“Certified organic” is witnessing rising interest across apparel, tissue and hygiene and dietary supplements, but the largest consumer following outside food and drink remains in cosmetics. Due to strong awareness of organic principles in the US, North America offers the greatest potential for the development of organic cosmetics or personal care products, although Japan and the Netherlands also offer opportunities.
The US holds prime ground for exploration
Over 2010-2015 organic food and drink in the US is set to see absolute growth of US$2.6 billion while the organic beauty and personal care industry is anticipated a gain of US$1.7 billion. This strong growth shows that North America is the prime target market for companies wishing to explore organic beauty. Niche natural and organic personal care brands are becoming mainstream, and as a result are increasingly being sold in drugstores and supermarkets, thus attracting a growing consumer base. For example, natural beauty brand Lavera is on sale at mass US retailer Target.
Japan is the largest market for beauty and personal care, accounting for a global value sales share of 14% in 2011. Equally important, there is also growing awareness in the country of organic food and drink, with retail value sales set to witness a constant CAGR of 4% over the 2010-2015 forecast period. Both factors combined mean that Japan has the potential to be the second most attractive market to organic beauty and personal care players, provided of course that green credentials and organic benefits can be effectively conveyed to consumers.
Finally, Germany is the most mature market for natural beauty products, with many of the biggest and most established names, such as Börling, Dr Hauschka, Lavera and Weleda, originating from the country. Thus, it is likely to see little growth (weaker growth but from a larger base) in organic beauty products over the 2010-2015 period as local interest has plateaued. Nevertheless, these brands are witnessing increasing popularity abroad, for example in the Netherlands where consumer spend on organic food and drink as a proportion of disposable income increased by 50% over 2006-2010.
Growth of Top 10 Organic Markets and Prospects for Organic Beauty and Personal Care 2010-2015
Source: Euromonitor International
Green formulations: Sustainable credentials add value
In some of the mature markets, beauty players have already gone a step further in the search for the ultimate organic beauty solutions. They have adopted a “holistic” approach to ensuring their brands cater for demand for fairtrade, local sourcing and sustainability as well as organic ingredients. For example, the USP of the product range from French beauty brand Nominoë is that it is both organically certified and also uses only plant extracts that have been locally sourced, as opposed to using those imported from other countries. This concept not only attracts those consumers interested in the locality of a product but also in a reduced carbon footprint.
Another brand, Oriflame from Sweden, launched a line called Ecobeauty in November 2011. The company claims that 95% of ingredients in the line come from traceable, renewable and sustainable sources. The company promotes the added value of the brand, with all products being fairtrade, Ecocert, vegan and FSC certified. Thus, in terms of added value, these products offer more than those that are simply “certified organic”.
Appeal of natural nourishment
Within beauty and personal care, organics are predominantly found in personal care products, as not only do consumers apply these products directly onto the hair and skin, but also their appeal is based on nourishment and long-term care. The appeal of products that are less damaging to long-term health means that consumers are most likely to buy into organic products in categories such as skin care, hair care, sun care and bath and shower.
Unwanted artificial ingredients which cause many consumers to turn to organic cosmetics are the main reason why many consumers buy into organic alcoholic drinks and organic vitamins and dietary supplements. However, with regard to the latter, there is also a promise of superior nutrition.
Organic cotton is being used more widely in apparel and tissue and hygiene as consumers become more aware of the production methods used for products which they are putting close to their skin.
But perhaps most closely linked to organic food and drink is organic pet care. Pet anthropomorphism is occurring in many countries and in order for pets to receive the same high-quality food as their owners, consumers are also buying into organic pet food.
Movement of Organic Outside of Food and Drink
Source: Euromonitor International