Environmental and labeling issues to hit sales of natural products

The global cosmetics and toiletries market is worth $269.6bn and grew annually by five percent 2001-2006, growth that Euromonitor attributes largely to the development of the naturals category. The market research firm identified environmental and labeling issues as factors that threaten to stall sales of naturals in the short-run while helping to secure the long-term health of the category. Labeling Issues ​ Euromonitor predicts that growing consumer awareness that cosmetics labeled as natural are often not as natural as their manufacturers make out will put the brakes on growth. It is becoming increasingly hard for products with few natural ingredients to be serenaded as 'natural' because regulators are cracking down on misleading labels. In Canada companies can no longer hide and in the US plans are under foot to expose brands that exaggerate natural claims Explaining the implications, report author Diana Dodson, said: "The result will be a thinning out of the category, with only those brands with a high percentage of natural ingredients remaining as credible players." ​ Although sales of natural cosmetics may be hit by regulatory change in the short-run, Dodson said it would ultimately benefit the industry because consumer confidence would be assured. Manufacturers would also be driven to invest in research and development to create innovative and truly natural products that would not otherwise be the case, added the analyst. Environmental Issues ​​The Euromonitor report argues that sales of natural cosmetics will also be held back by an emerging conflict between the eco-friendly and natural trends. Concern about environmental issues is deepening and manufacturers of natural products are finding that they fall short of expectations. The replacement of synthetic ingredients with natural ones is posing sustainability and environmental issues. Mintel analyst Nica Lewis told CosmeticsDesign.com that the environment is a particularly significant issue for manufacturers of natural products because their consumers are more likely to be ethical shoppers. A particular example of the emerging conflict is the widely used natural cosmetic ingredient, palm oil. It hit the headlines recently as conservationists warned that its use is contributing to deforestation and putting the future of the orangutan at risk. Euromonitor analyst Dodson said sustainability issues are exacerbated by the popularity of scarce and exotic ingredients from the Amazon rainforest and the ocean. The increasingly demanding natural consumer is likely to push for a resolution to this conflict, which will put pressure on manufacturers and potentially damage sales in the short run, added Dodson. The cosmetics industry has already begun to tackle the problem with some firms taking a lead including Symrise and Natura who ensure that their ingredients are ethically sourced. Pressure is also being put on regulatory bodies with the UN calling for international policies to protect precious marine resources at a time when exotic extracts from the depths become popular beauty ingredients.