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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. | 
