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Natural and organic cosmetics tipped to resist downturn

By Guy Montague-Jones , 09-Jan-2009

Industry insiders predict that natural and organic cosmetics will hold up well in 2009 even if they do not enjoy the dramatic sales growth of previous years.

Even in a recession people have to wash and still want to look good so cosmetics and personal care are often thought to be better insulated than other industries in a downturn.

But as disposable income drops in 2009, commentators have suggested that consumers will switch to cheaper beauty products.

Falling into a higher price bracket, organic and natural cosmetics should therefore struggle to compete in the new economic environment.

Organic resistance to recession

Not so, according to Tina Gill from Organic Monitor. The research and consultancy company expects the organic and natural sector to continue to perform well in the year ahead.

Consumers are unlikely to give up their commitment to organic products just to save a few pennies.

Gill said organic cosmetics are not even necessarily more expensive than traditional products and often a lot cheaper than those in the premium category.

Nevertheless, Gill said the natural and organic market would be affected by the economic situation. She said consumers are likely to go for more mid-range and private label organics instead of luxury options.

Variations between countries

The worldwide economic slowdown will make it harder to attract new customers. Gill does not anticipate a continuation of the dramatic growth rates of recent years but insisted that growth opportunities remain, especially in the Asian countries.

The spokesperson for international marketing at the leading natural cosmetics firm Weleda agreed, suggesting that growth would come from the LOHAS countries.

He said countries that have been hard hit by the financial crisis such as Spain will present a real challenge but that important markets such as Germany and Austria are looking strong. The picture varies between countries, but the spokesperson said that even in badly affected countries he does not expect many consumers to drop their commitment to natural and organic cosmetics.