The Natual Products Market

November 14, 2005

Science and nature meet to produce the next generation of botanical-based personal care products.

The natural products market is enormous, and difficult to get a grasp on. Many products contain natural ingredients, but are not exclusively natural; others are all-natural, but not certified organic.

Atlanta, GA-based Earth Solutions takes a serious approach to natural personal care, company executives said. The company's DermAlive products are distributed to medical clinics, health, gift and beauty stores across the U.S.

Through the confusion, one thing is clear: this fascinating market is already big, and getting bigger. According to the Natural Foods Merchandiser, natural product sales topped $34 billion in 2001. Natural and organic product sales in food, drug and mass merchandisers grew 5.5%. Of that total, natural personal care and other non-food natural products grew an impressive 22%.

"People are aspiring to an organic lifestyle," commented Jay Jacobowitz, president, Retail Insights, Brattlebro, VT. "It's hard to overstate the implications of that trend for the growth of our industry."

Though organics and natural products first drew interest in health food markets, it wasn't long before personal care and cosmetic marketers caught on. It's a trend that isn't likely to slow down, industry experts agree.

However, sorting through the many offerings in this category-all natural; certified organic-ingredient containing; food grade-ingredient containing and synthetic products with natural additives, to name just a few-can lend more confusion than information. Industry experts contacted by Happi tried to help unravel the mystery and reveal the future of the natural personal care products market.

Urist Cosmetics' Dark Circle Diminishing eye gel and Skin Protecting serum target intensive personal care with unique ingredients, including naturally-derived actives.

As Natural as it Gets
Though it's difficult to pull together an all-natural product without sacrificing the shelf life that comes with preservatives, Anne Dobeaux of Wild Earth, Chicago, insists she has the answer.

Wild Earth products utilize an odorless form of rosemary extract, purported to help prolong the products' shelf life. Unlike many personal care products, Wild Earth products do not contain water as a base.

"By foregoing added water, we're not introducing bacteria into the product, so there's less likelihood that products will go bad before their time," said Ms. Dobeaux, the company's managing director.

In addition, the company takes advantage of the natural stability of certain botanicals, such as babasu oil, as opposed to less stable varieties. According to executives, these steps ensure a respectable shelf life: "We guarantee a two-year shelf life on our products," Ms. Dobeaux said.

Babasu's best seller by far is the Babasu sugar rub, which comes in a crock pot. "Sugar rubs are relatively new on the market," Ms. Dobeaux said. "Our customers like the fact that sugar is an organic product. All of our products use certified organic ingredients."

She pointed out that traditional salt rubs, though effective, can be irritating to the skin, especially after shaving. "Sugar is less abrasive and works just as well," Ms. Dobeaux said.

Babasu sugar rub was such a hit that the company plans on rolling out a sugar rub refill for the crock pot. "The demand for a refill has been so great that we're introducing it this month or the beginning of February," Ms. Dobeaux revealed. Also in the offing is a sugar rub that is twice the size and comes in a shower-friendly package.

The company's second-best selling item is the Babasu body cream. "It's a balm, and of course, there's no water added," Ms. Dobeaux pointed out. "The product is very rich and long-lasting. Balms feel very heavy, but when they're used, they are wonderfully emollient. We also use certified organic olive oil. The skin feels like velvet, and hours later, the customer still has soft skin without flakiness."

She admitted that using all-organic products "limits the amount of ingredients one can work with. But using certified organic ingredients puts us a step above being what most companies call 'natural.'"

Cost Considerations
One drawback to utilizing natural ingredients is the cost. Generally, a naturally-derived active will cost more than its synthetic counterpart.

However, this hasn't stopped consumers who are committed to living a healthier lifestyle, according to some industry experts.

"Some customers are willing to spend more; some are not," conceded Ms. Dobeaux. "We'll never offer a product that's great-looking on the outside but garbage inside. The discriminating customer knows what's quality and what's not."

"A percentage of the public is very willing to spend more on natural, and especially organic," agreed Stephen Byckiewicz, who along with Bob MacLeod is co-founder of Kiss My Face, Gardiner, NY. "The biggest gains in the grocery industry have been in the organic category and, judging by the higher prices, the willingness is there."

Kiss My Face recently unveiled Obsessively Organic facial care, Organic lip balm, Organic lip repair and Hot Spots Organic sun block, for sensitive skin areas.

"There is much more of an awareness as to natural and organic ingredients today," Mr. MacLeod pointed out. "Who wants to put chemicals, dyes, preservatives and pesticides on the face?"

Other longstanding natural product marketers agree. Jason Natural Cosmetics' tagline is "pure, natural and organic," a simply-put philosophy for a highly successful company. The Culver City, CA-based company recently developed a Co-Q10 toothpaste line, using coenzyme Q10 (ubiquinone), known for its skin-caring qualities, in a different application. The tooth care line is based on the co-enzyme's reported ability to fight disease.

Jason's PowerSmile Plus with fluoride contains three natural whiteners that polish without abrasives. Sea Fresh Plus with fluoride strengthens gums and teeth utilizing blue-green algae and sea salts.

NutriSmile Plus employs ester C to reinforce tooth enamel and defend against decay, while Oral Comfort, also available with the "Plus" Co-Q10, is formulated for sensitive teeth. The line also contains Oral Comfort Mouthwash spray with Co-Q10.

The tooth care line reinforces Jason's offerings of not only personal care but health products. "There is an immeasurable, qualitative aura about a person in harmony and balance," said Jeffrey B. Light, president. "When people are able to see and feel their natural beauty shining through, they become more comfortable with themselves."

Jason offers a full range of health and beauty products, from topical vitamin C products to skin and hair treatments to sunscreens, aromatherapy and a progesterone cream.

The company is ISO 9001 certified, making Jason the first company in the health food/natural beauty industry to receive this status, according to company executives. ISO certification is an international quality management and assurance system for service businesses and manufacturers.

Jason's philosophy is "manufacturing and developing products that deliver a growing sense of well-being and happiness," Mr. Light insisted.

Tried, True and New
Other natural products leaders have introduced new products in the past year and have new ones in the works. For example, Aura Cacia products, available through Frontier Natural Brands, www.frontiernaturalbrands. com, developed the Aura Cacia Organics line. Aura Cacia Organics addresses consumers' demand for organic personal care products that are more pure, effective and luxurious than their conventional counterparts, according to company executives.

Aura Cacia Organics includes two product lines: skin care and spa aromatherapy. More than 50 new SKUs have been introduced, including moisturizers, cleansers, toners, specialty treatments, masks and scrubs. Additional Aura Cacia Organics will be added during the next couple of years, executives revealed.

"Aura Cacia Organics brings the benefits of organic to the personal care category," said Steve Hughes, chief executive officer, Frontier Natural Brands, Aura Cacia's parent company. "Current Aura Cacia followers will love the expanded variety of new organic skin care and spa lines as they add Organics to their everyday routine. And new customers will be amazed by Aura Cacia Organics' refreshing approach to natural personal care."

Nora's Naturals offers a variety of personal care products. The company's formulations include such ingredients as lavender, rosewater, tea tree and geranium.

Another well-known name in organic personal care is Los Angeles-based Archipelago Botanicals. The company was founded in 1996 and made an impressive entrance into the personal care business in 2000 with its milk based collection of bath and body products; following the success of the milk line, the Mineral Mud collection was introduced in 2001, and the Morning Mint line was launched last year.

The Morning Mint collection includes a 5.2-oz. soap, Mint bath soak, hand créme, hydrating lotion, body wash, facial cleanser, shampoo, conditioner, toothpaste, mouthwash and a candle. The products are available at boutiques and salons nationwide.

Mineral Mud features a Mineral bath, body scrub, hydrating lotion, Mineral face mask, Mineral hair mask and exfoliating bar. Prices range from $8-20.

The Milk collection of bath soaps, Archipelago's original personal care offering, contain dried milk proteins and are triple-milled. Oat, rice and soy fragrances are available. The 5.2-oz. bars retail for $7. The Milk collection also includes such products as Milk bath, Milk salts, body créme, body lotion, dusting powder, body wash, foot soak, foot scrub, foot balm, shampoo, conditioner and lip balm.

Archipelago Botanics was originally fueled by the founders' desire to make aromatherapy both accessible and pleasant, company executives said. Originally known for its candles, the company offers pillars, votives, travel tins and glass-encased candles in more than 25 essential oil fragrance blends.

Naturals in the Real World
Consumers who crave a more natural lifestyle gravitate toward products that say they are natural-but pleasing choosy customers isn't easy, according to some marketers. "All"-natural is a feat unto itself, and dramatically limits ingredient choices. At the same time, many organic and/or natural ingredients are much more costly than more traditional additives.

A good compromise is a product that contains as few synthetics as possible, while maintaining good preservation, said Robert Urist, president, Urist Cosmetics, Vancouver, Canada. "What we focus on (at Urist Cosmetics) is unique products containing naturally-derived ingredients," he explained.

The company has existed since 1949, but the real focus on naturally-derived ingredients was spawned some 15 years ago. The company works with two experts-a skin care clinic in the UK, and a dermatologist in Alberta, Canada-to develop its more serious care products. "Until about 15 years ago, we were more pharmaceutical (than cosmetic)," Mr. Urist pointed out. "My father, Dr. Harold Urist, started the company, and his specialty was always vitamins. So from very early on, Urist has focused on vitamins and their effects on the body."

Mr. Urist said he has not yet discovered a truly natural preservative comparable in activity to synthetics currently on the market. "We in the industry are always searching for that elusive ideal-the completely effective, completely natural preservative," he said. "At Urist we're going to keep on looking until we find it. In the meantime, we utilize a very small amount of preservative in our products to keep them free of bacteria, for our consumers' safety."

Some of Urist Cosmetics' most popular products include a Dark Circle Diminishing, two-product system; a Natural Skin Whitening sytem and a Stretch Mark Fading system-serious care for the skin, Mr. Urist pointed out.

The Dark Circle Diminishing system includes vitamin K and horse chestnut seed extract, while Natural Skin Whitening utilizes kojic acid, stabilized vitamin C, glycolic acid and natural extracts as an alternative to hydroquinone. The Stretch Mark Fading system's main ingredient is a yeast cell derivative extract, a very strong collagen stimulator, according to Mr. Urist.

"Consumer reaction to these products is very, very good," Mr. Urist said. "A lot of people are looking for these ingredients. We make it easy for consumers by offering a website with complete information on the ingredients, our company background and ordering information." The website, www.uristcosmetics.com, boasts an average of 10 different pages of information for each product so that consumers can get a clear view of the items they are ordering.

What of the future for Urist Cosmetics? According to Mr. Urist, "I have always felt that people will spend more on quality products, but not a lot more," he cautioned. "We're trying to give the consumer the best of both worlds: effective, attainable products that truly do what they say." This means using actives in high enough concentrations to make a difference, he pointed out.
"It's part of the national consciousness that 'natural' is generally safer and, perhaps, works better," he said. "That's not true of all natural products, of course, but we are careful in our selections. We bring to consumers products that not only have a safe appeal, but truly work."

Growing Concerns
Also serious about skin care is Bella Mama, Boulder, CO, which caters to the changing and expanding skin of pregnant women.

"Taking care of one's skin, nails, hair and teeth is part of the total gestalt of natural health," said Aimee Snow, the company's chief executive officer.

Bella Mama's offerings include the You're Pregnant! collection, with Belly oil, spritzer, cooling eye gel masque, Preggy Pops lollipops for morning sickness and all-natural pregnancy tea.

Another popular pick, the Spa Mama gift box, includes belly oil, with four natural, non-greasy carrier oils, calendula, vitamins and essential oils; foot salts; Inara milk bath; a waffle weave cotton robe and a satin lavender filled eye pillow.

Also in the company's offerings is the Just Hatched gift box, with sitz bath herbs, Mom's baby balm for nursing, chaffing and eczema, a vintage shoulder cloth for burping and Traditional medicinal mother's milk tea. All products are offered on the company's website, www.bellamama.com.

"Our most popular item by far is the Belly oil," a company representative commented. For the future, the company plans on developing a baby care line. In the meantime, there is definitely room for growth in the natural personal care category, Bella Mama executives said. "Growth in the natural personal care products category parallels the growth in the natural products industry overall, which has been experiencing double-digit growth for nearly 20 years," Ms. Snow said. "Within the (general) natural products category, natural personal care product sales have been growing even faster."

Ms. Snow agreed with many other experts on the issue of cost. "There's greater awareness and discernment about natural vs. synthetic products," she said. "And once customers are tuned in to the differences between artificial and natural, they are willing to spend a little more for natural skin care products because, in truth, the ingredients are superior."

Naturally Beautiful Hair
Skin can certainly benefit from natural ingredients, but let's not forget hair: many hair care companies are getting in on the natural products trend.

Goldwell Cosmetics, Linthicum Heights, MD, recently introduced a line of hair-reparative treatments. Definition Color & Highlights serum seals in hair color with moisturizing aloe vera milk, vitamin E and UV filters. Definition Permed and Curly serum is an instant leave-in conditioner and curl stabilizer containing almond milk. Definition Dry & Porous Repair serum contains avocado milk to restore lipids and vitamins specifically for intensive care, according to company executives.

The serums contain alpha hydroxy fruit acids extracted from apples, pears, blackberries and raspberries. The fruit acids seal moisture into the cuticle and smooth the hair shaft for shine and strength, executives said. Each serum retails for $5.

Though the products can't necessarily be considered "all" natural, they are a good compromise between nature and science, Goldwell professionals said. "Many consumers are looking for products that use sophisticated technology to harness nature," said Susan Hilger, director of marketing, Goldwell USA. "The dichotomous relationship of nature and technology seems to be at the forefront of product development in this day and age."

Goldwell's newest products address this need, Ms. Hilger said. "Goldwell has worked to create a balanced, harmonious relationship between (nature and technology)," she insisted. "Using a unique, patented method, Definition protects the sensitive components of natural oils to ensure that the maximum benefits are realized."

The Definition line is not new, but the incorporation of plant milks is. "With this relaunch, we introduced a number of new products to the Definition line," Ms. Hilger said.

Like most industry professionals, she predicted a continuation of the tremendous growth the natural products industry has experienced during the past few years. "This category will continue to experience growth as technology continues to improve ways to deliver the nutrients that nature offers in personal care products," she said. "Consumers are recognizing the advantages of using natural ingredients, and will continue to seek products that maximize their potential."

Slick Moves
One of the first products to be touted by the personal care industry as both physically and emotionally beneficial were essential oils. According to both folklore and history, oils have been used for centuries to impart a number of benefits. The resurgence in interest for natural solutions to personal care, wellness and beauty has created renewed interest in essential oils.

Santa Fe, NM-based AromaLand Inc. offers a variety of oils, but a spokesperson commented that lavender, "the calming scent," was one of its most popular. Three different lavender essential oils are available from the company: Bulgarian lavender, lavender mailette and extra fine lavender. Although many commercially available aromatherapy products contain synthetics, AromaLand's 150 essential oils are pure, executives insisted.

In Fiore Luxury body oils also boast high product integrity. The line debuted at New York's Ex-Tracts trade show in April. Available on high-profile shelves such as Bacara in Santa Barbara, Sonoma Mission Inn in Sonoma, CA and Venta in Big Sur, CA, In Fiore encompasses eight blends designed to soothe and moisturize the skin, reduce tension, stimulate new skin cell growth and detoxify the skin. They contain a base of grapeseed, jojoba and hazelnut oil for easy absorption, In Fiore executives said.

Taking a serious attitude, Earth Solutions, Atlanta, GA, utilizes aromatherapy not only for personal care but for other uses, such as the company's Appetite Control aromatherapy inhalers. The company even suggests a meditation to accompany the therapy. Earth Solutions executives noted that the industry continues to grow dramatically: "The consciousness for natural ingredients has risen to new heights," said company founder David Epstein in a statement. "Whereas in the past natural health products could only be found in small health stores, today natural health counters exist in virtually every large grocery and mass retailer."

Other marketers have expanded their aromatherapeutic lines; Essence of Vali, New York, NY, offers targeted blends such as Sleep and Passion, and Keene, NH-based Nora's Naturals offers a variety of hypoallergenic, spa quality essential oils free of perfumes, colors and mineral oil. The oils are never tested on animals, Nora's Naturals executives said.

Dragonfly LP, which imports and distributes such fine skin care products as Ionithermie, Crystal Remedyd and Les Complexes Biotechniques in France, introduced Les Oleades essential oils. They are 100% pure and can benefit different skin types while soothing and rejuvenating the body.

The company also introduced the Woah Mask, a traveling mini-facial compressed into a tablet size that, after application of an accompanying all-natural serum, expands into a full-size mask. The Woah Mask is available in Actilight for dehydrated, sensitive skin with waterlily, birch and chestnut or Actilift, with wheat protein for more mature skin.

Bath and Beyond
Bathtime therapy is another time-tested personal care method. Cleansing has grown from a detergent bath bar to plant-enhanced gels, oils, muds and specialty scrubs.

Mood Muds from Maruba Therapy Natural Products, Houston, TX, utilize the natural properties of mud when it dries; mud poultices naturally exfoilate the skin and can even reduce inflammation or swelling and diminish scar formation, according to Maruba Therapy executives.

Goat's Milk (lait de chévre) from Canus, Waitsfield, VT, is the basis for the company's complete line of bath products. Items include Foaming milk bath, Goat's Milk body wash, Goat's Milk lotions and Goat's Milk soaps.

Plainfield, MA-based Kathy's Family puts a fun and familiar spin on its products: each is named for a different member of her family. For example, Kathy and Her Brother Dale's Soap is "for really dirty kids (and everybody else too);" Aunt Leona's soak helps her feel like a little lady and Uncle Earl experiences snow shoveling relief with the company's Massage Oil. Kathy's Family products are "honest, trustworthy and down to earth," company executives said.

Far from Saturated
With so many potential places to incorporate natural ingredients, the market is far from saturated, company executives said. Despite an already enormous scope of product offerings, the natural products market can only get better from here.

On the other hand, the mass availability of products previously available only in niche stores is pushing smaller marketers out of the arena, according to industry experts contacted by Happi.

"The market is so huge, individual stores are crying the blues," Mr. Urich of Urich Cosmetics commented. "A small store can no longer make a living selling vitamin C and echinacea; those can be had just as easily at a chain grocery or drug store."

Because of this shift, "smaller and niche stores really need to stay on their toes," Mr. Urich said. "They need to keep coming up with new and different things, and they have to really tend to their customers personally, because that's one of their strongest selling points vs. larger, less personal stores."

To stay ahead of the competition, however, all marketers need that special something that makes them different. For example, Bella Mama is sold in spas and select boutiques, maternity stores and department stores such as Nordstrom. "When we started we wanted to be something other than functional. We wanted a high-end product, and we do very well," said Ms. Hohlfelder of the company.

Marketers large and small have entered this market, and intend to stay there. With a positive consumer response to natural actives in virtually every area of the personal care market, it's a category with outstanding growth potential. "Consumers are recognizing the advantages of using natural ingredients," said Ms. Hilger of Goldwell USA. So have marketers. Together, it's a natural match.