For the major global brands in the natural personal care market, Kline has analyzed product ingredients to give each brand a natural rating based on a scale of 1 to 10, identifying brands that used almost exclusively synthetic ingredients and very little natural ones, or those using mainly botanical extracts and only a small percentage of non-natural ingredients. Kline also assigned a sustainability rating—based on factors such as carbon neutrality, manufacturing processes, packaging, ingredient sources, and social responsibility—to each brand. Interestingly enough, in many instances the extent to which the products are truly natural do not always coincide with the sustainability scores and vice versa; several companies that practice rigorous sustainability are selling products that score lower on the natural scale. However, the differences are not vast. For example, the highest truly natural scores often had medium-level sustainability practices.
Regarding the amount of sales as compared to degree of truly natural formulations, the difference is even greater. The biggest-selling brands in 2009 had some of the lowest natural scores, and the most truly natural brands have much smaller sales. Of course, it is usually easier and cheaper to make products heavily reliant on synthetics, and especially with the recent global economic prices, cost was king. However, Kline maintains that personal care manufacturers competing in the natural personal care space need to start reformulating toward the more natural end of the spectrum. With growing consumer awareness and education on the matter, and with natural and organic certifications becoming more prevalent, demand for truly natural products will eventually triumph over natural-inspired products. Consumers are wary and tired of greenwashing, and a growing number of people prefer products with truly natural ingredients from companies that respect and adhere to sustainable practices.
Pressure is coming from all sides; consumers, retailers, and the industry itself. In mid-2009, Walmart announced it is developing a global sustainability index. This sets a new precedent for responsible product lifecycle management. Furthermore, the lawsuit by Dr. Bronner’s Magic Soaps (along with Intelligent Nutrients, Organic Essence and the Organic Consumers Association) against other companies that they maintain are making misleading organic labeling claims is still active. Therefore, in order to compete in the natural personal care market in the medium- to long-run, companies should align strategic business principles with product formulation and marketing messages.
In summary, as the natural trend grows, Kline believes that the industry is moving toward a critical mass of acceptance and demand. As marketers combine natural ingredients with overall sustainability practices that appeal to consumers, it may be just a matter of time before purchasing natural and sustainable products becomes a way of life for the majority of people, and natural personal care products solidify their position as a standard in the industry.
About the Author
Nancy Mills is the industry manager for the Consumer Products practice at Kline & Company. She is currently launching the new program Kline Pulse: Consumer Insights of Personal Care Innovation 2010. This forward-looking study combines cutting-edge primary consumer research with Kline’s market data. To learn more visit: www.klinegroup.com/reports/y685.asp. She oversees the Cosmetics & Toiletries and Household Cleaning Products reports and is the global project manager in charge of Natural Personal Care. Nancy also manages parts of the Professional Skin Care, Beauty Retailing and Salon Hair Care studies. She has 13 years of experience in global business: market research, strategic marketing and consulting. She is regularly quoted in all major industry publications and many national media outlets.