US Organic personal care market takes off as consumers grow wary of ‘pseudo naturals’


The natural and organic sector is the fastest growing in the North American cosmetics and toiletries industry, with sales increasing by 20% a year, says Organic Monitor.

A new report from the London-based organic industry analysts project strong future growth with natural and organic increasing its share of the total US? personal care products market growing from 8% this year to 15% in the coming years.

The report also identifies a two-tier market emerging in the North American market and shift towards more organically certified products in response to growing consumer wariness of ‘pseudo-naturals’.?

Organic Monitor attributes the current high market growth rates to the rise in ethical purchasing and ‘mainstreaming’ of natural and organic products. Distribution in mass-market retailers is increasing as retailers focus on ecological and natural products. It notes that mass merchandisers like Wal-Mart and Target are introducing natural and organic personal care products, supermarkets like Safeway and Loblaws are expanding product ranges, whilst drugstores are launching exclusive products.

The report finds that product penetration is increasing in all channels. Specialty personal care stores and department stores are introducing premium natural and? organic brands. High growth is also coming from spas, salons and beauty centers. Most sales however remain from natural food shops which have 45% market share. Leading chains like Trader Joe’s and Wild Oats have developed private labels for natural beauty products, whilst independents are giving greater shelf-space to these products. Whole Foods Market is setting the pace by looking at setting up dedicated spas in some of its natural food supermarkets.

A key finding by Organic Monitor is that the North American market is evolving into a two-tier market. The first-tier comprises companies that have received a capital injection in recent years. These frontrunners, backed by large marketing budgets, are showing a large rise in market share as they expand distribution and strengthen their product portfolios. Aveda is the market leader because of its extensive, yet exclusive, distribution channels. The second-tier comprises smaller companies that continue to focus on traditional markets. The gap between first and second tier companies is widening as the market evolves.

Ingredient and formulation issues are becoming increasingly important in the North American market. The growing number of pseudo-natural products is leading consumers to scrutinize the composition of natural and organic personal care products. Manufacturers are responding by launching products with high levels of natural extracts, ethical and certified organic ingredients. Organic Monitor expects to see more certified fair trade and organic products as companies move away from ‘natural marketing’. Indeed, major new entrants like Yves Saint Laurent (Care by Stella McCartney) and Origins Natural Resources are launching Ecocert-certified products. Intelligent Nutrients is expected to have a major impact in 2008 with its novel range of nutritional cosmetics that are made from certified organic food ingredients.

More information is on http://www.organicmonitor.com/300160.htm
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