Features

A Natural Progression in Personal Care

January 7, 2009

A look at the past, present and future of the natural and organic personal care category.

A Natural Progression in Personal Care



A look at the past, present and future of the natural and organic personal care category.



Darrin Duber-Smith
Green Marketing, Inc.
Boulder, Colorado



Mother nature is not only difficult to fool, she is also tough to ignore. As a 20 year veteran of the natural and organic products industry, I am still amazed at the level of growth sustained year after year, especially with regard to personal care and household products. In 2007, the natural and organic personal care market, once merely a novel, yet bothersome, sub-segment of the beauty industry, reached $9.23 billion at an annual growth rate of 23.3% (Nutrition Business Journal 7/08), and now represents more than 15% of the total cosmetics market.

Aveda's Uruku lip pigment contains 100% certified organic aroma.
 
The natural and organic products industry began with the efforts of that famous health enthusiast, Will Keith Kellogg, and a handful of early pioneer companies such as lozenge maker Thayer’s, soap manufacturer Dr. Bronner’s and vitamin provider KAL. The industry grew very, very slowly until the zeitgeist embodied in culture of the 1960s, as well as the ortgeist in places like San Francisco, Boulder and New York City, fostered an overall concern for personal health and the environment never seen before. There are probably 1000 lines around the world with natural or organic product positioning in an ongoing effort to exploit a trend that has been building for more than 70 years.

During that time, health food stores sprung up everywhere, most of which still do a brisk business despite competitors such as Whole Foods Market and larger mass market players. Products were found in some specialty stores, but mostly in what is still termed “the natural chan nel,” a nationwide group of retailers that determined what was really natural or organic since government regulation did not exist. Larger players such as Aveda were very progressive for their time, while other brands (which shall remain nameless) resorted to the practice of “dusting” products with a minute amount of a particular botanical and “greenwashing” the product’s positioning. Core natural channel brands, including Burt’s Bees, Jason, Kiss My Face, Nature’s Gate (Levlad), Avalon, Alba, Zia and others, dominated this tiny, but rapidly growing industry.

Eventually, research providers began to segment consumers in an attempt to identify and better define this target market which was simply clamoring for natural and organic alternatives. It was clear that “better living through chemistry” would be put to the test as numerous reports profiling “health and wellness” consumers became available for use in strategic planning.

My terribly biased interpretation is that the Lifestyles of Health and Sustainability (LOHAS) study first published around 2000 (and developed in conjunction with a trade show and trade publication by a team of industry veterans that included yours truly) is the most comprehensive.

Defining Organic and Natural



Regulation with regard to products marketed as “organic” developed first at the state level in places such as Oregon and California before reaching the national level using a network of third party certifiers with USDA oversight. Food regulations have been long established, and personal care regulations are currently being finalized. The result is a growing number of products now bearing the USDA Organic or Europe’s Ecocert symbol, validating the product’s status as 95% or more organic.

Potent & Pure skin care from Kiss My Face contains 65% recycled packaging.
Products marketed as natural, however, posed more of a problem. Other than a couple of programs offered by European certifiers (such as BDIH), there existed no definition of natural, little industry regulation and a complete lack of government oversight. After publishing several articles on the subject, I was compelled to form a committee of 25 organizations, including companies such as Jason and Bath and Body Works, whose sole mission was to define the term “natural” for the industry. The International Association of Natural Products Producers (IANPP), although obscure and short lived, got the proverbial ball rolling and eventually passed on its work to the Natural Products Association (NPA), the natural products industry’s most influential organization.

As it stands now, the NPA has defined the term and has started to issue seals similar to the aforementioned organic marks. As of this writing, the FDA has refused to define natural for personal care and the FTC has refused to regulate its use. In the absence of government regulation, the industry is compelled to self regulate so that the consumer’s best interests can be served. Abuse of the term will continue, but the seal will at least provide a benchmark and opportunity for consumer identification.


The Current Period



Now that the second decade of the 21st century is around the corner, the industry stands as a bona fide segment within the health and beauty market. Not a fad like “the macarena,” these products have penetrated every product category and every channel and are growing at, to some, an alarming rate. Boulder, CO-based Nutrition Business Journal, offered the following product category figures for 2007, identifying total revenue, segment growth rates over 2006, and overall health and beauty category revenues (see list at right). You can figure out the natural/organic “market penetration” yourself:

Color Cosmetics, a $14.7 billion market
• $380 million in NOPC (12.1% growth)

Hair Care/Coloring, a $10.2 billion market
• $1.5 billion in NOPC (22.2% growth)

Skin Care, an $8.8 billion market
• $2.9 billion in Natural/Organic Personal Care (NOPC), (12.1% growth).

Fragrances/Aromatherapy, a $6.3 billion market
• $332 million in NOPC (10.5% growth)

Oral Care, a $4.9 billion market
• $563 million in NOPC (11.7% growth)

Bath/Toilet Soap, a $3.8 billion market
• $926 million in NOPC (14.3% growth)

Feminine Hygiene, a $2.7 billion market
• $87 million in NOPC (28.4% growth)

Shaving Products, a $1.7 billion market
• $127 million in NOPC (14.5% growth)

Deodorants, a $1.6 billion market
• $198 million in NOPC (14.1% growth)

Nail Care, a $720 million market
• $22 million in NOPC (5.9% growth)

Baby Care, a $620 million market
• $134 million in NOPC (35.1% growth)

Bath Items, a $590 million market
• $138 million in NOPC (17.3% growth)

A breakdown by channel, also provided by Nutrition Business Journal, further illustrates the sheer power of this trend and reflects 2007 total revenues and growth rates:
• Natural Channel (Core Brands): $2.22 billion (14.5% growth);
• Department Store/Spa/Salon /Boutique: $784 million (11.2% growth);
• Specialty PC Stores: $582 million (10.5% growth);
• Network Marketing/MLM: $1.56 billion (4.3% growth);
• Other Direct Channels: $817 million (8.5% growth) and
• Mass/Beauty Supply Discounters: $1.32 billion (61.3% growth).

The LOHAS Consumer



Finally, I would be remiss to exclude the latest LOHAS segmentation numbers as part of what is now a very compelling case. The study, which was first conducted in 1999 by LOHAS, and since then by Harleyville, PA-based Natural Marketing Institute, identifies five distinct segments in the general U.S. adult population. There are three segments of interest to marketers offering natural/organic options totaling 63% of all adults in the U.S.:

• The LOHAS consumer represents 19% of the general population and represents the core target market for all things healthy and sustainable. These highly motivated consumers are opinion leaders, early product adopters, demonstrate high rates of product usage and are very much interested in integrating products into their healthy lifestyle.

• The Naturalites represent another 19% of the population and also a primary target for natural/organic personal care. While being completely green is not as much of an imperative, this important segment of “light green” consumers is interested in personal health and demonstrates a propensity to buy natural and organic packaged goods through a variety of different channels and are good for mainstream target marketing.

• The Drifters are 25% percent of the population and represent a huge segment of potential customers. They are younger, financially unstable, and have rather underdeveloped value structures since many are still under the direct influence of their parents. They want to be green, but either cannot or will not based on priorities that only the young can interpret.

Clever marketers can reach all three segments with one communications plan or they can easily reach the LOHAS and Naturalite segments at the same time. Each segment can also be targeted individually with specified media and vehicles appropriate for their personal characteristics. Great stuff if you are a marketer!

Still to Come



When looking ahead, you can expect more of the same. The market is driven by a perfect storm of consumers, non-profits, industry, media and government, all of whom have a stake in the demand for more natural and environmentally sustainable products. New players emerge every week, some large and others still stirring concoctions in their kitchens and bathtubs. More and more shelf space in an increasing number of retail outlets is devoted to these high growth categories, offering an opportunity for growth seldom found in a mature industry. The consumer base continues to grow and regulations with regard to synthetic compounds and “green” business practices continue to proliferate.

The juggernaut that is natural and organic personal care is likely to continue moving at a brisk pace. The existing economic crisis will quell the growth only temporarily and opportunities for success abound for the organization truly committed to the category. Time will tell, as it usually does.
About the Author

Darrin C. Duber-Smith, MS, MBA, is president of Green Marketing, Inc., a Colorado-based strategic planning firm that has offered marketing auditing and planning, marketing plan implementation, sustainability planning, branding, product development, and other consulting services to natural products companies in all stages of growth for 10 years. He has 20 years of specialized expertise in the natural, organic and sustainable products industries and is also visiting assistant professor of marketing at the Metropolitan State College School of Business in Denver, CO.
More info: DuberSmith@GreenMarketing.net or www.greenmarketing.net
 
blog comments powered by Disqus
  • Kitchen Counter Cosmetics

    Kitchen Counter Cosmetics

    Christine Esposito, Associate Editor||May 2, 2016
    LOLI box marks the convergence of natural and organic ingredients, subscription service and DIY cosmetic chemistry.

  • What’s New at La Prairie?

    What’s New at La Prairie?

    Melissa Meisel, Associate Editor||April 25, 2016
    VP of marketing shares the latest buzz with Happi.

  • Mapping Out Multicultural Beauty

    Mapping Out Multicultural Beauty

    April 25, 2016
    Agnieszka Saintemarie of Kline Group about current trends and challenges in multicultural beauty.

  • Bite Now

    Bite Now

    Christine Esposito, Associate Editor||May 2, 2016
    Is the time finally right for beauty-from-within to move into the mainstream?

  • Boxed Out?

    Boxed Out?

    Tom Branna, Editorial Director||May 2, 2016
    Salon sales outpace mass-market results in the highly competitive, highly fashionable and yes, highly-colorful hair color cat

  • That’s Awesome!

    That’s Awesome!

    May 2, 2016
    Extracts & Ingredients highlights the newest ideas in efficacious oils for the personal care market.

  • Wacker Builds on Its Success

    Wacker Builds on Its Success

    Tom Branna, Editorial Director ||May 2, 2016
    The silicone maker had a good 2015 and expects the gains to continue in 2016, driven, in part, by success in the Americas and

  • I Want It All

    I Want It All

    Melissa Meisel , Associate Editor||May 2, 2016
    Skin care moves beyond the basics with pampering formulations with unique components and novel functions.

  • Erasing the Signs of Aging

    Pauline Rouaud-Tinguely, David Boudier, Sylvain Mazalrey, Jenny Laumonier, Isabelle Cruz, Gu00e9raldine Bon, Karine Perrinet, Bu00e9ranger Tassy, Brigitte Closs, Silab R&D, Saint-Viance, France||May 2, 2016
    Silab researchers explain how by acting on the endogenous hyaluronic acid pathway.

  • The Zika Threat

    The Zika Threat

    Christine Esposito, Associate Editor||April 1, 2016
    Concerns are spreading about transmission of this mosquito-borne disease.

  • The New Spot For Acne Care

    The New Spot For Acne Care

    Tom Branna, Editorial Director||April 1, 2016
    Acne Treatment Research Center opens in Morristown, NJ.

  • The Essence of Individuality

    The Essence of Individuality

    Melissa Meisel , Associate Editor||April 1, 2016
    Fragrance sales are fueled by unique facets.

  • The Scalp Microbiome

    The Scalp Microbiome

    Nava Dayan PhD, Dr. Nava Dayan LLC||April 1, 2016
    A review of recent findings and innovative approaches for treating scalp disorders.

  • Multi-Cultural Beauty Update

    Multi-Cultural Beauty Update

    Christine Esposito, Associate Editor||April 1, 2016
    Established brands and start-ups address the needs of multi-cultural beauty consumers.

  • Who Makes That?

    Who Makes That?

    Tom Branna, Editorial Director||April 1, 2016
    From concept and formulation to testing and filling, today’s contract manufacturers perform a range of services for marketers

  • Inspiring the Next Generation Of Personal Care Products

    Inspiring the Next Generation Of Personal Care Products

    March 1, 2016
    In-Cosmetics 2016 returns to Paris next month, April 12-14, 2016.

  • Playing Doctor

    Playing Doctor

    Christine Esposito, Associate Editor||March 1, 2016
    The OTC aisle offers a wide array of no-prescription-needed treatments.

  • Shielding Skin from Airborne Antagonists

    Shielding Skin from Airborne Antagonists

    Shyam Gupta, Ph.D., John Stanek and Melinda Wochner, Bioderm Research and CoValence Laboratories, Inc.||March 1, 2016
    The enemy, it seems, is all around us. Researchers explain how to alleviate damage caused by a variety of villains.

  • Makeup Magic

    Makeup Magic

    Melissa Meisel, Associate Editor||March 1, 2016
    Sales get a lift from novel ingredients and endorsements from the likes of Gwen Stefani.

  • Feel the Burn?

    Feel the Burn?

    Tom Branna, Editorial Director||March 1, 2016
    Sun care product sales rise, but more must be done to make sure compliance rates grow.

  • New Sun Care Ingredients

    March 1, 2016
    Here is a list of new ingredients for sun care that have been introduced by industry suppliers during the past 12 months. For information regarding any of the products listed here, contact the supplier directly using the information provided.

  • Cleaning Up

    Cleaning Up

    Tom Branna, Editorial Director||March 1, 2016
    At the American Cleaning Institute’s 90th Annual Meeting & Industry Convention attendees work on regulatory issues and hammer out business deals.

  • Supply-Side Solutions

    Supply-Side Solutions

    Tom Branna , Editorial Director||March 1, 2016
    Executives from leading detergent industry suppliers sat down with Happi during the recent annual meeting of the American Cleaning Institute to discuss the problems, products and answers that are transforming the cleaning space.

  • Cleaning Industry Heads to Singapore

    Cleaning Industry Heads to Singapore

    March 1, 2016
    The World Conference on Fabric and Home Care, sponsored by the American Oil Chemists Society, will be held Oct. 4-7 in Singapore.

  • Electric Slide

    Electric Slide

    Melissa Meisel, Associate Editor||February 3, 2016
    Skin care devices bring anti-aging to the next level

  • Crowning Glory

    Crowning Glory

    Christine Esposito , Associate Editor||February 3, 2016
    Celebrity stylists and experts from leading hair care brands talk about the ingredients and formats driving the styling sector.

  • Innovation On Display

    Melissa Meisel, Associate Editor||February 3, 2016
    P&G Beauty Digital Studio showcases new products for 2016

  • Testing for Sustainable Preservatives

    Adam P. Byrne, William Michael Hart-Cooper, Kaj Johnson, Larry H. Stanker, Dominic W. S. Wong, William J. Orts||January 4, 2016
    A rapid, inexpensive and qualitative protocol for determining microbial growth inhibition.