All-natural, organic gain momentum
The drug channel has seen the all-natural and organic beauty categories grow aggressively in recent years. The roster of brands offering natural and organic skin and hair care products has expanded, and consumers have more knowledge and choices when it comes to natural beauty than ever before.
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Natural and organic beauty products have enjoyed a 24% compound annual sales growth rate over the past four years — significantly outpacing the 2.7% growth for the total beauty category, according to Nielsen.
Technavio’s latest report on natural and organic products predicts that the organic skin care products market will grow at a compound annual sales growth rate of more than 10% through 2020. The report lists organic face creams and body lotions as the two primary product segments in the market.
Much like better-for-you food, natural and organic beauty products aren’t new, but their popularity is skyrocketing, especially among women between the ages of 20 to 65 years. As the trend gains popularity, debate rages over what constitutes natural and organic. According to Mintel, 47% of consumers consider products “free from chemicals” as the main indicator for a true natural beauty product. So what exactly is an “organic” beauty product?
“Labels often have the words ‘natural’ and ‘organic’ and, often, they are really just buzzwords more than a verifiable claim. There is currently no certification process for ‘natural,’ so that word means whatever a company wants it to mean,” said Melinda Olson, CEO and founder of Earth Mama Angel Baby. “When we use it, we mean the closest to nature we can possibly make a product, and still have it be safe and effective. The word ‘organic,’ when legally used, has to be certified to very strict standards by a third party. We voluntarily send products with organic or non-GMO claims through the NOP, NSF or Non-GMO Project process to assure consumers that they can trust those claims.”
Beauty shoppers increasingly prefer natural beauty products, Nielsen said. The company’s most recent beauty survey showed 53% of respondents felt “all-natural” was important in their buying habits. Technavio goes even further, saying its research indicated that “natural” is no longer sufficient. The firm said consumers increasingly preferred organic products over those labeled “natural.”
“The growing aging population has led to high demand for natural and organic anti-aging creams, moisturizers and body lotions, and this is likely to continue during the next five years,” said Brijesh Kumar Choubey, a lead analyst at Technavio for beauty and personal care products.
Many suppliers big and small are launching natural and organic products to gain greater market share, according to Technavio. For instance, Burt’s Bees has launched renewal face care products made of natural and organic ingredients to reduce wrinkles and lines.
Olson said the drug channel offers a good example of retailers finding a place in their stores for expansion of their natural assortment, as well as being responsive to consumer demands and requests for safer products. “Drug stores that think outside of the box to help promote a brand that does not have the same size budgets as mega brands are on the cutting-edge,” Olson said. “Often the smaller company’s voice is powerful, and very much in tune with their customers. They have built a trust and a following, and retailers that can honor that relationship in a creative new way will see positive reactions from consumers.”
Another example is Target, which is doing a good job of bringing in “green beauty” brands to their store, according to Hana Organic Skincare’s COO Natalie Berry.
“They have created accessibility when it is really needed. Another store to pay close attention to is Credo Beauty — think Sephora, but with only clean brands. Only a year in, and they have a dominating Web presence (along with two retail stores), with more cities and locations lined up for next year,” Berry said.
Olson said ethics in the natural and organic beauty category is important. Millennials have grown up skeptical and are merciless if a company is cutting corners or skimping on integrity.
“Ethical consumption also is a hot issue in beauty, and in general,” said Eleanor Dwyer, research associate at Euromonitor. “In Euromonitor International’s 2015 Beauty Survey, we found that U.S. consumers’ beauty purchases are significantly impacted by cruelty-free, animal testing-free and vegan claims. These claims influenced purchasing decisions even more than organic claims.”
Clearly there has been a tipping point when it comes to natural beauty products. Beauty shoppers increasingly are looking for:
Chemical-free;
Multifunctional organic skin care; and
New formulations in organic skin care.
Some suppliers said the Environmental Working Group’s Skin Deep database and the Think Dirty app have contributed to a lasting change in the shopper mind-set.
“More and more consumers are starting to understand that beauty and personal care products actually often contain ingredients that are causing harm. People are learning how to read labels and to understand the safety of the ingredients of their health and beauty products,” Olson said.