Organic Products Sector Fastest Growing In The North American Cosmetics Industry With Sales Increasing 20% A Year, Says New Report

The report finds that product penetration is increasing in all channels such as specialty personal care stores and department stores, which are introducing premium natural and organic brands, spas, salons, beauty centres, television shopping and online retailers. Greater segmentation is leading to dedicated brands being developed for some channels. End Quote

(1888PressRelease) January 17, 2008 - Report Buyer, the online destination for business intelligence for major industry sectors, has now added a new report showing that the natural and organic sector is the fastest growing in the North American cosmetics and toiletries industry, with sales increasing by 20% a year. The market share of natural and organic personal care products is expected to expand from 8% this year to 15% in the coming years.

“The North America Market for Natural and Organic Personal Care Products: Market Assessment and Forecasts” reports that high market growth rates are because of the rise in ethical purchasing and ‘mainstreaming’ of natural and organic products. Distribution in mass market retailers is also increasing as retailers focus on ecological and naturalproducts. Additionally, mass merchandisers like Wal-Mart and Target are introducing natural and organic personal care products and supermarkets like Safeway and Loblaws are expanding product ranges and drugstores are launching exclusive products.

The report finds that product penetration is increasing in all channels such as specialty personal care stores and department stores, which are introducing premium natural and organic brands, spas, salons, beauty centres, television shopping and online retailers. Greater segmentation is leading to dedicated brands being developed for some channels.

Most sales however remain from natural food shops which have 45% market share. Leading chains like Trader Joe’s and Wild Oats have developed private labels for natural beauty products, whilst independents are giving greater shelf-space to these products. Whole Foods Market is setting the pace by looking at setting up dedicated spas in some of its natural food supermarkets.

According to the authors of the report, the North American market is evolving into a two-tier market. The first-tier comprises companies that have received a capital injection in recent years. They note that these frontrunners, backed by large marketing budgets, are showing a large rise in market share as they expand distribution and strengthen their product portfolios. Aveda is the market leader because of its extensive, yet exclusive, distribution channels. The second-tier comprises smaller companies that continue to focus on traditional markets.

The report shows that ingredient and formulation issues are becoming increasingly important in the North American market. The growing number of pseudo-natural products is leading consumers to scrutinise the composition of natural and organic personal care products. Manufacturers are responding by launching products with high levels of natural extracts, ethical and certified organic ingredients. The authors expect to see more certified fair trade and organic products as companies move away from ‘natural marketing’. They note that, indeed, major new entrants like Yves Saint Laurent (Care by Stella McCartney) and Origins Natural Resources are launching Ecocert-certified products, additionally, Intelligent Nutrients is expected to have a major impact in 2008 with its novel range of nutritional cosmetics that are made from certified organic food ingredients.

“The North America Market for Natural and Organic Personal Care Products: Market Assessment and Forecasts” gives strategic recommendations to natural personal care product companies, retailers and new entrants. Apart from focusing on natural ingredient compositions and formulations, manufacturers are advised to develop strategies based on product positioning and distribution. Market winners will be those companies that can successfully differentiate their natural and organic products from competing products.

“The North America Market for Natural and Organic Personal Care Products: Market Assessment and Forecasts” is available from Report Buyer. (http://www.reportbuyer.com/go/ORM00053)

Report Buyer product ID: ORM00053

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