Natural ingredients drive growth in cosmetics and toiletries – by 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.
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.- See more at: http://petaldew.com.au/natural-ingredients-drive-growth-in-cosmetics-and-toiletries/#sthash.mY9cw3LX.dpuf