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Local Ingredients, Reformulation Drive Growth in Naturals
Posted: November 23, 2010
The natural personal care market has grown more than the overall personal care market, recovering more quickly from the economic recession than other personal care segments, according to a report by Kline and Company.
The report found natural personal care to outpace overall industry growth in all four major market regions including: Europe, Brazil, Asia and the United States. It also anticipated that natural personal care will continue to grow by appearing in some unexpected markets such as Russia and Indonesia. Different factors such as locally sourced ingredients, increased consumer awareness and reformulation are driving growth in specific markets, of which the formulator should be aware to create successful products for these regions.
Since 2005, the natural personal care market in Brazil has a 20% compound average growth rate (CAGR). This growth, according to the report, was driven by two major product manufacturers, Natura and O Boticário, which command a majority of the marketshare. Also driving the growth is the country's biodiversity, particularly the flora of the Amazon region, with many well-known ingredients already being explored for their cosmetic properties. In Brazil, natural personal care products reportedly are more affordable and accessible for consumers due to their local sources. Also, consumers in Brazil are said to hold more belief in natural remedies.
Similar to Brazilian consumers, Asian consumers also are strong believers in natural remedies. Truly natural formulations are said to hold a larger share (25%) of the Asian personal care market than natural-inspired formulations. However, as consumers demand natural products for lower prices, natural-inspired products will gain ground.
The market for naturals in Asia is expected to grow by a nearly 14% CAGR through 2015, propelled by rapidly increasing urban population and greater awareness of natural products, especially in China, India and Indonesia. Product manufacturers in Asia reportedly are investing more money in naturals R&D.