Natural cosmetics conference: information and networking in pleasant atmosphere

The second natural cosmetics conference was held in Nuremberg on 22 and 23 September 2009 in the Congress Center CCN Ost. The programme was wide-ranging, with 13 presentations and three panel discussions attended by 120 participants, who learned about new market developments, trends, the results of market research and basic issues like brand management, design and labels. The breaks provided the opportunity to exchange ideas and experiences and make contacts (picture). This year, the conference emphasised the international dimension too.
After the welcome by the project leader of BioFach and Vivaness Udo Funke (picture), the industry specialist Elfriede Dambacher opened the first day’s proceedings with an overview of market trends and developments. She said the effects of the ecological and the economic crises were clearly reflected in the consumer market and manifested themselves in a change of values. She gave the example of the increasing status of honorary positions and the transition from prestige luxury to ethical luxury. “The luxury products industry is engaging with awareness themes and green consuming is in.” The green revolution was one of the things being engendered in Hollywood.

Dambacher (picture) commented that the natural cosmetics segment was benefiting significantly from the sustained change in markets and consumer habits in the direction of new values. However, at the same time, the industry was facing new demands: customers of natural cosmetics were looking for products that were effective but also had ethical and ecological benefits. In this search, natural and luxury are no longer a contradiction, and it’s the customers themselves who are now determining the degree of luxury and naturalness. Moreover, the new customers for natural cosmetics look for these products where they usually do their shopping. The market remains dynamic: Organic Monitor (London) estimates the worldwide turnover of genuine natural cosmetics to be 7 billion dollars today and 10 billion dollars by 2010. In Germany, the turnover of natural cosmetics increased to 672 million euros in 2008, a rise of 60 million euros. In 2009, the natural cosmetics market is continuing to grow in Germany: “The rise in customer numbers is constant, with a fifth of all Germans now buying natural cosmetics.”

Dambacher pointed out that the market was being shaped by increased competition and diversification in distribution. However, the established sales structures, with close ties between the pioneer brands and the wholefood retail trade, were not reaching the affluent Lohas. One of the reasons for this was that, although you could find a high level of expertise on organics in wholefood stores, there was a much lower level of expertise regarding cosmetics. In contrast, the specialist cosmetics trade was expert in cosmetics but was found wanting when it came to natural cosmetics. Overall, cosmetics are becoming “greener”, which Dambacher put down to a number of factors: first, by taking over natural cosmetics firms, the cosmetics industry has secured know-how and brands (L’Oreal/Sanoflore, L’Occitane/Melvita) and is positioning itself accordingly in the market; second, chains (dm, Tesco, Walmart, Aldi, etc.) have launched their own natural cosmetics brands, and firms in the semi-natural cosmetics sector (Origins, Yves Rocher, L’Occitane, etc.) have produced organic lines. “The market is moving rapidly.” Dambacher even prophesied that in the next three years the market will change more than in the last 30 years.

Next, Katharina Loeper (picture) from IRI Information Research presented interesting details from market research. She based her core statement – “natural cosmetics develop successfully in a challenging environment” – on figures from 2008 and the first half of 2009. In Germany, cosmetics and body care have a share of 8.8 % in the market for fast moving consumer goods that have a total turnover of 56.9 billion euros. IRI examined, for example, various outlets and found growth of 7.6 % in the case of natural cosmetics in the first half of 2009 compared with last year, whereas semi-natural cosmetics grew by only 3.2 % and conventional cosmetics declined by 1.2 % (retail food outlets > 200 m², drugstores, excluding Aldi, Lidl and Norma). The biggest potential is currently found in the drugstores and small-scale stores. Loeper took a close look at the face-care segment. With a current market share of 0.9 % of the total market, natural cosmetics grew from January to July 2009 by 17.7 %, semi-natural cosmetics (market share 22.6 %) scarcely expanded (0.1 %), and traditional face care declined by 2.5 %. The major reason Loeper gave for buying natural cosmetics was their effectiveness (60 %), then came image and test reports. Fragrance, promotions in shops and recommendation by friends are, according to IRI, less significant.

Peter Bachmann (picture), from the management consults Signum Forte, spoke in his address about creating and maintaining a success code for brands. A history, staying power and the recognition factor are some of the important features a brand should have. Taking some successful worldwide brands as examples, Bachmann described what makes brands powerful: colour, descriptions, fragrance, identification with a country (Made in Germany, Swiss quality), product performance and packaging all make a contribution, together with price policy and communication (in one small detail the customer should be able to recognise the whole). He called today’s consumer a hybrid consumer “who drives to Aldi in his Porsche”. The challenge was, he said, to lead this type of customer to natural cosmetics and their brands.

Irene Domberger from Stuttgart and Dr. Stefan Kraus from Augsburg gave refreshing presentations on innovative retail concepts. For the last three years, Domberger has managed Autrepart Nature in Stuttgart and sells natural cosmetics and organic cosmetics from all over the world in the shop that is characterised by a lovingly created ambience, service orientation and expertise. It is striking that you find scarcely any German natural cosmetics brands on sale in Autrepart. On the other hand, Domberger incorporates, in part exclusively, ranges by Korres (Greece) and The Organic Pharmacy (England).

Chemist Stefan Kraus (picture, chemist shop top right) and his wife Christina run two shops in Augsburg and the internet shop  greenglam. Their aim is to put clear water between themselves and their competitors, Dr. Kraus chemist shops give prominence to their special services, like nutrition advice, a mother and child department, phytotherapy and mixing their own prescriptions. Customers are also attracted by homeopathy products, an individually designed natural cosmetics range and an apothecary’s garden. In putting together the brands for the two shops, Stefan and Christina Kraus have been guided by the principle of exclusiveness (for example, The Organic Pharmacy) and well known brands like Dr. Hauschka and Weleda, but they also go further by arousing people’s curiosity with unknown brands too. The product selection (Korres, Kibio, Sanoflore, Less is More, Pure, Voya, etc.) offer both semi-natural and certified organic cosmetics. They are planning an own brand and an even stronger link between the chemist shop and natural cosmetics.

The panel discussion examined the change in the market and in customer requirements, and the panel discussed the opportunities and risks of channel selling and the ubiquity principle, in other words being available everywhere. They were all agreed that customers have become more savvy, more value-oriented and greener, that the natural cosmetics product range is developing dynamically and that there is no absolute answer as far as the decision for selective or wide distribution is concerned. Christoph Wöhlke, from the management of the Hamburg drugstore chain Budnikowsky, commented that natural cosmetics firms are making a lot of the same mistakes made by the conventional consumer goods industry. Wide distribution involved in many cases a confusion of prices, and that was not a road manufacturers and the trade wanted to go down. (Picture: Panel from left: Andreas Sommer/Weleda, Christoph Wöhlke/Budni, Bettina Bockhorst/Logona, Dr. Stefan Kraus/Chemist, Peter Bachmann/Signum Forte, Irene Domberger/Autrepart)

If concepts are copied but without the corresponding service and advice being offered, brands are in danger of being destroyed, declared Irene Domberger. “Packaging can be changed; the spoken word is what counts,” agreed Stefan Kraus. All the panel were positive regarding the future for natural cosmetics. Andreas Sommer from Weleda AG is even anticipating double-digit growth over the next 10 years.

Another panel discussion dealt with the question “How green is the cosmetics market becoming?” Assessments were put forward by Helmut Eiermann/Börlind, Franka Hänig/Redspa Media, Klara Ahlers/Laverana, Gerd Weiler/Sanoflore and Ted Ning/Lohas.com (picture from left to right). Ning expressed the view that in the case of natural cosmetics they were not dealing with a trend but with a movement. “This is a really big thing,” he said. “We are a part of something we can describe as a revolution.” Gerd Weiler from L’Oreal/Sanoflore thought the issue of sustainability was only just beginning. “We’ve only got one Earth.” The hype is still to come, because the big firms were only now coming on board, and they could make natural cosmetics into mainstream.

On the morning of the second day in particular, the conference emphasised the international dimension. Hana Hrstková from Kline Market Research, an international market research company, dealt with the natural cosmetics markets in Europe and the USA. As on the previous day in the panel discussion on labels and certification, she stressed the desirability of uniform standards and stopping the flood of logos. In 2008 in particular, various interest groups have formed in the USA and have presented their standards: NPA (Natural Products Association), OASIS (Organic and Sustainable Industry Standards) and Whole Foods, that has developed its own standard. The USA is still out in front as the biggest single market for natural cosmetics and body care, followed by Germany, Great Britain and France.

The highlight of the day was the American Lohas expert Ted Ning (picture). He is the managing director of the Lohas Conference, and the chief editor of the Lohas Journal and the websites. He gave a graphic presentation about the Lohas movement and the power of consumers, and included many examples. He showed how the movement had developed in America and spread worldwide. He also explained, with the help of examples, how the industry is adjusting to the new consumer group and is doing business with it. However, he criticised the fact that the links between the different sectors trying to reach the same target group are still unsatisfactory. They could, he said, achieve much more if the network functioned properly. “It is my job to improve it.” He said the turning point had, however, been reached: 80 % of consumers were already “some shade of green”. In this assessment, he took account of all aspects of life, from separating the rubbish for recycling and using low energy bulbs to the Lohas lifestyle. In his view, word of mouth, the new media and events were important for communicating. His conclusion: “We are on the way and in the process, we can only be winners.”