New markets for natural cosmetics

In terms of turnover, the German natural cosmetics market is the biggest in Europe. But the most important German brands, and even the smaller manufacturers, have long since turned their attention to further afield and are discovering and conquering new markets beyond the confines of Germany. At Vivaness this year, Elfriede Dambacher chaired a discussion on the subject. Market data and the prerequisites for success were presented by Dr. Burkhard Schaer from Ekozept and a specialist on the French market, Dr. Kirsten Hüttner, an independent consultant and expert on Russia, and Théo Stalder, whose area of responsibility is natural cosmetics customers at the wholesaler Bio Partner Schweiz. (Picture)
At the moment, the French market could well be one of the most interesting territories for natural cosmetics manufacturers. Dr. Schaer from Ekozept said that for a long time, up to about 2005, the country of cosmetics par excellence had lagged behind the trend for natural cosmetics. At that point in time, it started to catch up rapidly, and this development was continuing today with double-digit growth rates. A number of German brands had helped to create the French market in the pioneer phase and were now well established in France. His prognosis for the next few years is that there could be a shake-up in the market if today’s three dominant brands (Melvita, Dr. Hauschka and Weleda) are challenged for shelf space by their six or seven aspiring rivals. Schaer estimates the market share of natural cosmetics in the total cosmetics market in France to be approximately 3 %. He is of the opinion that the double-digit growth will continue in the next few years.

Schaer defines the customer profile as follows: “Interested in culture, educated, chic post 1968 generation”. In his view, since France is the country of the consumer goods label, customers can easily find their way around the plethora of quality marks for natural cosmetics (Picture: Natural cosmetics department at Le Retour à la Terre). They are familiar with BDIH, Cosmebio and Ecocert, although Natrue is still relatively unknown, and they put a great deal of trust in labels. When judging a cosmetics product, the most important issue is its effectiveness, but they are calling increasingly for fairness in the value added chain too. Outlining the spectrum of possibilities, he pointed out, however, that many people in France regard cosmetics that don’t contain parabens as organic. He sees inadequate distribution and the lack of competence at the PoS as hindering rapid expansion. (For more on the natural cosmetics market in France, see the study “Natural Cosmetics in France”)

Théo Stalder from the wholesaler Bio Partner Schweiz described the situation in Switzerland – a small but sophisticated market for natural cosmetics, with huge untapped potential (Picture: Cosmetics department at Egli). There is a mood of optimism regarding natural cosmetics in Switzerland, although the high standards demanded by customers and aggressive competition have made entering the market very difficult. The drugstore as the traditional sales channel is still heavily oriented to plant-based cosmetics, and it is here that retailers are entering the world of natural cosmetics. Stalder points out that the market is experiencing double-digit growth, although it is still dominated by high-pressure brands supplied by the manufacturers to selected outlets. This system restricts the freedom of retailers to choose which products to sell.

The company Bio Partner Schweiz AG, that supplies about 70 % of the specialist organic retail trade in Switzerland, is trying to encourage the natural cosmetics product range. Stalder explained that they had done a lot of communication via the press in the last two years, and this was already bearing fruit and had drawn attention to these products. (Picture: Cosmetics department at Vatter in Bern). He thinks that communicating the advantages of natural cosmetics, particularly with regard to the environment and sustainability, has been neglected. Also the distinction between these products and near- natural products like those of the Yves Rocher brand, that is very well known in Switzerland, leaves a lot to be desired.

The labels BDIH, Ecocert and Natrue are standard for this wholesaler’s product range. However, Bio Suisse is also considering a natural cosmetics label. In the interest of consumers, Stalder would like to see global harmonisation of standards. Above all, he warned that some labels cast doubt on the credibility of others, and thus created uncertainty in the minds of consumers. He said that there were too few opportunities for Swiss customers to access critical information on natural and near-natural cosmetics, and there was still a lot to be done in this respect.

Really restrictive regulations by the federal health authorities regarding what can be said about products was also limiting communication. Despite this, Bio Partner brought the German brand Santaverde and the Latvian brand Madara to the Swiss market last year, and they are proving to be very successful. When asked about future prospects, Stalder said: “The starting gun has been fired and we were great over the first few metres, but it’s still difficult to say how the rest of the race will go.” In his view, that depended not only on the development of the Lohas target group but also on the strategies of the manufacturers.

The currently smallest but possibly most exciting market in Europe for natural cosmetics is probably Russia. Russia expert Dr. Kirsten Hüttner (picture on left above) has long been an observer of developments there and has an internet portal. (Screenshot, see picture on right)

She estimates the share of natural cosmetics in the Russian cosmetics market to be less than 0.5 % but says there is definite interest that is being exploited by the bigger companies. Thus, all new shopping centres have L’Occitane and Yves Rocher shops, and they stock Ecocert certified lines. And L’Oréal has already introduced Sanoflore to the Russian market, where plant-based cosmetics have a long tradition. As for German natural cosmetics companies entering the Russian market, Hüttner points out that
“timing by the big German brands has not been optimal. They seem to forget that coming into the market late is getting increasingly costly.” (Picture: Russian perfumery with Börlind and Lavera products)

An outstanding exception is the Austrian firm Styx. Wolfgang Stix (picture) turned his attention early to the Russian market and made it his main preoccupation. The result today is the availability of his brand in more than 4,500 shops-in-shop in shopping centres and chemists. Together with beauty salons, Hüttner regards these sales channels as the most important for natural cosmetics. She says that the most important target group for natural cosmetics, although the distinction between them and near-natural products is far from clear, is women between 25 and 45 who have been through higher education. They (for example, young mothers) come to natural cosmetics either because they are searching specifically for products without parabens and other harmful ingredients or because they have become aware of different products through travelling to western countries. Other reasons for choosing natural cosmetics are curiosity, the desire to experiment and the attractiveness of product presentation. They are also heavily influenced by the product claim. She pointed out that they have practically no understanding of the ecological connections. She emphasised that the biggest obstacle standing in the way of successfully marketing genuine natural cosmetics is quite obviously the lack of consumer awareness. Another factor that has made entering the market difficult is the presence of big conventional firms who dominate the market and, with huge advertising budgets at their disposal, achieve a high level of penetration. (Picture: Börlind in the well known department store ZUM)

All in all, you have to say that conquering new markets has to be very well prepared if you are to achieve success in a reasonable timescale. Many markets on the Asian side of the world seem to have more interest in natural cosmetics and greater potential buying power than the countries of the southern hemisphere that are still primarily suppliers of raw materials.