Cosmeceutical Skincare: A Full Guide For Small Brands
Cosmeceutical skincare has huge market potential, even for small brands. But it’s not easy to get right.
From unstable ingredients and expensive formulation costs to strict regulations, this category can be difficult to navigate for small business owners.
So, how can you create high-quality cosmeceutical skincare without breaking regulatory rules, or the bank?
Innacos is here to help!
Our in-depth guide below reveals everything you need to know about cosmeceuticals for your small cosmetics business.
We discuss what cosmeceutical really means, how to stay compliant across different markets, and some high-quality cosmeceutical actives that are worth considering for your next product launch.
What Is Cosmeceutical Skincare?
The Oxford dictionary defines cosmeceuticals as “a cosmetic that has or is claimed to have healing or medicinal properties,” while researchers Pandey et al. (2023) describe them as personal care products that deliver “a pharmaceutical therapeutic benefit but not necessarily a biological therapeutic benefit.”
In practice, cosmeceuticals refer to skincare products that go beyond basic moisturizing or cleansing promises. They are science-backed skincare formulations, containing active ingredients capable of delivering measurable changes to the skin.
Why Use Cosmeceuticals?
The market opportunity for cosmeceutical products is huge, even for smaller brands. Grand View Research estimates that the global cosmeceutical market is projected to reach $84 billion by 2030.
Driven by an aging population looking for more than a simple cleanser and moisturizer, and a consumer base increasingly educated on ingredients, formulating high efficacy products is no longer optional - it’s essential to succeed.
As outlined in Cosmetics Design, research from 2024 found that 40% of consumers haven’t found a skin care product that truly delivers results, while 39% are willing to pay more for products that offer multiple benefits. Beauty Independent reports that 85% of women who purchase skincare specifically look for efficacy claims, and 86% research brands before buying.
This performance-focused demand presents a major opportunity for small entrepreneurs to compete with legacy brands: by creating cosmeceuticals that deliver visible, multi-functional results.
With the right marketing, cosmeceuticals can help you achieve cult brand status. An academic paper from 2023 highlights Caudalie as an example: the brand uses resveratrol as its star ingredient (an anti-aging cosmeceutical derived through biotechnological upcycling of vineyard waste).
The combination of new skincare tech, a novel ingredient, and luxury storytelling allowed Caudalie to brand itself as sustainable, tech-forward, and luxurious - all thanks to just one cosmeceutical ingredient.
Three Highly Effective Cosmeceutical Skincare Ingredients
Many household skincare routines already feature cosmeceuticals as staples. Let’s discuss three of the most effective (and commonly used) actives to consider for your next skincare line:
Niacinamide
If you are formulating at home, niacinamide is one of the most beginner-friendly cosmeceuticals to work with. A form of vitamin B3, it’s effective, stable, non-irritating, and affordable - ideal for early-stage brands and formulas targeted toward sensitive skin types.
Its versatility is impressive: Healthline explains that it helps brighten, reduce redness and enlarged pores, and soften fine lines all at the same time. Plus, it’s compatible with most other ingredients and is one of the most accessible cosmeceuticals on the market.
At Innacos, our Gentle Daily Cleanser contains niacinamide for its brightening and collagen-enhancing benefits. Try our Gentle Daily Cleanser by purchasing samples from our website here.
Retinoids
Considered the ‘gold standard’ of anti-aging, retinoids help promote cell turnover, stimulate collagen, and improve overall skin tone and texture.
Despite their effectiveness, Personal Care Insights explains that retinoids are not easy to work with. They’re often unstable and can cause skin irritation issues if not carefully formulated.
That’s why choosing the right form is key.
Consider your customer’s skin type and level of skincare experience. Are they new to retinoids? Do they have sensitive skin? Educating your customer base on how to choose the right product for the current phase of their skincare journey is essential.
At Innacos, our Clean Retinol Drops contain Hydroxypinacolone Retinoate, an ultra-stable and non-irritating form of retinoid, ideal for sensitive skin types and those new to active skincare. Learn more about our retinol drops and order a sample on our website here.
Vitamin C
Vitamin C is a powerful antioxidant best known for its skin brightening and free-radical fighting properties.
However, as Chen et al. (2022) explain, many forms of vitamin C - especially L-ascorbic acid - are notoriously unstable and pH-sensitive, making them difficult to work with (especially in small batch production).
While Vitamin C and retinoids can be part of the same skin care routine, they should not be used at the same time. Vitamin C is best used in the morning (with an SPF) while retinoids are recommended at night.
At Innacos, our Luxury Vitamin C Serum contains Tetrahexyldecyl Ascorbate, a stable, oil-soluble form of vitamin C that delivers brightening results with less irritation. Although TA is an easier type of vitamin C to formulate with, it’s a pricey ingredient. Shop samples of our Luxury Vitamin C Serum on our website here.
Regulatory Rules And Implications
As explained by the FDA, the term ‘cosmeceutical’ is not recognised under US law. In the US, products applied to the skin are classified as either drugs, cosmetics, or both:
Cosmetics are intended to clean, beautify, promote attractiveness, or alter the appearance of a person
Drugs are intended to treat/prevent disease, or affect the structure/function of the body
Some products (eg. anti-dandruff shampoo) are considered both cosmetics AND drugs, depending on the ingredients and claims made about the product.
As outlined by legal firm Perkins Coie, this distinction is important when it comes to your product claims. The legal standards set for marketing drugs and cosmetics are radically different.
For example, the FDA states that all drugs must receive premarket approval before release. Accidentally making drug claims about your product, if it has not been approved as a drug, is a violation of the law.
Just changing a word or two in your marketing can be enough to flip from the cosmetic to the drug category.
For example, a claim like “smoothes the appearance of wrinkles” falls under the cosmetics category. However, biologically transformative claims, like “eliminates wrinkles” or “stimulates collagen”, are drug claims under US law.
To remain compliant, always err on the side of caution and phrase claims around appearance.
For example, use terms like “visibly reduces” or “improves the look of” instead of making transformational claims. Review a full FDA compliance protocol by Ann Marie Gianni (dated 2017) for more guidance here.
Selling Cosmeceuticals Internationally
If you plan to sell your cosmeceutical products internationally, you must comply with each region's specific regulations.
The European Union regulates cosmetic ingredients under EU Regulation 1223/2009, and is generally more strict than the US. For example, formaldehyde-releasing preservatives (such as DMDM hydantoin) are still legal in the US, but are restricted in the EU due to potential carcinogenic links.
As regulatory consultant Karen Yarussi-King advises in Beauty Independent, brands aiming to go global should adhere to the strictest, most conservative standards from the beginning to avoid costly reformations.
That’s why it’s important to partner with a reputable lab experienced in clean cosmeceuticals to formulate effective skincare that meets high-performance, safety, and strict global market standards from day one.
At Innacos, we take clean skincare seriously and can formulate to virtually any global standard.
We formulate our products without over 2,000 potentially harmful ingredients that just don’t belong in cosmetics. Learn more about our clean and safe standards at Innacos on our website here.
Formulating Cosmeceuticals With A Professional Lab
Cosmeceuticals offer huge value, but they also introduce unique formulation challenges.
For example, a 2020 study discusses that actives often have shorter shelf lives, are more unstable, and can degrade much more quickly than traditional ingredients.
For these reasons, cosmeceutical products are exceptionally difficult to formulate from home. Plus, even if you nail the product formula, packaging can make or break your product.
Certain actives (like vitamin C, retinoids, or acids) react negatively when paired with particular packaging materials, and will lose effectiveness rapidly if not stored correctly.
That’s why working with a professional lab is so important. Experienced manufacturers can:
Select the right actives for maximum stability and effectiveness
Formulate for compatibility between ingredients and packaging
Perform essential safety and stability testing (and beyond)
Formulate to meet strict regulations domestically and abroad
At Innacos, whether you’re looking for preformulated or custom-formulated cosmeceutical skincare, we can create a clean beauty product line to match your needs. Learn more about choosing the right path for you in our quiz.
In sum, cosmeceuticals have huge market potential, even for smaller brands:
These ingredients can deliver visible results, helping brands earn trust in a market increasingly focused on performance-driven products and multi-benefit skincare
Powerful actives like niacinamide, retinoids, and vitamin C offer powerful benefits, but they are only effective when formulated correctly
Regulatory language matters - frame your products in cosmetics (not drug) terms to stay compliant
Formulating with cosmeceuticals is tricky and can be expensive, and regulations vary across the globe, which makes partnering with a lab more important than ever
Ready to start formulating your own range of cosmeceutical skincare? Innacos would love to work with your brand! Find out more by emailing: customerservice@innacos.com or calling: (812) 329-1105.
