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Big Players Help Encourage the Growth of the Naturals Market

Some of the biggest cosmetic players are positioned to tap into continued growth in the naturals personal care market despite the economic gloom, a study reveals.

Last year was a mixed bag for the personal care industry, with fortunes tailing off markedly in the last six months, even for some of the biggest and most dominant players, such as P&G and L’Oreal. However, the natural personal care segment seems particularly well positioned to continue growth, which according to market research company Kline Group increased by 19% in 2008 to reach an estimated $2 billion.

Naturals market looks well insulated

Kline believes that continued interest in natural products will help insulate manufacturers working in this sector from the declining consumer spend that is affecting other categories. “Consumers’ desire for safer products and their concern for the environment have combined with more mainstream availability of natural products to drive growth in the market,” said Karen Doskow, associate project manager for Kline.

However, perhaps the biggest challenge facing natural personal care players is whether or not consumers will be prepared to pay the premium price that products in this category command in the face of diminishing spending power.

Will consumers afford to buy natural?


Product prices in this category start at 20% higher than their non-natural counterparts—pricing that is justified by the fact that sourcing natural ingredients is significantly more challenging and expensive than synthetic products.

But despite the pricing challenge, the experts at Kline believe there are still opportunities, especially as the bigger players get more involved in the category. “Major marketers are in an excellent position to leverage the naturals proposition that began with the smaller niche players,” said Carrie Mellage, director of Kline’s Consumer Products division.

Bigger players move in on the act

“Manufacturing economies of scale, a stronger position for negotiating supplier agreements, and well-developed distribution channels will allow master brands like Unilever’s Dove and Colgate-Palmolive’s Softsoap to ride the naturals wave even during the lean times," Mellage added.

Kline has recently published the U.S. volume of its Natural Personal Care 2008, which examines the various brands on the market as well as the type of ingredients they are using., February 9, 2009



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