Natural players expand through pan-European strategies

By Simon Pitman

- Last updated on GMT

Related tags: Europe

A number of the most significant players in the European natural personal care market are lining up strategies to expand into new geographic markets and tap into a market that should reach a value of €2bn this year.

"We predict companies that have strong backing to have most potential in Europe,"​ said Amarjit Sahota, director of market research company, Organic Monitor.

"Together with Korres, we expect Burt's Bees and Melvita to do well. Both these companies have received considerable investment which is helping finance their expansion programmes."

These big brands, together with a handful of lesser known brands, are all poised to increase their footprint across Europe through new distribution agreements and store expansion, according to Organic Monitor.

But it is the big brands that look set to lead this growth throughout the continent, with the market researcher pointing out that Korres is likely to experience market leading growth this year, further building on the 37 per cent sales growth it achieved in 2009 as it continues to open concept stores across Europe.

Melvita to grow through concept store expansion

Likewise, France-based brand Melvita is also expected to further develop its reach in Europe. Investment by the world renowned brand L’Occitane in 2008 has enabled Melvita to expand its concept stores into major cities such as London and Prague.

Burt’s Bees has been one of only a handful of US brands that has been able to make a mark on the European market. Until now its presence has been limited to the UK market, but that is expected to change during the course of this year thanks to a distribution agreement with Sephora.

Swedish clothing retailer H&M has continued the expansion of its successful personal care line with the launch of a certified organic brand in April this year, a move that Organic Monitor says will be carried by the company’s expansive store network throughout Europe.

However, Sahota points out that H&M might not do as well as the other big brand names, as its range will only be stocked in its own outlets, whereas the other brands are likely to be stocked in multiple retail channels.

Most of these brands are already household names in Europe, despite not being available everywhere. However, a number of smaller brands could be heading for bigger things if planned growth is successful this year.

Latvia puts its stamp on the map

Organic Monitor notes that two natural players from Latvia – bio2you and Madara Cosmetics are both expected to increase their brand profiles in Europe and beyond over the course of this year.

Madara expanded in Moscow earlier this year and is also lining up new distribution agreements in western Europe and Asia, while the smaller bio2you brands is expanding its presence in the Baltic markets by entering into neighbouring Estonia.

"The reason why the Central & Eastern European brands mentioned are targeting other European countries is that their consumer markets are very small,"​ said Sahota.

"These companies have to look at exports in order to grow their business, with Latvia, as an example, having a consumer market of 2.3 million people, compared to over 300 million in the European Union."

The expansion of the smaller independent players into new markets is likely to make these type of brands more appealing to potential acquisitors on the look out for growth potential, with further investment likely to fuel yet more growth.

Overall the pan-European expansion of these players is expected to continue to drive growth of the natural and organic personal care market in Europe, outpacing flat overall industry growth.

Related topics: Market Trends

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