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Natural Cosmetics Approach US$7 Billion
Posted: October 10, 2007
Global sales of natural and organic cosmetics are soaring, with revenues projected to approach US$7 billion this year, according to a report by the Environmental News Network referencing work by Organic Monitor. New research has found that North America and Europe are the two main regions of growth, comprising the bulk of the US$1 billion sales increase this year. The major drivers of market growth are the mainstreaming of natural and organic cosmetics, inward investment and growing consumer demand for green products.
Distribution of natural and organic cosmetics is increasing across North America and Western Europe, and investment reportedly is coming from large cosmetic manufacturers, retailers, private and financial investors. Europe has seen most retailer investment with a number of leading mass market retailers launching natural and organic cosmetics in the last year. The leading British supermarkets are marketing natural and organic cosmetics under their private labels; however, most retail investment has been in Germany where even discounters have launched certified natural cosmetics.
Investment is also reportedly coming from large cosmetic companies that are either acquiring dedicated natural and organic cosmetic companies or launching certified products. L’Oréal is eyeing further acquisitions since buying Sanoflore and The Body Shop in 2006. Origins Natural Resources, part of Estee Lauder, has launched a certified organic cosmetics line under the Origins Organics banner.
A new report by Organic Monitor looks at Mergers, Acquisitions, and Investments in the Global Natural Cosmetics Industry and projects global natural cosmetics market revenues to surpass US$10 billion before 2010. At that time, the market share of natural and organic products of total cosmetics is projected to almost 10% in countries like Germany and the United States.
New Product Development (NPD) has become a key feature of the natural cosmetics market. By adopting private standards like Ecocert and Soil Association, cosmetic manufacturers are forced to innovate through product formulations. Companies are experimenting with natural preservatives, surfactants and colorants as they move away from synthetic chemicals. The major challenge the industry faces is lack of regulation, with many pseudo-natural products competing with legitimate natural and organic cosmetic products.