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Natural
ingredients drive growth in cosmetics and toiletries
27 Sep 2005
Author: Leonie Tait
Cosmetics
and toiletries products containing natural ingredients are reviving
growth in maturing cosmetics markets, according to a new report
from Euromonitor International - "The Growth of Natural
Ingredients".
Over the
past five years, developed markets, such as the United States,
have been facing stagnating cosmetics and toiletries sales and
slowing growth. In an effort to improve sales, manufacturers
have capitalised on growing consumer interest in health and
wellness and have started to invest in new products containing
natural ingredients. This investment looks to be paying off,
with certain industry sources predicting that the natural/organic
skin care, hair care and colour cosmetics markets will grow
by an impressive average of 9% a year between 2003 and 2008.
This growth is expected to provide a boost to the total cosmetics
and toiletries sector, which Euromonitor International forecasts
to grow by only 1% a year to 2009.
Consumers
are drawn to natural products
One
of the main drivers of growth in natural cosmetics has been
the consumer trend towards healthier lifestyles. Rightly or
wrongly, good health is often associated in consumers’
minds with all things natural, while chemicals are considered
by some to be the root of all evil. Consequently, these perceptions
have given rise to demand for natural additives and ingredients
used in cosmetics.
Certain
synthetic ingredients used in cosmetics have also faced considerable
negative publicity, which has only solidified consumers’
negative perceptions of chemicals. Media coverage of the possible
carcinogenic effects of phthalates and triclosan, used in hair
care, oral hygiene and colour cosmetics, have especially had
an impact on consumers, encouraging them to shop for alternative
products containing natural ingredients.
The baby
care sector has been particularly impacted, as medical professionals
and manufacturers have warned parents’ of the health effects
of certain additives, thereby heightening consumers’ fears
of chemical ingredients. To appease their customers and to maintain
their share of the market, manufacturers have begun to highlight
the natural ingredients in their products. Johnson & Johnson,
for example, managed to maintain its share of the US baby care
market under the Aveeno brand name, when it extended its oatmeal-based
Aveeno adult skin care line into baby care products in 2000.
Manufacturers
capitalise on the natural products trend
Consumer
are drawn to cosmetics containing natural ingredients not just
because of their perceived health benefits, but also because
many believe they have higher standards of quality. This has
enabled cosmetics manufacturers to charge higher prices for
natural products, thereby injecting value into the market. Major
manufacturers have also used this perception of quality to drive
packaging developments, which convey fresher, more upscale appearances
for natural products. Origins and Aveda, for example, have achieved
success by emphasising the quality of their products, which
in turn have prompted smaller producers to introduce competing
products and rejuvenate their packaging.
Also benefiting
manufacturers of natural cosmetic products is their widening
availability. Upscale department stores such as Nordstrom’s
in the US are taking advantage of the growing interest in natural
personal care products and are expanding their selections accordingly.
"Natural supermarket" chains and health food stores,
such as Whole Foods in the US, are also educating consumers
on the benefits of natural personal care products and some now
devote considerable space to natural personal care products,
including moisturisers, lip glosses and toothpaste.
Outlook
Over
the next five years, Euromonitor International predicts that
natural cosmetics and toiletries will grow strongly, but will
remain inferior to mainstream products in terms of overall sales.
The largest potential for growth in natural cosmetics and toiletries
market lies in sectors such as baby care, bath and shower products
and hair care.
In the future,
manufacturers are likely to increase the amount of natural ingredients
used in their products in order to satisfy consumers, without
completely abolishing chemicals that they deem necessary to
increase the shelf life or effectiveness of their products.
At the same time, the major players are likely to dedicate huge
marketing budgets to promoting the natural aspects of their
products.
A potential
hindrance to the industry, however, are forthcoming regulations
in the EU and US that will force manufacturers to disclose ingredients
that are known to cause allergic reactions. Since many synthetic
ingredients are actually found to be safer than natural ingredients,
this could potentially damage the market for some natural cosmetics
and toiletries products.
"The
Growth of Natural Ingredients: Implications for Global Marketing
Strategies" is part of Euromonitor International’s
new IMIS Strategy Briefings series.
Consumer
demand for natural ingredients and an increased desire for healthy
lifestyles is directly affecting the market for personal care
and packaged foods. This report analyses how suppliers are rising
to meet the challenge beyond the label and what the impact will
be for the ingredients industry and consumer goods companies’
marketing strategies.
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