Natural Beauty Market Opportunities
The market for natural beauty and personal care products is outpacing the marketing for conventional products, driven by consumer interest in natural solutions and other beauty, cultural and demographic trends. However, operating within the natural beauty space is no easy feat; a lack of clarity around use of the term “natural” poses challenges to marketers, formulators and brand owners. Additionally, natural ingredients can pose challenges in formulation, as compared to their synthetic counterparts.
This Slide Show was adopted from the SupplySide West Workshop, “Exploring Opportunities in the Natural Beauty Market,” presented on Tuesday, Sept. 26 in Las Vegas.
Global Market for Personal Care
The global market for personal care is estimated to reach US$450 billion by 2020, according to Xuesong Li, director, chemicals and materials, Kline Group, during her presentation, “The Market Landscape, Trends and Opportunities” at SupplySide West 2017.
Several factors are impacting the market, including increased demand for personalization and preventative care within the category, the impact of influencer collaborations, mergers and acquisitions, and the male grooming and makeup movement, among others.
Anti-aging is the single largest product type in the global personal care market, as well as a key growth engine for the entire industry. Anti-aging falls under the umbrella of skin care, which is the leading product class in the personal care market, followed by hair care. Other product classes include toiletries, makeup, fragrance and oral care.
The global market for personal care represents roughly 10 percent of the overall personal care market, but is growing at a faster pace. Asia Pacific represents the largest natural personal care market, followed by Europe, Brazil and the United States.
Global Market Drivers
According to Paula Simpson, principal, Nutribloom Consulting, who presented on the market for nutricosmetics at SupplySide West 2017, market drivers impacting the global nutricosmetics market include an aging population, growing consumer awareness of nutricosmetics, increased demand for non-invasive beauty treatments, a rise in spa culture, and increased demand for natural ingredients.
Among challenges facing the global nutricosmetics market are unsuccessful product launches, consumer skepticism of nutricosmetics, distribution issues and regulatory challenges.
Key Consumer Trends
Looking at the North American nutricosmetics market, Simpson outlined key consumer trends:
- Anti-pollution and healthy aging;
- “Feeling good, looking good, doing good,” a clean health and beauty movement adopted by Millennials; and
- Integrated skin and hair care.
As discussed by Ryan Nelson, managing editor, Rose Sheet, Informa—Pharma Intelligence, there’s no regulatory definition for the use of the term “natural” or its derivatives in foods. However, FDA has a longstanding policy concerning the use of “natural” in food labeling, which suggests foods labeled as “natural” do not contain added color, artificial flavors or synthetic substances.
Considering cosmetics, FDA has declared its priority on public health and safety, and declined to make a determination regarding the term “natural” in cosmetics labeling. However, FTC has taken action against natural cosmetics claims, targeting products with “all natural” and “100% natural” claims.
When questioned about the clarity of FTC’s position, FTC responded by saying, “We do not have evidence that consumers necessarily interpret natural to mean all natural or no synthetic ingredients … If an advertisement states that a product is natural, and if reasonable consumers would interpret that advertisement as a whole to imply that the product is all natural, this claim would violate the order unless it is true and not misleading.”
Natural Labeling: Safe or Risky?
Nelson outlined risky and less risky moves when it comes natural labeling in cosmetics. Some risky moved include: “naturals” in the brand name; “all natural” or “100% natural”; free from claims; and operating without a consumer-facing natural definition/policy. Some less risky moves include: use of “natural” in labeling versus “all natural” or “100% natural”; organic; and use of labeling cues to guide consumers toward the brand’s natural definition/policy.
How Natural Is Natural?
As Perry Romanowksi, vice president, Brains Publishing, said, there are no natural cosmetics. But some products are more natural than others.
Without a regulatory definition, manufacturers are left to operate within the confines of the current positions taken by FTC and FDA on “natural” claims, but also must also create products that align with consumers’ beliefs on natural. According to Romanowski, natural consumers believe natural is safer; believe natural works better; believe chemicals are “bad,” which is driving free-from claims; avoid fragrances and preservatives; and are swayed by “chemical fearmongers” (i.e., media, bloggers and other influencers spreading concern over synthetic ingredients).
There are several ingredients used in cosmetic formulations that are proven safe, but don’t align with natural standards:
- Formaldehyde donors
- Petrolatum & petroleum derived
- Propylene glycols
- Synthetic silicones
- Synthetic fragrances
- Synthetic polymers
Among hurdles to formulating natural products are consumers’ expectations that natural products will work as effectively as conventional products and varying definitions of natural, among others. Additionally, natural products won’t work as well as conventional products, they’re less stable and cost more to make.
Tiered Approach to Formulating
Romanowski outlined four tiers of natural formulating, with tier 1—“true nature”—being the most natural, while tier 4—“greenwashing”—is the least natural. While tier 1 is ultimately more natural, it offers the fewest formulation options, while tier 4 is the best performing.
Greenwashing, though the least natural of the four tiers, is used by many top selling natural brands. Greenwashing techniques utilize a blend of natural and synthetic ingredients, and is legal.