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Naturals Market Maintains Strong Global Growth

Posted: March 11, 2010

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A key differentiator in this market is the variety of distribution channels from one country to another. In China and Japan, the growing appeal of Western-style department stores has drawn shoppers in for cosmetics and skin care products, while direct sales remain quite strong throughout the more rural areas of the region. Unique to the Indian market, kiranas—the equivalent of mom-and-pop stores in the U.S.—are responsible for the majority of naturals sales in this country.

Truly Naturals Growing in Europe

The European naturals market is thriving on an increase in the supply of products and the expansion of specialized skin care offerings with anti-aging and sun protection benefits. While less than one-third of the overall market comprises truly natural products, this segment is growing here as marketers reformulate their products to meet increasing demands of certifying bodies. In Europe, a pan-European standard for natural certification is brewing, which presents a great opportunity for international brands that rank at the higher end of the naturals scale.

Makeup is the leading growth category here as well, with product innovation in organic and mineral-based formulations by leading worldwide brands leading category growth. The top marketers here are large domestic brands with broad appeal and considerable clout in the personal care industry, such as Oriflame and The Body Shop.

Value Drives Growth in the United States

Stymied considerably by the recession, the U.S. market for naturals posted relatively modest growth in 2009, but was still remarkable compared to the cosmetics and toiletries market as a whole. Here, as in Europe, marketers are reformulating their products to beef up their natural positioning to appeal to more skeptical consumers and meet increasing scrutiny over the true naturalness of ingredients.

Challenging this move to more natural ingredients, the recession forced U.S. consumers to seek out more mid-range, mass-marketed products that provide greater value and cost less.