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A Natural Fit

By: Jeff Falk
Posted: October 26, 2006, from the October 2006 issue of GCI Magazine.

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In a recent New York Times article, L’Occitane chief executive, Reinold Geiger, states that nobody cared about natural ingredients when the company was founded in 1976. Today, according to Euromonitor, the global market for natural cosmetics stands at $3.9 billion, and is forecast to grow 9% annually through 2008 to $5.8 billion—compared with a growth rate of 1% for conventional cosmetics and personal care. Freedonia Group Inc.’s “Cosmetic & Toiletry Chemicals” study forecasts the U.S. market to move away from traditional cosmetic and toiletry chemicals and toward more natural products.

L’Occitane exemplifies this growth, expanding from a retail chain of 10 stores to 750 in approximately 10 years; posting $350 million in revenue in its last financial year. The company opens an average of two stores per week in the U.S. and Asia.

According to the Freedonia Group, Inc., natural products have become a key element of marketing strategies in cosmetics and toiletries, and consumer awareness and concern about the source and properties of the ingredients in their personal care products is increasing. Natural formulations often are defined by what they do not include, and, according to Freedonia, consumers are reassured by labels that feature natural rather than synthetic-sounding ingredients.

Though the packaging itself does not move natural products off the shelf, naturals are gaining momentum, and the packaging has to support that growing interest.

“Our consumers are often defined under the LOHAS umbrella,” said Setzfand. “These are consumers who live or strive to live a lifestyle characterized by health and sustainable practices. This group actively seeks out brands that reflect a commitment to health and sustainability. As consumers become more aware of natural products and organic produce, they also become more aware of natural packaging and the need to minimize wasteful packaging and recycle. These consumers increasingly expect and demand packaging that is made from recycled content or includes at least 35% post-consumer waste.”