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BOSTON — Gluten-free skin care, packaging redesigns, recessionista shoppers and new developments in the ongoing (oft contentious) debate over product labeling standards were the buzzed-about topics at the Natural Product Expo East, which ran from Sept. 23 to 26 at the Boston Convention and Exhibition Center. The show drew 1,200 exhibitors, including 196 heath and beauty brands and 21,000 attendees. The show practiced what attendees preached: Compost buckets sat in the food hall, the press room was paperless and reusable shopping bags were the most common freebie.
This story first appeared in the October 2, 2009 issue of WWD. Subscribe Today.
The estimated $4.5 billion natural beauty market is feeling many of the same pressures as conventional beauty brands, yet players in the space continue to express optimism. They are retaining existing customers even during the economic squeeze and seeing continued momentum in “conversions” of mainstream HBA customers.
“We believe a green-natural mentality continues to deepen both for consumers and companies,” said John Replogle, chief executive officer of Burt’s Bees, who cited a Mintel report showing a rise in consumers regularly purchasing green products, from 12 percent in 2007 to 36 percent in 2008. “Continued consumer interest in both personal and planetary well-being is enabling natural personal care to continue to outperform the category” as a whole, he said.
Curt Valva, general manager of family-owned Aubrey Organics, which has annual revenues of roughly $50 million, collected several business cards on the show’s first day from private investment firms interested in natural sector acquisitions.
Several exhibitors cited supermarkets, mass chains and other traditional players as their fastest-growing channel, suggesting natural brands have significant growth opportunities.
“We believe this category has great potential,” said Doug Jones, vice president of merchandising for Vitamin Shoppe, a 435-store chain based in North Bergen, N.J. “We have customers all over the spectrum looking at natural — from value shoppers to people willing to pay $40 and up for an item.”
With increasing concerns about “greenwashing” — deceptive marketing of ingredients as more natural or eco-friendly than they are formulated to be — the natural beauty industry is simultaneously lobbying the government for more oversight and developing its own standards and seals to reassure consumers. At present, the USDA does not regulate how the labels “natural” and “organic” are used on personal care products. In May, the Natural Products Association announced the creation of a “certified natural” seal, using criteria developed by executives from Burt’s Bees, Weleda, Farmaesthetics and others, that mandates 95 percent natural origin ingredients are in a product.
Yes To Inc., best known for selling cheerful carrot products in Target, is looking to grow distribution with natural and health food independents, said Lauren Block, vice president of business development for the San Francisco-based company.
As a result, Yes To is “becoming more ingredient-focused,” she said, and will seek the NPA seal on its entire line. Currently, only lip products are certified.
Other companies are taking different approaches. In July, Dr. Bronner’s, known for its quirkily labeled castile soaps, sued 12 entities, including Kiss My Face, Hain Celestial Group (makers of Alba Botanica) YSL Beauté and Levlad LLC (makers of Nature’s Gate), for false advertising in connection with labeling claims.
Several brands said the economy is shifting customers’ purchase patterns. Shower gel sales are down, according to several brands, while purchases of inexpensive, long-lasting bar soap have surged.
“Consumers are certainly changing some of their usage habits,” said Burt’s Bees Replogle. “Consumers are making sure to finish a product before replacing it, using products more sparingly and they are more actively seeking value packs.”
With that in mind, Kiss My Face is introducing 32-oz. value-size bottles of best-selling shampoos, conditioners and lotions.
“For our customer, there’s two meanings — the bigger bottle is bought less often, which means less [packaging] waste,” said Lewis Goldstein, vice president of marketing for the Gardiner, N.Y., brand. “But there’s also the price-value message. You’d have to be crazy to think that’s not really important right now. We see customers wanting to stay within the channel, but they’re looking for affordability.”
The company is projecting 2009 sales as flat. For the fourth quarter, they’re introducing a reusable gift bag, with a gift tag and a coupon for return purchase, which can hang off a standard grocery shelf. They’ve done well with lip glosses ($6.95 retail) and lip tints ($4.95), fashion-impulse items they hope frugalista customers will drop into a gift bag.
A handful of companies — including Aubrey Organics, Ahava, Mineral Fusion and Kiss My Face — have redesigned packaging to highlight key ingredients and “free-of” ingredients. Overall, the industry is moving to a more clinically effective look, while still emphasizing plant-based ingredients.
“We needed more of a professional look,” said brand manager Lauren Shaffer of Mineral Fusion’s decision to retool all its packaging for 2010. Based on the concentric curves of the agate, the new boxes feature arcing blue metallic lines and heavier type to emphasize the word “mineral.” “We have a sophisticated audience that wants as much performance from our line as in anything else they use.”
Known for its mineral cosmetics, Mineral Fusion will move to package more items into value-priced convenience kits. At holiday, for instance, the company will offer a three-piece Violet Smoky Eye Kit, $19.99 retail for mascara, eyeliner, a shadow trio and how-to instructions.
To build clearer product franchises, Aubrey Organics has redesigned labels to emphasize the headline ingredient in its best-selling moisturizers and body washes.
The brand hand-makes products in 30- and 50-gallon batches in Tampa, Fla. They have no warehouse. Sales will be flat this year, projected general manager Curt Valva. “And that’s with no increased distribution. In this economy, we’re quite pleased by that performance,” he said.
Ahava is coupling a packaging redesign with an ingredient overhaul. The U.S.-based subsidiary has removed parabens from its hand, body and foot creams.
Some companies, such as Kiss My Face, are planning to add “gluten free” to select products, a result of growing awareness of celiac disease (a genetic inability to digest wheat.)
While many skin care products are naturally free of gluten, some use facilities that also process wheat-containing foods and so would need to switch sourcing in order to use the label.