German natural cosmetics market grows to 920 million euros

Whereas the classic cosmetics market in Germany had to be satisfied once again with low growth of 0.6 %, growth of the market for controlled natural cosmetics was a triumphant 7.1 %. Industry expert Elfriede Dambacher announced these figures at Vivaness. The representatives of the market research companies GfK and IRI presented their analyses of market penetration and the trends in the market. Annual market data and sector data are collected in cooperation with the market research companies IMS Health and BioVista.

(Picture from left: Elfriede Dambacher Naturkosmetik Konzepte, Nadia Cimbollek, IRI, Denise Nordbeck, GfK)


 

“Natural cosmetics are a significant engine of growth for the cosmetics industry,” Elfriede Dambacher maintained. The owner of the consultancy Naturkosmetik Konzepte continuously monitors market development and in her estimation the turnover of €920m for natural cosmetics in 2013 (2012: €860m) is a very substantial achievement in view of the saturated cosmetics market. Dambacher explained: “Value-oriented consumption is increasingly influencing the markets, and nature as an emotional added value is changing the cosmetics market.” Controlled natural cosmetics now have a market share of a good 7 %, and if we add to this figure the share of nature-based cosmetics (7.6 % and turnover of €983m) total market share comes to almost 15 %, and their combined turnover in the total cosmetics market comes to over €1.9bn. Nature-based cosmetics grew in 2013 by 2.5 %. (Picture: The column chart shows the continual growth over recent years. Chart: Naturkosmetik-Konzepte)

In the ranking of distribution channels, drugstores with a market share of 38.6 % (2012: 37.6 % (see our earlier report) continue to be in the lead. dm-drugstores constitute the biggest part of this high market share in the total drugstore market. The dm-natural cosmetics line Alverde celebrates its 25th birthday this year. “The early involvement of the drugstores with their own natural cosmetics brands is bearing rich fruit, and market share is continung to grow,” Dambacher concluded. The market share of the wholefood and health food trade fell by 1.8 % to 25.9 %. In contrast, pharmacies recorded a slight growth from 12.1 % to 12.9 %. (Picture: Drugstores, the specialist organic trade and health food stores account for two-thirds of the German natural cosmetics market. Chart: Naturkosmetik Konzepte)
 

The real winners last year were the conventional trade’s sales channels. As the figures of the IRI Trade Panel Infoscan Retailer show, the growth in turnover of controlled cosmetics in the conventional trade with over 200 m2 in drugstores, perfumeries and department stores rose by 12.1 %, which was above the average of 7.1 % for the total market. As Nadia Cimbollek from IRI Marktforschung explained at the Vivaness event, natural cosmetics grew in these channels twice as strongly as in 2012 to reach €22.2m. She said this was down to an increased presence in the media, ranging from advertising in all the popular women’s magazines and TV ads to conversations on social media portals and blogs (see picture below on the left, IRI). She added that it was also influenced by the brand management of the manufacturers of natural cosmetics becoming more professional and by expanding the scale of distribution.
 

Media presence and the increasing availability of natural cosmetics brands in many classic sales channels also impacts on market penetration. According to the GfK Consumer Panel, the number of purchasers rose by 11.8 % compared with 2012, resulting in an increase in market penetration in the same period from 19.3 % to 21.5 %. In the process, purchasing frequency and the number of packs per purchase both fell (-1.1% and -1.6 % respectively). Nevertheless, the rising number of buyers with a 10.1 % increase in sales resulted in growth in turnover of 10.3% in the GfK Panel ConsumerScan covering 40,000 people (Chart GfK: Germans and foreigners over 18 years old, personal care products and cosmetics).

According to GfK expert Denise Nordbeck, it was campaigns on a large scale in the mass market that drew attention to the natural cosmetics brands. In particular, the private label products increased their market penetration (14.3%, 2012: 12.5%) compared with manufacturers’ brands (12.1%, 2012: 11.2%). When sales and the percentage share of spending by customers are compared, the dominance of the private labels becomes even more noticeable: with 51.7 % of the items sold, they have very clearly overtaken the manufacturers’ brands - in 2007 almost 62 % were manufacturers’ brands. The low price policy of many private labels is reflected in the amount customers spend: private labels account for only 27.2% of customers’ spend. (Chart GfK: Inexpensive private labels are in demand)

 
Denise Nordbeck said that turning customers who occasionally buy natural cosmetics into regular customers was a real challenge. Last year, 32% of customers were new (9% of turnover) but 28% switched from natural cosmetics (7% of turnover). The other 84% of turnover was generated by around 40 % of habitual buyers. “In future it will, however, depend increasingly on brands being available where there is the corresponding retail competence. This change is in full swing, even though the trade is transforming itself more slowly than the demand for natural cosmetics requires,” she maintained. Elfriede Dambacher explained: “The trading formats that benefit most are those that understand how to make the  Point of Sale into the Point of View and thus to create for the customer ‘the natural cosmetics world of experience’.” (Picture: Different kinds of marketing are necessary to maximize regular customers and to attract and retain new customers)
 

Further information:

IRI-Expert Nadia Cimbollek: Nadia.Cimbollek@IRIworldwide.com

GfK-Expertin Denise Nordbeck: denise.nordbeck@gfk.com
GfK will bring out a study of natural cosmetics in the spring.
 

Elfriede Dambacher is an industry expert with longstanding experience and the owner of the Dortmund firm Naturkosmetik Konzepte. Further background reports and analyses of the natural cosmetics market can be found in the Naturkosmetik Jahrbuch 2014. Everything you want to know about the growing market for natural cosmetics is available in this thorough reference book that, with 1,600 industry addresses, provides comprehensive information. The Naturkosmetik Branchenmonitor is new – a management summary bringing together on a quarterly basis trends and developments across all sales channels plus international industry news.
 

Further information: www.naturkosmetik-verlag.de 
Contact: ed@naturkosmetik-verlag.de