| 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. |
