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Natural Beauty: A $20 Billion Market

Topics covered at the Natural Beauty Summit covered far-ranging subjects, including market size, plus various types of consumption habits and retail channels.

PARIS — Topics covered at the Natural Beauty Summit, which took place here on Nov. 23 and 24, covered far-ranging subjects, including market size, plus various types of consumption habits and retail channels.

The global natural personal care market (comprising natural-inspired and truly natural products) is estimated at $20 billion in wholesale revenues in 2009, according to Hana Hrstková, a manager at Kline & Co., which has management consultancy and market research practices. She was citing preliminary findings in the run-up to the publication of Kline’s “Natural Personal Care 2009” study.

Hrstková added it is expected that the global natural personal care market will continue experiencing double-digit gains and may reach approximately $33 billion in wholesale sales by 2014.

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Asia boasts the largest share of the business, followed by Europe (where Germany, France and the U.K. lead and together account for almost 70 percent of the segment’s sales) and then the U.S., she said, adding the fastest-growing markets in the category are in countries such as China, Brazil, India and Germany.

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Still, naturals account for a small share of the worldwide cosmetics and toiletries market, said Hrstková. They can be perceived differently from country to country. In the U.S., for instance, they’re considered a special commodity, so their premium pricing is well accepted, explained Hrstková. Meanwhile, in India, low-priced natural personal care products have historically been widespread and found even in remote villages. Natural is also a way of life for the masses beautywise in Brazil, she said.

Hrstková explained in some regions, such as Asia, natural brands are not highly sophisticated, particularly when it comes to packaging, marketing and natural preservatives.

Helping to boost the growth of the natural beauty market is the ballooning awareness of such issues as sustainability. “Awareness of risk is growing,” said Sharon Greene, managing director of RISC International, a consumer behavior and trends consultancy, who explained part of that could be due to the fact there have been a large number of natural disasters in the recent past. These include phenomenons such as SARS, swine flu and avian flu. “People want to be heard, reassured, understood,” she said. “They are aware the world they are in is fragile.”

Greene said positive consumption consists of five dimensions: social engagement, the environment, health, well-being and ethics.

Positive consumption, she added, “is not a niche movement; it’s a fundamental force.”

Greene divided natural consumers into four main categories. According to her, “the purists” make up 26 percent of natural beauty consumers and seek a close-to-nature experience.

Comprising 21 percent are “the fusionists” (representing the new growth area); they want nature’s gentle qualities mixed with or bolstered by scientific advances.

“The fusionists expect constant innovation,” said Greene. “It is a segment with high purchasing power.”

They think it should be possible to combine consumption with sustainability.

Meanwhile, “the disengaged” — or those not engaged in natural beauty — account for 38 percent, and “the futurists,” who are more intent on high science than on nature, make up the remaining 15 percent.

Beauty brands have taken note of the growing quest for natural products. Yves Rocher, for instance, plans to roll out its Atelier of Botanical Beauty concept in all it doors by 2012, said Hrstková. She also cited The Body Shop and L’Occitane as other examples of companies helping to drive the market.

However, among phenomena impacting natural beauty’s gains is the burgeoning private label business involving retailers such as Wal-Mart, Carrefour, Tesco, Target and Aldi.

According to Matthew Stych, health and beauty research director at Planet Retail, a global retail intelligence provider, some of the options for natural beauty brands are to increase their collaboration with retailers — with exclusive products and cobranding ventures, for instance. It’s also possible for brands to stretch their offering into the low-cost end of the market. Stych believes it is important to emphasize a brand’s heritage and values and increasingly use new media channels to recruit consumers.

Taking an atypical retail route is Violette Watine, founder of Mademoiselle Bio, who opted to open a boutique that sells organic beauty products in Paris in September, three years after starting up her e-tail site,

“The ‘click’ is easy, dynamic and very rapid,” she said, adding brick-and-mortar brings a sensorial element.

The Natural Beauty Summit drew 200 attendees altogether, up 33 percent versus the session in 2008, which ran as an extension of the Beyond Beauty show.