Continuing success of international natural cosmetics markets

Picture: Continuing demand for natural cosmetics worldwide. The public at Vivaness getting information about make-up trends © Karin Heinze

Not only in Germany but on the international stage too the trend in the natural and organic cosmetics industry continues to be very positive development. In the leading market in Europe, the German market, demand shows no sign of slowing. According to Naturkosmetik Verlag, about nine million consumers buy natural cosmetics several times a year and their purchasing behaviour caused turnover in the first half of this year to grow by around two percent.  The “Green & Clean” trend is to be seen everywhere in neighbouring countries with robust market development and also internationally. However, manufacturers and the trade are having to confront a number of challenges.

In the last ten years the market volume in Germany has doubled. According to surveys carried out by the consultancy naturkosmetik konzepte, Elfriede Dambacher and partners in market research, market volume in 2016 came to around 1,150 billion euros. Natural and organic cosmetics have a share of 8.5 percent of the German cosmetics market (16.5 % with nature-inspired cosmetics).

Elfriede Dambacher with representatives from market research at the Vivaness Congress in 2016. © Karin Heinze

Global trend: Green & Clean, ethics and sustainability

Consumers are the drivers of the global Green & Clean trend. “They are looking for milder and more natural products, are in possession of more information and make more conscious choices,” say the market researchers. Elfriede Dambacher, the proprietor of naturkosmetik konzepte, adds: “Today, ethics and sustainability are right at the top of the agenda.” According to this industry expert, who also publishes the natural cosmetics industry report, products for this consumer group must have a fair and credible story and not only be produced sustainably but incorporate transparency along the whole value chain. Attention is focusing increasingly on packaging for cosmetics on account of the discussion round polluting the sea with plastic waste.

Germany: natural cosmetics the driver in the cosmetics sector

Analysts often refer to the natural cosmetics sector as the driver of the cosmetics industry as a whole. But Dambacher points out that it is not easy – either for well known brands or for newcomers – to meet the demands of the mature and sophisticated German market: “Today you expect to find natural cosmetics in any cosmetics offer. But manufacturers and brands must meet high standards to satisfy customers.” The price policy of the dominating sales channel, the drugstores with market share of around 40 percent, and successful retail concepts for nature-inspired brands are having a big impact on the market  – they are increasingly determining the way the market is developing. This means, as Dambacher explains, that more consumers are being introduced to the natural cosmetics offer: “Significantly more people putting natural cosmetics in their shopping baskets and a valuable increase in turnover of around five percent in 2017 are a good outcome and demonstrate how strong the demand is for natural cosmetics.” She adds that this, bearing in mind the size of the market and the competitive situation, is also a signal to all market participants to tackle the challenges of today with future-proof concepts.

Greenwashing – trade should make the differences clear

There is, however, a darker side to this worldwide boom.  Dambacher notes that the multinational corporations naturally want a slice of the cake and she is quoted in a Vivaness press release as saying: “The dynamism in the global market has given rise to huge growth that is, however, accompanied by a great deal of greenwashing.” She said that new product lines are targeting customers who are influenced by the natural-looking presentation and the use of a few botanical ingredients. She emphasised that it is all the more important for the trade to make the differences from genuine natural cosmetics even cleare.

Department of certified natural cosmetics at BioCompany in Berlin. © Karin Heinze

At the Natural & Organic Cosmetics Conference, held recently in Berlin, experts from the media and the trade were in agreement that digitisation, globalisation, rising demand and a change in consumer behaviour call for reflection and a rethink, together with the courage to embrace change and a healthy measure of risk-taking. In his concluding remarks, the co-organiser of the conference Wolf Lüdge (naturkosmetik verlag) said: “However, we must not lose sight of the USP of natural & organic cosmetics. No matter what changes we are facing, the important thing is that we're clear in our own minds who we are and what we stand for.”

International markets with eight to ten percent growth

In the international context the term 'natural cosmetics' is loosely defined. The biggest market for natural cosmetics, the USA, opts for either 'organic' or 'nature-inspired' cosmetics. Certified natural cosmetics account for 20 percent. With annual turnover of 19 billion US dollars, the US-American company Persistence Market Research (PMR), New York, forecasts annual growth of more than 430 million US dollars for the next seven years. The assumption of international market watchers is that the core markets for natural cosmetics will grow now and in the next few years by eight to ten percent annually.

Picture: Dr.Hauschka products at Whole Foods Market in the USA. © Karin Heinze

Expanding markets abroad are to be found in Asia and South America. China, South Korea, Singapore, Japan and India are beginning to produce natural and organic cosmetics . Just as in the USA and Europa, consumer behaviour in those countries is shifting in favour of natural cosmetics. It's interesting to follow developments in Brazil, where the natural cosmetics market is repositioning itself: the market leader for natural cosmetics, Natura, recently took over The Body Shop.  Scandinavian natural cosmetics brands too are also increasingly becoming international and are setting trends overseas.

Digitisation redefines the Customer Journey

As products become more readily available in all online and offline sales channels, with a powerful media presence, organic beauty blogs and innovative new brands, the industry is reaching a growing number of consumers. Events aimed directly at consumers or other target groups like brand ambassadors or influencers are drawing attention all over Europe to the benefits of natural cosmetics.

Smart Natives get information about natural cosmetics online. IFH representative presenting data at the Natural Cosmetics Conference in 2016. © Karin Heinze

UK: Organic Beauty & Wellbeing Week

The Organic Beauty & Wellbeing Week, an initiative of the British organic organisation and certifier, The Soil Association, a member of the COSMOS Group, caused a great deal of excitement in May round 'organic beauty'. The idea behind it: packing product experience and information on certified natural and organic cosmetics into atmospheric pictures and attractive offers. In consequence, the campaign was beneficial to the participating manufacturers and the trade – retailers were delighted with the increase in sales. The annual  action week, supported by social media activities and numerous events in specialist stores, was a real boost to the  organic beauty industry in Britain. The turnover recorded by members of the Soil Association rose by more than 20 percent in 2015 and by 13 percent in 2016.

France: natural cosmetics benefiting from the organic boom

Organic is booming in France and the  organic beauty industry is one of the sectors feeling the benefit. According to Cosmebio, the professional association for natural and organic cosmetics in France, member companies registered an average increase in turnover of 16 percent in 2016. Last year the total market for natural and organic cosmetics grew by nearly 6 percent. The many brands are on sale in around 2,600 specialist organic stores, that account for 25 percent of turnover in excess of 450 million euros, and are also available in other sales channels. According to Cosmebio, mail order and online shops with their 12 percent market share play a particularly important role. A bridge to the bricks-and-mortar retail trade is created with Click & Collect concepts.

Picture: Mademoiselle Bio is the name of a chain of natural & organic cosmetics stores in France. © Karin Heinze

Italy: the future of cosmetics is green

The economy is recovering in Italy. Italy’s organic sector has seen above- average growth – something from which natural and organic cosmetics are benefitting. According to the association Cosmetica Italia, Milan, the entire cosmetics market was able to record a growth of 0.5 percent in 2016 with sales of 9.9 billion EUR. Retail concepts with natural cosmetics, such as so-called erboristeria, are recording particularly strong growth rates. Indeed, these specialist herbal shops grew by 1 percent. “Consumers are increasingly interested in natural and green products”, the association commented. In other sales channels, the growth of the “organic beauty sector” is even greater and is lasting for longer. From 2013 to 2015, the number of perfume stores and e-commerce businesses offering natural and organic cosmetics grew by more than 200 percent and more than 100 percent respectively. This was demonstrated by the report “Rapporto Bio Bank 2016” published by the company BioBank (Italy), which specialises in the Italian organic sector.

PIcture: The new products stand at Vivaness is always a magnet for visitors. © Karin Heinze

Vivaness is a meeting place for the industry and a platform

The next important industry event is Vivaness, the international trade fair for natural cosmetics, that will be held from 14 -17 February 2018. With its clear criteria for exhibitors and products it offers optimal orientation and security for the whole trade and is, therefore, an ideal platform for profiling. The highlights include the Vivaness Congress, the special show Breeze for international niche brands, the joint stand for German newcomers and the new product stand with the Best New Product Awards.