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Monday, April 16, 2018

BUSINESS SPECIAL..... Cosmetic Rules In a Natural Market


Cosmetic Rules In a Natural Market

What is a herbal product and what are its ingredients? It’s time consumers had greater clarity on this as the business booms

Shahnaz Husain set up her first herbal products’ outlet in 1971 in New Delhi. She placed her products as a mix of the ancient knowledge of ayurveda and her modern beauty training and is today considered the pioneer of herbal beauty products and treatment in India.
While Husain continues to make waves globally, the herbal products’ scene has exploded in India. It is already a $2-billion market, growing at close to 20%. Older players like Husain are now competing with multinationals and spiritual gurus — all having joined the bandwagon with cosmetics and nutraceuticals to make money off this trend.
But despite a growing market, no one is sure what qualifies as herbal products. And it becomes imperative to address this in a place like India, where regulation can be lax and buyers can find themselves at the mercy of manufacturers and sellers.
“There is practically no governance,” says Ram A Vishwakarma, director of the Indian Institute of Integrative Medicine, Jammu, the oldest institute under the Council of Scientific & Industrial Research, working on pharmaceutical and cosmetic research. “It is haphazard. In the US, if a company claims its products are herbal and make the skin glow, then they show scientific data. And the companies are highly regulated. But India is like the Wild Wild West.”

Regulatory Loopholes
Vishwakarma explains that the root of the problem is that there is no single regulatory pathway for herbal products, which are governed by the Drugs and Cosmetics Act of 1940. While the Drug Controller of India is supposed to be the gatekeeper for specified categories of drugs, the ministry of AYUSH (ayurveda, yoga and naturopathy, Unani, Siddha and homoeopathy) has introduced strict guidelines for ancient codified ayurvedic preparations. The Food Safety and Standards Authority of India (FSSAI) is the regulator for herbal dietary supplements that have to be ingested. French certification body ECOCERT also has an arm in India and certifies natural/herbal products. The lack of a uniform regulatory pathway often leads to herbal products falling through the cracks.
Vibhav Sanzgiri, vice-president for research and development and skin cleansing at Hindustan Unilever, says the Ministry of AYUSH has strict guidelines for ayurvedic rasayan, ayurvedic proprietary medicines and ayurvedic saundarya prasadhan. But there are no additional guidelines other than the Drugs & Cosmetics Act of 1940 for herbal products. “We have to depend on our company’s principles to be true to the spirit of herbal products — based on how it is broadly applied globally.” Hindustan Unilever has a strong portfolio of both herbal and ayurvedic products.
Vishwakarma also laments the lack of scientific research before a herbal product is registered in India. In the developed markets, the key is to demonstrate results. In India, it is more about positioning and linking the product to emotions or traditions — “dadi, naani ke nushke (tips)”.
“Neither is research on herbal cosmetics patented or published, nor is it reviewed by peers. Scrutiny is non-existent in India. Look at international brands like Garnier or Christian Dior and how they follow processes,” he says. Vishwakarma points out that while a consumer can get a food or dietary supplement tested by the FSSAI, there is no such place for cosmetic products.
DC Katoch, who advises the AYUSH Ministry, says India can do a lot better in codifying its research requirement. “Companies elsewhere conduct research for years, apply scientific techniques, do human tests and then come out with a product.”

Buyer Beware
The presence of loopholes and an almost-80-year law finally affect only one segment — consumers. Buyers often do not have enough information about such products but nevertheless make purchases based on advertisements and market positioning. “I use so-called herbal toothpaste and lotion. But when I see the ingredient list ending after detailing only 3% as herbal components, I begin to have doubts — is it as safe and as efficacious as it claims?” says Manjari Rohatgi, a 35-year-old Delhi-based dentist and a mother of two who has recently taken a fancy to herbal products.
Naturally, there’s more than what meets the eye, literally, in a pack of herbal product than what is written on the pack. Vishwakrama of IIIM-Jammu cautions: “A lot of companies are fortifying their products with other substances. Adulteration with synthetic drugs is not uncommon.”
It is not uncommon to find just “neem, chandan, lemon, turmeric, glycerine, rose water, cleaner base” on the ingredient list, without any mention of the percentage or the nature of the base used to make a product. Adding to the confusion is the use of the acronym QS or quantity sufficient, to indicate how much base has been used.
Base materials are inactive or inert materials but play an important role in the formulation of a product. They provide bulk and stability, help absorption, and prevent decomposition. Most companies do not declare the composition of the base or its exact amount. For simpler products, the base could just be water. For others, it could be oil or a similar substance that helps dilute the active ingredient to a proportion suitable for use and also makes up the volume for a standard pack size. It is supposed to have an inert or neutral effect on the human body. Sometimes it also contains mandated preservatives — which means the product concerned is not strictly herbal.
Shushmul Maheshwari, chief executive officer of market researcher RNCOS, which recently came out with a White Paper on the herbal market in India, says some brands misuse the term herbal. According to the RNCOS report, Indian Herbal Cosmetic Market Outlook 2022, “Many herbal companies list the herbal active ingredients but avoid listing what chemicals have gone into the making of cream or lotion base, colouring, fragrance and preservatives. They simply don’t put those chemical names on the label and try to create an impression that their products are herbal and somehow safe.”
In some products, certain herbal ingredients are listed as making 3-15%. A base or just water is mentioned as making up the rest.
“We use natural products and herbal ingredients,” says Acharya Balakrishna, cofounder of Patanjali Ayurved. “Only in some products such as soap, do we put some base. But customers can be assured of the purity of our products.”
Vinita Jain, founder and chairman of Biotique, explains most cosmetics can’t be made only from natural components, as a high concentration of these can harm the human skin.
“It is important to know what the rest of the components are. Is base derived from a natural ingredient or a substance that wipes away the goodness of the herbal part?” asks Jain, adding that Biotique uses a fully natural base. Forest Essentials’ managing director Mira Kulkarni claims she even uses Himalayan spring water for their products.
Sanzgiri of HUL says active herbal ingredients need to be diluted for these to be effective for use on the skin. Husain explains that while her products are almost fully herbal, some amount of preservatives have to be used as it is mandated by the government. Preservatives are also required to maintain the effectiveness of the botanical ingredients, she adds.
Maheshwari of RNCOS says many companies do not reveal the components of the base, claiming it is a trade secret.
The prohibitive cost of highly concentrated items is another issue. Verma of IIIM says research at the institute shows pure rose water can cost 1 lakh a litre. Therefore, rose water available in the market has to be diluted many times over to make it viable for some sellers.
Rakesh Misri, cofounder and business head of Jovees Health Care, which has more than 150 herbal products, says while all its formulations are approved by the Drugs Controller of India, the company does not disclose everything on a pack. “As a policy, we do not disclose all the ingredients, not just because it is a trade secret.”
Not everyone is on the non-disclosure bandwagon, though. Arush Kapoor, the chief executive of Mohali-based Just Herbs, says: “We believe in complete disclosures. One can go to any product pack or on our website and find the exact list of ingredients along with the percentage.”

To Tell or Not To Tell
According to the Drugs & Cosmetics Act, the disclosure of ingredients has to be 100%. If a product falls under the act, the manufacturer has to declare the ingredients according to the International Nomenclature of Cosmetic Ingredients guidelines — in decreasing order, up to 1% of addition. Below 1%, the ingredients can be in any order. However, there are issues with compliance.
HUL’s Sanzgiri says awareness can help customers. He uses the example of Lifebuoy: Originally a carbolic soap containing phenol (a coal-tar extract), 98% of the soap is now natural — 75% being either coconut or palm oil and 20% natural alkaline material, glycerine and natural talc. The rest is colouring pigments, silver and fragrance.
“Just because the label says C12-C18 fatty acid/triglycerides, instead of oil, consumers may feel it is a chemical product. However, this is incorrect. If we list water as H2O and salt as NaCl, you will think of these as chemicals. Sometimes, the use of INCI guidelines can lead to misconception,” adds Sanzgiri.
The solution, according to Shahnaz Husain, is to select good brands and stick to those. Vishwakarma says more regulation can help. “In America, there are advocacy groups. Philanthropic research organisations come out with research on products. Their views are taken seriously. Such things are missing in India,” he adds.
What is not missing is the huge export opportunity in this sub-sector.
According to the RNCOS report, the herbal cosmetic industry in the country is anticipated to reach 31,660 crore by 2022, growing at 18% during 2017-22. A separate study by the Basic Chemicals, Cosmetics and Dyes Export Promotion Council (under the Ministry of Commerce and Industry) says India is the second largest exporter of herbal cosmetics, after China.
“India can lead the world in the section not on false claims, but on the basis of scientific studies,” says G N Singh, the Drugs Controller General of India.

Reasons for Rise of Herbal Cosmetics’ Market
Changing lifestyle
Growing awareness about harmful chemicals
Increasing disposable income
Proven efficacy of natural products
Low per capita consumption on cosmetics compared with mature economies
Companies’ focus on advance research of plant-derived peptides, active plant stem cells
Awareness about ingredients that go into products
Rising R&D expenditure by companies
Increasing concern to look good over the long term
Checklist for Buyers              
Check if the product pack has the full list of ingredients
Check the list for inactive ingredients
Take a look at what is mentioned in the company’s website
Product should be certified by an authorised government body
Find out what constitutes the base of the product and what are the herbal components
Defining Moves       
Baba Ramdev led Patanjali Ayurved’s foray into the herbal segment, with a vast collection of shampoos, soaps and beauty products. This was followed by Sri Sri Ravi Shankar and others
Many foreign cosmetic companies like French major L’Oreal entered the booming herbal business space recently
Hindustan Unilever re-launched Ayush to take on Patanjali and acquired hair oil brand Indulekha; it also has a herbal variant of its cream Fair & Lovely
Emami purchased Kesh King (herbal) hair oil from SBS Biotech
Godrej Consumer has said it is looking at the herbal products’ segment
Triple Reporting
All cosmetics products are regulated by the Drugs and Cosmetics Act, 1940, and the Drugs and Cosmetics Rules, 1945. The Central Drugs Standard Control Organisation
Ayurvedic products that follow traditional norms and nomenclature have to be cleared by the AYUSH ministry
The FSSAI clears nutraceuticals or nutrition enhancers
Explainer: QS & Base
Base material is used in cosmetics and medicines to ensure the product gets the desired weight per unit composition. Sometimes, active ingredients need to be diluted to make these suitable for human use. Quantity Sufficient or QS is often written on packs to indicate that a base or solvent has been added in “enough quantity” to make the formulation weight reach a specified number (say 500 ml or 500 mg).
Base materials are inactive or inert materials but play an important role in the formulation of a product. These provide bulk and stability, help absorption and prevent decomposition. Most companies do not declare the composition of the base or its exact amount
Why Companies are Reluctant to Disclose QS or Base
Considered a trade secret by some               
Can be easily copied, thus creating unnecessary competition
Paucity of space to write all ingredients on packs
Some don’t disclose due to fortification
:: Prerna Katiyar
ETM8APR18

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