Tina Gill, marketing manager at Organic Monitor, told CosmeticsDesign-Europe.com it no longer depends on the size of a company, but rather the channels of distribution they use.
According to Organic Monitor projections, the European market is expected to expand by 12 per cent in 2010. The report states that although outpacing the total cosmetics market, growth is below the 20 per cent plus growth rates observed in previous years.
The latest study, entitled ‘European Natural Cosmetics Market’, has found that competitively priced brands are currently reaping the greatest rewards, particularly since the economic downturn.
Competitive pricing leads the way
Consumers are attracted by the value propositions of these brands – obtaining certified natural products at low prices.
Organic Monitor report that it is private label brands, which are most prominent in Germany where they comprise approximately a third of all natural cosmetics sales, that are excelling the most.
In terms of distribution, the highest growth in Europe is coming from mainstream retailers as brands look to increase distribution in supermarkets and pharmacies.
Segmented approach for new entrants
Organic Monitor research director, Amarjit Sahota, told CosmeticsDesign-Europe.com that there has been a big change in the way brands approach the natural market.
He said that in the past brands would have products in every segment whereas nowadays new entrants will focus on specific consumer groups such as male skincare, or specific channels of distribution.
“Now we are seeing more and more segmentation in the way new entrants approach the market,” he explained.
This is in stark contrast to premium natural and organic brands that are struggling with slow demand from organic food shops and beauty retailers and are subsequently losing market share.
This has led to many natural cosmetic firms taking a direct approach to the consumer, which Sahota pointed out, has prompted many companies to introduce online stores and home delivery schemes.
Success is ‘not for everyone’
Organic Monitor’s findings also displayed concern for new entrants to the natural market, as it states not all will be successful.
As competition steps up, the research consultancy company state that companies who simply extend their existing product ranges with natural products will not appeal to all green consumers.
As large brands such as Garnier enter the natural and organic cosmetics market, Organic Monitor predicts market winners to be those companies who can adopt strategies based on product differentiation.
Leading natural cosmetics brands and the report itself will be discussed further with regards to marketing and distribution developments at the upcoming Sustainable Cosmetics Summit on 18-20 October in Paris.
Sahota highlighted dedicated sessions at the summit that will provide the latest European and global data as well as competitive developments in the market.
CosmeticsDesign-Europe.com will be covering the event.