Welcome Guest to Happi

Subscribe Free: Magazine | eNewsletter

current issue August 2014
 •  Personnel Changes at Energizer  •  Avon Launches Color Cosmetics  •  The Honest Co. Closes Financing Round  •  Oral-B Touts Made in USA Status  •  Walgreens Partners With NeoCell
Print

All Hyped Up?



Is growing demand for organic beauty care products myth or reality?



Published January 8, 2009
Related Searches: president body spa research
Post a comment
All Hyped Up?

All Hyped Up?



Is growing demand for organic beauty care
products myth or reality?



By Christine Esposito
Associate Editor



When it comes to rapid growth of the organic beauty market, don’t believe the hype, warns an executive at one market research firm.


According to a new study conducted by TABS Group, a Shelton, CT market research and consulting firm, organic food and beauty care items have still not gained mainstream acceptance by American consumers, and growth is a function of more items on the shelf than any inherent increase in demand.

   
"There is a significant gap between the hype and reality of consumer purchase behavior with regards to organic products," said Kurt Jetta, TABS Group president and founder. "Less than 40% of adults claim to have purchased anything from the major organic categories in the last six months."

   
According to TABS, purchase levels for organic beauty care products had very low mainstream acceptance with stated purchase for organic skin care at just 5% and organic hair care and cosmetics at 4% and 3%, respectively. In contrast, non-organic products for all of the above categories have household penetration levels of well above 70%, according to TABS.

   
The aisles are full, but is anyone buying?
TABS’ organic product study was conducted among 1,000 representative respondents aged 18+ in the TNS panel between Nov. 12-15, 2008.

   
The findings are consistent with trends TABS has been tracking in retailer sales data, according to Dr. Jetta.  "Very few of these products have meaningful sales levels in traditional mass market retailers, even the ones that are very strong in the natural food and specialty channels,” he noted.

   
According to Dr. Jetta, tracking the growth in sales of organics concurrent with the growth in SKU count of organics, sheds light on the matter.


“What we see is that distribution growth is actually outpacing actual sales growth. This means the average sales per organic item is actually decreasing. We have found this measure—the change in dollars per SKU—to be highly predictive of future growth. I’m not sure why there is no growth in dollars per SKU. This lack of growth is a good indication of a lack of increased demand, and it predates the current recession.”


According to Dr. Jetta, while a few retailers have had success with organic products, “most of the ones that have invested heavily in this trend will see a poor return on that investment. Most of the sales growth in these channels has been driven by increased selection of organic products rather than any inherent growth in consumer appeal."


Dr. Jetta insists that the situation in analogous to the piqued interest in teen beauty products several years ago. 


“The products never sold very well, yet there was a lot of press about the topic so manufacturers entered the market and retailers greatly expanded their selection. Today you barely see any brands that are specific targeted for teens that have mainstream presence,” he said.


Still, Dr. Jetta acknowledged that growth will occur in organics. “We expect growth to continue because retailers appear to be continuing to expand their organic selection.”


Dr. Jetta also offered some advice for companies considering entering the marketplace or adding an organic beauty care range.


“Do your due diligence work before launching into the mass market,” he said. “Look at the market results of current organic products and conduct consumer research. Otherwise, stick to channels where the product is more likely to succeed, such as specialty beauty outlets.”


blog comments powered by Disqus