By GMDC
The natural and organic segment of the personal care market is the fastest growing in North American cosmetics and toiletries, increasing at 20 percent per year, with predictions it will expand from eight percent this year to 15 percent in the near future.
Global sales are projected to approach $7 billion in 2007 with the United States and Europe serving as the two major growth engines, according to research from Organic Monitor.
High growth rates are being attributed to the rise of ethical purchasing and 'mainstreaming' of natural and organic products. Beauty products are increasingly being formulated with ingredients that are food-grade quality, natural, free of synthetic chemicals, and organically produced. Consumers are realizing their skin 'eats' too, and are beginning to care more about what their skin and body consumes in terms of products and ingredients. New product development is happening rapidly using formulations with high levels of natural extracts, and ethical and certified organic ingredients.
As consumers become savvier to the differences between regulated organics and more openly defined naturals, they are caring more about product composition and are scrutinizing labels more closely. By adapting private standards like Ecocert and Soil Association, cosmetic manufacturers can proactively formulate or reformulate products to meet the new consumer demand. Even "fair trade" has become a new aspect for the consumer to care about. The first-ever certified fair trade cosmetic products launched through the Queen Helene Naturals brand owned by Hain Celestial have cocoa butter that is ethically sourced from Third World producers.
This natural and organic trend represents a major lifestyle shift. Evidence of this is the expanded distribution of natural and organic beauty products across mainstream retail outlets. No longer are natural and organic beauty products only found in salons and spas and available through sources from Europe or high-end cosmetic companies. Today, supermarkets such as Safeway are expanding product ranges, drugstores are launching exclusive products and mass merchandisers like Target are introducing natural and organic personal care products. Wal-Mart has introduced not one but several lines.
While natural foods stores still retain a 45 percent market share and independents continue to give greater shelf space to natural and organic beauty products, leading chains like Trader Joe's and Wild Oats have gone one step further by launching private label natural beauty products. Whole Foods may top them both, as it explores creating dedicated spas in some stores and begins selling the Nude brand this spring, which offers biocompatible formulas or products that work with the skin's natural biology instead of against it, created by the founder of the UK's Fresh & Wild stores.
Discussion Questions: What can traditional retailers do to capture the growing natural and organic beauty department? How can retailers educate their store associates and the consumer in-store about the natural and organic beauty products they offer? What else can retailers do both in-store and beyond to differentiate their personal care product set and communicate their offerings to their consumers?