, France and Spain), as well as the USA. The peak in European supplies in 2012 stems from increased imports

from Italy and France, which declined again in 2014.

Exports

The main European exporters of botanical extracts are Italy (59% of 2014 exports), Spain (19%) and Germany (7%).

These countries export substantially more than they import. Exports can be based on domestically produced materials, but

can also include re-export of extracts imported from other countries.

European exports of botanical extracts rose by an annual average of 13% from 2010 to 2014, amounting to 74 thousand

tonnes with a value of € 520 million in 2014. Major export destinations were other European countries (most notably

France), followed by countries outside Europe such as Equatorial Guinee, Israel and the USA.

What trends offer opportunities for hair conditioning extracts on the European market?

First and foremost, consumers want effective, safe hair conditioners that can help them keep their hair shiny, smooth,

thick and healthy-looking.

The conditioning power of both natural and synthetic ingredients depends on such factors as electric charge, molecular

weight and pH. Furthermore, their marketability in the EU also depends on marketing factors such as their provenance and

traditional use.

Tip:

Analyse the export data of countries that produce similar or competing extracts to find competitors or

export markets for your products. More detailed and specific export statistics are often available from

local offices of national statistics. The website of the Department of Commerce or the Ministry of

Economic Affairs in these countries may also yield useful information.

Tip:

Refer to CBI Trade Statistics for Natural Ingredients for Cosmetics for further trade statistics.

Tips:

Perform clinical trials to demonstrate the effectiveness of your hair conditioning extract. This will give

you an advantage over competitors who limit their product documentation to stories of traditional use.

Do not claim that an extract has benefits without the scientific evidence to support these claims. Refer

to Market Channels below and EU rules on claims for further information on this point.

Keep up to date on trends in hair conditioning extracts and nature-driven ingredients by checking the

websites of trade fairs such as in-cosmetics and the trade press such as Cosmetics Design Europe.

CBI | Market Intelligence Product Factsheet Hair conditioning extracts in Europe | 7

Natural ingredients and hair conditioners

“Botanicals are the fastest growing ingredient category in hair care”, according to Euromonitor. Most cosmetics companies

are launching hair care products that include natural ingredients – or, more frequently, nature-inspired ingredients. These

ingredients are used to attract more consumers, and may be either “marketing extracts” or “performance extracts” (see

Product Description above). In general, nature-inspired ingredients are more commonly used as performance extracts,

whereas natural ingredients are more commonly used as marketing extracts.

European consumers increasingly believe that natural ingredients are safer and healthier than synthetic alternatives.

Global sales of natural cosmetics grew by 10.6% in 2013, according to market research by the Kline Group (Cosmetics

Design Europe, 2014).

Opportunities for extracts also revolve around the marketing story that can be built around them. The following details

should be considered here:

The provenance of an ingredient, including traditional use, plays a major role in the marketing of hair conditioning

ingredients.

Exotic extracts offer a particular opportunity due to ongoing consumer interest in exotic ingredients. Consumers

appreciate stories about extracts from regions such as the Amazon rainforest that have ‘exotic’, ‘mystical’ or

‘luxurious’ connotations.

Consumers are not only showing an increased demand for natural cosmetics, but are also looking for ingredients that

are produced sustainably and do not harm the environment. Stories about the local benefits of production or

traditional production practices can also add to the marketability of such ingredients.

Organic or similar certification can add to your marketing story.

However, the proven performance of these extracts remains the most powerful marketing argument when dealing with

your buyers.

Innovations drive the market for hair care products, including hair conditioners. Innovation comes in many forms, such

as:

Multifunctional hair conditioners: conditioners that untangle, moisturise and smooth the hair, and make it feel soft

and silky.

Leave-in conditioners, which meet consumer demands for convenience.

Nutri-cosmetics to improve hair health and prevent hair loss.

Scalp health: adapted from skin care products, e.g. exfoliating scrubs or soothing conditioners for scalp treatment.

Conditioners for different hair types: for example dry, fine, curly and coloured; from short to long and from sleek to

voluminous.

Tip:

Focus on the market for natural hair care cosmetics when exporting hair conditioning extracts. See

Market Segments below for further information.

Tips:

Include the provenance of your extract in your marketing materials, especially if you have information

on traditional use.

If you produce exotic extracts, focus on the area of origin and the traditions of cultivation or collection

in your marketing materials.

Provide your buyers with all available data on sustainability of supplies.

Ask your buyers how interested they are in certification for your extracts. Before you apply for

certification, make sure you can meet the certification requirements (see Additional Requirements

below in this connection).

Tips:

Carry out research to determine your product’s potential to respond to increasing consumer demand

for a variety of different products and trends in product application. Can your product meet the needs

of a specific hair or product type? Can it perform multiple functions in hair conditioning? Demonstrate

your understanding of these trends in your promotional materials. Support this with clear data from

your research.

Refer to the CBI Product Factsheet Vegetable oils for Hair Conditioning for further hair care trends.

Refer to CBI Trends for Botanicals for further market trends.

CBI | Market Intelligence Product Factsheet Hair conditioning extracts in Europe | 8

What requirements should hair conditioning extracts comply with to be allowed on the

European market?

EU Cosmetics Regulation: This includes requirements on ingredients and details EU rules on claims that may be made

concerning products. Cosmetics manufacturers and ingredient producers are increasingly making compliance the

responsibility of their suppliers.

Chemicals legislation

REACH: Cosmetics ingredients that are imported or manufactured in quantities exceeding 1 tonne annually, as well

as hazardous chemicals, need to be registered with the European Chemicals Agency as laid down under REACH

(Registration Evaluation and Authorisation of Chemicals) legislation, unless they are exempt. There are some

exemptions to this rule, especially for natural ingredients that have not undergone chemical modification. The burden

of proof lies with the importing country that wishes to make use of these exemptions. REACH registration can be

expensive and must be applied for by European manufacturers, EU importing companies or by a so-called Only

Representative, an EU representative of a non-EU manufacturer.

Classification, labelling and packaging of chemicals (CLP): The EU sets the requirements on the packaging of

chemical substances, as well as the symbols, phrases and safety advice to be shown on labels as information for

users.

The Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES) regulates the

trade in endangered plants collected in the wild (among other things) and provides a detailed list of species for which trade

is prohibited, restricted or bound by certain rules.

Access and Benefit Sharing (ABS) are mutually agreed terms that detail the terms and conditions of access and use of

genetic resources and/or traditional knowledge and supply of such material. The Union for Ethical BioTrade (UEBT)

provides thorough information on the practical implications of ABS.

Tips:

Refer to the CBI Buyer Requirements module for a full list of requirements for cosmetics ingredients.

Comply with relevant legislation. Read more about the Marketing conditions for cosmetics products,

the Cosmetics Regulation and the rules on claims on the EU Export Helpdesk.

Check what information your buyers require and in which format they require it. For new extracts,

documentation on the toxicological profile will be expected. This should include details of local toxicity

such as skin and eye irritation and of photo-toxicity.

Avoid animal testing, and seek alternative methods that do not involve animals. Even though there are

some exceptions to the marketing ban in the EU, buyers usually want to avoid animal testing

altogether.

Tips:

Refer to the Identify Your Obligations section of the European Chemicals Agency (ECHA) website for a

practical step-by-step guide to the implementation of REACH and CLP

Check the REACH registration status of your cosmetics ingredient. If your product is not registered find

out whether it needs to be. The ECHA offers guidance on exemptions.

Use the database on classification and labelling on the ECHA website to determine which symbols and

warning phrases need to be displayed on the packaging of your product.

Refer to the EU Export Helpdesk for further information on REACH and CLP.

Tips:

Check in Annexes A and B of Regulation (EC) 338/97 whether import and export permits are required

for your product. Another resource is the CITES Checklist. You can also contact your local CITES

authority for further information.

Refer to the EU Export Helpdesk for further information on CITES requirements and procedures in

Europe.

CBI | Market Intelligence Product Factsheet Hair conditioning extracts in Europe | 9

European buyers prefer suppliers who can demonstrate good standards in respect of sustainability. This involves social

and environmental responsibility as well as sustainable sourcing practices. Certification is not always necessary, but buyers

are looking for suppliers who can demonstrate they have incorporated sustainability into their operations.

Quality management: European buyers expect the products they source to be of good, reliable quality. Most buyers

expect suppliers at least to follow Hazard Analysis and Critical Control Points (HACCP) principles for food processing. The

following requirements are also frequently imposed and compliance may give you a competitive advantage:

Good Manufacturing Practices (GMP).

Good Agricultural and Collection Practices (GACP), commonly followed in farming and wild collection of cosmetics

ingredients prior to processing.

Quality standards such as ISO.

Buyers may also have their own requirements.

Documentation: Buyers require well-structured product and company documentation. They generally want to see

detailed specifications supported by certificates of analysis and efficacy tests, as well as Safety Data Sheets (SDS). An

allergen declaration is increasingly becoming a common feature in these documents, even for products where allergenic

properties are unlikely.

Additional requirements

Natural cosmetics: Private sector standards such as NaTrue and Cosmos specify what requirements final cosmetics

products need to comply with to be certified natural and organic.

Organic: EU legislation specifies what organic production and labelling entails for food products and forms the basis

of private standards for organic labelling. Examples of such standards are those of the Soil Association (UK), Ecocert

(France) and BDiH (Germany).

Tips:

Put a procedure in place to check whether ABS applies to your hair conditioning extract. This is

especially pertinent if your product is based on traditional knowledge and/or you are generating

intellectual property (and a patent application) based on endemic biodiversity.

Check ABS regulations in your own country and make sure you can advise your buyer appropriately.

Tips:

Assess your performance in respect of sustainability in terms of sourcing and social and environmental

responsibility. Demonstrate to your buyers how you have incorporated sustainability into your

operations.

Prepare and publish a code of conduct that defines your social and environmental responsibilities, both

as an employer and a supplier. For further information on responsible business practices, refer to the

Supplier Ethical Data Exchange (SEDEX) online database, where members can share information on

ethical and responsible practices.

Tips:

At the very least, follow HACCP principles.

Find out whether you can help your buyer to comply with GMP principles in the production of

cosmetics. This may give you a competitive advantage. Consult the guide developed by the European

Federation for Cosmetic Ingredients (EFfCI) for specific GMP principles applying to the manufacture of

cosmetics ingredients.

Comply with the World Health Organisation’s GACP guidelines, even though they are only legally

binding for medicinal plants. Compliance gives you a competitive advantage from a marketing

perspective.

Tips:

Create a commercially oriented product data sheet for your buyers, containing photos, information on

the product’s origin and bibliographical references where available. For your own internal purposes,

you should prepare a more detailed dossier containing all the technical data from both primary and

secondary research.

Consider seeking qualified advice in preparing an SDS. Check the websites of European companies

such as The Soap Kitchen for examples of an SDS.

CBI | Market Intelligence Product Factsheet Hair conditioning extracts in Europe | 10

Fair production: Examples of consumer labels that guarantee fair social practices include Fairtrade and FairWild (for

wild-collected ingredients).

Tips:

Stress the natural character of your extract in marketing messages. Refer to specific cosmetics

standards for further information on permitted ingredients and thresholds for natural and organic

cosmetics.

Determine whether there are real opportunities for certified ingredients on the European market before

you decide to promote them. Further information on these market opportunities is given under Market

Trends below.

If you want to certify you products, consult the ITC Standards map database, which provides further

information on various voluntary standards, including those for organic and fair production, and their

requirements.

CBI | Market Intelligence Product Factsheet Hair conditioning extracts in Europe | 11

What competition do I face on the European market for hair conditioning extracts?

Market entry

Cosmetics manufacturers are not keen to switch ingredients in existing formulations due to the high costs of reformulating

and testing the product and creating product information files. When it comes to new products, manufacturers will be

readier to switch an ingredient if they have not already marketed it heavily in a previous product line and if they trust the

supplier to provide them with a safe, effective product.

Strong competition from alternative products

Synthetic alternatives are the main source of competition for hair conditioning extracts. These can be nature-derived –

that is, having the same composition or properties as natural products. This natural aspect is stressed in marketing stories

and images. Several of these alternative products are already well-established: international standards have been

developed for their quality and they and are proven to be effective, which makes them powerful competitors.

A wide range of botanical extracts and vegetable oils is already used in hair conditioning products. You can expect

competition from botanical extracts based on hydrolysed proteins (see Annex 1 below). Moreover, you can expect

competition from vegetable oils, which are commonly used in hair conditioners for their moisturising properties.

Competition is strong if your extracts have a similar function. You will have to demonstrate how you can differentiate your

product from this competition (e.g. in properties or marketing story).

European competitors use their technical expertise and close contacts with cosmetics buyers to produce high-quality,

innovative extracts that closely match customer expectations.

What do the trade channels and market segments of interest for hair conditioning

extracts in Europe look like?

Market channels

Please refer to the CBI Module Market Channels and Segments for Botanicals. This module gives an overview of the market

channels for botanical extracts in cosmetics, together with information on important trends in this sector.

Tip:

Demonstrate reliability in terms of quality consistency, documentation, communication, delivery,

packaging, service delivery and supply security. This, together with having an effective and safe

product, are the prime requirements for market entry.

Tips:

Explain in your marketing campaign why the price of your natural extract is higher than that of

comparable synthetic ingredients. Focus your arguments on the benefits of natural cosmetics

ingredients.

Provide efficacy data on the use of your extract in specific application areas to underline its special

benefits on the intended market. Make sure you have well-researched efficacy data to back up your

specific claims. This will help buyers in their marketing of the finished product. The further you

progress along the efficacy chain, from theory through chemical analysis to testing on cell cultures, on

synthetic hair and in formulations, the more attractive your product becomes to cosmetics

manufacturers.

Help your product to stand out with the aid of evocative images, or stories built around the benefits,

origin and traditions of collection, cultivation or use of the plant from which the extract is derived, or

the extract itself.

If you supply wild-harvested raw materials, you should use sustainable resource management methods

in their collection. Examine the possibilities of the FairWild certification scheme, but discuss with your

buyers whether certification will benefit them before you actually embark on the certification

procedure.

Use sources such as the in-cosmetics Innovation Zone to identify competing ingredients being brought

to market.

Refer to CBI Competition for Botanicals for further information.

CBI | Market Intelligence Product Factsheet Hair conditioning extracts in Europe | 12

Hair conditioning extracts based on raw materials from developing countries may be produced in the countries of origin, in

neighbouring countries with a strong processing industry (for example India for South Asia or Mexico for Central America)

or in Europe. The optimum production location depends on the origin of the plant materials, their shelf life and perishable

nature, the complexity of the extraction process and the costs of processing and transporting the product to the market.

In some cases the extract can be used directly in cosmetics. However, several conditioning extracts require further

processing such as isolation of active principles or chemical processing to yield the performance required in the

formulation. Industry sources indicate that true conditioning power typically comes from substances that have been

chemically modified.

If you want to develop proprietary extracts or active ingredients, you need to work on product development together with

partners (distributors and/or processors) in Europe. These European companies are also better equipped to market the

product, as they have a keen understanding of buyer requirements and know the decision-makers within their client

companies. They will often require a period of exclusivity before engaging in joint product development.

Specialty (organic or Fairtrade) extracts and in particular proprietary extracts usually have relatively short trade channels

because buyers are often interested in using stories about the source of the extracts in their marketing campaigns. If there

are fewer middlemen, buyers may find it easier to get the information they need to base their stories on.

Market segments

Figure 3: Segmentation of hair conditioning extracts

Both a product with a strong marketing story and new extracts supported by appropriate performance and safety data will

help you to sell your product as a specialty extract. Furthermore, the natural and organic cosmetics sector is showing an

interest in organic hair conditioning extracts for cosmetics in order to meet increasing consumer demand for ‘natural’

products. However, more common hair conditioning extracts, such as those based on high protein plants including rice,

oats or legumes, can also provide a good business case if you can deliver the required volumes and meet price

expectations.

Hair conditioning extracts are primarily used in hair conditioners, both in rinse-off and leave-in solutions. Other hair care

applications include shampoos, serums and hair masks. Please note that some hair conditioning extracts have possible

applications in skin care products, but whether they can be used as such depends on the availability of adequate efficacy

data.

Tips:

Diversify your product portfolio. This will strengthen your position on the market, which is important in

a competitive sector like hair conditioning. Possible ways of diversifying your portfolio are to add new

non-proprietary extracts and/or extracts destined for other sectors.

Supply a combination of hair conditioning extracts to make yourself more attractive to potential

buyers. Consider both ‘wet’ and ‘dry’ alternatives for extracts in order to reduce transportation costs,

especially if the water content can be lowered without affecting the quality of the extract.

Refer to CBI Trends for Botanicals for further information on the different marketing routes for

extracts.

Take advantage of the experience and knowledge of specialised European ingredient distributors

instead of approaching end users directly. European distributors offer the best distribution channels if

you wish to export specialised products such as proprietary hair conditioning extracts.

CBI | Market Intelligence Product Factsheet Hair conditioning extracts in Europe | 13

What are the end market prices for hair conditioning extracts?

Price depends on properties, quality and the type of extract

The price of hair conditioning extracts is determined on the basis of:

Their properties: an extract’s effectiveness in delivering certain hair care benefits such as moisturising, strengthening

and shine, and proof of this effectiveness, have a strong impact on price. Intellectual property, and value for your

company, is created at the testing stage. The further you progress along the above-mentioned efficacy chain, the

more valuable your product becomes.

The price of the raw material and the parameters of the extraction method such as energy input, yield, equipment

and process management costs.

The popularity of the extract in relation to its availability.

Certification: some cosmetics buyers require certified extracts and are prepared to pay a higher price for them.

Industry sources identify prices ranging from €15 per kg for widely available, mass-produced extracts up to several

hundred Euros per kg for specialised extracts. Such high-priced extracts are used at low concentrations in finished

products, and are more common in skin care than in hair care products. However, consumers are more willing to pay a

high price for outstanding hair care products. In general, natural extracts are more expensive to produce and are offered

at higher prices than comparable synthetic ingredients.

The following price breakdown shows which costs and margins are applied to hair conditioning extracts before they reach

the end user.

Tips:

Refer to the CBI Product Factsheet Skin Conditioning Extracts for further information and tips on the

use of extracts in skin care.

Target natural cosmetics manufacturers and distributors.

Before certifying your extract as organic, discuss the opportunities for such certified extracts with your

buyers and see whether they are prepared to pay a premium for certification.

Tips:

Calculate your production costs on the basis of a detailed cost breakdown. Do not forget to take into

account additional costs such as customs duty and the costs of loading/unloading, marketing and

sampling for batch analysis. When pricing your product, consider your costs and the maximum price

the market might be willing to pay for your product. In the case of proprietary extracts, ensure that

your price also reflects your product development costs and intellectual property rights. Add a profit

margin to arrive at your selling price.

Take the recommended dosage in cosmetics formulations into account when comparing with prices of

competing products. Different ingredients need to be used in different quantities for optimum

effectiveness, and these differences should be taken into account when determining the price per kg.

Ensure that investments are justified before setting up installations for extraction or further processing

of extracts, since such operations can be complicated and costly. Even though processed ingredients

can fetch a much higher price, the processing costs and the human resources required for processing

are also far higher.

Ensure you have access to sufficient raw material. Investigate whether you can meet market prices

and secure sufficient quantities to achieve economies of scale. You may be able to improve your price

competitiveness by improving production and extraction yields or reducing inputs of energy or other

resources. The ability to reduce your consumption of energy or other resources can serve as an

important sales argument when dealing with buyers who focus on sustainability.

Monitor harvests of your extract in major production countries to anticipate price trends. Buyers may

be able to provide you with this information.

CBI | Market Intelligence Product Factsheet Hair conditioning extracts in Europe | 14

Figure 4: Indicative price breakdown for hair conditioning extracts, mark-ups in %

Source: Profound, 2015

Useful sources

Trade fairs

Visiting and in particular participating in trade fairs is one of the most efficient ways of testing market receptivity,

obtaining market information and finding prospective business partners. The most relevant trade fairs in Europe for

exporters of hair conditioning extracts are:

in-cosmetics, a travelling trade fair

Beyond Beauty in Paris, France

SANA in Bologna, Italy

Vivaness in Nuremberg, Germany (for organic producers)

Further information

CBI market information: Promising EU export markets.

EU Expanding Exports Helpdesk – http://exporthelp.europa.eu – go to “trade statistics”.

Eurostat - http://epp.eurostat.ec.europa.eu/newxtweb - statistical database of the EU.

You can input various queries. For trade, choose “EU27 Trade Since 1995 By CN8”.

International Trade Statistics - http://www.trademap.org – registration required.

A ir cargo

+2-25% +5%

Export Import Sales

+30%

CBI Market Intelligence

P.O. Box 93144

2509 AC The Hague

The Netherlands

www.cbi.eu/market-information

marketintel@cbi.eu

This survey was compiled for CBI by ProFound – Advisers In Development

in collaboration with CBI sector expert Andrew Jones

Disclaimer CBI market information tools: http://www.cbi.eu/disclaimer

November 2015