Joanna Cosgrove, Online Editor01.16.12
Historically speaking, when the economy has taken a downward turn, certain consumer products have weathered the storm with aplomb. Chief among them have been lipstick—a small ticket item capable of boosting a woman’s self-confidence without taking a big bite out of her pocketbook. According to a recent report from Rockville, MD-based Packaged Facts, a division of MarketResearch.com, the natural health and beauty care segment has followed the lead of lipstick during our present economic dip, not only surviving the recession but thriving at a time when life’s little luxuries are most often axed from a consumer’s monthly budget.
The report, “Natural and Organic Personal Care Products in the US,” estimated the natural health and beauty care product segment was worth approximately $8.5 billion last year, having experienced an increase of $3.7 billion since 2005, equaling a compound annual growth rate (CAGR) of 10% over the six-year period.
The segment’s primary driver from 2005-2011 has been its hair care component, which has enjoyed an 86% increase in dollar sales in the last six years, generating a worth of about $2.1 billion. Packaged Facts researchers found that although hair care brands have traditionally been the most vulnerable to commoditization, both in the natural or the conventional product arenas, what helped natural and/or organic hair care brands to defy ongoing pressures has been “extraordinary consumer faith” in the products deemed natural and/or organic. A second influential category driver cited in the report was that many HBC marketers have used hair care products as a growth strategy, a trend that has been evident since 2007. An example of this trend cited in the report was Now Foods’ extension of its namesake brand of supplements into fruit or herb-infused shampoo.
Skin care products represented the second strongest growth category in the natural health and beauty care product segment, growing 11% in 2011. “A return to double-digit sales growth reflects the ongoing strength of natural skin care products in the U.S. marketplace, and consumers’ continued faith in the functional and remedial possibilities of these products,” Packaged Facts stated in a press release. Perceived benefits driving the purchase of natural skin care products included “protection from weather and pollution, reduction of wrinkles and other signs of aging, even relief of stress by pampering the skin.”
Not faring as well but still contributing to overall category growth was natural makeup products. Bearing an estimated value of $455 million at retail in 2011, natural makeup has been a relatively smaller product category, having posted respectable but less stellar growth rates since 2005. Yet Packaged Facts researchers maintained that by “any industry-wide yardstick natural makeup was another strong performer, despite the difficulties that marketers face in obtaining sell-through in brick-and-mortar stores for selections of hundreds of eye shadow, lip color or nail polish shades.”
The packaging of natural cosmetics continues to be an important factor, as consumers have higher expectations about the type of packaging materials used. Seeing packaging as a hurdle, Packaged Facts researchers said it typically costs natural marketers more to package and market their products in comparison to major national brands that make use of “slick countertop or freestanding fixtures.”
Consumer perception (or misconception) of the quality of natural/organic makeup has proven to be another hindrance. Specifically, consumers have been wary, wondering if the effects of natural makeup will be as dependable or as elegant as mainstream makeup. “As of 2011, nonetheless, well-performing natural/organic makeup products brands like Aveda, Bare Escentuals, Dr. Hauschka, and Tarte are streaming their way to retailers’ shelves,” the researchers commented.
Natural health and beauty care sales are unlikely to “find their level” soon, according to David Sprinkle, publisher of Packaged Facts, such that this thriving market will start to behave conventionally, struggling to post dollar increases that keep ahead of inflation rates. He predicted that natural/organic skin care, hair care and makeup products will continue to be excellent performers as Americans seek to stay or become healthy, equate health and fitness with an attractive appearance, and keep the faith about the special efficacy and desirability of natural and organic personal care products.
For more information about Packaged Facts’ report, click this link.
The report, “Natural and Organic Personal Care Products in the US,” estimated the natural health and beauty care product segment was worth approximately $8.5 billion last year, having experienced an increase of $3.7 billion since 2005, equaling a compound annual growth rate (CAGR) of 10% over the six-year period.
The segment’s primary driver from 2005-2011 has been its hair care component, which has enjoyed an 86% increase in dollar sales in the last six years, generating a worth of about $2.1 billion. Packaged Facts researchers found that although hair care brands have traditionally been the most vulnerable to commoditization, both in the natural or the conventional product arenas, what helped natural and/or organic hair care brands to defy ongoing pressures has been “extraordinary consumer faith” in the products deemed natural and/or organic. A second influential category driver cited in the report was that many HBC marketers have used hair care products as a growth strategy, a trend that has been evident since 2007. An example of this trend cited in the report was Now Foods’ extension of its namesake brand of supplements into fruit or herb-infused shampoo.
Skin care products represented the second strongest growth category in the natural health and beauty care product segment, growing 11% in 2011. “A return to double-digit sales growth reflects the ongoing strength of natural skin care products in the U.S. marketplace, and consumers’ continued faith in the functional and remedial possibilities of these products,” Packaged Facts stated in a press release. Perceived benefits driving the purchase of natural skin care products included “protection from weather and pollution, reduction of wrinkles and other signs of aging, even relief of stress by pampering the skin.”
Not faring as well but still contributing to overall category growth was natural makeup products. Bearing an estimated value of $455 million at retail in 2011, natural makeup has been a relatively smaller product category, having posted respectable but less stellar growth rates since 2005. Yet Packaged Facts researchers maintained that by “any industry-wide yardstick natural makeup was another strong performer, despite the difficulties that marketers face in obtaining sell-through in brick-and-mortar stores for selections of hundreds of eye shadow, lip color or nail polish shades.”
The packaging of natural cosmetics continues to be an important factor, as consumers have higher expectations about the type of packaging materials used. Seeing packaging as a hurdle, Packaged Facts researchers said it typically costs natural marketers more to package and market their products in comparison to major national brands that make use of “slick countertop or freestanding fixtures.”
Consumer perception (or misconception) of the quality of natural/organic makeup has proven to be another hindrance. Specifically, consumers have been wary, wondering if the effects of natural makeup will be as dependable or as elegant as mainstream makeup. “As of 2011, nonetheless, well-performing natural/organic makeup products brands like Aveda, Bare Escentuals, Dr. Hauschka, and Tarte are streaming their way to retailers’ shelves,” the researchers commented.
Natural health and beauty care sales are unlikely to “find their level” soon, according to David Sprinkle, publisher of Packaged Facts, such that this thriving market will start to behave conventionally, struggling to post dollar increases that keep ahead of inflation rates. He predicted that natural/organic skin care, hair care and makeup products will continue to be excellent performers as Americans seek to stay or become healthy, equate health and fitness with an attractive appearance, and keep the faith about the special efficacy and desirability of natural and organic personal care products.
For more information about Packaged Facts’ report, click this link.
