As the natural personal care marketplace becomes ever more crowded, some big names in the business are taking steps to stand out. Whether revamping an entire product lineup, expanding with a new brand or starting over from scratch—their tactics are all designed to grow their business in this still-growing category.
According to a Packaged Facts report released in the fourth quarter of last year, natural health and beauty care (HBC) product sales through all US retail channels were expected to reach $8.5 billion in 2011, representing a compound annual growth rate (CAGR) of 10% over the six-year period 2005-2011. That’s not too shabby, especially considering the economy has been in the tank for a significant percentage of that time.
“The data are still pretty rosy,” said Timothy Dowd, senior analyst on assignment with Packaged Facts. The market research firm’s report shows that the skin care category within the overall natural HBC market grew 11% in 2011, to $5.9 billion. Hair care was the fastest-growing sector within the market in 2005-2011, with retail dollar sales climbing 86% over the six-year period to reach $2.1 billion. Natural makeup, valued at $455.0 million at retail in 2011, is a relatively smaller product category that posted very respectable but less stellar growth rates since 2005, according to Packaged Facts, which is a division of MarketResearch.com.
Burt’s Bees has created a new line called Güd, which is geared for younger consumers who love fragrance.
Much of that growth has come from the proliferation of natural brands in mainstream retailers, not the corner health food store.
“People take it for granted—even marketers too—that everyone is aware of natural/organic products and they are everywhere. Indeed, ‘ubiquity’ is today’s watchword,” said Dowd, pointing to the expansion and influence of retailers like Whole Foods and growing shelf presence for natural brands at big boxes like Target and Walmart, in addition to supermarkets, pharmacies and even college bookstores.
Still, Dowd continued, “Geographic coverage is one thing, but penetration is still weak. Our survey shows that fewer than one in five adults use organic/natural personal care products. That leaves tremendous potential.”
And that data, specifically, has marketers enraptured.
More Good ThingsTo Come
One of those companies is Burt’s Bees. The Durham, NC-based natural personal care firm that is owned by Clorox, is rolling out an entirely new line called Güd. The range has a decidedly different look and personality from the firm’s flagship brand. In fact, Güd will be to Burt’s Bees what Sprite is to The Coca-Cola Company.
“It will appeal to different consumers,” Garrett Putman, brand manager, told Happi. “The goal is to bring new shoppers into the category.”
That, for the most part, means women in their 20s. Putman described the Güd consumer as “a follower of trends, who has been curious about natural personal care, but nothing appeals to her aesthetic.”He continued, “She’s primarily fragrance driven. She is the type of woman who goes to the shelf, pulls off a bottle and will smell it.”
|Intelligent Nutrients’ new lipglosses garnered a 2011 “Best of Beauty Award Winner” from Allure.|
And as such, Burt’s Bees has made fragrance a key attribute, enlisting Giuvaudan and Roger Schmid to develop its four unique scents. Described as very “modern and complex, not simple, earthy accords,” the scents are Floral Cherrynova (Japanese cherry blossoms and almond milk), Orange Petalooza (blood oranges and hyacinth), Vanilla Flame (vanilla and rice milk) and Pearanormal Activity (pear and açaí berry).
The collection, which encompasses hair care, skin care and body care SKUs, began shipping last month—less than a year after the team at Burt’s Bees embarked on the project.
“Our team had been looking at natural personal care; how can we grow it and get new consumers into the category,” Putman told Happi. While M&A candidates were considered, ultimately the company decided it had “some really strong experience in the category, compelling consumer insights and great R&D folks and chemists to create a second brand here in Durham.”
With Güd skewing to millennenials—or at least those young in spirit—digital marketing will be in important part of the brand’s launch strategy.For example, QR codes on the back of key products will link shoppers to a mobile website that can explain the benefits of the brand or offer giveaways likes samples, coupons and wallpaper. Naturally, the brand is already on Facebook and Twitter.
Not Just Standard Issue
While Burt’s Bees created Güd for consumers who aren’t natural product enthusiasts, Avalon Organics has taken a big step of its own to improve its pole position among committed consumers—the loyalists to the organic concept in personal care.
In Q4 2011, the firm unveiled its completely revamped line of products that are compliant with the NSF/ANSI 305 Standard for Personal Care Products Containing Organic Ingredients. This month, the fully reformulated range should be on shelves everywhere the brand is stocked.
The project was as much about meeting its own standards as it was that of NSF/ANSI 305, according to Emma Froelich-Shea, senior vice president, marketing and R&D with Hain Celestial Personal Care, parent company of Avalon Organics.
“Our transition to the NSF/ANSI 305 standard was three long years in the making. We’re incredibly proud of the reformulation work, not just because it was a challenging goal that we successfully achieved, but rather because we think it’s a true testament to the Consciousness in Cosmetics pledge,” she said about the brand’s tagline.
“Not only did we reformulate to become compliant…we also improved the efficacy of our key facial skin care franchises,” Froelich-Shea added.
For example, Avalon’s Vitamin C Renewal, which targets the effects of photoaging, now contains two forms of vitamin C and green and white tea extracts to help diminish the signs of sun damage. Lavender Luminosity has lavender essential oil as well as kombucha and grape seed polyphenols, and CoQ10 Repair received an “efficacy boost” with the addition of marine algae and vitamin E.
Even one of Avalon’s top sellers—its Lavender Shampoo—was reworked.
“When we started development work on it, we were worried that we might have to sacrifice efficacy to become NSF/ANSI 305 compliant. Why should consumers have to settle for a formula that dries out hair or doesn’t lather properly just because it’s compliant with the standard?’” Froelich-Shea said. “We took our time, we experimented, we washed our hair a lot. Ultimately, we created a formula that satisfied all of us internally.”
To make sure consumers would like it too, Avalon put the new SKU into a quantitative test in which Avalon Organics users tested the blinded formula and compared it to the original formula.
“When the results came back and we heard that current users of Avalon Organics shampoo actually liked the new formulations even better, we knew we were on to something big,” she said.
Second Time’s a Charm
Another big name in natural personal care—Horst Rechelbacher—is back on the scene, this time with Intelligent Nutrients. The line is his second natural personal care brand, he founded Aveda in 1978 and sold it to Estée Lauder for $300 million in 1997.
EmerginC’s new Scientific Organics Eyelight Serum rolls out this month.
“Having a non-compete for so many years, I realized that I would have done things in a different way if I had owned the company,” he told Happi. “I am not just a business man, I am an environmental activist. But I only realized how much I really was when I didn’t own a company anymore.”
For example, Rechelbacher said that while he was buying jasmine from Egypt, and was helping women pick the jasmine, taking pictures and motivating employees, he felt he wasn’t really “participating.”
“It wasn’t getting involved from the ground up,” he said.
So this time, Rechelbacher started out at the ground level, literally. He became an organic farmer, started private tutoring at the University of Minnesota and began looking at what it takes to “grow a healthy plant, to make a healthy essence.”
Today, his dedication has helped the company create a range of wellness and personal care, including an anti-aging skin product called Plant Stem Cell Renewal Complex. Offered in All Over Treatment ($130) or Targeted Treatment ($55) formats, the topical complex features ingredients from a proprietary biotech process that allows for the selection and reproduction of antioxidant-rich plant stem cells cultivated in the purest lab, without the use of soil. This process provides access to rare, highly active plant stem cells with antioxidant concentrations at least 1,000 times that of plants in nature, according to the company.
The proprietary blend of antioxidant-rich plant stem cells from edelweiss, coneflower and pennywort are formulated at the highest potency for maximum efficacy, making it a powerful agent to fight the visible signs of aging—reduce fine lines and wrinkles, diffuse age spots, even skin tone, and reduce redness and other skin discolorations. In addition, the plant stem cells are free of genetic modifications, environmental contaminates, heavy metals, pesticide and toxins.
Last quarter, Rechelbacher’s Intelligent Nutrients rolled out Lip Delivery Antioxidant Gloss ($24), a USDA certified organic, gluten-free lipgloss that combines “powerful colorful antioxidant chemistry and nutritious food ingredients with a high Oxygen Radical Absorbance Capacity (ORAC) value. The formulations feature the brand’s Antioxidant Intellimune Seed Oil Complex, which battles oxidative stress and aids in fighting pre-mature aging, while delivering “delicious” moisture and shine with a certified organic aroma and flavor blend of agave, caramel, coconut, raspberry and vanilla. Shades currently include Purple Maize and Clear Vanilla Frosting, and a new color, Cranberry, is due out next month.
Recently, Intelligent Nutrients netted the highest rating (9.5 out of 10) in Organic Monitor’s assessment of more than 50 international brands of natural cosmetic products. According to Rechelbacher, the rating reinforces the need for transparency in the organic beauty industry and “also affirms what we are trying to do as a brand, which is educate the consumer that everything we put in and on our bodies must be nutritious and safe.”
Not only has Organic Monitor’s ranking drawn attention to Intelligent Nutrients products, consumer media is helping to spreading the word too. For instance, Allure named IN’s Purple Maize lipgloss a “Best of Beauty Award Winner” in 2011, an honor that attracts the attention of avid beauty consumers. Plus, Intelligent Nutrients was among those recently championed by the Campaign for Safe Cosmetics (see side bar on p. 44), an organization that often gets its voice heard loud and clear via mainstream media reports.
While he wouldn’t divulge sales figures, Rechelbacher told Happi that Intelligent Nutrients has grown 180% from 2010 to 2011.
“The company is doing well for a start-up that started in the worst time,” he quipped, noting that he launched the line in 2008, at the beginning of this long-running, lackluster economic cycle.
According to Rechelbacher, companies can succeed by being “pure, clean and efficient. That is the new economy,” he said. “Nature gets on your side if you play the game right.”
300-Plus Meet ‘Compact for Safe Cosmetic’ Goals
• The Campaign for Safe Cosmetics announced that 322 cosmetics companies have met the goals of the Compact for Safe Cosmetics, its voluntary pledge to avoid chemicals banned by health agencies outside the US and to fully disclose product ingredients. An additional 110 companies made “significant progress” toward those goals, according to the San Francisco-based coalition of more than 150 nonprofit organizations.
More than 1,500 companies signed the Compact from its inception in 2004 until August 2011, when the Campaign for Safe Cosmetics closed the project. The research team at Environmental Working Group’s Skin Deep database developed tools for tracking each company’s compliance with the goals of the Compact and through these tools.
“These companies have truly broken the mold. They are leading the cosmetics industry toward safety, showing it’s possible to make products with full transparency and without using hazardous chemicals,” said Janet Nudelman, program director of the Breast Cancer Fund, a founding member of the Campaign for Safe Cosmetics.
The report and the companies can be found at www.safecosmetics.org.
Small But Mighty
• While leaders like Horst Rechelbacher and companies such as Burt’s Bees and Avalon Organics are among the biggest names in the natural personal care space, they once were start-ups. Within the natural/organic personal care market—where revenues are expected to surge to $14 billion by 2015, according to Organic Monitor—there’s a herd of smaller marketers thriving in their own right.
One of those small but mighty firms is The Seaweed Bath Co., a startup that rolled out its first products online in October 2010 and has since been picked up by Whole Foods. Distribution has increased significantly since its launch, and sales growth jumped more than 300% per month in 2011, according to founder Adam Grossman, a long-time psoriasis sufferer who created the seaweed-based personal care products to take control of his condition.
The Seaweed Bath Co.’s skin care and hair care products are formulated with sustainably harvested bladderwrack seaweed (Fucus Vesiculosus). Rich in essential amino acids, vitamins and nutrients, this brown seaweed also contains fucoidan, a natural anti-inflammatory, and iodine, which helps stimulate the thyroid, drawing out heavy metals and toxins in the body.
But there are major issues with sourcing bladderwrack. For starters, it is harvested solely from the North Atlantic Ocean off the coast of Ireland, Maine and Novia Scotia.
“Luckily, most seaweed harvesters are as adamant as the company is about protecting the ocean and sustainably harvesting seaweed,” Grossman said. “Organizations like the Irish Seaweed Research Group and the Maine Seaweed Council help manage the industry to make sure it has long-term viability. This starts with testing the ocean water for heavy metals where the different types of seaweed are harvested for agricultural and consumer purposes. From there, the harvesting boats, if they use a motor, must have it concealed so there is no chance of oil being leaked onto the harvested seaweed.”
Additionally, bladderwrack, must be harvested by hand when the tide is out.
“That simple fact is why it is not as widely known in personal care products as kelp which can simply be run over and trimmed by a boat since it is always in deep water,” said Grossman. “After harvest, the seaweed is naturally dried outside until its moisture content drops to between 8%-10%. From there, it is milled to varying degrees dependent upon which product it is going into.”
One of those is Ocean Fresh Whole Seaweed Detox Bath, which alkalizes the skin’s pH, reducing redness and smoothing rough patches. The Seaweed Bath Co. range also includes Wildly Natural powder bath, body washes, skin butter and cream, shampoo and conditioner. And expect more to come, as “current research and development is focused on new delivery methods in order for the powerful nutrients found in seaweed to soak directly into the skin,” Grossman said.
Another brand that’s expanding in the naturals arena is EmerginC, which boasts the Scientific Organics line of skin care products, a range that feature a minimum of 70% organic ingredients.
For EmerginC, the spa scene is core to its success. In the US, the company’s products can be found in many A-level properties such as Miraval, Trump Miami, Wynn Las Vegas, Caesars Palace Las Vegas, The Mayflower and The Broadmoor, among others.
“EmerginC has a lot of momentum right now—we are just starting new distribution in Dubai, Kuwait, China and Egypt, in addition to the countries we are already in,” said Ian Lirenman, CEO and founder.
The newest treatments within the Scientific Organics line include Eyelight serum and Eyelight cream, both of which debut this month. The SKUs contain asthaxanthin, a super potent antioxidant, as well as a roster of natural ingredients including kombucha, grape stem cells, cupacua butter; and Derm SRC, a bamboo and pea extract.