Ingredient Composition Becomes More Important as Organic Personal Care Product Market Evolves

London – The natural & organic sector is the fastest growing in the North American cosmetics & toiletries industry, with sales increasing by 20% a year. Organic Monitor projects the market share of natural & organic personal care products to expand from 8% this year to 15% in the coming years.

High market growth rates are because of the rise in ethical purchasing and ‘mainstreaming’ of natural & organic products. Distribution in mass market retailers is increasing as retailers focus on ecological and natural products. Mass merchandisers like Wal-Mart and Target are introducing natural & organic personal care products, supermarkets like Safeway and Loblaws are expanding product ranges, whilst drugstores are launching exclusive products.

Organic Monitor’s new report on The North America Market for Natural & Organic Personal Care Products: Market Assessment & Forecasts finds that product penetration is increasing in all channels. Specialty personal care stores and department stores are introducing premium natural & organic brands. High growth is also coming from spas, salons and beauty centers. Television shopping and online retailers are also important for certain brands. 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.

A key finding by Organic Monitor is that 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. 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 gap between first and second tier companies is widening as the market evolves.

Ingredient and formulation issues are becoming increasing important in the North American market. The growing number of pseudo-natural products is leading consumers to scrutinize the composition of natural & organic personal care products. Manufacturers are responding by launching products with high levels of natural extracts, ethical and certified organic ingredients. Organic Monitor expects to see more certified fair trade and organic products as companies move away from ‘natural marketing’. Indeed, major new entrants like Yves Saint Laurent (Care by Stella McCartney) and Origins Natural Resources are launching Ecocert-certified products. 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 new report by Organic Monitor 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 & organic products from competing products.

About Organic Monitor

Organic Monitor is a business research & consulting company that specializes on the global organic & related product industries. Since its formation in 2001, Organic Monitor has been providing a range of business services to operators in high-growth ethical industries. Their business services include market research publications, customized research and business consulting. Visit us at