New research by Organic Monitor demonstrates that the mainstreaming of the European natural cosmetics market is leading to increased market segmentation; new entrants and existing suppliers are developing products for specific consumer segments and sales channels.
Most developments are in the U.K. market, with many new product launches targeted at distinct consumer segments. In the last 18 months, new products have been introduced—especially for babies and children, teenagers and male grooming. Mirroring developments in the conventional cosmetics market, other new product launches are designed for professional applications such as antiaging and skin therapy.
The trend of increased segmentation is also manifesting itself in retailer private label products. The U.K. and German markets have witnessed the largest number of natural cosmetic product launches under private labels. Natural and organic products have been launched under own brands of supermarkets, drugstores, organic food retailers and even discounters. Private labels are the most successful in the German market, where they comprise more than 10% of total natural cosmetic sales.
High consumer interest in natural and organic cosmetics is also leading to investment in natural beauty retailers and concept stores. Established brands like Korres and Aveda are opening concept stores across Europe. Dedicated beauty retailers like The Organic Pharmacy and Naturalia are expanding their chained outlets. Most developments are in France where international brands like Weleda and Natura have opened flagship stores in Paris.
Organic Monitor finds that specialist retailers have been most affected by the economic recession in Europe. Natural and organic cosmetic sales in organic food retailers, health food shops and similar retailers are experiencing slow sales growth; whereas demand from mass market retailers and non-retail channels continues to remain buoyant. Private labels are becoming prominent because of their competitive prices. In the German market, private label products are typically three to four times less expensive than the leading brands of natural cosmetics.
Natural cosmetics are the most successful in Germany, where they comprise 5% of total cosmetic sales. Although the U.K. market has been showing high growth rates, the market share of total cosmetic sales remains below 3%.