Market research firm Kline & Company divides the natural personal care space into two camps: truly natural and naturally inspired, with the latter accounting for 55% of the total market.
Both sides are fueling performance. The global natural personal care market posted a healthy 10.6% increase to reach $29.5 billion at the manufacturers’ level in 2013, noted Kline & Company, which has published a new market brief on the sector.
According to Kline, growth within mature markets remains impressive as exemplified by a 7% increase in the US alone.
Steve French, managing partner at the Natural Marketing Institute (NMI), pointed to another positive sign in its 12th annual report on the US LOHAS (Lifestyles of Health and Sustainability) market.
“We have seen numbers come back very strong in terms of consumers’ willingness to pay for environmentally friendly products; back above recession levels,” he told Happi.
According Carrie Mellage, vice president of Kline’s Consumer Products practice, while the double-digit growth numbers of year’s past may be gone, “a focus on new natural ingredients, the opening of new channels of distribution, and consumer movement demanding greater transparency in labeling, are stimulating the industry.”
Retailers like Whole Foods are pushing for greater transparency in the natural/organic sector. Boasting more than 370 stores in the US, UK and Canada, Whole Foods Market has more than 4,000 products that have been approved under its Premium Body Care Standards—more than triple the 1,200 products that it started with when the standards were launched in March 2008. And while personal care products carried in Whole Foods shops that make an organic claim must be certified by either the USDA or meet NSF/ANSI 305 organic standards, the retailer is asking for more. By 2018 every product in Whole Foods Market’s US and Canadian stores will be labeled to indicate whether they include genetically modified organisms (GMOs)—including personal care products.
“GMO is big topic and cosmetics aren’t immune,” said Cara Welch, who as SVP of scientific and regulatory affairs, oversees the Natural Seal program at the Natural Products Association (NPA) in Washington, DC. When NPA wrote its Natural Seal program six years ago, GMO wasn’t included. But according to Welch, the NPA Natural Seal committee has since added a statement into the standards to “encourage non-GMO,” and is currently evaluating a final statement on the issue.
According to NMI’s data, more than one-third of consumers are concerned about GMOs. While much of the GMO talk centers on food right now, more personal care marketers have started to call out their status to consumers.
For instance, there are no GMOs in Jasön’s Dandruff Relief 2-in-1 Treatment Shampoo and Conditioner, a dual-action dandruff solution is formulated to fight flakes, cleanse and condition both the scalp and hair, while controlling scalp dermatitis and mild psoriasis. Fortified with zinc pyrithione as well as jojoba, babassu, olive oil and wheat protein, it can be found at Whole Foods Market, Ulta Beauty and online.
Coldstream Naturals, Inc., a niche oral care company, has rolled out four new USDA-certified organic and GMO-free oral care products. Certified organic tooth creams and mouthwashes from the Newberry, FL-based firm feature citrozine, a proprietary blend of natural fruit bioflavonoids, which are known to help maintain favorable oral health by neutralizing oxidative stress caused by free radicals.
Making It Official
Non-GMO has its own third-party certification by way of the Non-GMO Project, a non-profit organization “committed to preserving and building the non-GMO food supply, educating consumers, and providing verified non-GMO choices.”
“What we decide to put on our bodies is as important as what we put in our bodies,” said Megan Westgate, executive director of Non-GMO Project, which operates out of Bellingham, WA. “We stand behind Non-GMO Project Verified beauty products for the same reasons we believe in non-GMO food products—human health, environmental protection, farmer sovereignty, and transparency throughout the entire supply chain for products we buy for ourselves and our families.”
According to Westgate, the body care category within its verification program has grown steadily in the past few years.
“Consumers want to trust and believe in their beauty products, and there are companies that have sustainable, non-GMO practices and are eager to share their supply chain transparency. The Non-GMO Project Verified seal helps shoppers know which products they can trust to avoid GMOs.”
Andalou Naturals—a manufacturer of fruit stem cell-based skin, body and hair care products sold in the US and Canada through natural health and beauty channels—earned Non-GMO Project verification at the start of 2013.
“Partnering with the Non-GMO Project and achieving third-party verification was consistent with our brand standard to use natural and organic ingredients,” said Stacey Kelly Egide, founder and CEO, in a press statement. “We’re confident in our supply chain and value their support of transparency from farm to shelf.
Certification can serve as a beacon for more discerning consumers, offering a means for natural/organic brands to further separate themselves from naturally inspired offerings as well as the growing number of competitors in the space.
Other companies on Non-GMO Project’s certified personal care list include Dr. Bronner’s, EO, Dessert Essence and Raw Elements, a niche maker of sunscreens. According to the non-profit’s website, brands currently enrolled in the verification program include Avalon Organics, Badger, Mrs. Meyer’s Clean Day, Neal’s Yard Remedies, The Seaweed Bath Co. and Kiss My Face.
This year, the Non-GMO Project is looking to further the GMO conversation by launching www.LivingNon-GMO.org, a new consumer-facing web platform for families, students and individuals.
Points of Entry
With more information and more brands at their fingertips, consumers are testing the waters in natural personal care. According to NMI’s 2013 LOHAS study, 43% of the general population of US adults reports use of a natural/organic product—with the biggest sub-segment in terms of usage being baby care.
When it comes to the introduction of organic, natural and sustainability, certain events, like the changing composition of a household, can be a trigger, noted NMI’s French.
Brands like Erbaviva recognize that point of entry as it was created based on one conviction: that the world needed clean, organic products especially for babies and moms-to-be.
“This was in 1996 before there was an organic trend so the industry did not understand the need to manufacture organic products with care and integrity. For this reason, my wife and I started creating organic soaps, butters and balms formulated for baby and pregnancy in our own home in Topanga, CA,” said founder Robin Brown.
Today, production has grown from a kitchen to a state-of-the-art manufacturing facility and Erbaviva SKUs are found in Anthropologie, luxury spas and in 4- and 5-star resorts throughout the US, as well as internationally.
Hero SKUs include those designed for baby and pregnant women—think Baby Lip & Cheek, Stretch Mark Cream and Baby WashBag, a soap-less means to wash baby that features organic oatmeal, lavender, milk and essential oils in unbleached muslin sachets—but the brand has branched out. Its roster also includes organic deodorants (which Brown says “fly off the shelves”) and a new hand cream, which won best hand cream in the 2013 Natural Solutions magazine 5th Annual Beauty with a Conscience Awards.
“Because Erbaviva mommy-to-be and baby lines are well-established, we capture an audience made up of discerning moms who convert to organics during pregnancy,” Brown said.
Other life-changing events can be tipping points too.
Back in the early 1990s, Bill Stern was suffering from gum disease that had his dentist recommending surgery. In 1994, he met a dentist who developed a rinse to combat gum disease.
“I started using this rinse and my gums improved so much I did not need the surgery,” Stern told Happi, noting that he still hasn’t had the surgery almost 20 years later.
With a long career in retail merchandising, Stern “knew that there was not another product like this one,” so he brought the Natural Dentist to the marketplace in 1995.
Since then, the Natural Dentist line—which is now part of Revive PPC, Madison, NJ—has grown to include more rinse items and a full line of toothpastes for adults and children. According to Stern, it currently has more than a 20% share of Whole Foods Markets’ mouth rinse category, and is looking to make further inroads in mainstream retail. Healthy Gums is currently carried by Walgreen’s, Rite Aid, Stop & Shop, Shop Rite and Giant supermarkets and, in the next few months, consumers will be able to find the brand at 1,200 Walmart stores too.
“More consumers and dentists are looking for natural solutions for oral care. Some of this is related to the overall trend toward more natural products and some is due to dissatisfaction with current products,” said Stern, who is Revive’s vice president of professional products.
Bringing ‘Em on Board
Regardless of retail channel, stores are stocking more natural brands alongside traditional products, and shelf exposure can attract new consumers. According NMI’s research, there’s been an uptick in interest among a key category of consumers.
“From a generation standpoint, we are beginning to see significant engagement of millennials for the first time ever,” French said.
That’s sure to be good news for brands like Güd, the offshoot of Burt’s Bees, which was launched to the millennial consumer base back in 2012.
“Our target demographic tends to fall within the tween-twenties range, but we’ve also received great interest from consumers outside of that range. Our different scent variants really do appeal to people of all ages,” said Mariah Eckhardt, global marketing director, Güd/Burt’s Bees.
The newest addition to Güd is Mango Moonbreeze, a scent that “evokes tropical experience” from notes such as nectarine, lemon, black currant, pineapple and jasmine. It “genuinely speaks to the overall theme of the Güd brand—beauty is a reflection of happiness. Consumers can now find fun, fresh fragrances in natural formulas with great aesthetics,” according to Eckhardt, who told Happi retailers are excited about the new scent as well as new Natural Cleansing Wipes that will rollout this month.
“We’re confident that these will be well received by our core consumer: the girl on the go who needs to transition from the gym to an evening out with friends in a flash,” she said.
Natural personal care marketers are confidently expanding their formulation expertise to new categories.
For example, Alba Botanica has entered the CC cream segment with its new Even Advanced Mineral Color Correcting Cream, and Intelligent Nutrients is rolling out a new four-SKU, Cosmos-certified hair styling line that uses patent-pending technology from larch tree resin and castor emollient in lieu of chemical plasticizers. (For more on Intelligent Nutrients, visit Happi.com later this month.)
Meanwhile, distribution is growing for Burt’s Bees Natural Pet Care, a licensed natural grooming and oral care line for dogs.
Whether for a millennial or a mutt, natural products must still meet consumer expectations. In fact, according to NMI, the mainstreaming of environmentally friendly products has caused increased expectations for product performance—consumers are not willing to compromise.
There are greater expectations for the bottom line too, as industry observers are forecasting continued growth for category.
Kline, which has planned a webinar on Jan. 28 covering key insights gleaned from its Natural Personal Care: Global Market Brief, is predicting that the US market for natural care products is expected to show moderate growth of almost 6% (CAGR) through 2018.
And while it can be tough for smaller natural personal care brands to gain distribution traction, some long-standing players are already reaping benefits from a growing pool of engaged consumers.
“We don’t feel the typical Erbaviva consumer has changed a lot over time, although we do feel our audience has greatly expanded,” said Brown. “Our customers have always been sophisticated and well-informed shoppers who want an organic product with a distinct level of quality. But since the organic trend is so strong, the number of educated consumers is much greater.”