After many years of double-digit growth, the annual growth rate for the global natural and organic cosmetics and toiletries market has slowed to 7-9%, according to Organic Monitor. Valued at $9.1 billion in 2011, the global market continues to attract manufacturers keen on satisfying consumer demand for natural or organic alternatives to mainstream products.

The two largest regions for natural and organic cosmetics are in North America and Europe. In North America, the market is dominated by natural cosmetics, with fewer consumers actively seeking organic alternatives, or certified products, than in Europe.

“In Europe, there is a greater focus on organic cosmetics and certification in particular,” explained Amarjit Sahota, director, Organic Monitor. “Our research shows that almost 70% of pure natural and organic cosmetics are now certified in Europe. The percentage in North America is less than 10%.”

Sahota maintained that Europe is primarily responsible for the slowdown in global growth. Demand in Europe is showing low growth due to the debt crisis. Economic conditions have affected consumer purchasing power, while the harsh retail environment is making retailers less inclined to introduce natural and organic product lines. The North American market is in recovery mode, having picked up since the 2007-2009 US financial crisis. In Asia, market growth rates are continuing at double-digit levels, albeit from a low base.

Investment in new product launches has continued, according to Mintel, which has recorded 6,999 new “all natural” and “organic” global beauty and personal care launches for 2012 (through November), compared to 7,139 new product launches in 2011. Organic Monitor research confirms that the number of new product launches has dropped significantly in Europe during the past 12 months due to weak economic conditions, but launches are increasing in North America and, in particular, Asia.

“There have been important developments in Asia, whereby many new brands have come into the market and established Asian companies like Himalaya Herbals (India) and Amore Pacific (Korea) launch certified lines,” explained Sahota.

No International Certification
More than five years ago, Organic Monitor called for regional, if not international, certification for natural and organic cosmetics.

“I regret to say that we are no closer to this goal,” observed Sahota. “If anything, fragmentation is occurring at the standards level.”

He noted that there are now more than 20 different standards in Europe alone, including new ones launched in Asia Pacific with more in the pipeline in other regions. In Europe, Cosmos has not yet taken off as the major European certification agencies (including Ecocert, Cosmebio, Soil Association and BDiH) had hoped. Natrue got off to a good start in 2009 with the aim of becoming a pan-European standard. However, until now, its adoption rate is mainly in German-speaking countries. In North America, the Natural Products Association and NSF International are the main standards, but neither has an organic standard.

“We appear to be seeing more standards developing and no regional standard, let alone global standard,” said Sahota.

Barbara Olioso, green chemist and founder of natural skin care brand Forest Secrets, insists that there are too many standards and too many symbols. She points out that even when chemists make the effort to formulate a green product according to a green standard, they may discover it has no meaning to the consumer, because people do not know about it. She experienced this first-hand with her own brand.

“I realized that if there is no education and recognition behind a certification system, it is not worth the effort and investment.”

She agreed with Sahota for the need to have one system and one symbol.

“The original intent behind certification bodies was probably good, giving credibility to genuine green products against greenwash products,” she maintained. “It is confusing for the industry and consumers, so my view is that the ‘experiment’ was not successful and we need to think of other ways to deal with the greenwash.”

She predicted that the regulation of green claims, along with the definition of what natural and organic, will be the way to go.

The differing and sometimes conflicting certification standards may restrict brands from developing innovative products as they have limited access to the wide palette of ingredients that conventional brands enjoy. For example, there are standards that allow hydrogenated ingredients and propylene glycol from vegetable sources, providing more flexibility to formulators. But to purists, such as Olioso, allowing these types of ingredients dilutes the value and the spirit behind natural and organic.

“To really innovate natural and organic beauty products, we must define what natural and organic is at a global level with one symbol and one system that is consumer-, industry- and environment-friendly,” she suggests. “In this way, the industry can focus on the creation of new green chemistry ingredients that improve performance and innovation.”

Olioso has been working on replacing conventional functional ingredients that can add sensorial benefits to the skin but are usually in the background of a product’s formulation. She is especially keen on finding replacements for silicones, which she describes as “liquid plastic” and, when released into the environment, silicones could cause problems far into the future. Olioso has been working with Inolex to develop silicone alternatives and has obtained good reviews from these.

“Inolex has also produced the only 100% natural cationic conditioner available on the market today, so I believe they are a really innovative company.”

The natural and organic sector has yet to reach its full potential, which is why so many brands are looking to move into the category. However, apart from issues with certification, there are limitations on natural ingredients in categories such as hair care, hair styling and nail care. Moving forward, manufacturers must find new and effective ways of responding to this growing consumer demand.