Natural and organic cosmetics meet the mainstream

The concept of natural and organic cosmetics has long since ceased to be strange. Worldwide, the turnover of comes to more than 30 billion US-dollars. In many countries - such as Germany and France – natural and organic skin, hair and body care products are no longer a niche segment. We spoke with the Swiss management consultant Moritz Aebersold who has been working in top management jobs in the international natural cosmetics industry about the development of the European and international markets.

For over 20 years, the Swiss management consultant Moritz Aebersold (Contura Consulting) has been working in top management jobs in the international natural cosmetics industry. An expert in marketing strategy and innovation, he has excellent connections with the most important markets in Asia, North and South America and Europe. We spoke with him about the development of the European and international markets, what customers want and the challenges and opportunities for the manufacturers of genuine natural cosmetics.

Mr Aebersold, you know the international markets for natural cosmetics very well. Where are developments in Europe going and what are the current trends in the most important markets?

In the two biggest European markets, namely Germany and France, it’s very clear that natural cosmetics are rapidly becoming more popular. In Germany in particular the turnover of cosmetics is more than just good and this year could well mean that once again we’ll see impressive growth. And, moreover, it’s highly likely that the intense competition in the conventional retail food trade and drugstores will impact on the price of natural cosmetics. I’m sure that affordable natural cosmetics are good for further opening up the market and for familiarising more consumers with the range of products. However, I see a couple of dangers. First, it might become difficult to maintain high quality as pressure on manufacturers’ prices increases, because there is a higher input of ingredients in the case of natural cosmetics than with conventional products. And second, precisely the smaller firms could find it increasingly difficult to maintain their position in the market if the price level of natural cosmetics gets close to the price of traditional mainstream brands. The good news is that there nevertheless continues to be movement in the market and that we’re seeing innovations in natural cosmetics being launched.
 
In your view, which countries in Europe have benefited most in recent years from consumers wanting to buy natural cosmetics?

Germany and France are out in front if we think in terms of markets with dynamic and positive development. The development of certified natural cosmetics in Italy has unfortunately been somewhat subdued, which was probably down not least to the macro-economic situation. In England, the development of natural cosmetics continues to be strong, especially in urban locations. However, the market is not growing at the rate of other core markets in Europe. In Switzerland we see the growing phenomenon of cross-border shopping tourism as people take advantage of big price differences. This results in sales going down, whereas the outlets near the border in Germany are enjoying not insignificant increases in turnover. Taken as a whole, I would, however, describe the trend in Europe and worldwide as very positive. Germany and France are the driving force and this has a good effect on other European and international markets. I can see how local manufacturers – incentivized by the outstanding market development of the trailblazers in west Europe - are increasingly trying to position themselves in the international natural cosmetics market and are paying more attention than in the past to quality and professionalism.

Are the manufacturers responding sufficiently to consumers’ demand for naturalness and sustainability?
 
In the past, the leading brands invested a great deal in sourcing quality (organic raw material quality) and in product development. The products gained in functionality and effectiveness and the width and depth of product ranges have increased hugely. So this satisfies the demands of consumers. And the great thing is that more and more people are making conscious choices when they shop. Genuine natural cosmetics focus on fairly traded, organic raw materials and sustainable production methods and packaging. This meets the expectations of discerning customers.

In your view, what are the biggest challenges for the manufacturers of genuine natural cosmetics and what are the best opportunities?
 
As I see it, the biggest challenges – especially for SMEs - include maintaining product quality and the rate of innovation as competition increases and prices fall as a consequence and also as regulatory requirements become more stringent. At the same time, brand profiling and development are becoming more and more important, which is related to a higher level of professionalism and expenditure on marketing. I see the greatest opportunities in the far from fully exploited potential of natural cosmetics and in the continuing desire consumers have to buy sustainable, natural products that make the world a better place. Because of many new suppliers operating in the markets and the growing volumes of high-value raw materials for certified natural cosmetics we’re even seeing a beneficial impact again on organic farming in the procurement markets.

What’s the situation in Asia and North and South America?

In Asia, especially Japan and South Korea have continued to develop as aspiring markets for natural cosmetics. Even though most people understand nature-identical cosmetics to be natural cosmetics there is nevertheless a general trend to more sustainability and a desire to buy natural products.
Sales are doing very well in the USA, but the organic supermarkets are  important and they are facing increasing competition from organic food offerings by the classic conventional chains, which could have a negative effect and might well give rise to further movement in the market. In Latin America, Brazil is by far the biggest market for “green” cosmetics, with genuine natural cosmetics having great potential as well. On account of the problematic economic situation the market is currently tending to stagnate.


In the international context the term natural cosmetics is defined differently from in the important European markets. An ISO-Norm is intended to create an international minimum standard. Is that a solution or a danger for further development of the market?

From my point of view, ISO 16128 will have no direct effect on the natural cosmetics market in Europe. In the medium term, there’s even the possibility that the ISO-Norm will give rise to discussion again round a binding European natural cosmetics regulation or clear definitions under Art 20 relating to natural cosmetics claims. That’s something I’d welcome.

Thank you for the interview Mr. Aebersold!

Interview and photos by Karin Heinze