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According to Nancy Mills, an industry manager for the consumer products division of market research company Kline & Co., the market for natural personal care products has persevered through the recession, posting strong gains around the world. Spurred by growing consumer awareness, better raw material supplies, and wider availability of more affordable products, the naturals market posted double-digit gains in 2009. It is a sustained pattern of strong growth that has personal care product marketers of all sizes looking to seize the growing opportunities in worldwide markets to tap into this attractive industry.
With more than a 15% CAGR in the past five years, the naturals trend seems to have solidified its position as more than just a passing fad. While the trend is growing steadily worldwide, what makes it most interesting is the diversity of impact in each region. Kline’s Natural Personal Care 2009 report—one of the only such studies to examine the naturals industry in the United States, Europe, Asia, and Brazil—reveals significant differences among the major markets with regard to consumers’ adoption of the trend, the popularity of products, the competitive landscape, and the degree to which so-called natural products really live up to their billing.
As a clear indication of the growing naturals appeal, manufacturers are pushing the envelope of what passes for natural in order to get on the bandwagon. Kline’s ingredient analysis finds that nearly 75% of so-called natural personal care products are not so natural after all. The overwhelming majority are considered “natural-inspired,” comprised mostly of synthetics with just enough natural ingredients thrown in to take advantage of low consumer differentiation. Unfortunately, the lack of explicit standards that define the degree of naturalness in most markets makes it possible for manufacturers in some countries to call their products “natural” just by adding a flowery label to the package.
As the second-largest single country market for naturals in the world, Brazil is one of the most attractive opportunities for natural personal care marketers. Growing consumer purchasing power and greater supply of products have also made it the fastest-growing, up more than 15% from 2008.
Dominated by a single supplier that commands about two-thirds of the total market, Brazil has also benefited from a weakening U.S. dollar that has made the importation of natural products more affordable. Consumer differentiation remains quite low here as well, with most so-called natural products merely natural-inspired.