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Natural products are benefitting from the organic trend, says Euromonitor

By Michelle Yeomans , 30-Jan-2013
Last updated on 30-Jan-2013 at 12:57 GMT

Mergers and acquisitions in the last couple of years have demonstrated companies' increased interest in organic and natural-positioned products and brands, according to the market researcher.

According to the research group, organic products are noted as increasingly gaining momentum in the beauty and personal care market, infiltrating not only the premium but also the mass market.

This has never been indicated more than in Shiseido's acquisition of Bare Essentials, LVMH's takeover of Nude Skincare and Ole Henriksen and the French organic brand Kibio acquired by Clarins.

Today, even the men’s grooming market has embraced natural ingredients in their formulation, as brands such as BullDog (Little Wing Trading), saw its sales doubled from 2009 to 2011 in the UK.

“With mainstream players developing their organic range, they have also benefited to the natural trend, pushing consumers to look for natural ingredients,” says analyst Johanna Kolkerski-Bezerra.

Natural / Organic debacle

Like most insightful industry analysts, Kolkerski-Bezerra highlights that the difference between organic and natural can sometimes be blurred and the fact that natural products does not necessarily mean organic, but are composed of plant-based material.

Simple natural products tend to be less expensive than organic cosmetics; therefore, more attractive to consumers, who might have trouble to distinguish the difference between organic and natural,” she explains.

The Euromonitor expert then points out that in a French hypermarket for example, an organic shower gel can cost twice the price per litre of a shower gel with a natural positioning. "Limited supplies of organic ingredients due to low yields or bad harvests can drive the price of raw materials through the roof."

Opportunity knocks for halal cosmetics

Some companies have even started to formulate natural/organic cosmetics with Halal certification as they realize that halal products, while increasingly popular, often fall short in terms of their ecological credentials as the formulations are similar to conventional cosmetics.

Multinationals such as Avon and Colgate-Palmolive have launched certified products in Muslim countries, and chemical players such as CP Kelco and BASF are getting ingredients certified for these markets.

However, fellow market researcher firm Organic Monitor highlights that there are challenges associated with formulating cosmetics that are both halal and natural/organic certified.

President, Amarjit Sahota explains that there are important differences in the standards when it comes to halal such as restrictions on packaging, tools and utensils and the manufacturing facility, while natural and organic cosmetics standards are largely based on ingredients and processes.

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