US natural players target UK market

By Simon Pitman

- Last updated on GMT

An increasing number of US natural and organic personal care
players are targeting the lucrative UK market as significant market
opportunities, tied in with shared business and consumer cultures,
help to drive the market.

The trend was highlighted by the March 2007 acquisition of UK company Cosmeuticals Limited by US player Bare Escentuals. At the time of the acquisition, the company said that it was hoping to expand into the fast growing market for natural and organic personal care products in the UK, where significant progress and evolution in recent years has made it the leading such market in Europe. Organic Montior estimates that sales of natural and organic personal care products doubled between 2002 and 2005 in the UK, with annual sales expected to top €200m in 2007. However, the US market is at an even more advanced stage of development than both the European, and more specifically the UK, markets, giving players there the opportunity to tap into the market growth in the UK from a higher base. Furthermore, there are significant cultural similarities that also serve to make business connections between the US and the UK more successful, as pointed out by Organic Monitor's Tina Gill. "These kind of similarities make the UK a preferred export market for US personal care players, which, tied in with the growth in the naturals and organic segment, is likely to lead to further US businesses operating trying to muscle in on the growth,"​ said Gill. Indeed, Hain Celestial has already made this jump into the UK market in recent years. It generates most of its European sales from the UK market through its Jason Natural and Avalon brands, which have proved highly successful with British consumers. "It is the success of companies such as Hain Celestial that other US companies are hoping to copy in the UK market,"​ said Gill, who believes that further movement by US players trying to expand into the UK market is likely to occur in the coming year or so. The trend is also being reflected in the retail sector, with Texas-based Whole Food Markets buying up UK retailer Fresh and Wild in 2004. This will lead to the opening of the UK's first ever organic superstore in June 2007. Likewise, this movement on to the UK market is also expected to give the US players an improved port of entry into the European market. This is because strong trade ties between the UK and the rest of Europe are further enhanced by the fact that the UK often leads on new trends within the industry. "This is the aim of the American companies to use the UK as a springboard for the European market,"​ Said Gill. "However most US companies have had limited success outside of the UK market, mainly because of the language barrier."​ She added that viewing Europe as the 'United States of Europe' was not the key to cracking the market there, emphasizing that an organic and diversified approach, in line with the variety of business and consumers cultures, was likely to draw greater success.

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