Natural and Organic Beauty Products Going Mainstream

Discussion
Oct 22, 2007

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?

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9 Comments on "Natural and Organic Beauty Products Going Mainstream"


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Mark Lilien
Guest
14 years 6 months ago

The HBA category mainstreamed “natural” and “organic” many years ago. Tom’s of Maine was founded in 1970. The Body Shop was founded in 1976. Dr. Bronner’s was a national brand since the 1960s. The article suggests that retail store employees get sales training for natural and organic HBA items. How would that be profitable? Almost all drug store, supermarket, and mass merchant HBA departments in the US are self-service.

M. Jericho Banks PhD
Guest
M. Jericho Banks PhD
14 years 6 months ago

As long as the meaningless terms “natural” and “organic” continue to convince consumers that they have value, businesses will take advantage of shopper ignorance. But, no amount of employee training or advertising has offset the eventual consumer realization that bottled water isn’t special, and the same concept applies to this discussion. Make hay while the sun shines, “traditional retailers,” because someday you will be held accountable for empty claims about the beauty products you sell. I’m reminded of the iconic “snake-oil” salesman in his horse-drawn wagon in the Old West.

Laura Davis-Taylor
Guest
Laura Davis-Taylor
14 years 6 months ago

Offering organic skin care may not appeal to everyone, but for those that it does appeal to, this move is a no brainer. This is not a fad…this is part of a new awareness by a specific segment of consumers who want to be proactive about what they want to put on–and in–their bodies. I’m one of them and 6 months pregnant so I speak from experience!

I’m with Mark here on the retail support. People who seek these products are self educating and we can’t rely on already unreliable store employees to become trusted specialists. The women buying these products often know what they are looking for and don’t need to heavily rely on associates for education. But, when making the POS decision, Don makes a good point that having access to digital information to help guide their final product selection would be a plus.

Susan Rider
Guest
Susan Rider
14 years 6 months ago

This is an area that every store should examine in all kinds of products. People are looking for healthier products; non-toxic products. Should the employee be trained on specifically organic or natural products? Probably not, but the sales and repeat business will go to the retailer that has a subject matter expert guiding the consumer on many different topics and solutions. Position yourself as the helpful, knowledgeable guide that cares about providing the assistance and you will be amazed at the loyalty you will receive.

Dick Seesel
Guest
14 years 6 months ago

As Joel mentions above, drug and HBA retailers will have success when they present this product differently then the rest of the assortment. They could take a page from food retailers that are competing more successfully with Whole Foods by carving out footage on their gondolas for the category and then highlighting it with special signing and other fixture enhancements. Co-branding and co-operative advertising with vendors can also enhance these stores’ position as “headquarters” in the natural cosmetics category.

Don Delzell
Guest
Don Delzell
14 years 6 months ago
I agree with the initial comment here. There are specific retailers with established competitive positioning built around in-depth customer service. Those retailers should insure their employees are knowledgeable about organic HBA products simply as an extension of internal processes designed to support and maintain the competitive advantage. How is this accomplished? The resources range from internal programs powered by subject matter expert consultants to vendor-supplied training. Unfortunately, as with most things, the quality of the effort varies across that entire spectrum, and there is no direct answer to which works best. Beyond that, the vast majority of “mainstream” retailers do not provide in-depth product support in-store. It is unrealistic to even suggest that they begin to do so for this category as it would be outside the business model and competitive dynamic. In other words, it won’t work. A solution to this is to utilize their ecommerce sites as sources and locations for consumer empowerment. The costs of creating support assets for the online environment are manageable, and the leverage is substantial. Further, any asset… Read more »
Len Lewis
Guest
Len Lewis
14 years 6 months ago

It’s also not going to hurt the organic/natural product segment when they start to find lead in lipstick.

Anne Howe
Guest
14 years 6 months ago

Almost every woman I know is trying something organic or “natural” in cosmetics, primarily because experimenting with “potions and lotions” is fun and cultural for most of us.

Retailers and manufacturers, however, should put more effort into making literature available at point-of-sale for consumers to understand potential impact of natural ingredients.

Experimenting with natural and organic cosmetics and lotions can cause allergy problems for consumers with sensitivities. Case in point, facial products with a very small amount of chamomile caused a major reaction to a friend’s face that required use of an epi-pen in the ER. Ingredients listed in 4 point type don’t really communicate all that well. And I agree that sales associate training is not a viable solution for mass and drug class of trades.

Joel Warady
Guest
Joel Warady
14 years 6 months ago

Longs Drugs has done a great job in some of their stores in creating a separate department just for organic and natural HBA products. This seems to work more effectively than having the products integrated throughout the store. The next step is to create a “natural specialist” who can act as a source of knowledge for all of these products, and help consumers choose what is best for them. These products can command higher margins than traditional products, and if executed properly, can draw new shoppers into the stores. Why give all of this business to Whole Foods?

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