Natural cosmetics still an international growth market in 2011

As we can see from the half-year figures, the signs are still pointing to growth. At the end of the year, the German market will be worth considerably more than 800 million euros and will continue to be first in the ranking of European countries. France is catching up fast and is experiencing growth rates of up to 30 %. The markets are on the move, and overall they are becoming greener. Both the classic manufacturers of natural cosmetics and the specialist trade, as the traditional sales outlet, are being confronted by increasing competition from the cosmetics industry and the conventional distribution channels. At the Natural Cosmetics Conference in Berlin, current data were presented and market trends were discussed. (Picture: Elfriede Dambacher introducing Jeanne Christensen, an expert on France)Growth in the natural cosmetics market does not pause for a break – current analyses by GfK and IRI Symphony Group for the first half-year show growth of 5 % to 8 %. Last year, turnover of natural cosmetics was approximately 795 million euros, and by the end of 2011 this figure is expected to rise by between 40 and 60 million euros. Analysis of the sales channels revealed to market researchers that, in the first half of 2011, in contrast to the same period last year, there was a clear shift of turnover in favour of natural-based cosmetics. Brands with natural ingredients but without certification registered growth of 21 %. A large proportion of this growth was probably down to the entry of Beiersdorf into the market with the brand Pure & Natural. Once again, manufacturers’ brands in the natural cosmetics segment were successful, rising by around 15 %. Turnover of conventional cosmetics fell slightly in the first half-year. (Picture: Natural-based cosmetics grew disproportionately in the first half-year)

In addition to the introduction of new products, factors that contributed to growth were expanding existing lines and increasing distribution via various channels – especially to the mass market. Also, market penetration is steadily increasing. As the organiser of the Natural Cosmetics Conference pointed out, you can no longer ignore the fact that the mineral oil age in the cosmetics industry is coming to an end. She said the consumer can already find lots of green products on the shelves, although the mood of expansion in the natural cosmetics market was not having only positive outcomes. There was often little differentiation between brands, and presentation and communication were becoming more and more like each other. So one of the big challenges was to develop a clearer profile and to bring genuine innovations to the market. (Picture: Nivea Pure & Natural: natural-based cosmetics on the rise)

The trend of recent years is on the whole confirmed by the statistics of the distribution channels: drugstores with their market share of 35.1 % (2010) are recording a further increase in turnover, whereas in the wholefood trade (17.7 %) turnover is continuing to decline. In the health food trade, sales have risen slightly since the middle of last year. In contrast, during this year there has been little movement in the sales channels pharmacies, the conventional retail food trade and perfumeries. Cosmeticians and spas are recording a positive trend, but they’re starting from a low base. The trade has largely accepted natural cosmetics and is becoming more imaginative in developing sales concepts. Dambacher singled out, among others, the Budni-concept Aliqua, that is to be integrated in more Budnikowsky drugstores as shop-in-shop, the Müller Naturshop and the brand stores of various manufacturers.

Dambacher also explained that the raw materials market was changing in the process of greening the cosmetics market, and organic and fair trade materials were very much in demand. The impact of the sustainability discussion on the cosmetics industry could be clearly seen, and the cosmetics industry was investing heavily in products free of chemical and controversial ingredients, that were being demanded by many consumers who were aware of the issues. An increasing number of consumers are getting information from the internet, and this was putting the younger generation too increasingly in touch with natural cosmetics. But companies too are turning more and more to the social media to reach out to new target groups. (Picture: Alexandre Harkaly from the certification organisation IBD in Brazil introducing the raw material treasures of his country)

Germany remains by far the biggest market for natural cosmetics in Europe (see graphic), followed by France, Britain and Italy, that are more or less the same as each other. In Scandinavia, Spain, the Netherlands, Switzerland and Austria, natural cosmetics are quite important in terms of turnover, but in the other EU states the market is still small. The growth rates recorded by France for a number of years are remarkable. The traditional country of cosmetics has taken giant strides, with up to
30 % growth in natural cosmetics. The reason for the boom is the increasingly critical attitude of consumers towards toxic materials in cosmetics. Between 2007 and 2010, the proportion of consumers buying natural cosmetics shot up from 7 % to 25 %. The sales channels pharmacies and para-pharmacies have acquired a dominant position.

Uldis Iltners (picture) introduced the northern European markets – Scandinavia and the Baltic region. He is the co-owner and managing director of the Latvian natural cosmetics brand Mádara, that has only been on the market since 2006. As Iltners illustrated, cosmetics markets in the north sometimes followed their own rules: important criteria for the success of products were nature, regionality, functionality, quality, simplicity and a good price-performance ratio. Consumers’ requirements were shaped by their traditionally extensive knowledge of the forces of nature and trust in natural products. In total, the turnover of cosmetics on the markets in the north lies below 10 % of the total cosmtics-turnover in Europe. According to the statistics of the European association of the cosmetics industry, Colipa, the general turnover of cosmetics in Sweden was 140 million euros and in Denmark 97 million euros.

The young markets, Lithuania, Latvia and Estonia, have rapidly caught up in recent years. For example, Lithuania, with turnover of 37 million euros, has overtaken Finland (27 million euros). Despite only having a population of 2.2 million, Latvia achieved sales of 21 million euros in 2010. Mádara has managed to place the brand in more than 20 countries in just a few years. (Picture: Mádara’s values are tailored to the markets of Northern Europe)